<PAGE> 1
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- --------------------------------------------------------------------------------
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-13960
------------------------
ITT CORPORATION
<TABLE>
<S> <C>
NEVADA 88-0340591
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
</TABLE>
1330 AVENUE OF THE AMERICAS
NEW YORK, NY 10019-5490
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
TELEPHONE NUMBER: (212) 258-1000
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ___
As of November 6, 1996 there were outstanding 116.4 million shares of
common stock, no par value, of the registrant.
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<PAGE> 2
ITT CORPORATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM PAGE
- --------- ----
<C> <S> <C>
PART I. FINANCIAL INFORMATION:
1. Financial Statements:
Consolidated Income --
Third Quarter and Nine Months Ended September 30, 1996 and 1995.......... 2
Consolidated Balance Sheet --
September 30, 1996 and December 31, 1995................................. 3
Consolidated Cash Flow --
Nine Months Ended September 30, 1996 and 1995............................ 4
Notes to Financial Statements............................................ 5
Business Segment Information............................................. 7
2. Management's Discussion and Analysis of Financial Condition and Results
of Operations............................................................ 8
PART II. OTHER INFORMATION:
6. Exhibits and Reports on Form 8-K......................................... 13
Signature................................................................ II-1
Exhibit Index............................................................ II-2
</TABLE>
1
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following unaudited financial statements, in the opinion of management,
reflect all adjustments (which include only normal recurring adjustments)
necessary for a fair presentation of the financial position, the results of
operations and cash flow for the periods presented. For a description of
accounting policies, see notes to financial statements in the Corporation's 1995
Annual Report on Form 10-K.
ITT CORPORATION AND SUBSIDIARIES
CONSOLIDATED INCOME
(IN MILLIONS EXCEPT FOR SHARES)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
THIRD QUARTER SEPTEMBER 30,
----------------- -----------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues.............................................. $1,665 $1,624 $4,805 $4,558
Costs and expenses:
Salaries, benefits and other operating.............. 1,208 1,153 3,468 3,321
Selling, general and administrative................. 203 289 613 662
Depreciation and amortization....................... 69 53 197 181
------ ------ ------ ------
1,480 1,495 4,278 4,164
------ ------ ------ ------
185 129 527 394
Interest expense, net................................. (53) (61) (171) (218)
Miscellaneous income, net............................. 1 3 9 12
------ ------ ------ ------
133 71 365 188
Income tax expense.................................... (53) (14) (153) (69)
Minority equity....................................... (13) (7) (29) (16)
------ ------ ------ ------
Net income............................................ $ 67 $ 50 $ 183 $ 103
====== ====== ====== ======
Earnings per share (Pro Forma for 1995 --
See Notes to Financial Statements).................. $ .57 $ .42 $ 1.54 $ .87
====== ====== ====== ======
Weighted average common equivalent shares (Pro Forma
for 1995 -- See Notes to Financial Statements)...... 118.2 117.2 118.4 117.2
====== ====== ====== ======
</TABLE>
The accompanying notes to financial statements are an integral part of the above
statement.
2
<PAGE> 4
ITT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN MILLIONS EXCEPT FOR SHARES)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......................................... $ 175 $ 177
Marketable securities.............................................. 631 --
Receivables, net................................................... 709 784
Inventories........................................................ 97 86
Prepaid expenses and other......................................... 124 96
------ ------
Total current assets............................................ 1,736 1,143
Plant, property and equipment, net................................... 4,609 3,979
Investments.......................................................... 966 1,757
Goodwill, net........................................................ 1,333 1,332
Long-term receivables, net........................................... 174 150
Other assets......................................................... 349 331
------ ------
$ 9,167 $8,692
====== ======
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable................................................... $ 282 $ 309
Accrued expenses................................................... 614 695
Notes payable and current maturities of long-term debt............. 289 265
Other current liabilities.......................................... 165 161
------ ------
Total current liabilities....................................... 1,350 1,430
Long-term debt....................................................... 3,875 3,575
Deferred income taxes................................................ 184 141
Other liabilities.................................................... 427 350
Minority interest.................................................... 284 260
------ ------
6,120 5,756
------ ------
Stockholders Equity:
Common stock: authorized 200,000,000 shares, no par or stated
value, outstanding 116,350,260 and 117,196,370 shares,
respectively.................................................... 2,896 2,944
Cumulative translation adjustment.................................. (5) --
Unrealized loss on securities, net of tax.......................... (19) --
Retained earnings/(accumulated deficit)............................ 175 (8)
------ ------
Total stockholders equity....................................... 3,047 2,936
------ ------
$ 9,167 $8,692
====== ======
</TABLE>
The accompanying notes to financial statements are an integral part of the above
statement.
3
<PAGE> 5
ITT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CASH FLOW
(IN MILLIONS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------
1996 1995
----- -------
<S> <C> <C>
OPERATING ACTIVITIES
Net income.............................................................. $ 183 $ 103
Adjustments to net income:
Depreciation and amortization......................................... 197 181
Provision for doubtful receivables.................................... 38 47
Changes in working capital:
Accounts receivable................................................... (5) (103)
Inventories........................................................... (12) (7)
Accounts payable...................................................... (32) 32
Accrued expenses...................................................... 7 46
Accrued and deferred taxes.............................................. 2 55
Other, net.............................................................. (24) 37
----- -------
Cash from operating activities........................................ 354 391
----- -------
INVESTING ACTIVITIES
Additions to plant, property and equipment.............................. (359) (321)
Proceeds from divestments............................................... 242 1
Acquisitions, net of acquired cash...................................... (299) (2,208)
Other, net.............................................................. (39) 80
----- -------
Cash used for investing activities.................................... (455) (2,448)
----- -------
FINANCING ACTIVITIES
Short-term debt, net.................................................... 5 (19)
Long-term debt issued................................................... 206 64
Long-term debt repaid................................................... (56) (143)
Repurchase of common stock.............................................. (57) --
Change in investments and advances from ITT Industries, Inc.*........... -- 2,424
Other, net.............................................................. 2 10
----- -------
Cash from financing activities........................................ 100 2,336
----- -------
EXCHANGE RATE EFFECT ON CASH AND CASH EQUIVALENTS....................... (1) --
----- -------
(Decrease)/Increase in cash and cash equivalents........................ (2) 279
Cash and cash equivalents -- Beginning of period........................ 177 191
----- -------
Cash and cash equivalents -- End of period.............................. $ 175 $ 470
===== =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest.............................................................. $ 158 $ 263
===== =======
Income Taxes.......................................................... $ 144 $ 45
===== =======
</TABLE>
- ---------------
* Investments and advances from ITT Industries, Inc. represents the means by
which ITT was funded by ITT Corporation, a Delaware corporation (which has
been renamed ITT Industries, Inc. and reincorporated in Indiana; "Old ITT"),
prior to the distribution on December 19, 1995 of the outstanding shares of
common stock of ITT to shareholders of Old ITT on that date and consisted of
both equity and interest bearing advances.
The accompanying notes to financial statements are an integral part of the above
statement.
4
<PAGE> 6
NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS EXCEPT PER SHARE)
1) BASIS OF PRESENTATION
ITT Corporation ("ITT" or the "Corporation") is one of the world's largest
hotel and gaming companies. ITT's principal lines of business are hotels, gaming
and information services. The hotels segment is comprised of a worldwide
hospitality network of over 400 full-service hotels serving three markets:
luxury, upscale and mid-price. ITT's hotel operations are represented in nearly
every major world market. ITT's gaming operations are located in several key
domestic jurisdictions. ITT also operates various hotel/casino ventures outside
the United States. ITT's information services segment publishes telephone
directories in many countries outside the United States and provides
post-secondary career education in the United States.
On December 19, 1995 (the "Distribution Date"), ITT Corporation, a Delaware
corporation ("Old ITT", which has been reincorporated in Indiana and renamed ITT
Industries, Inc.), distributed to its shareholders of record at the close of
business on such date all of the outstanding shares of common stock of ITT, then
a wholly owned subsidiary of Old ITT (the "Distribution"). In such Distribution,
holders of common stock of Old ITT received one share of ITT common stock for
every one share of Old ITT common stock held. In connection with the
Distribution, ITT, which was then named "ITT Destinations, Inc.", changed its
name to ITT Corporation.
2) GAMING OPERATIONS
Casino revenues represent the net win from gaming wins and losses. Revenues
exclude the retail value of rooms, food, beverage, entertainment and other
promotional allowances provided on a complimentary basis to customers. The
estimated retail value of the promotional allowances was $38 and $48 for the
third quarter of 1996 and 1995 and $121 and $104 for the nine months ended
September 30, 1996 and 1995, respectively. The estimated cost of such
promotional allowances was $27 and $34 for the third quarter of 1996 and 1995
and $83 and $73 for the nine months ended September 30, 1996 and 1995,
respectively, and have been included in costs and expenses.
Revenues and costs and expenses of the Gaming operations are comprised of
the following:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
THIRD QUARTER SEPTEMBER 30,
------------- -------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues
Gaming.............................................. $264 $318 $790 $744
Rooms............................................... 17 21 53 53
Food and beverage................................... 19 21 58 53
Other operations.................................... 25 26 79 64
---- ---- ---- ----
Total....................................... $325 $386 $980 $914
==== ==== ==== ====
Costs and Expenses
Gaming.............................................. $146 $154 $448 $389
Rooms............................................... 5 6 18 18
Food and beverage................................... 19 17 54 49
Other operations.................................... 17 34 42 59
Selling, general and administrative................. 54 49 159 144
Depreciation and amortization....................... 19 25 58 64
Provision for doubtful accounts..................... 8 20 22 38
---- ---- ---- ----
Total....................................... $268 $305 $801 $761
==== ==== ==== ====
</TABLE>
5
<PAGE> 7
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN MILLIONS EXCEPT PER SHARE)
3) ACQUISITIONS
On January 30, 1995, the Corporation acquired Caesars World, Inc.
("Caesars") for approximately $1.76 billion and on March 10, 1995, the
Corporation acquired a 50% interest in the businesses which comprise Madison
Square Garden ("MSG") for approximately $.6 billion.
The following pro forma summary for the nine months ended September 30,
1995 presents information as if the acquisitions of Caesars and MSG had occurred
as of January 1, 1995:
<TABLE>
<S> <C>
Net revenues........................................................ $4,640
Net income.......................................................... $ 88
======
Income per share.................................................... $ .74
======
</TABLE>
The pro forma information is not necessarily indicative of the results that
would have occurred had such acquisitions taken place at the beginning of the
year.
4) EARNINGS PER SHARE
Earnings per share in the 1995 third quarter, nine months and through the
Distribution Date were computed based upon the number of ITT common shares that
were outstanding on the Distribution Date.
5) MARKETABLE SECURITIES
The existing restrictions on the Corporation's investment in Alcatel
Alsthom shares expire in July, 1997. Accordingly, this investment is being
carried at fair value and has been classified as "available for sale" in
accordance with SFAS No. 115, "Accounting for Certain Investments in Debt and
Equity Securities".
6) RECEIVABLES
Current receivables of $709 and $784 at September 30, 1996 and December 31,
1995, including current maturities of notes receivable, are reported net of
allowances for doubtful accounts of $118 and $106.
Long-term receivables of $174 and $150 at September 30, 1996 and December
31, 1995, are net of allowances for doubtful accounts of $92 and $98, exclude
current maturities of $28 and $21.
7) PLANT, PROPERTY AND EQUIPMENT
Plant, property and equipment consists of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
Land and improvements...................................... $ 1,326 $1,178
Buildings and improvements................................. 2,566 2,311
Machinery, furniture, fixtures and equipment............... 985 789
Construction work in progress.............................. 384 250
Other...................................................... 119 97
------ ------
5,380 4,625
Less -- accumulated depreciation and amortization.......... (771) (646)
------ ------
$ 4,609 $3,979
====== ======
</TABLE>
8) RECLASSIFICATIONS
Certain amounts in the 1995 financial statements have been reclassified to
conform to the current year presentation.
6
<PAGE> 8
BUSINESS SEGMENT INFORMATION
(IN MILLIONS)
Business segment information is as follows:
<TABLE>
<CAPTION>
INCOME
REVENUES ------------------------------
------------------------------------
THIRD
THIRD QUARTER NINE MONTHS QUARTER NINE MONTHS
---------------- ---------------- ------------ --------------
1996 1995 1996 1995 1996 1995 1996 1995
------ ------ ------ ------ ---- ---- ----- -----
<C> <C> <C> <C> <S> <C> <C> <C> <C>
Hotels....................
$1,104 $1,034 $3,190 $3,046 $ 84 $ 5 $ 242 $ 109
Gaming....................
325 386 980 914 57 81 179 153
Information Services......
236 204 635 598 65 31 175 131
------ ------ ------ ------ ---- ---- ----- -----
Total Segments............
1,665 1,624 4,805 4,558 206 117 596 393
Other.....................
-- -- -- -- (21) 12 (69) 1
------ ------ ------ ------ ---- ---- ----- -----
1,665 1,624 4,805 4,558 185 129 527 394
Interest expense, net..... (53) (61) (171) (218)
Miscellaneous income,
net....................... 1 3 9 12
Income tax expense........ (53) (14) (153) (69)
Minority equity........... (13) (7) (29) (16)
------ ------ ------ ------ ---- ---- ----- -----
$1,665 $1,624 $4,805 $4,558 $ 67 $ 50 $ 183 $ 103
====== ====== ====== ==== ==== ===== =====
</TABLE>
The accompanying notes to financial statements are an integral part of the above
statement.
7
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(DOLLARS IN MILLIONS UNLESS OTHERWISE STATED)
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH THREE MONTHS ENDED
SEPTEMBER 30, 1995
Revenues of $1,665 in the 1996 third quarter increased 3% on an overall
basis compared with $1,624 in 1995. Hotels revenues rose 7% driven by strong
average daily rate increases, particularly in owned and leased properties.
Revenues at ITT World Directories, Inc. ("ITT World Directories") increased 16%
due primarily to the acquisition of Maister Directories, a South African concern
acquired in November, 1995. ITT Educational Services, Inc. ("ITT Educational
Services") revenues increased 16% due to tuition price increases, an expanded
curriculum and increased census. Gaming revenues decreased 16% due to several
factors. Results from the Corporation's premium play business in both Las Vegas
properties declined substantially compared with the 1995 quarter. In addition,
construction disruption from ongoing casino expansion projects and increased
competition in the Tunica, Mississippi market negatively impacted results.
Salaries, benefits and other operating costs increased 5% in the quarter to
$1,208 from $1,153 in 1995, primarily representing the costs of acquired hotel
properties. Overall, salaries, benefits and other operating costs represented
73% of revenues in 1996, compared with 71% in the 1995 quarter.
Selling, general and administrative expenses decreased 30% to $203 in 1996
compared with $289 in 1995. Included in the 1995 quarter is a charge of $80 for
severance and other costs associated with restructuring the headquarters of the
Hotels and Information Services business segments and a benefit of $23
representing the reimbursement of overhead expenses related to world
headquarters by the entities that comprised Old ITT prior to the Distribution
("service fee income"). Excluding the impact of these items, selling, general
and administrative expenses declined 13% from the prior period, reflecting
management's continuing commitment to cost containment.
Excluding the restructuring charge and service fee income, the Corporation
generated earnings before interest, taxes, depreciation and amortization
("EBITDA") of $254 in the 1996 quarter compared with $239 in the 1995 quarter, a
6% improvement. This improvement reflects significant increases in average room
rates, particularly in owned and leased properties, the benefits from
acquisitions in both the Hotels and Information Services segments and
operational improvements somewhat offset by the decline in Gaming. Depreciation
and amortization increased 30% compared with the prior period due to the impact
of the acquisitions discussed above and the Corporation's method of allocating
such costs prior to the Distribution. Operating income increased 5% when
excluding the impacts of the depreciation and amortization allocation, the
restructuring charge and service fee income.
Net interest expense decreased significantly in the 1996 third quarter.
However, during 1995 Old ITT allocated certain indebtedness between ITT and ITT
Industries, Inc. ("ITT Industries") in anticipation of the Distribution. As a
result of such allocation, the interest expense reflected in the 1995 third
quarter is not necessarily indicative of the interest expense which ITT would
have incurred if ITT was an independent entity during such period.
Income tax expense increased in 1996 on higher pretax earnings. In
addition, during the 1995 third quarter, ITT and ITT Industries allocated
certain tax attributes of Old ITT between the companies in anticipation of the
Distribution. Such allocation reflects results which are not necessarily
indicative of the income tax expense which ITT would have incurred if ITT was an
independent entity during such period.
The minority equity represents the net income attributable to the minority
shareholders of Ciga, S.p.A., ITT World Directories and ITT Educational
Services.
8
<PAGE> 10
BUSINESS SEGMENTS
Revenues, EBITDA and operating income, excluding the effects of overhead,
restructuring charges ($51 in Hotels and $29 in Information Services)and
minority equity, for each of ITT's three major business segments were as
follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER THREE MONTHS ENDED SEPTEMBER
30, 1996 30, 1995
- ----------------------------- -----------------------------
OPERATING OPERATING
REVENUES EBITDA INCOME REVENUES EBITDA INCOME
- -------- ------ --------- -------- ------ ---------
<C> <C> <C> <S> <C> <C> <C>
$1,104 $125 $84 Hotels......................... $1,034 $ 87 $56
</TABLE>
Hotels' 1996 third quarter results reflect average rate increases of 11% at
owned and leased properties throughout the world. The average rate gains at
these properties contributed to a 9% increase in revenue per available room
("REVPAR")from $97 in 1995 to $106 in 1996, and was the primary contributor to a
14% revenue increase in these properties from the prior period. Improvements in
the owned and leased properties have a greater impact on the Hotels segment
results than do improvements in managed properties, where the majority of the
improvements are realized by those property owners. Despite strong rate gains,
managed property revenues increased by only 3% from the prior period due to the
termination of several hotel management contracts. EBITDA and operating income
growth were generated primarily in the major geographic areas in which the
Corporation has invested most heavily, most notably North America. Management
continues to aggressively pursue profitable expansion opportunities while
optimizing cost saving initiatives in each of its market segments.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER THREE MONTHS ENDED SEPTEMBER
30, 1996 30, 1995
- ----------------------------- -----------------------------
OPERATING OPERATING
REVENUES EBITDA INCOME REVENUES EBITDA INCOME
- -------- ------ --------- -------- ------ ---------
<C> <C> <C> <S> <C> <C> <C>
$ 325 $ 76 $57 Gaming......................... $ 386 $106 $81
</TABLE>
Gaming's 1996 third quarter results were negatively impacted by several
factors which contributed to results which were significantly below the 1995
quarter. The Corporation experienced a substantial decline in its premium play
business at both of its Las Vegas, Nevada properties. In addition, the
Corporation is continuing to examine ways to reduce construction disruption at
Caesars Palace, Caesars Atlantic City and the Desert Inn, as construction
negatively impacted performance at Caesars Palace and the Desert Inn during the
third quarter of 1996 and is expected to continue to have a negative impact on
performance until the completion of each project. These negative impacts are
expected to primarily result from the noise, appearance and physical condition
of the properties caused by the construction and, to a lesser extent, a slight
reduction in the number of available rooms at Caesars Palace and Caesars
Atlantic City during certain phases of those projects. A discussion of the
Corporation's program to upgrade and expand its existing gaming operations is
contained under "Liquidity and Capital Resources".
The performance of the Corporation's Sheraton Casino in Tunica,
Mississippi, was adversely affected in the 1996 third quarter as a result of
additional competition in the Tunica market. The Corporation expects that this
competition will continue and, as a result, is examining ways to increase the
competitiveness of its Tunica property.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER THREE MONTHS ENDED SEPTEMBER
30, 1996 30, 1995
- ----------------------------- -----------------------------
OPERATING OPERATING
REVENUES EBITDA INCOME REVENUES EBITDA INCOME
- -------- ------ --------- -------- ------ ---------
<C> <C> <C> <S> <C> <C> <C>
$ 236 $ 72 $65 Information Services........... $ 204 $ 65 $60
</TABLE>
Revenues at ITT World Directories increased 16 percent primarily as a
result of the contribution from Maister Directories, which was acquired in
November, 1995. EBITDA and operating income continued to improve due mainly to
continuing cost controls throughout the organization.
9
<PAGE> 11
ITT Educational Services revenues increased 16 percent due to tuition price
increases, expanded curriculum and increased census which more than offset the
cost of newly opened schools and increased marketing efforts.
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH NINE MONTHS ENDED SEPTEMBER
30, 1995
Revenues of $4,805 in the 1996 period increased 5% compared with $4,558 in
1995. All segments contributed to this increase with the largest contribution
coming from Hotels as higher average room rates in owned and leased properties
was the primary factor. Gaming revenues in the 1996 period benefited from the
inclusion of a full nine months of results from the January, 1995 acquisition of
Caesars. Revenues at ITT World Directories increased slightly due primarily to
the acquisition of Maister Directories which was offset somewhat by the impacts
of foreign exchange. ITT Educational Services revenues increased 14% due to
tuition price increases, an expanded curriculum and increased census.
Salaries, benefits and other operating costs increased 4% in the nine
months to $3,468 from $3,321. Overall, salaries, benefits and other operating
costs represented 72% of revenues in 1996, down from 73% in the 1995 period.
This decrease reflects management's ongoing cost containment programs as well as
increases in average room rates primarily at the Corporation's owned and leased
hotels outpacing the increase in costs.
Selling, general and administrative expenses decreased 7% to $613 in 1996
compared with $662 in 1995. Included in the 1995 nine months is a charge of $80
for severance and other costs associated with restructuring the headquarters of
the Hotels and Information Services business segments and a benefit of $75
representing service fee income. Excluding the impact of these items, selling,
general and administrative expenses declined 7% from the prior period,
reflecting management's continuing commitment to cost containment.
Excluding the restructuring charge and service fee income, the Corporation
generated EBITDA of $724 in the 1996 nine months compared with $580 in 1995, a
25% improvement, while operating income rose 32% in the period. These
improvements reflect significant increases in average room rates, particularly
in owned and leased properties, the benefits from acquisitions in both the
Hotels and Information Services business segments and operational improvements
as previously discussed. Depreciation and amortization increased 9% compared
with the prior period due to the impact of the acquisitions discussed above.
Net interest expense decreased significantly in the 1996 period. However,
during 1995, Old ITT allocated certain indebtedness between ITT and ITT
Industries in anticipation of the Distribution. As a result of such allocation,
the interest expense reflected in the 1995 nine months is not necessarily
indicative of the interest expense that ITT would have incurred if ITT was an
independent entity during such period.
Income tax expense increased in 1996 on higher pretax earnings. In
addition, during the 1995 nine months, ITT and ITT Industries allocated certain
tax attributes of Old ITT between the companies in anticipation of the
Distribution. Such allocation reflects results which are not necessarily
indicative of the income tax expense which ITT would have incurred if ITT was an
independent entity during such period.
The minority equity represents the net income attributable to the minority
shareholders of Ciga, S.p.A., ITT World Directories and ITT Educational
Services.
BUSINESS SEGMENTS
Revenues, EBITDA and operating income, excluding the effects of overhead,
restructuring charges ($51 in Hotels and $29 in Information Services) and
minority equity, for each of ITT's three major business segments were as
follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER NINE MONTHS ENDED SEPTEMBER
30, 1996 30, 1995
- ----------------------------- -----------------------------
OPERATING OPERATING
REVENUES EBITDA INCOME REVENUES EBITDA INCOME
- -------- ------ --------- -------- ------ ---------
<C> <C> <C> <S> <C> <C> <C>
$3,190 $355 $ 242 Hotels......................... $3,046 $253 $ 160
</TABLE>
10
<PAGE> 12
Hotels' 1996 nine months results reflect a significant increase in REVPAR
in the Corporation's owned and leased properties from $95 in 1995 to $104 in
1996, a 10% increase. This increase was the primary contributor to a 13% revenue
increase in these properties from the 1995 period. Despite strong rate gains,
managed property revenues were basically unchanged from the prior period due to
the termination of several hotel management contracts. EBITDA and operating
income growth were generated primarily in the major geographic areas in which
the Corporation has invested most heavily, most notably North America.
Management continues to aggressively pursue profitable expansion opportunities
while optimizing cost saving initiatives in each of its market segments.
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER NINE MONTHS ENDED SEPTEMBER
30, 1996 30, 1995
- ----------------------------- -----------------------------
OPERATING OPERATING
REVENUES EBITDA INCOME REVENUES EBITDA INCOME
- -------- ------ --------- -------- ------ ---------
<C> <C> <C> <S> <C> <C> <C>
$ 980 $237 $ 179 Gaming......................... $ 914 $217 $ 153
</TABLE>
Gaming's 1996 nine month results reflect the impact of the January 30, 1995
acquisition of Caesars and the impact of opening two additional casinos in
Halifax and Sydney, Nova Scotia during the second and third quarters of 1995,
respectively. The contributions from these properties as well as the benefits of
cost reductions and ongoing operating efficiencies were substantially offset by
several factors which negatively impacted the 1996 third quarter and which were
previously discussed herein.
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER NINE MONTHS ENDED SEPTEMBER
30, 1996 30, 1995
- ----------------------------- -----------------------------
OPERATING OPERATING
REVENUES EBITDA INCOME REVENUES EBITDA INCOME
- -------- ------ --------- -------- ------ ---------
<C> <C> <C> <S> <C> <C> <C>
$ 635 $196 $ 175 Information Services........... $ 598 $178 $ 160
</TABLE>
Revenues at ITT World Directories increased 5% due primarily to the Maister
Directories acquisition which was offset somewhat by the impacts of foreign
exchange. EBITDA and operating income continued to improve due mainly to
continuing cost controls throughout the organization.
ITT Educational Services revenues increased 14% due to tuition price
increases, expanded curriculum and increased census which more than offset the
cost of newly opened schools and increased marketing efforts.
LIQUIDITY AND CAPITAL RESOURCES
The Corporation's EBITDA increased 25% in the 1996 nine months reflecting
earnings growth in all business segments, the continuing benefits of
management's cost rationalization strategies and the accretive impact of the
Caesars acquisition. These cash flows are expected to be sufficient to service
indebtedness, satisfy tax obligations and fund maintenance capital expenditures
and other liquidity needs. Additional liquidity needs would be funded through
traditional debt or equity financing, asset sales or any combination thereof.
Cash from operating activities, as defined by Statement of Accounting
Standards No. 95 ("SFAS 95"), decreased to $354 in the 1996 nine months from
$391 in the 1995 period due primarily to changes in working capital
requirements. The SFAS definition of cash from operating activities differs from
EBITDA largely due to the inclusion of interest, income taxes and changes in
working capital.
On May 2, 1996, the Corporation sold 2.1 million shares, or about 22%, of
its holdings in Alcatel Alsthom for approximately $200. Proceeds from this sale
were used for general corporate purposes, including debt reduction. After giving
effect to this sale, the Corporation owns approximately 7.5 million, or
approximately 5%, of the outstanding capital shares of Alcatel Alsthom.
On June 27, 1996, the Corporation announced an extensive capital
expenditure program to upgrade and expand its existing gaming operations.
Approximately $1.2 billion is expected to be invested in Caesars Palace in Las
Vegas, Nevada, and Caesars Atlantic City in Atlantic City, New Jersey. The
Corporation is also in the process of renovating the Desert Inn in Las Vegas.
This renovation commenced in 1995 and is expected to be completed in the third
quarter of 1997 with a total cost of approximately $160. In addition to the
expansion of
11
<PAGE> 13
existing gaming operations, the Corporation has announced that: (i) it has
entered into an agreement in principle with Planet Hollywood International, Inc.
to form a joint venture to construct, develop, manage and operate two "Planet
Hollywood" themed casino resort hotels at a cost of approximately $1.0 billion
and (ii) it will construct a riverboat casino and a hotel in Harrison County,
Indiana at a cost of approximately $230.
Construction on certain of these projects has commenced with capital
spending estimated to be approximately $200, $1,000, $1,100, and $300 in 1996,
1997, 1998 and 1999, respectively. The Corporation plans to finance this capital
expenditure program from a combination of cash generated from operations, net
proceeds received from the issuance of securities and the sale of non-strategic
assets. These capital expenditures, and the timing of these capital
expenditures, are dependent upon many factors, including business conditions
during the construction period. Major construction projects such as the program
described above, entail significant risks, including shortages of skilled labor
or materials, unforeseen environmental, engineering or geological problems, work
stoppages, weather interference, all of which could result in unanticipated cost
increases and delays.
On September 9, 1996, the Corporation exercised an option to acquire
one-half of SportsChannel Associates, a partnership which owns SportsChannel New
York. SportsChannel New York is a regional cable programming service owned by
subsidiaries of Rainbow Programming Holdings, Inc.("Rainbow"), a subsidiary of
Cablevision Systems Corporation. Subsidiaries of Rainbow and the Corporation are
partners in Madison Square Garden, L.P. SportsChannel New York carries New York
Mets baseball, New Jersey Nets basketball, New York Islanders hockey and New
Jersey Devils hockey games. The purchase price for one-half of SportsChannel
Associates is approximately $87.5 and will be paid in the form of a credit
against the amounts Rainbow would need to pay the Corporation in order to
equalize the partnership interests in Madison Square Garden, L.P. Immediately
following the acquisition, both the Corporation and Rainbow will contribute
their interests in SportsChannel Associates to Madison Square Garden, L.P. The
closing of this transaction is subject to the satisfaction of various
conditions. There can be no assurance that such conditions will be satisfied.
On October 15, 1996, the Corporation received $81.25 as a partial payment
of the remaining amount necessary to equalize the partnership interests of
Rainbow and the Corporation in Madison Square Garden L.P. Rainbow has until
March 17, 1997 to equalize its interest in Madison Square Garden, L.P. In the
event that the Corporation does not acquire one-half of SportsChannel
Associates, Rainbow does not equalize its interest in Madison Square Garden,
L.P., and certain other conditions are met, Rainbow has the right to require the
Corporation to purchase all of Rainbow's interest in Madison Square Garden, L.P.
Capital expenditures totaled $359 in the 1996 nine months, 45% and 44% at
the Hotels and Gaming segments, respectively, compared with $321 in the 1995
period, with 69% and 27% attributable to the Hotels and Gaming segments,
respectively. In addition, the Corporation completed the acquisitions of Caesars
($1.76 billion) and a 50% interest in businesses which comprise Madison Square
Garden ($.6 billion) in January and March, 1995, respectively.
External borrowings were $4.16 billion and $3.84 billion at September 30,
1996 and December 31, 1995, respectively. This increase is primarily
attributable to two acquisitions during the 1996 third quarter. On July 1, 1996,
the Corporation paid $105 in connection with its acquisition of WBIS+ (formerly
WNYC-TV) in partnership with Dow Jones & Company. In July, 1996, the Corporation
acquired the remaining 50% interest in a previously managed joint venture hotel
property, resulting in approximately $200 in additional indebtedness.
In October 1996, a jury sitting in the California Superior Court, San Diego
County, returned a verdict in Eldredge, et. al. v. ITT Educational Services, et.
al. against both the Corporation and its subsidiary, ITT Educational Services,
Inc. The plaintiffs in Eldredge, seven 1995 graduates of ITT Educational
Services' school in San Diego, alleged fraud and violations of a segment of the
California Education Code. In the aggregate, the plaintiffs were awarded
approximately $0.2 in compensatory damages and $6.6 in punitive damages,
consisting of $2.6 as against ITT Educational Services and $4.0 against the
Corporation. The verdict is subject to various post-trial motions and appeal.
Management believes that it is probable the verdict will ultimately be reversed,
in whole or in substantial part and accordingly no provision has been recorded
in the accompanying financial statements.
12
<PAGE> 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See the Exhibit Index for a list of exhibits filed herewith.
(b) There were no reports on Form 8-K filed by the Corporation during the
quarter for which this report is filed.
13
<PAGE> 15
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ITT CORPORATION
By: J.F. DANSKI
------------------------------------
J.F. Danski
Senior Vice President and Controller
(Chief Accounting Officer)
November 12, 1996
II-1
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION LOCATION
- ------ ---------------------------------------- ----------------------------------------
<C> <S> <C>
3.1 Restated Articles of Incorporation...... Incorporated by reference to Exhibit 3.1
to the Registrant's Amendment No. 1 to
Form 10/A dated November 13, 1995
(File No. 1-13960).
3.2 Certificate of Amendment of Articles of
Incorporation......................... Incorporated by reference to Exhibit No.
1 to the Registrant's Current Report on
Form 8-K dated December 22, 1995 (File
No. 1-13960).
3.3 Amended and Restated By-Laws............ Incorporated by reference to Exhibit 3.3
to the Registrant's Quarterly Report on
Form 10-Q for the quarterly period
ended June 30, 1996 (File No.
1-13960).
4.1 Specimen common share certificate....... Incorporated by reference to Exhibit 4.1
to the Registrant's Amendment No. 1 to
Form 10/A dated November 13, 1995
(File No. 1-13960).
4.2 Rights Agreement dated as of November 1,
1995 between the Registrant and The
Bank of New York...................... Incorporated by reference to Exhibit 4.4
to the Registrant's Amendment No. 1 to
Form 10/A dated November 13, 1995
(File No. 1-13960).
4.3 Form of Certificate of Voting Powers,
Preferences and Relative
Participating, Optional and Other
Special Rights and Qualifications,
Limitations or Restrictions of Series
A Participating Cumulative Preferred
Stock................................. Incorporated by reference to Exhibit 4.4
(attached as Exhibit A thereto) to the
Registrant's Amendment No. 1 to Form
10/A dated November 13, 1995 (File No.
1-13960).
4.4 Form of Right Certificate............... Incorporated by reference to Exhibit 4.4
(attached as Exhibit B thereto) to the
Registrant's Amendment No. 1 to Form
10/A dated November 13, 1995 (File No.
1-13960).
4.5 Other instruments defining rights of
security holders, including
indentures............................ The Registrant hereby agrees to file
with the Commission a copy of any
instrument defining the rights of
long-term debt holders of the
Registrant and its consolidated
subsidiaries upon the request of the
Commission.
10.1 Distribution Agreement among ITT
Industries, Inc., the Registrant and
ITT Hartford Group, Inc............... Incorporated by reference to Exhibit
10.1 to the Registrant's Annual Report
on Form 10-K for the year ended
December 31, 1995 (File No. 1-13960).
</TABLE>
II-2
<PAGE> 17
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION LOCATION
- ------ ---------------------------------------- ----------------------------------------
<C> <S> <C>
10.2 Intellectual Property License Agreement
between and among ITT Industries,
Inc., the Registrant and ITT Hartford
Group, Inc............................ Incorporated by reference to Exhibit
10.2 to the Registrant's Annual Report
on Form 10-K for the year ended
December 31, 1995 (File No. 1-13960).
10.3 Trademark Assignment Agreement between
ITT Industries, Inc. and the
Registrant............................ Incorporated by reference to Exhibit
10.3 to the Registrant's Annual Report
on Form 10-K for the year ended
December 31, 1995 (File No. 1-13960).
10.4 License Assignment Agreement between ITT
Industries, Inc. and the Registrant... Incorporated by reference to Exhibit
10.4 to the Registrant's Annual Report
on Form 10-K for the year ended
December 31, 1995 (File No. 1-13960).
10.5 License Assignment Agreement among the
Registrant, ITT Hartford Group, Inc.
and Nutmeg Insurance Company.......... Incorporated by reference to Exhibit
10.5 to the Registrant's Annual Report
on Form 10-K for the year ended
December 31, 1995 (File No. 1-13960).
10.6 License Assignment Agreement among the
Registrant, Nutmeg Insurance Company
and Hartford Fire Insurance Company... Incorporated by reference to Exhibit
10.6 to the Registrant's Annual Report
on Form 10-K for the year ended
December 31, 1995 (File No. 1-13960).
10.7 Tax Allocation Agreement among ITT
Industries, Inc., the Registrant and
ITT Hartford Group, Inc............... Incorporated by reference to Exhibit
10.7 to the Registrant's Annual Report
on Form 10-K for the year ended
December 31, 1995 (File No. 1-13960).
10.8 Employee Benefit Services and Liability
Agreement among ITT Industries, Inc.,
the Registrant and ITT Hartford Group,
Inc................................... Incorporated by reference to Exhibit
10.8 to the Registrant's Annual Report
on Form 10-K for the year ended
December 31, 1995 (File No. 1-13960).
10.9 Form of ITT Corporation 1996 Restricted
Stock Plan for Non-Employee
Directors............................. Incorporated by reference to Exhibit
10.9 to the Registrant's Annual Report
on Form 10-K for the year ended
December 31, 1995 (File No. 1-13960).
10.10 Form of indemnification agreement with
members of the Board of Directors..... Incorporated by reference to Exhibit
10.10 to the Registrant's Form 10 dated
September 18, 1995 (File No. 1-13960).
10.11 Form of 1995 ITT Corporation Incentive
Stock Plan............................ Incorporated by reference to Exhibit
10.11 to the Registrant's Form 10 dated
September 18, 1995 (File No. 1-13960).
10.12 Form of ITT Corporation Senior Executive
Severance Pay Plan.................... Incorporated by reference to Exhibit
10.12 to the Registrant's Form 10 dated
September 18, 1995 (File No. 1-13960).
</TABLE>
II-3
<PAGE> 18
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION LOCATION
- ------ ---------------------------------------- ----------------------------------------
<C> <S> <C>
10.13 Form of R.V. Araskog employment
agreement............................. Incorporated by reference to Exhibit
10.13 to the Registrant's Form 10 dated
September 18, 1995 (File No. 1-13960).
10.14 364-Day Competitive Advance and
Revolving Credit Facility Agreement
dated as of November 5, 1996 among the
Registrant, the lenders parties
thereto and The Chase Manhattan Bank,
as administrative agent............... Filed herewith.
10.15 Five-Year Competitive Advance and
Revolving Credit Facility Agreement
dated as of November 5, 1996 among the
Registrant, the lenders parties
thereto and The Chase Manhattan Bank,
as issuing bank and administrative
agent................................. Filed herewith.
11 Statement re computation of per share
earnings.............................. None.
12 Statement re computation of ratios...... Filed herewith.
15 Letter re unaudited interim financial
information........................... None.
18 Letter re change in accounting
principles............................ None.
19 Report furnished to security holders.... None.
22 Published report regarding matters
submitted to vote of security
holders............................... None.
23 Consents of experts and counsel......... None.
24 Power of attorney....................... None.
27 Financial data schedule................. Filed herewith.
99 Additional exhibits..................... None.
</TABLE>
II-4
<PAGE> 1
CONFORMED COPY
================================================================================
364-DAY COMPETITIVE ADVANCE AND
REVOLVING CREDIT FACILITY AGREEMENT
Dated as of November 4, 1996
among
ITT CORPORATION
THE LENDERS NAMED HEREIN
and
THE CHASE MANHATTAN BANK, as Administrative Agent
================================================================================
<PAGE> 2
TABLE OF CONTENTS
I. DEFINITIONS
1.01. Defined Terms ............................................ 1
1.02. Terms Generally .......................................... 11
II. THE CREDITS
2.01. Commitments............................................... 12
2.02. Loans .................................................... 12
2.03. Competitive Bid Procedure ................................ 13
2.04. Standby Borrowing Procedure .............................. 15
2.05. Conversion and Continuation of Standby Loans ............. 15
2.06. Fees .................................................... 16
2.07. Repayment of Loans; Evidence of Debt ..................... 17
2.08. Interest on Loans ........................................ 17
2.09. Default Interest ......................................... 18
2.10. Alternate Rate of Interest ............................... 18
2.11. Termination and Reduction of Commitments.................. 18
2.12. Prepayment ............................................... 18
2.13. Reserve Requirements; Change in Circumstances............. 19
2.14. Change in Legality ....................................... 20
2.15. Indemnity ................................................ 21
2.16. Pro Rata Treatment ....................................... 21
2.17. Sharing of Setoffs ....................................... 21
2.18. Payments ................................................. 22
2.19. Taxes .................................................... 22
2.20. Duty to Mitigate; Assignment of Commitments
Under Certain Circumstances............................. 24
III. REPRESENTATIONS AND WARRANTIES
3.01. Organization; Powers ..................................... 25
3.02. Authorization ............................................ 25
3.03. Enforceability ........................................... 26
3.04. Governmental Approvals ................................... 26
3.05. Financial Statements ..................................... 26
3.06. Litigation; Compliance with Laws.......................... 26
3.07. Federal Reserve Regulations............................... 26
3.08. Investment Company Act; Public Utility Holding
Company Act ............................................ 27
3.09. Use of Proceeds........................................... 27
3.10. Full Disclosure; No Material Misstatements ............... 27
3.11. Taxes .................................................... 27
3.12. Employee Pension Benefit Plans ........................... 27
<PAGE> 3
2
IV. CONDITIONS OF LENDING
4.01. All Borrowings............................................ 28
4.02. Effective Date ........................................... 28
4.03. First Borrowing by Each Borrowing Subsidiary.............. 29
V. COVENANTS
5.01. Existence................................................. 29
5.02. Business and Properties . ................................ 29
5.03. Financial Statements, Reports, Etc........................ 29
5.04. Insurance . . . . ....................................... 30
5.05. Obligations and Taxes .................................... 30
5.06. Litigation and Other Notices ............................. 30
5.07. Maintaining Records; Access to Properties
and Inspections.......................................... 31
5.08. Use of Proceeds........................................... 31
5.09. Consolidations, Mergers, and Sales of Assets.............. 31
5.10. Limitations on Liens ..................................... 31
5.11. Limitations on Sale and Leaseback Transactions............ 33
5.12. Consolidated Total Debt to Consolidated EBITDA............ 34
VI. EVENTS OF DEFAULT................................................ 34
VII. GUARANTEE........................................................ 36
VIII. THE ADMINISTRATIVE AGENT ........................................ 37
IX. MISCELLANEOUS
9.01. Notices................................................... 39
9.02. Survival of Agreement .................................... 39
9.03. Binding Effect............................................ 40
9.04. Successors and Assigns ................................... 40
9.05. Expenses; Indemnity ...................................... 42
9.06. Applicable Law ........................................... 42
9.07. Waivers; Amendment ....................................... 42
9.08. Entire Agreement ......................................... 43
9.09. Severability ............................................. 43
9.10. Counterparts ............................................. 43
9.11. Headings ................................................. 43
9.12. Right of Setoff .......................................... 44
9.13. Jurisdiction; Consent to Service of Process............... 44
9.14. Waiver of Jury Trial...................................... 44
9.15. Addition of Borrowing Subsidiaries........................ 45
<PAGE> 4
3
9.16. Execution................................................. 45
EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Competitive Bid Request
Exhibit A-2 Form of Notice of Competitive Bid Request
Exhibit A-3 Form of Competitive Bid
Exhibit A-4 Form of Competitive Bid Accept/Reject
Exhibit A-5 Form of Standby Borrowing Request
Exhibit B Administrative Questionnaire
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Opinion of Counsel for ITT Corporation
Exhibit E Form of Borrowing Subsidiary Agreement
Schedule 2.01 Commitments
Schedule 5.10 Existing Liens
<PAGE> 5
364-DAY COMPETITIVE ADVANCE AND REVOLVING CREDIT
FACILITY AGREEMENT (as it may be amended, supplemented or
otherwise modified, the "Agreement") dated as of November
4, 1996, among ITT CORPORATION, a Nevada corporation (the
"Company"), each Borrowing Subsidiary party hereto, the
lenders listed in Schedule 2.01 (together with their
permitted assigns, the "Lenders") and THE CHASE MANHATTAN
BANK, a New York banking corporation, as administrative
agent for the Lenders (in such capacity, the
"Administrative Agent").
The Lenders have been requested to extend credit to the Borrowers
(such term and each other capitalized term used but not defined herein having
the meaning assigned to it in Article I) to enable them to borrow on a standby
revolving credit basis on and after the date hereof and at any time and from
time to time prior to the Maturity Date a principal amount not in excess of
$1,000,000,000 at any time outstanding. The Lenders have also been requested to
provide a procedure pursuant to which the Borrowers may invite the Lenders to
bid on an uncommitted basis on short-term borrowings by the Borrowers. The
proceeds of such borrowings are to be used for working capital and other general
corporate purposes. The Lenders are willing to extend credit on the terms and
subject to the conditions herein set forth.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Standby Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Administrative Fees" shall have the meaning assigned to such
term in Section 2.06(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit B hereto.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly or indirectly controls or is controlled by
or is under common control with the person specified.
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. For purposes hereof, "Prime Rate"
shall mean the rate of interest per annum publicly announced from time to time
by the Administrative Agent as its prime rate in effect at its principal office
in New York City; each change in the
<PAGE> 6
2
Prime Rate shall be effective on the date such change is publicly announced as
effective. "Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as released on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so released for any day which is a Business Day, the arithmetic
average (rounded upwards to the next 1/100th of 1%), as determined by the
Administrative Agent, of the quotations for the day of such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it. If for any reason the Administrative Agent
shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Federal Funds Effective Rate for any
reason, including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms thereof, the Alternate Base
Rate shall be determined without regard to clause (b) of the first sentence of
this definition until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime Rate
or the Federal Funds Effective Rate shall be effective on the effective date of
such change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" shall mean on any date, with respect to
Eurodollar Loans or with respect to the Facility Fee, as the case may be, the
applicable percentage set forth below under the caption "Eurodollar Spread" or
"Facility Fee Percentage", as the case may be, based upon the Ratings in effect
on such date:
Category 1 Eurodollar Spread Facility Fee Percentage
- ---------- ----------------- -----------------------
AA- or higher by D&P; .130% .045%
AA- or higher by Fitch;
Aa3 or higher by Moody's;
AA- or higher by S&P
Category 2
- ----------
A+ or A by D&P; .150% .050%
A+ or A by Fitch;
A1 or A2 by Moody's;
A+ or A by S&P
Category 3
- ----------
A- by D&P; .170% .055%
A- by Fitch;
A3 by Moody's;
A- by S&P
<PAGE> 7
3
Category 4
- ----------
BBB+ by D&P; .185% .065%
BBB+ by Fitch;
Baa1 by Moody's;
BBB+ by S&P
Category 5
- ----------
BBB by D&P; .270% .080%
BBB by Fitch;
Baa2 by Moody's;
BBB by S&P
Category 6
- ----------
BBB- or lower or unrated by D&P; .275% .125%
BBB- or lower or unrated by Fitch;
Baa3 or lower or unrated by Moody's;
BBB- or lower or unrated by S&P
For purposes of the foregoing, if all the Ratings shall fall within two adjacent
Categories, then (i) if no Rating is below Category 5, the Applicable Percentage
will be determined by reference to the higher of such Categories and (ii)
otherwise, the Applicable Percentage will be determined by reference to Category
6. If the Ratings shall fall in more than two Categories or in two Categories
that are not adjacent, then one Rating from each of the highest Category and the
lowest Category in which Ratings shall fall shall be excluded and (x) if the
lower of the remaining Ratings is in Category 5 or above, the Applicable
Percentage will be determined by reference to the higher of the remaining
Ratings, and (y) otherwise, the Applicable Percentage will be determined by
reference to Category 6. Each such change in the Applicable Percentage shall
apply to all outstanding Eurodollar Loans and to Facility Fees accruing during
the period commencing on the effective date of such change and ending on the
date immediately preceding the effective date of the next such change. If the
rating system of any Rating Agency shall change, the parties hereto shall
negotiate in good faith to amend the references to specific ratings in this
definition to reflect such changed rating system.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee in the form of Exhibit C.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"Board of Directors" shall mean the Board of Directors of a
Borrower or any duly authorized committee thereof.
"Borrower" shall mean any of the Company and the Borrowing
Subsidiaries.
<PAGE> 8
4
"Borrowing" shall mean a group of Loans of a single Type made by
the Lenders (or, in the case of a Competitive Borrowing, by the Lender or
Lenders whose Competitive Bids have been accepted pursuant to Section 2.03) on a
single date and as to which a single Interest Period is in effect.
"Borrowing Subsidiary" shall mean any Restricted Subsidiary which
shall have executed and delivered to the Administrative Agent for distribution
to each Lender a Borrowing Subsidiary Agreement.
"Borrowing Subsidiary Agreement" shall mean an agreement, in the
form of Exhibit E hereto, duly executed by the Company and a Subsidiary.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks are
open for business in New York City; provided, however, that, when used in
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.
"Capitalized Lease-Back Obligation" shall mean with respect to a
Principal Property, at any date as of which the same is to be determined, the
total net rental obligations of the Company or a Restricted Subsidiary under a
lease of such Principal Property, entered into as part of an arrangement to
which the provisions of Section 5.11 are applicable (or would have been
applicable had such Restricted Subsidiary been a Restricted Subsidiary at the
time it entered into such lease), discounted to the date of computation at the
rate of interest per annum implicit in the lease (determined in accordance with
GAAP). The amount of the net rental obligation for any calendar year under any
lease shall be the sum of the rental and other payments required to be paid in
such calendar year by the lessee thereunder, not including, however, any amounts
required to be paid by such lessee (whether or not therein designated as rental
or additional rental) on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges.
A "Change in Control" shall be deemed to have occurred if (a) any
person or group of persons shall have acquired beneficial ownership of more than
30% of the outstanding Voting Shares of the Company (within the meaning of
Section 13(d) or 14(d) of the Exchange Act and the applicable rules and
regulations thereunder), or (b) during any period of 12 consecutive months,
commencing after the Effective Date, individuals who on the first day of such
period were directors of the Company (together with any replacement or
additional directors who were nominated or elected by a majority of directors
then in office) cease to constitute a majority of the Board of Directors of the
Company.
"Code" shall mean the Internal Revenue Code of 1986, as the same
may be amended from time to time.
"Commitment" shall mean, with respect to each Lender, the
commitment of such Lender hereunder as set forth as of the Effective Date in
Schedule 2.01 hereto as such Lender's Commitment may be permanently terminated
or reduced from time to time pursuant to Section 2.11. The Commitment of each
Lender shall automatically and permanently terminate on the Maturity Date if not
terminated earlier pursuant to the terms hereof.
<PAGE> 9
5
"Competitive Bid" shall mean an offer by a Lender to make a
Competitive Loan pursuant to Section 2.03.
"Competitive Bid Accept/Reject Letter" shall mean a notification
made by a Borrower pursuant to Section 2.03(d) in the form of Exhibit A-4.
"Competitive Bid Rate" shall mean, as to any Competitive Bid, (i)
in the case of a Eurodollar Loan, the Margin, and (ii) in the case of a Fixed
Rate Loan, the fixed rate of interest offered by the Lender making such
Competitive Bid.
"Competitive Bid Request" shall mean a request made pursuant to
Section 2.03(a) in the form of Exhibit A-1.
"Competitive Borrowing" shall mean a Borrowing consisting of a
Competitive Loan or concurrent Competitive Loans from the Lender or Lenders
whose Competitive Bids for such Borrowing have been accepted under the bidding
procedure described in Section 2.03.
"Competitive Loan" shall mean a Loan made pursuant to the bidding
procedure described in Section 2.03. Each Competitive Loan shall be a Eurodollar
Competitive Loan or a Fixed Rate Loan.
"Consolidated EBITDA" shall mean, for any period, the sum of (a)
Consolidated Net Income, (b) provisions for taxes based on income, (c)
Consolidated Interest Expense, (d) total depreciation expense and (e) total
amortization expense, all of the foregoing as determined on a consolidated basis
for the Company and the Subsidiaries in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any period, the
gross interest expense of the Company and the Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" shall mean, for any period, net income
or loss of the Company and the Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Tangible Assets" shall mean the total of all
assets appearing on a consolidated balance sheet of the Company and its
Restricted Subsidiaries, prepared in accordance with GAAP (and as of a date not
more than 90 days prior to the date as of which Consolidated Net Tangible Assets
are to be determined), less the sum of the following items as shown on said
consolidated balance sheet:
(i) the book amount of all segregated intangible assets,
including such items as good will, trademarks, trademark rights, trade
names, trade name rights, copyrights, patents, patent rights and
licenses and unamortized debt discount and expense less unamortized debt
premium;
(ii) all depreciation, valuation and other reserves;
(iii) current liabilities;
<PAGE> 10
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(iv) any minority interest in the shares of stock (other than
Preferred Stock) and surplus of Restricted Subsidiaries of the Company;
(v) the investment of the Company and its Restricted Subsidiaries
in any Unrestricted Subsidiary of the Company;
(vi) the total indebtedness of the Company and its Restricted
Subsidiaries incurred in any manner to finance or recover the cost to
the Company or any Restricted Subsidiary of any physical property, real
or personal, which prior to or simultaneously with the creation of such
indebtedness shall have been leased by the Company or a Restricted
Subsidiary to the United States of America or a department or agency
thereof at an aggregate rental, payable during that portion of the
initial term of such lease (without giving effect to any options of
renewal or extension) which shall be unexpired at the date of the
creation of such indebtedness, sufficient (taken together with any
amounts required to be paid by the lessee to the lessor upon any
termination of such lease) to pay in full at the stated maturity date or
dates thereof the principal of and the interest on such indebtedness;
(vii) deferred income and deferred liabilities; and
(viii) other items deductible under GAAP.
"Consolidated Total Debt" shall mean, as at any date of
determination, all Indebtedness of the Company and the Subsidiaries determined
on a consolidated basis in accordance with GAAP.
"D&P" shall mean Duff & Phelps Credit Rating Co. or any of its
successors.
"Default" shall mean any event or condition which upon notice,
lapse of time or both would constitute an Event of Default.
"Dollars" or "$" shall mean lawful money of the United States of
America.
"Effective Date" shall mean the first date on or after November
4, 1996, on which the conditions set forth in Section 4.02 are satisfied.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) that, together with the Company, is treated as a single
employer under Section 414(b) or (c) of the Code, or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as defined
in Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan; (b) the adoption of any amendment to a Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or Section 307
of ERISA; (c) the existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in
<PAGE> 11
7
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (d) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (e) the incurrence of any liability under Title IV of ERISA with respect
to the termination of any Plan or the withdrawal or partial withdrawal of the
Company or any of its ERISA Affiliates from any Plan or Multiemployer Plan; (f)
the receipt by the Company or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to the intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (g) the receipt by the
Company or any ERISA Affiliate of any notice that Withdrawal Liability is being
imposed or a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA; and (h)
the occurrence of a "prohibited transaction" with respect to which the Company
or any of its Subsidiaries is a "disqualified person" (within the meaning of
Section 4975) of the Code, or with respect to which the Company or any such
Subsidiary could otherwise be liable.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Competitive Loan" shall mean any Competitive Loan
bearing interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"Eurodollar Loan" shall mean any Eurodollar Competitive Loan or
Eurodollar Standby Loan.
"Eurodollar Standby Loan" shall mean any Standby Loan bearing
interest at a rate determined by reference to the LIBO Rate in accordance with
the provisions of Article II.
"Event of Default" shall have the meaning assigned to such term
in Article VI.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Existing Credit Facilities" shall mean the 364-Day Competitive
Advance and Revolving Credit Facility Agreement dated as of November 10, 1995
and the Five-Year Competitive Advance and Revolving Credit Facility Agreement
dated as of November 10, 1995, among the Company, certain lenders and The Chase
Manhattan Bank, as administrative agent and as Issuing Bank, as applicable.
"Facility B Credit Agreement" shall mean the $2,000,000,000
Five-Year Competitive Advance and Revolving Credit Facility Agreement dated the
date hereof among the parties hereto, as such agreement may be amended,
supplemented or modified from time to time.
"Facility Fee" shall have the meaning assigned to such term in
Section 2.06(a).
"Fair Value", when used with respect to property, shall mean the
fair value as determined in good faith by the board of directors of the Company.
"Fees" shall mean the Facility Fee and the Administrative Fees.
<PAGE> 12
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"Financial Officer" of any corporation shall mean the chief
financial officer, principal accounting officer, treasurer, associate or
assistant treasurer or director of treasury services of such corporation.
"Fitch" shall mean Fitch Investors Service, Inc. or any of its
successors.
"Fixed Rate Borrowing" shall mean a Borrowing comprised of Fixed
Rate Loans.
"Fixed Rate Loan" shall mean any Competitive Loan bearing
interest at a fixed percentage rate per annum (the "Fixed Rate") (expressed in
the form of a decimal to no more than four decimal places) specified by the
Lender making such Loan in its Competitive Bid.
"GAAP" shall mean generally accepted accounting principles,
applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body .
"Guaranteed Obligations" shall mean the principal of and interest
on the Loans made to, and the other obligations, monetary or otherwise, of, the
Borrowing Subsidiaries hereunder.
"Indebtedness" of any person shall mean all indebtedness
representing money borrowed or the deferred purchase price of property (other
than trade accounts payable) or any capitalized lease obligation, which in any
case is created, assumed, incurred or guaranteed in any manner by such
corporation or for which such corporation is responsible or liable (whether by
agreement to purchase indebtedness of, or to supply funds to or invest in,
others or otherwise).
"Interest Payment Date" shall mean, with respect to any Loan, the
last day of each Interest Period applicable thereto and, in the case of a
Eurodollar Loan with an Interest Period of more than three months' duration or a
Fixed Rate Loan with an Interest Period of more than 90 days' duration, each day
that would have been an Interest Payment Date for such Loan had successive
Interest Periods of three months' duration or 90 days' duration, as the case may
be, been applicable to such Loan and, in addition, the date of any prepayment of
each Loan or conversion of such Loan to a Loan of a different Type.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the case
may be, and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that is 1,
2, 3 or 6 months thereafter, as the Borrower may elect, (b) as to any ABR
Borrowing, the period commencing on the date of such Borrowing or on the last
day of the immediately preceding Interest Period applicable to such Borrowing,
as the case may be, and ending on the earliest of (i) the next succeeding March
31, June 30, September 30 or December 31, (ii) the Maturity Date, and (iii) the
date such Borrowing is converted to a Borrowing of a different Type in
accordance with Section 2.05 or repaid or prepaid in accordance with Section
2.07 or Section 2.12 and (c) as to any Fixed Rate Borrowing, the period
commencing on the date of such Borrowing and ending on the date specified in the
Competitive Bids in which the offers to make the
<PAGE> 13
9
Fixed Rate Loans comprising such Borrowing were extended, which shall not be
earlier than seven days after the date of such Borrowing or later than 360 days
after the date of such Borrowing; provided, however, that if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of Eurodollar
Loans only, such next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the next preceding
Business Day. Interest shall accrue from and including the first day of an
Interest Period to but excluding the last day of such Interest Period.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the rate at which dollar deposits
approximately equal in principal amount to (i) in the case of a Standby
Borrowing, the Administrative Agent's portion of such Eurodollar Borrowing and
(ii) in the case of a Competitive Borrowing, a principal amount that would have
been the Administrative Agent's portion of such Competitive Borrowing had such
Competitive Borrowing been a Standby Borrowing, and for a maturity comparable to
such Interest Period as are offered to the principal London offices of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" shall mean, with respect to any property or asset, any
mortgage, deed of trust, lien, pledge, security interest, charge or other
encumbrance on, of or in such property or asset.
"Loan" shall mean a Competitive Loan or a Standby Loan, whether
made as a Eurodollar Loan, an ABR Loan or a Fixed Rate Loan, as permitted
hereby.
"Loan Documents" shall mean this Agreement, the Borrowing
Subsidiary Agreements and promissory notes, if any, issued pursuant to Section
9.04(i).
"Margin" shall mean, as to any Eurodollar Competitive Loan, the
margin (expressed as a percentage rate per annum in the form of a decimal to no
more than four decimal places) to be added to or subtracted from the LIBO Rate
in order to determine the interest rate applicable to such Loan, as specified in
the Competitive Bid relating to such Loan.
"Margin Regulations" shall mean Regulations G, T, U and X of the
Board as from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Margin Stock" shall have the meaning given such term under
Regulation U of the Board.
"Material Adverse Effect" shall mean a materially adverse effect
on the business, assets, operations or condition, financial or otherwise, of the
Company and its subsidiaries taken as a whole.
"Maturity Date" shall mean November 3, 1997.
"Moody's" shall mean Moody's Investors Service, Inc. or any of
its successors.
<PAGE> 14
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"Multiemployer Plan" shall mean a multiemployer plan as defined
in Section 4001(a)(3) of ERISA to which the Company or any ERISA Affiliate
(other than one considered an ERISA Affiliate only pursuant to subsection (m) or
(o) of Code Section 414) is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.
"Notice of Competitive Bid Request" shall mean a notification
made pursuant to Section 2.03(a) in the form of Exhibit A-2.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"person" shall mean any natural person, corporation, limited
liability company, business trust, joint venture, association, company,
partnership or government, or any agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which any Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Principal Property" shall mean any single facility or other
property owned by the Company or any Restricted Subsidiary having a gross book
value in excess of 2% of Consolidated Net Tangible Assets, except any such
property or portion thereof which the board of directors of the Company by
resolution declares is not of material importance to the total business
conducted by the Company and its Restricted Subsidiaries as an entirety.
"Rating Agencies" shall mean D&P, Fitch, Moody's and S&P.
"Ratings" shall mean the ratings from time to time established by
the Rating Agencies for senior, unsecured, non-credit-enhanced long-term debt of
the Company.
"Register" shall have the meaning given such term in Section
9.04(d).
"Regulation D" shall mean Regulation D of the Board as from time
to time in effect and all official rulings and interpretations thereunder or
thereof.
"Reportable Event" shall mean any reportable event as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate that is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Code Section 414).
"Required Lenders" shall mean, at any time, Lenders having
Commitments representing at least 66-2/3% of the Total Commitment or, for
purposes of acceleration pursuant to clause (ii) of Article VI, Lenders holding
Loans representing at least 66-2/3% of the aggregate principal amount of the
Loans outstanding.
<PAGE> 15
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"Responsible Officer" of any corporation shall mean any executive
officer or Financial Officer of such corporation and any other officer or
similar official thereof responsible for the administration of the obligations
of such corporation in respect of this Agreement.
"Restricted Subsidiary" shall mean any Subsidiary other than an
Unrestricted Subsidiary.
"S&P" shall mean Standard and Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc. or any of its successors.
"SEC" shall mean the Securities and Exchange Commission.
"Standby Borrowing" shall mean a Borrowing consisting of
simultaneous Standby Loans from each of the Lenders.
"Standby Borrowing Request" shall mean a request made pursuant to
Section 2.04 in the form of Exhibit A-5.
"Standby Loans" shall mean the revolving loans made pursuant to
Section 2.04. Each Standby Loan shall be a Eurodollar Standby Loan or an ABR
Loan.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board and any other banking authority to which
the Administrative Agent is subject for new negotiable nonpersonal time deposits
in dollars of over $100,000 with maturities approximately equal to three months.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"subsidiary" shall mean, with respect to any person (the
"parent"), any corporation, association or other business entity of which
securities or other ownership interests representing more than 50% of the
ordinary voting power are, at the time as of which any determination is being
made, owned or controlled by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" shall mean a subsidiary of the Company.
"Total Commitment" shall mean, at any time, the aggregate amount
of Commitments of all the Lenders, as in effect at such time.
"Transactions" shall have the meaning assigned to such term in
Section 3.02.
"Type", when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall
include the LIBO Rate, the Alternate Base Rate and the Fixed Rate.
<PAGE> 16
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"Unrestricted Subsidiary" shall mean (a) any Subsidiary which has
been designated an Unrestricted Subsidiary by resolution of the board of
directors of the Company (which resolution has been communicated in a notice
delivered by the Company to the Administrative Agent for distribution to the
Lenders) as an Unrestricted Subsidiary, other than any such Subsidiary as to
which such a designation has been rescinded by resolution of said board of
directors and not thereafter, or after some subsequent such rescission, restored
by resolution of said board, or (b) any Subsidiary 50% or less of the Voting
Shares of which is owned directly by the Company and/or one or more Restricted
Subsidiaries. A Subsidiary may not be designated as (or otherwise permitted to
become) an Unrestricted Subsidiary unless, immediately after such Subsidiary
becomes an Unrestricted Subsidiary, such Subsidiary would not own any capital
stock of, or hold any indebtedness of, any Restricted Subsidiary. A designation
as an Unrestricted Subsidiary may not be rescinded (or an Unrestricted
Subsidiary otherwise permitted to become a Restricted Subsidiary) unless such
Subsidiary (i) is not a party to any lease which it would have been prohibited
by this Agreement from entering into had it been a Restricted Subsidiary at the
time it entered into such lease, unless (x) such Subsidiary had not been a
Restricted Subsidiary prior to its entering into such lease, or (y) the property
subject to such lease shall be owned by the Company and/or one or more
Subsidiaries, or (z) such Subsidiary would not be prohibited by this Agreement
from entering into such lease immediately after it becomes a Restricted
Subsidiary, and (ii) does not have outstanding upon any of its property any
mortgage, pledge or other lien which it would be prohibited by this Agreement
from creating, suffering to be created, or assuming, immediately after it
becomes a Restricted Subsidiary.
"Voting Shares" shall mean, as to a particular corporation or
other person, outstanding shares of stock or other equity interests of any class
of such person entitled to vote in the election of directors, or otherwise to
participate in the direction of the management and policies, of such person,
excluding shares or interests entitled so to vote or participate only upon the
happening of some contingency.
SECTION 1.02. Terms Generally. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include," "includes" and
"including" shall be deemed to be followed by the phrase "without limitation."
All references herein to Articles, Sections , Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided,
however, that for purposes of determining compliance with any covenant set forth
in Article V, such terms shall be construed in accordance with GAAP as in effect
on the date hereof applied on a basis consistent with the application used in
preparing the Company's audited financial statements referred to in Section
3.05.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and conditions
and relying upon the representations and warranties herein set forth, each
Lender agrees, severally and not jointly, to make Standby Loans to the
Borrowers, at any time and from time to time on and after the date hereof and
until
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the earlier of the Maturity Date and the termination of the Commitment of such
Lender, in an aggregate principal amount at any time outstanding not to exceed
such Lender's Commitment minus the amount by which the Competitive Loans
outstanding at such time shall be deemed to have used such Commitment pursuant
to Section 2.16, subject, however, to the conditions that (i) at no time shall
(A) the sum of (x) the outstanding aggregate principal amount of all Standby
Loans made by all Lenders plus (y) the outstanding aggregate principal amount of
all Competitive Loans made by all Lenders exceed (B) the Total Commitment and
(ii) at all times, the outstanding aggregate principal amount of all Standby
Loans made by each Lender shall equal the product of (A) the percentage which
its Commitment represents of the Total Commitment times (B) the outstanding
aggregate principal amount of all Standby Loans.
Within the foregoing limits, the Borrowers may borrow, pay or
prepay and reborrow Standby Loans hereunder, on and after the Effective Date and
prior to the Maturity Date, subject to the terms, conditions and limitations set
forth herein.
SECTION 2.02. Loans. (a) Each Standby Loan shall be made as part
of a Borrowing consisting of Loans made by the Lenders ratably in accordance
with their respective Commitments; provided, however, that the failure of any
Lender to make any Standby Loan shall not in itself relieve any other Lender of
its obligation to lend hereunder (it being understood, however, that no Lender
shall be responsible for the failure of any other Lender to make any Loan
required to be made by such other Lender). Each Competitive Loan shall be made
in accordance with the procedures set forth in Section 2.03. The Standby Loans
or Competitive Loans comprising any Borrowing shall be (i) in the case of
Competitive Loans, in an aggregate principal amount which is an integral
multiple of $1,000,000 and not less than $5,000,000 and (ii) in the case of
Standby Loans, in an aggregate principal amount which is an integral multiple of
$5,000,000 and not less than $20,000,000 (or an aggregate principal amount equal
to the remaining balance of the available Commitments).
(b) Each Competitive Borrowing shall be comprised entirely of
Eurodollar Competitive Loans or Fixed Rate Loans, and each Standby Borrowing
shall be comprised entirely of Eurodollar Standby Loans or ABR Loans, as the
Borrower may request pursuant to Section 2.03 or 2.04, as applicable. Each
Lender may at its option make any Eurodollar Loan by causing any domestic or
foreign branch, agency or Affiliate of such Lender to make such Loan; provided
that any exercise of such option shall not affect the obligation of the Borrower
to repay such Loan in accordance with the terms of this Agreement. Borrowings of
more than one Type may be outstanding at the same time. For purposes of the
foregoing, Loans having different Interest Periods, regardless of whether they
commence on the same date, shall be considered separate Loans.
(c) Subject to Section 2.05, each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds to the Administrative Agent in New York, New York,
not later than 12:00 noon, New York City time, and the Administrative Agent
shall by 3:00 p.m., New York City time, credit the amounts so received to the
account or accounts specified from time to time in one or more notices delivered
by the Company to the Administrative Agent or, if a Borrowing shall not occur on
such date because any condition precedent herein specified shall not have been
met, return the amounts so received to the respective Lenders. Competitive Loans
shall be made by the Lender or Lenders whose Competitive Bids therefor are
accepted pursuant to Section 2.03 in the amounts so accepted. Standby Loans
shall be made by the Lenders pro rata in accordance with Section 2.16. Unless
the Administrative Agent shall have received notice from a
<PAGE> 18
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Lender prior to the date (or, in the case of ABR Borrowings, on the date) of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender's portion of such Borrowing, the Administrative Agent may assume
that such Lender has made such portion available to the Administrative Agent on
the date of such Borrowing in accordance with this paragraph (c) and the
Administrative 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
Lender shall not have made such portion available to the Administrative Agent,
such Lender and the Borrower severally agree to repay to the Administrative
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 Administrative Agent at (i)
in the case of the Borrower, the interest rate applicable at the time to the
Loans comprising such Borrowing and (ii) in the case of such Lender, the Federal
Funds Effective Rate. If such Lender shall repay to the Administrative Agent
such corresponding amount, such amount shall constitute such Lender's Loan as
part of such Borrowing for purposes of this Agreement.
SECTION 2.03. Competitive Bid Procedure. (a) In order to request
Competitive Bids, a Borrower (the "Applicable Borrower") shall hand deliver or
telecopy to the Administrative Agent a duly completed Competitive Bid Request in
the form of Exhibit A-1 hereto, to be received by the Administrative Agent (i)
in the case of a Eurodollar Competitive Loan, not later than 10:00 a.m., New
York City time, four Business Days before a proposed Competitive Borrowing and
(ii) in the case of a Fixed Rate Borrowing, not later than 10:00 a.m., New York
City time, one Business Day before a proposed Competitive Borrowing. No ABR Loan
shall be requested in, or made pursuant to, a Competitive Bid Request. A
Competitive Bid Request that does not conform substantially to the format of
Exhibit A-1 may be rejected in the Administrative Agent's sole discretion, and
the Administrative Agent shall promptly notify the Borrower of such rejection by
telecopy. Each Competitive Bid Request shall refer to this Agreement and specify
(w) whether the Borrowing then being requested is to be a Eurodollar Borrowing
or a Fixed Rate Borrowing, (x) the date of such Borrowing (which shall be a
Business Day) and the aggregate principal amount thereof, which shall be in a
minimum principal amount of $10,000,000 and in an integral multiple of
$5,000,000, and (y) the Interest Period with respect thereto (which may not end
after the Maturity Date). Promptly after its receipt of a Competitive Bid
Request that is not rejected as aforesaid, the Administrative Agent shall
telecopy to the Lenders a Notice of Competitive Bid Request inviting the Lenders
to bid, on the terms and conditions of this Agreement, to make Competitive
Loans.
(b) Each Lender invited to bid may, in its sole discretion, make
one or more Competitive Bids to the Applicable Borrower responsive to such
Borrower's Competitive Bid Request. Each Competitive Bid by a Lender must be
received by the Administrative Agent by telecopy, in the form of Exhibit A-3
hereto, (i) in the case of a Eurodollar Competitive Loan, not later than 9:30
a.m., New York City time, three Business Days before a proposed Competitive
Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later than 9:30
a.m., New York City time, on the day of a proposed Competitive Borrowing. A
Lender may submit multiple bids to the Administrative Agent. Competitive Bids
that do not conform substantially to the format of Exhibit A-3 may be rejected
by the Administrative Agent, and the Administrative Agent shall notify the
Lender making such nonconforming bid of such rejection as soon as practicable.
Each Competitive Bid shall refer to this Agreement and specify (x) the principal
amount (which shall be in a minimum principal amount of $5,000,000 and in an
integral multiple of $1,000,000 and which may equal the entire principal amount
of the Competitive Borrowing requested) of the Competitive Loan or Loans that
the Lender is willing to make, (y) the Competitive Bid Rate or Rates at which
the Lender is prepared to make the Competitive Loan or Loans and (z) the
Interest Period and the
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last day thereof. If any Lender invited to bid shall elect not to make a
Competitive Bid, such Lender shall so notify the Administrative Agent by
telecopy (I) in the case of Eurodollar Competitive Loans, not later than 9:30
a.m., New York City time, three Business Days before a proposed Competitive
Borrowing, and (II) in the case of Fixed Rate Loans, not later than 9:30 a.m.,
New York City time, on the day of a proposed Competitive Borrowing; provided,
however, that failure by any Lender to give such notice shall not cause such
Lender to be obligated to make any Competitive Loan as part of such Competitive
Borrowing. A Competitive Bid submitted by a Lender pursuant to this paragraph
(b) shall be irrevocable.
(c) The Administrative Agent shall as promptly as practicable
notify the Borrower, by telecopy, of all the Competitive Bids made, the
Competitive Bid Rate and the principal amount of each Competitive Loan in
respect of which a Competitive Bid was made and the identity of the Lender that
made each bid. The Administrative Agent shall send a copy of all Competitive
Bids to the Borrower for its records as soon as practicable after completion of
the bidding process set forth in this Section 2.03.
(d) The Borrower may in its sole and absolute discretion, subject
only to the provisions of this paragraph (d), accept or reject any Competitive
Bid referred to in paragraph (c) above. The Borrower shall notify the
Administrative Agent by telephone, confirmed by telecopy in the form of a
Competitive Bid Accept/Reject Letter, whether and to what extent it has decided
to accept or reject any of or all the bids referred to in paragraph (c) above
not more than one hour after it shall have been notified of such bids by the
Administrative Agent pursuant to such paragraph (c); provided, however, that (i)
the failure of the Borrower to give such notice shall be deemed to be a
rejection of all the bids referred to in paragraph (c) above, (ii) the Borrower
shall not accept a bid made at a particular Competitive Bid Rate if it has
decided to reject a bid made at a lower Competitive Bid Rate, (iii) the
aggregate amount of the Competitive Bids accepted by the Borrower shall not
exceed the principal amount specified in the Competitive Bid Request, (iv) if
the Borrower shall accept a bid or bids made at a particular Competitive Bid
Rate but the amount of such bid or bids shall cause the total amount of bids to
be accepted to exceed the amount specified in the Competitive Bid Request, then
the Borrower shall accept a portion of such bid or bids in an amount equal to
the amount specified in the Competitive Bid Request less the amount of all other
Competitive Bids accepted with respect to such Competitive Bid Request, which
acceptance, in the case of multiple bids at such Competitive Bid Rate, shall be
made pro rata in accordance with the amount of each such bid at such Competitive
Bid Rate, and (v) except pursuant to clause (iv) above, no bid shall be accepted
for a Competitive Loan unless such Competitive Loan is in a minimum principal
amount of $5,000,000 and an integral multiple of $1,000,000; provided further,
however, that if a Competitive Loan must be in an amount less than $5,000,000
because of the provisions of clause (iv) above, such Competitive Loan may be for
a minimum of $1,000,000 or any integral multiple thereof, and in calculating the
pro rata allocation of acceptances of portions of multiple bids at a particular
Competitive Bid Rate pursuant to clause (iv) the amounts shall be rounded to
integral multiples of $1,000,000 in a manner which shall be in the discretion of
the Borrower. A notice given pursuant to this paragraph (d) shall be
irrevocable.
(e) The Administrative Agent shall promptly notify each bidding
Lender whether or not its Competitive Bid has been accepted (and if so, in what
amount and at what Competitive Bid Rate) by telecopy, and each successful bidder
will thereupon become bound, subject to the other applicable conditions hereof,
to make the Competitive Loan in respect of which its bid has been accepted.
<PAGE> 20
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(f) No Competitive Borrowing shall be requested or made hereunder
if after giving effect thereto any of the conditions set forth in paragraphs (i)
or (ii) of Section 2.01 would not be met.
(g) If the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Lender, it shall submit such bid directly
to the Applicable Borrower one quarter of an hour earlier than the latest time
at which the other Lenders are required to submit their bids to the
Administrative Agent pursuant to paragraph (b) above.
(h) All notices required by this Section 2.03 shall be given in
accordance with Section 9.01.
SECTION 2.04. Standby Borrowing Procedure. In order to request a
Standby Borrowing, a Borrower shall hand deliver or telecopy to the
Administrative Agent a duly completed Standby Borrowing Request in the form of
Exhibit A-5 (a) in the case of a Eurodollar Standby Loan, not later than 10:30
a.m., New York City time, three Business Days before such Borrowing, and (b) in
the case of an ABR Borrowing, not later than 10:30 a.m., New York City time, on
the day of such Borrowing. No Fixed Rate Loan shall be requested or made
pursuant to a Standby Borrowing Request. Such notice shall be irrevocable and
shall in each case specify (i) whether the Borrowing then being requested is to
be a Eurodollar Standby Loan or an ABR Borrowing; (ii) the date of such Standby
Borrowing (which shall be a Business Day) and the amount thereof; and (iii) if
such Borrowing is to be a Eurodollar Standby Loan, the Interest Period with
respect thereto, which shall not end after the Maturity Date. If no election as
to the Type of Standby Borrowing is specified in any such notice, then the
requested Standby Borrowing shall be an ABR Borrowing. If no Interest Period
with respect to any Eurodollar Standby Loan is specified in any such notice,
then the Borrower shall be deemed to have selected an Interest Period of one
month's duration, in the case of a Eurodollar Borrowing. Notwithstanding any
other provision of this Agreement to the contrary, no Standby Borrowing shall be
requested if the Interest Period with respect thereto would end after the
Maturity Date. The Administrative Agent shall promptly advise each of the
Lenders of any notice given pursuant to this Section 2.04 and of each Lender's
portion of the requested Borrowing.
SECTION 2.05. Conversion and Continuation of Standby Loans. Each
Borrower shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (i) not later than 10:30 a.m., New York City time, on the
day of the conversion, to convert all or any part of any Eurodollar Standby Loan
into an ABR Borrowing, and (ii) not later than 10:30 a.m., New York City time,
three Business Days prior to conversion or continuation, to convert any ABR
Borrowing into a Eurodollar Standby Loan or to continue any Eurodollar Standby
Loan as a Eurodollar Standby Loan for an additional Interest Period, subject in
each case to the following:
(a) if less than all the outstanding principal amount of any
Standby Borrowing shall be converted or continued, the aggregate
principal amount of the Standby Borrowing converted or continued shall
be an integral multiple of $5,000,000 and not less than $20,000,000;
(b) accrued interest on a Standby Borrowing (or portion thereof)
being converted shall be paid by the Borrower at the time of conversion;
<PAGE> 21
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(c) if any Eurodollar Standby Loan is converted at a time other
than the end of the Interest Period applicable thereto, the Borrower
shall pay, upon demand, any amounts due to the Lenders pursuant to
Section 2.15;
(d) any portion of a Standby Borrowing maturing or required to be
repaid in less than one month may not be converted into or continued as
a Eurodollar Standby Loan;
(e) any portion of a Eurodollar Standby Loan which cannot be
continued as a Eurodollar Standby Loan by reason of clause (d) above
shall be automatically converted at the end of the Interest Period in
effect for such Eurodollar Standby Borrowing into an ABR Borrowing;
(f) no Interest Period may be selected for any Eurodollar Standby
Loan that would end later than the Maturity Date; and
(g) at any time when there shall have occurred and be continuing
any Default or Event of Default, no Borrowing may be converted into or
continued as a Eurodollar Standby Loan.
Each notice pursuant to this Section 2.05 shall be irrevocable
and shall refer to this Agreement and specify (i) the identity and amount of the
Standby Borrowing to be converted or continued, (ii) whether such Standby
Borrowing is to be converted to or continued as a Eurodollar Standby Loan or an
ABR Borrowing, (iii) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day) and (iv) if such Standby Borrowing is
to be converted to or continued as a Eurodollar Standby Loan, the Interest
Period with respect thereto. If no Interest Period is specified in any such
notice with respect to any conversion to or continuation as a Eurodollar Standby
Loan, the Borrower shall be deemed to have selected an Interest Period of one
month's duration. If no notice shall have been given in accordance with this
Section 2.05 to convert or continue any Standby Borrowing, such Standby
Borrowing shall, at the end of the Interest Period applicable thereto (unless
repaid pursuant to the terms hereof), automatically be continued into a new
Interest Period as an ABR Borrowing.
SECTION 2.06. Fees. (a) The Company agrees to pay to each Lender,
through the Administrative Agent, on each March 31, June 30, September 30 and
December 31 (with the first payment being due on December 31, 1996) and on each
date on which the Commitment of such Lender shall be terminated as provided
herein, a facility fee (a "Facility Fee"), at a rate per annum equal to the
Applicable Percentage from time to time in effect on the amount of the
Commitment of such Lender, whether used or unused, during the preceding quarter
(or other period commencing on the Effective Date, or ending with the Maturity
Date or any date on which the Commitment of such Lender shall be terminated).
All Facility Fees shall be computed on the basis of the actual number of days
elapsed in a year of 365 or 366 days, as the case may be. The Facility Fee due
to each Lender shall commence to accrue on the Effective Date, and shall cease
to accrue on the earlier of the Maturity Date and the termination of the
Commitment of such Lender as provided herein.
(b) The Company agrees to pay the Administrative Agent, for its
own account, the administrative and other fees separately agreed to by the
Company and the Administrative Agent (the "Administrative Fees").
<PAGE> 22
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(c) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders except that the Administrative Fee shall be paid
pursuant to paragraph (b) above. Once paid, none of the Fees shall be refundable
under any circumstances.
SECTION 2.07. Repayment of Loans; Evidence of Debt. (a) Each
Borrower hereby agrees that the outstanding principal balance of each Standby
Loan shall be payable on the Maturity Date and that the outstanding principal
balance of each Competitive Loan shall be payable on the last day of the
Interest Period applicable thereto. Each Loan shall bear interest on the
outstanding principal balance thereof as set forth in Section 2.08.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it
will record (i) the amount of each Loan made hereunder, the Type of each Loan
made and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from each
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder from each Borrower and each Lender's share
thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) of this Section 2.07 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of the Borrowers to repay the Loans in
accordance with their terms.
SECTION 2.08. Interest on Loans. (a) Subject to the provisions of
Section 2.09, the Loans comprising each Eurodollar Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum equal to (i) in the case of each Eurodollar Standby
Loan, the LIBO Rate for the Interest Period in effect for such Borrowing plus
the Applicable Percentage from time to time in effect and (ii) in the case of
each Eurodollar Competitive Loan, the LIBO Rate for the Interest Period in
effect for such Borrowing plus the Margin offered by the Lender making such Loan
and accepted by the Borrower pursuant to Section 2.03.
(b) Subject to the provisions of Section 2.09, the Loans
comprising each ABR Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be, for periods during which the Alternate Base Rate is determined by reference
to the Prime Rate and 360 days for other periods) at a rate per annum equal to
the Alternate Base Rate.
(c) Subject to the provisions of Section 2.09, each Fixed Rate
Loan shall bear interest at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to the fixed rate
of interest offered by the Lender making such Loan and accepted by the Borrower
pursuant to Section 2.03.
<PAGE> 23
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(d) Interest on each Loan shall be payable on each Interest
Payment Date applicable to such Loan except as otherwise provided in this
Agreement. The applicable LIBO Rate or Alternate Base Rate for each Interest
Period or day within an Interest Period, as the case may be, shall be determined
by the Administrative Agent, and such determination shall be conclusive absent
manifest error.
SECTION 2.09. Default Interest. If a Borrower shall default in
the payment of the principal of or interest on any Loan or any other amount
becoming due hereunder, whether by scheduled maturity, notice of prepayment,
acceleration or otherwise, such Borrower shall on demand from time to time from
the Administrative Agent pay interest, to the extent permitted by law, on such
defaulted amount up to (but not including) the date of actual payment (after as
well as before judgment) at a rate per annum (computed as provided in Section
2.08(b)) equal to the Alternate Base Rate plus 2%.
SECTION 2.10. Alternate Rate of Interest. In the event, and on
each occasion, that on the day two Business Days prior to the commencement of
any Interest Period for a Eurodollar Borrowing, the Administrative Agent shall
have determined (i) that dollar deposits in the principal amounts of the
Eurodollar Loans comprising such Borrowing are not generally available in the
London interbank market or (ii) that reasonable means do not exist for
ascertaining the LIBO Rate, the Administrative Agent shall, as soon as
practicable thereafter, give telecopy notice of such determination to the
Borrower and the Lenders. In the event of any such determination under clauses
(i) or (ii) above, until the Administrative Agent shall have advised the
Borrower and the Lenders that the circumstances giving rise to such notice no
longer exist, (x) any request by a Borrower for a Eurodollar Competitive Loan
pursuant to Section 2.03 shall be of no force and effect and shall be denied by
the Administrative Agent and (y) any request by a Borrower for a Eurodollar
Standby Loan pursuant to Section 2.04 shall be deemed to be a request for an ABR
Borrowing. In the event the Required Lenders notify the Administrative Agent
that the rates at which dollar deposits are being offered will not adequately
and fairly reflect the cost to such Lenders of making or maintaining Eurodollar
Loans during such Interest Period, the Administrative Agent shall notify the
applicable Borrower of such notice and until the Required Lenders shall have
advised the Administrative Agent that the circumstances giving rise to such
notice no longer exist, any request by such Borrower for a Eurodollar Standby
Loan shall be deemed a request for an ABR Borrowing. Each determination by the
Administrative Agent hereunder shall be made in good faith and shall be
conclusive absent manifest error.
SECTION 2.11. Termination and Reduction of Commitments. (a) The
Commitments shall be automatically terminated on the Maturity Date.
(b) Upon at least three Business Days' prior irrevocable telecopy
notice to the Administrative Agent, the Company may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Total Commitment; provided, however, that (i) each partial reduction of the
Total Commitment shall be in an integral multiple of $10,000,000 and in a
minimum principal amount of $50,000,000 and (ii) no such termination or
reduction shall be made which would reduce the Total Commitment to an amount
less than the aggregate outstanding principal amount of the Competitive Loans.
(c) Each reduction in the Total Commitment hereunder shall be
made ratably among the Lenders in accordance with their respective Commitments.
The Borrowers shall pay to the Administrative Agent for the account of the
Lenders, on the date of each termination of the Total Commitment, the Facility
Fees on the amount of the Commitments so terminated accrued through the date of
such termination or reduction.
<PAGE> 24
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SECTION 2.12. Prepayment. (a) Each Borrower shall have the right
at any time and from time to time to prepay any Standby Borrowing, in whole or
in part, upon giving telecopy notice (or telephone notice promptly confirmed by
telecopy) to the Administrative Agent: (i) before 10:00 a.m., New York City
time, three Business Days prior to prepayment, in the case of Eurodollar Loans,
and (ii) before 10:00 a.m., New York City time, one Business Day prior to
prepayment, in the case of ABR Loans; provided, however, that each partial
prepayment shall be in an amount which is an integral multiple of $10,000,000
and not less than $50,000,000. No prepayment may be made in respect of any
Competitive Borrowing.
(b) On the date of any termination or reduction of the
Commitments pursuant to Section 2.11, the Borrowers shall pay or prepay so much
of the Standby Borrowings as shall be necessary in order that the sum of the
aggregate Competitive Loan Exposures and Standby Loan Exposures will not exceed
the Total Commitment, after giving effect to such termination or reduction.
(c) Each notice of prepayment shall specify the prepayment date
and the principal amount of each Borrowing (or portion thereof) to be prepaid,
shall be irrevocable and shall commit the applicable Borrower to prepay such
Borrowing (or portion thereof) by the amount stated therein on the date stated
therein. All prepayments under this Section 2.12 shall be subject to Section
2.15 but otherwise without premium or penalty. All prepayments under this
Section 2.12 shall be accompanied by accrued interest on the principal amount
being prepaid to the date of payment.
SECTION 2.13. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall result in the imposition, modification or applicability of any
reserve, special deposit or similar requirement against assets of, deposits with
or for the account of or credit extended by any Lender, or shall result in the
imposition on any Lender or the London interbank market of any other condition
affecting this Agreement, such Lender's Commitment or any Eurodollar Loan or
Fixed Rate Loan made by such Lender, and the result of any of the foregoing
shall be to increase the cost to such Lender of making or maintaining any
Eurodollar Loan or Fixed Rate Loan or to reduce the amount of any sum received
or receivable by such Lender hereunder (whether of principal, interest or
otherwise) by an amount deemed by such Lender to be material, then such
additional amount or amounts as will compensate such Lender for such additional
costs or reduction will be paid by the Borrowers to such Lender upon demand.
Notwithstanding the foregoing, no Lender shall be entitled to request
compensation under this paragraph with respect to any Competitive Loan if the
change giving rise to such request was applicable to such Lender at the time of
submission of the Competitive Bid pursuant to which such Competitive Loan was
made.
(b) If any Lender shall have determined that the adoption of any
law, rule, regulation or guideline arising out of the July 1988 report of the
Basle Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards", or the
adoption after the date hereof of any other law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any lending office of
such Lender or any Lender's holding company with any request or directive
regarding capital adequacy
<PAGE> 25
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(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Lender's capital or on the capital of such Lender's holding company, if
any, as a consequence of this Agreement, such Lender's Commitment or the Loans
made by such Lender pursuant hereto to a level below that which such Lender or
such Lender's holding company could have achieved but for such adoption, change
or compliance (taking into consideration such Lender's policies and the policies
of such Lender's holding company with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time such additional
amount or amounts as will compensate such Lender for such reduction will be paid
by the Borrowers to such Lender. It is acknowledged that this Agreement is being
entered into by the Lenders on the understanding that the Lenders will not be
required to maintain capital against their Commitments under currently
applicable laws, regulations and regulatory guidelines. In the event the Lenders
shall be advised by any Governmental Authority or shall otherwise determine on
the basis of pronouncements of any Governmental Authority that such
understanding is incorrect, it is agreed that the Lenders will be entitled to
make claims under this paragraph (b) based upon market requirements prevailing
on the date hereof for commitments under comparable credit facilities against
which capital is required to be maintained.
(c) A certificate of any Lender setting forth such amount or
amounts as shall be necessary to compensate such Lender or its holding company
as specified in paragraph (a) or (b) above, as the case may be, shall be
delivered to the Company and shall be conclusive absent manifest error. The
Borrowers shall pay such Lender the amount shown as due on any such certificate
delivered by it within 10 days after its receipt of the same.
(d) Failure on the part of any Lender to demand compensation for
any increased costs or reduction in amounts received or receivable or reduction
in return on capital with respect to any period shall not constitute a waiver of
such Lender's right to demand compensation with respect to such period or any
other period; provided, however, that no Lender shall be entitled to
compensation under this Section 2.13 for any costs incurred or reductions
suffered with respect to any date unless it shall have notified the Company that
it will demand compensation for such costs or reductions under paragraph (c)
above not more than 90 days after the later of (i) such date and (ii) the date
on which it shall have become aware of such costs or reductions. The protection
of this Section shall be available to each Lender regardless of any possible
contention of the invalidity or inapplicability of the law, rule, regulation,
guideline or other change or condition which shall have occurred or been
imposed.
SECTION 2.14. Change in Legality. (a) Notwithstanding any other
provision herein, if any change in any law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
to make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Company and to the Administrative Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder, whereupon such Lender shall not submit a
Competitive Bid in response to a request for a Eurodollar Competitive
Loan and any request for a Eurodollar Standby Loan shall, as to such
Lender only, be deemed a request for an ABR Loan, unless such
declaration shall be subsequently withdrawn; and
<PAGE> 26
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(ii) require that all outstanding Eurodollar Loans, made by it be
converted to ABR Loans, in which event all such Eurodollar Loans, shall
be automatically converted to ABR Loans, as of the effective date of
such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurodollar Loans, that would have been made by such Lender or the
converted Eurodollar Loans, of such Lender shall instead be applied to repay the
ABR Loans, made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.14, a notice by any Lender
shall be effective as to each Eurodollar Loan, if lawful, on the last day of the
Interest Period currently applicable to such Eurodollar Loan; in all other cases
such notice shall be effective on the date of receipt.
SECTION 2.15. Indemnity. The Borrowers shall indemnify each
Lender against any out-of-pocket loss or expense which such Lender may sustain
or incur as a consequence of (a) any failure to borrow or to refinance, convert
or continue any Loan hereunder after irrevocable notice of such borrowing,
refinancing, conversion or continuation has been given pursuant to Section 2.03,
2.04 or 2.05, (b) any payment, prepayment or conversion, or assignment required
under Section 2.20, of a Eurodollar Loan required by any other provision of this
Agreement or otherwise made or deemed made on a date other than the last day of
the Interest Period, if any, applicable thereto, (c) any default in payment or
prepayment of the principal amount of any Loan or any part thereof or interest
accrued thereon, as and when due and payable (at the due date thereof, whether
by scheduled maturity, acceleration, irrevocable notice of prepayment or
otherwise) or (d) the occurrence of any Event of Default, including, in each
such case, any loss or reasonable expense sustained or incurred or to be
sustained or incurred in liquidating or employing deposits from third parties
acquired to effect or maintain such Loan or any part thereof as a Eurodollar
Loan. Such loss or reasonable expense shall include an amount equal to the
excess, if any, as reasonably determined by such Lender, of (i) its cost of
obtaining the funds for the Loan being paid, prepaid, refinanced or not borrowed
(assumed to be the LIBO Rate applicable thereto) for the period from the date of
such payment, prepayment, refinancing or failure to borrow or refinance to the
last day of the Interest Period for such Loan (or, in the case of a failure to
borrow or refinance the Interest Period for such Loan which would have commenced
on the date of such failure) over (ii) the amount of interest (as reasonably
determined by such Lender) that would be realized by such Lender in reemploying
the funds so paid, prepaid or not borrowed or refinanced for such period or
Interest Period, as the case may be. A certificate of any Lender setting forth
any amount or amounts which such Lender is entitled to receive pursuant to this
Section shall be delivered to such Borrower and shall be conclusive absent
manifest error.
SECTION 2.16. Pro Rata Treatment. Except as required under
Sections 2.14 and 2.20, each payment or prepayment of principal of any Standby
Borrowing, each payment of interest on the Standby Loans, each payment of the
Facility Fees, each reduction of the Commitments and each refinancing or
conversion of any Borrowing with a Standby Borrowing of any Type, shall be
allocated pro rata among the Lenders in accordance with their respective
Commitments (or, if such Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their outstanding Standby
Loans). Each payment of principal of any Competitive Borrowing shall be
allocated pro rata among the Lenders participating in such Borrowing in
accordance with the respective principal amounts of their outstanding
Competitive Loans comprising such Borrowing. Each payment of interest on
<PAGE> 27
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any Competitive Borrowing shall be allocated pro rata among the Lenders
participating in such Borrowing in accordance with the respective amounts of
accrued and unpaid interest on their outstanding Competitive Loans comprising
such Borrowing. For purposes of determining the available Commitments of the
Lenders at any time, each outstanding Competitive Borrowing shall be deemed to
have utilized the Commitments of the Lenders (including those Lenders which
shall not have made Loans as part of such Competitive Borrowing) pro rata in
accordance with such respective Commitments. Each Lender agrees that in
computing such Lender's portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Lender's percentage of
such Borrowing to the next higher or lower whole dollar amount.
SECTION 2.17. Sharing of Setoffs. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, setoff or counterclaim,
or pursuant to a secured claim under Section 506 of Title 11 of the United
States Code or other security or interest arising from, or in lieu of, such
secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of any Standby Loan or Loans as a
result of which the unpaid principal portion of its Standby Loans shall be
proportionately less than the unpaid principal portion of the Standby Loans of
any other Lender, it shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, a participation in the Standby Loans of such other Lender,
so that the aggregate unpaid principal amount of the Standby Loans and
participations in the Standby Loans held by each Lender shall be in the same
proportion to the aggregate unpaid principal amount of all Standby Loans then
outstanding as the principal amount of its Standby Loans prior to such exercise
of banker's lien, setoff or counterclaim or other event was to the principal
amount of all Standby Loans outstanding prior to such exercise of banker's lien,
setoff or counterclaim or other event; provided, however, that, if any such
purchase or purchases or adjustments shall be made pursuant to this Section 2.17
and the payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or adjustments shall be rescinded to the extent of such recovery
and the purchase price or prices or adjustment restored without interest. Any
Lender holding a participation in a Standby Loan deemed to have been so
purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing to such Lender by reason
thereof as fully as if such Lender had made a Standby Loan in the amount of such
participation.
SECTION 2.18. Payments. (a) The Borrowers shall make each payment
(including principal of or interest on any Borrowing and any Fees or other
amounts) hereunder from an account in the United States not later than 12:00
noon, local time at the place of payment, on the date when due in funds to the
Administrative Agent at its offices at 270 Park Avenue, New York, New York, in
immediately available funds. Each such payment shall be made in dollars.
(b) Whenever any payment (including principal of or interest on
any Borrowing or any Fees or other amounts) hereunder shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.
SECTION 2.19. Taxes. (a) Any and all payments to the Lenders
hereunder shall be made, in accordance with Section 2.18, free and clear of and
without deduction for any and all current or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
<PAGE> 28
24
excluding (i) income taxes imposed on the income of the Administrative Agent or
any Lender (or any transferee or assignee thereof, including a participation
holder (any such entity a "Transferee")) and (ii) franchise taxes imposed on the
income, assets or net worth of the Administrative Agent or any Lender (or
Transferee), in each case by the jurisdiction under the laws of which the
Administrative Agent or such Lender (or Transferee) is organized or doing
business (other than as a result of entering into this Agreement, performing any
obligations hereunder, receiving any payments hereunder or enforcing any rights
hereunder), or any political subdivision thereof (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities, collectively
or individually, "Taxes"). If any Borrower shall be required to deduct any Taxes
from or in respect of any sum payable hereunder to any Lender (or any
Transferee) or the Administrative Agent, (i) the sum payable shall be increased
by the amount (an "additional amount") necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.19) such Lender (or Transferee) other Administrative Agent
(as the case may be) shall receive an amount equal to the sum it would have
received had no such deductions been made, (ii) such Borrower shall make such
deductions and (iii) such Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrowers shall pay to the relevant
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document ("Other Taxes").
(c) The Borrowers shall indemnify each Lender (or Transferee) and
the Administrative Agent for the full amount of Taxes and Other Taxes paid by
such Lender (or Transferee) or the Administrative Agent, as the case may be, and
any liability (including penalties, interest and expenses (including reasonable
attorney's fees and expenses)) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant Governmental Authority. A certificate as to the amount of such
payment or liability prepared by a Lender (or Transferee) or the Administrative
Agent on its behalf, absent manifest error, shall be final, conclusive and
binding for all purposes. Such indemnification shall be made within 30 days
after the date any Lender (or Transferee) or the Administrative Agent, as the
case may be, makes written demand therefor, which written demand shall be made
within 60 days of the date such Lender (or Transferee) or the Administrative
Agent receives written demand for payment of such Taxes or Other Taxes from the
relevant Governmental Authority.
(d) If a Lender (or Transferee) or the Administrative Agent shall
become aware that it is entitled to claim a refund from a Governmental Authority
in respect of Taxes or Other Taxes as to which it has been indemnified by the
Borrowers, or with respect to which the Borrowers have paid additional amounts,
pursuant to this Section 2.19, it shall promptly notify the Borrowers of the
availability of such refund claim and shall, within 30 days after receipt of a
request by the Borrowers, make a claim to such Governmental Authority for such
refund at the Borrowers' expense. If a Lender (or Transferee) or the
Administrative Agent receives a refund (including pursuant to a claim for refund
made pursuant to the preceding sentence) in respect of any Taxes or Other Taxes
as to which it has been indemnified by the Borrowers or with respect to which
the Borrowers have paid additional amounts pursuant to this Section 2.19, it
shall within 30 days from the date of such receipt pay over such refund to the
Borrowers (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrowers under
<PAGE> 29
25
this Section 2.19 with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of such Lender (or Transferee) or the
Administrative Agent and without interest (other than interest paid by the
relevant Governmental Authority with respect to such refund); provided, however,
that the Borrowers, upon the request of such Lender (or Transferee) or the
Administrative Agent, agree to repay the amount paid over to the Borrowers (plus
penalties, interest or other charges) to such Lender (or Transferee) or the
Administrative Agent in the event such Lender (or Transferee) or the
Administrative Agent is required to repay such refund to such Governmental
Authority.
(e) As soon as practicable after the date of any payment of Taxes
or Other Taxes by the Borrowers to the relevant Governmental Authority, the
Borrowers will deliver to the Administrative Agent, at its address referred to
in Section 9.01, the original or a certified copy of a receipt issued by such
Governmental Authority evidencing payment thereof.
(f) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 2.19
shall survive the payment in full of the principal of and interest on all Loans
made hereunder.
(g) Each Lender (or Transferee) that is organized under the laws
of a jurisdiction other than the United States, any State thereof or the
District of Columbia (a "Non-U.S. Lender") shall deliver to the Company and the
Administrative Agent two copies of either United States Internal Revenue Service
Form 1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of "portfolio interest", a Form W-8, or any subsequent
versions thereof or successors thereto (and, if such Non-U.S. Lender delivers a
Form W-8, a certificate representing that such Non-U.S. Lender is not a bank for
purposes of Section 881(c) of the Code, is not a 10 percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Code) of the Company and is not a
controlled foreign corporation related to the Company (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or reduced rate of, U.S.
Federal withholding tax on payments by the Company under this Agreement. Such
forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of a Transferee that is a
participation holder, on or before the date such participation holder becomes a
Transferee hereunder) and on or before the date, if any, such Non-U.S. Lender
changes its applicable lending office by designating a different lending office
(a "New Lending Office"). In addition, each Non-U.S. Lender shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Notwithstanding any other provision of this
Section 2.19(g), a Non-U.S. Lender shall not be required to deliver any form
pursuant to this Section 2.19(g) that such Non-U.S. Lender is not legally able
to deliver.
(h) The Company shall not be required to indemnify any Non-U.S.
Lender, or to pay any additional amounts to any Non-U.S. Lender, in respect of
United States Federal withholding tax pursuant to paragraph (a) or (c) above to
the extent that (i) the obligation to withhold amounts with respect to United
States Federal withholding tax existed on the date such Non-U.S. Lender became a
party to this Agreement (or, in the case of a Transferee that is a participation
holder, on the date such participation holder became a Transferee hereunder) or,
with respect to payments to a New Lending Office, the date such Non-U.S. Lender
designated such New Lending Office with respect to a Loan; provided, however,
that this clause (i) shall not apply to any Transferee or New Lending Office
that becomes a Transferee or New Lending Office
<PAGE> 30
26
as a result of an assignment, participation, transfer or designation made at the
request of the Company; and provided further, however, that this clause (i)
shall not apply to the extent the indemnity payment or additional amounts any
Transferee, or Lender (or Transferee) through a New Lending Office, would be
entitled to receive (without regard to this clause (i)) do not exceed the
indemnity payment or additional amounts that the person making the assignment,
participation or transfer to such Transferee, or Lender (or Transferee) making
the designation of such New Lending Office, would have been entitled to receive
in the absence of such assignment, participation, transfer or designation or
(ii) the obligation to pay such additional amounts would not have arisen but for
a failure by such Non-U.S. Lender to comply with the provisions of paragraph (g)
above.
(i) Any Lender (or Transferee) claiming any indemnity payment or
additional amounts payable pursuant to this Section 2.19 shall use reasonable
efforts (consistent with legal and regulatory restrictions) to file any
certificate or document reasonably requested in writing by the Company or to
change the jurisdiction of its applicable lending office if the making of such a
filing or change would avoid the need for or reduce the amount of any such
indemnity payment or additional amounts that may thereafter accrue and would
not, in the sole determination of such Lender (or Transferee), be otherwise
disadvantageous to such Lender (or Transferee).
(j) Nothing contained in this Section 2.19 shall require any
Lender (or Transferee) or the Administrative Agent to make available any of its
tax returns (or any other information that it deems to be confidential or
proprietary).
SECTION 2.20. Duty to Mitigate; Assignment of Commitments Under
Certain Circumstances. (a) Any Lender (or Transferee) claiming any additional
amounts payable pursuant to Section 2.13 or Section 2.19 or exercising its
rights under Section 2.14 shall use reasonable efforts (consistent with legal
and regulatory restrictions) to file any certificate or document requested by
the Company or to change the jurisdiction of its applicable lending office if
the making of such a filing or change would avoid the need for or reduce the
amount of any such additional amounts which may thereafter accrue or avoid the
circumstances giving rise to such exercise and would not, in the sole
determination of such Lender (or Transferee), be otherwise disadvantageous to
such Lender (or Transferee).
(b) In the event that any Lender shall have delivered a notice or
certificate pursuant to Section 2.13 or 2.14, or the Company shall be required
to make additional payments to any Lender under Section 2.19, the Company shall
have the right, at its own expense, upon notice to such Lender and the
Administrative Agent, to require such Lender to transfer and assign without
recourse, representation or warranty (in accordance with and subject to the
restrictions contained in Section 9.04) all interests, rights and obligations
contained hereunder to another financial institution approved by the
Administrative Agent (which approval shall not be unreasonably withheld) which
shall assume such obligations; provided that (i) no such assignment shall
conflict with any law, rule or regulation or order of any Governmental Authority
and (ii) the assignee or the Company, as the case may be, shall pay to the
affected Lender in immediately available funds on the date of such assignment
the principal of and interest accrued to the date of payment on the Loans made
by it hereunder and all other amounts accrued for its account or owed to it
hereunder.
<PAGE> 31
27
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to each of the Lenders
that:
SECTION 3.01. Organization; Powers. Each Borrower and each of the
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority to own its property and assets and to carry on its
business as now conducted and as proposed to be conducted, (c) is qualified to
do business in every jurisdiction where such qualification is required, except
where the failure so to qualify would not result in a Material Adverse Effect,
and (d) in the case of each Borrower, has the corporate power and authority to
execute, deliver and perform its obligations under the Loan Documents and to
borrow hereunder and thereunder.
SECTION 3.02. Authorization. The execution, delivery and
performance by the Borrowers of this Agreement, the promissory notes, if any,
issued pursuant to Section 9.04(i) (and by the Borrowing Subsidiaries of each
Borrowing Subsidiary Agreement) and the Borrowings hereunder (collectively, the
"Transactions") (a) have been duly authorized by all requisite corporate action
and (b) will not (i) violate (A) any provision of any law, statute, rule or
regulation (including the Margin Regulations) or of the certificate of
incorporation or other constitutive documents or by-laws of the Borrowers, (B)
any order of any Governmental Authority or (C) any provision of any indenture,
agreement or other instrument to which any Borrower is a party or by which it or
any of its property is or may be bound, (ii) be in conflict with, result in a
breach of or constitute (alone or with notice or lapse of time or both) a
default under any such indenture, agreement or other instrument or (iii) result
in the creation or imposition of any lien upon any property or assets of any
Borrower.
SECTION 3.03. Enforceability. This Agreement and each Loan
Document to which a Borrower is a party constitutes a legal, valid and binding
obligation of each Borrower enforceable in accordance with its terms.
SECTION 3.04. Governmental Approvals. No action, consent or
approval of, registration or filing with or other action by any Governmental
Authority, other than those which have been taken, given or made, as the case
may be, is or will be required with respect to any Borrower in connection with
the Transactions.
SECTION 3.05. Financial Statements. (a) The Company has
heretofore furnished to the Administrative Agent and the Lenders copies of its
combined balance sheet and statements of income and cash flow as of and for the
year ended December 31, 1995, and the six months ended June 30, 1996. Such
financial statements present fairly, in all material respects, the consolidated
combined financial condition and the results of operations of the Company and
the Subsidiaries as of such dates and for such periods in accordance with GAAP.
(b) As of the Effective Date, there has been no material adverse
change in the consolidated financial condition of the Company and the
Subsidiaries taken as a whole from the financial condition reported in the
financial statements referenced in paragraph (a) of this Section 3.05.
<PAGE> 32
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SECTION 3.06. Litigation; Compliance with Laws. (a) As of the
Effective Date, there are no actions, proceedings or investigations filed or (to
the knowledge of the Borrowers) threatened affecting any Borrower or any
Subsidiary in any court or before any Governmental Authority or arbitration
board or tribunal which question the validity or legality of this Agreement, the
Transactions or any action taken or to be taken pursuant to this Agreement and
no order or judgment has been issued or entered restraining or enjoining any
Borrower or any Subsidiary from the execution, delivery or performance of this
Agreement nor is there any other action, proceeding or investigation filed or
(to the knowledge of any Borrower or any Subsidiary) threatened against any
Borrower or any Subsidiary in any court or before any Governmental Authority or
arbitration board or tribunal which would be reasonably likely to result in a
Material Adverse Effect or materially restrict the ability of any Borrower to
comply with its obligations under the Loan Documents.
(b) Neither any Borrower nor any Subsidiary is in violation of
any law, rule or regulation (including any law, rule or regulation relating to
the protection of the environment or to employee health or safety), or in
default with respect to any judgment, writ, injunction or decree of any
Governmental Authority, where such violation or default would be reasonably
likely to result in a Material Adverse Effect.
SECTION 3.07. Federal Reserve Regulations. (a) Neither any
Borrower nor any Subsidiary that will receive proceeds of the Loans hereunder is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry Margin Stock or to refund indebtedness originally incurred for
such purpose, or for any other purpose which entails a violation of, or which is
inconsistent with, the provisions of the Margin Regulations.
SECTION 3.08. Investment Company Act; Public Utility Holding
Company Act. No Borrower is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 (the "1940 Act")
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.09. Use of Proceeds. All proceeds of the Loans shall be
used for the purposes referred to in the recitals to this Agreement.
SECTION 3.10. Full Disclosure; No Material Misstatements. None of
the representations or warranties made by any Borrower in connection with this
Agreement as of the date such representations and warranties are made or deemed
made, and no report, financial statement or other information furnished by or on
behalf of any Borrower to the Administrative Agent or any Lender pursuant to or
in connection with this Agreement or the credit facilities established hereby
contains or will contain any material misstatement of fact or omits or will omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were or will be made, not
misleading.
<PAGE> 33
29
SECTION 3.11. Taxes. Each Borrower and each of the material
Subsidiaries have filed or caused to be filed all Federal, state and local tax
returns which are required to be filed by them, and have paid or caused to be
paid all taxes shown to be due and payable on such returns or on any assessments
received by any of them, other than any taxes or assessments the validity of
which is being contested in good faith by appropriate proceedings, and with
respect to which appropriate accounting reserves have to the extent required by
GAAP been set aside.
SECTION 3.12. Employee Pension Benefit Plans. The present
aggregate value of accumulated benefit obligations of all unfunded and
underfunded pension plans of the Company and its Subsidiaries (based on those
assumptions used for disclosure in corporate financial statements in accordance
with GAAP) did not, as of December 31, 1995, exceed by more than $77,000,000 the
value of the assets of all such plans. Of such $77,000,000, $28,000,000 is
attributable to employee pension plans in countries where the funding of such
obligations is not required or customary and $49,000,000 relates to domestic
pension plans where funding is not permitted under current tax regulations. In
these cases the Company has recorded book reserves to meet the obligations.
ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Lenders to make Loans hereunder are
subject to the satisfaction of the following conditions:
SECTION 4.01. All Borrowings. On the date of each Borrowing:
(a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03 or Section 2.04, as applicable.
(b) The representations and warranties set forth in Article III
hereof shall be true and correct in all material respects on and as of
the date of such Borrowing with the same effect as though made on and as
of such date, except to the extent such representations and warranties
expressly relate to an earlier date.
(c) At the time of and immediately after such Borrowing no Event
of Default or Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
each Borrower on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. Effective Date. On the Effective Date:
(a) The Administrative Agent shall have received a favorable
written opinion of Margaret M. Foran, Esq., dated the Effective Date and
addressed to the Lenders and satisfactory to the Lenders, Administrative Agent
and Cravath, Swaine & Moore, counsel for the Administrative Agent, to the effect
set forth in Exhibit D hereto.
<PAGE> 34
30
(b) The Administrative Agent shall have received (i) a copy of
the certificate of incorporation, including all amendments thereto, of the
Company, certified as of a recent date by the Secretary of State of its state of
incorporation, and a certificate as to the good standing of the Company as of a
recent date from such Secretary of State; (ii) a certificate of the Secretary or
an Assistant Secretary of the Company dated the Effective Date and certifying
(A) that attached thereto is a true and complete copy of the by-laws of the
Company as in effect on the Effective Date and at all times since a date prior
to the date of the resolutions described in clause (B) below, (B) that attached
thereto is a true and complete copy of resolutions duly adopted by the Board of
Directors of the Company authorizing the execution, delivery and performance of
this Agreement and the Borrowings hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect, (C) that
the certificate of incorporation referred to in clause (i) above has not been
amended since the date of the last amendment thereto shown on the certificate of
good standing furnished pursuant to such clause (i) and (D) as to the incumbency
and specimen signature of each officer executing this Agreement or any other
document delivered in connection herewith on behalf of the Company; and (iii) a
certificate of another officer of the Company as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the certificate
pursuant to (ii) above.
(c) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by a Financial Officer of the Company,
confirming compliance with the conditions precedent set forth in paragraphs (b)
and (c) of Section 4.01.
(d) The principal of and accrued and unpaid interest on any loans
outstanding under the Existing Credit Facilities shall have been paid in full,
all other amounts due in respect of the Existing Credit Facilities shall have
been paid in full and the commitments to lend under the Existing Credit
Facilities shall have been permanently terminated.
(e) The Administrative Agent shall have received any Fees or
other amounts due and payable on or prior to the Effective Date.
SECTION 4.03. First Borrowing by Each Borrowing Subsidiary. On or
prior to the first date on which Loans are made to any Borrowing Subsidiary:
(a) The Lenders shall have received the favorable written opinion
of counsel satisfactory to the Administrative Agent, addressed to the
Lenders and satisfactory to the Lenders, the Administrative Agent and
Cravath, Swaine & Moore, counsel for the Administrative Agent, to the
effect set forth in Exhibit D hereto.
(b) Each Lender shall have received a copy of the Borrowing
Subsidiary Agreement executed by such Borrowing Subsidiary.
<PAGE> 35
31
ARTICLE V
COVENANTS
A. Affirmative Covenants. Each Borrower covenants and agrees with
each Lender and the Administrative Agent that so long as this Agreement shall
remain in effect or the principal of or interest on any Loan, any Fees or any
other amounts payable hereunder shall be unpaid, unless the Required Lenders
shall otherwise consent in writing, it will, and will cause each of the
Subsidiaries to:
SECTION 5.01. Existence. Do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence,
rights and franchises, except as expressly permitted under Section 5.09;
provided, however, that nothing in this Section shall prevent the abandonment or
termination of the existence, rights or franchises of any Subsidiary or any
rights or franchises of any Borrower if such abandonment or termination is in
the best interests of the Borrowers and is not disadvantageous in any material
respect to the Lenders.
SECTION 5.02. Business and Properties. Comply in all material
respects with all applicable laws, rules, regulations and orders of any
Governmental Authority (including any of the foregoing relating to the
protection of the environment or to employee health and safety), whether now in
effect or hereafter enacted; and at all times maintain and preserve all property
material to the conduct of its business and keep such property in good repair,
working order and condition and from time to time make, or cause to be made, all
needful and proper repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in connection therewith
may be properly conducted at all times.
SECTION 5.03. Financial Statements, Reports, Etc. In the case of
the Company, furnish to the Administrative Agent for distribution to each
Lender:
(a) within 120 days after the end of each fiscal year, its
consolidated balance sheet and the related consolidated statements of
income and cash flows showing its consolidated financial condition as of
the close of such fiscal year and the consolidated results of its
operations during such year, all audited by Arthur Andersen LLP or other
independent certified public accountants of recognized national standing
selected by the Company and accompanied by an opinion of such
accountants to the effect that such consolidated financial statements
fairly present its financial condition and results of operations on a
consolidated basis in accordance with GAAP (it being agreed that the
requirements of this paragraph may be satisfied by the delivery pursuant
to paragraph (d) below of an annual report on Form 10-K containing the
foregoing);
(b) within 90 days after the end of each of the first three
fiscal quarters of each fiscal year, its consolidated balance sheet and
related consolidated statements of income and cash flow, showing its
consolidated financial condition as of the close of such fiscal quarter
and the consolidated results of its operations during such fiscal
quarter and the then elapsed portion of the fiscal year, all certified
by one of its Financial Officers as fairly presenting its financial
condition and results of operations on a consolidated basis in
accordance with GAAP, subject to normal year-end audit adjustments (it
being agreed that the requirements of this paragraph may be satisfied
<PAGE> 36
32
by the delivery pursuant to paragraph (d) below of a quarterly report on
Form 10-Q containing the foregoing);
(c) concurrently with any delivery of financial statements under
paragraph (a) or (b) above, a certificate of a Financial Officer
certifying that, to the best of such Financial Officer's knowledge, no
Event of Default or Default has occurred or, if such an Event of Default
or Default has occurred, specifying the nature and extent thereof and
any corrective action taken or proposed to be taken with respect
thereto;
(d) promptly after the same become publicly available, copies of
all reports on forms 10- K, 10-Q and 8-K filed by it with the SEC, or
any Governmental Authority succeeding to any of or all the functions of
the SEC, or, in the case of the Company, copies of all reports
distributed to its shareholders, as the case may be;
(e) promptly, from time to time, such other information as any
Lender shall reasonably request through the Administrative Agent; and
(f) concurrently with any delivery of financial statements under
paragraph (a) or (b) above, calculations of the financial test referred
to in Section 5.12.
SECTION 5.04. Insurance. Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers, and maintain
such other insurance, to such extent and against such risks, including fire and
other risks insured against by extended coverage, as is customary with companies
similarly situated and in the same or similar businesses (it being understood
that the Borrowers and their Subsidiaries may self-insure to the extent
customary with companies similarly situated and in the same or similar
businesses).
SECTION 5.05. Obligations and Taxes. Pay and discharge promptly
when due all taxes, assessments and governmental charges imposed upon it or upon
its income or profits or in respect of its property, as well as all other
material liabilities, in each case before the same shall become delinquent or in
default and before penalties accrue thereon, unless and to the extent that the
same are being contested in good faith by appropriate proceedings and adequate
reserves with respect thereto shall, to the extent required by GAAP, have been
set aside.
SECTION 5.06. Litigation and Other Notices. Give the
Administrative Agent prompt written notice of the following (which the
Administrative Agent shall promptly provide to the Lenders):
(a) the filing or commencement of, or any written threat or
written notice of intention of any person to file or commence, any
action, suit or proceeding which could reasonably be expected to result
in a Material Adverse Effect;
(b) any Event of Default or Default, specifying the nature and
extent thereof and the action (if any) which is proposed to be taken
with respect thereto; and
(c) any change in any of the Ratings.
<PAGE> 37
33
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections. Maintain financial records in accordance with GAAP and, upon
reasonable notice, at all reasonable times, permit any authorized representative
designated by the Administrative Agent to visit and inspect the properties of
the Company and of any material Subsidiary and to discuss the affairs, finances
and condition of the Company and any material Subsidiary with a Financial
Officer of the Company and such other officers as the Company shall deem
appropriate.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans only
for the purposes set forth in the recitals to this Agreement.
B. Negative Covenants. Each Borrower covenants and agrees with
each Lender and the Administrative Agent that so long as this Agreement shall
remain in effect or the principal of or interest on any Loan, any Fees or any
other amounts payable hereunder shall be unpaid, unless the Required Lenders
shall otherwise consent in writing, it will not, and will not cause or permit
any of the Subsidiaries to:
SECTION 5.09. Consolidations, Mergers, and Sales of Assets.
Consolidate or merge with or into any other person or sell, lease or transfer
all or substantially all of its property and assets, or agree to do any of the
foregoing, unless (a) no Default or Event of Default has occurred and is
continuing or would have occurred immediately after giving effect thereto, and
(b) in the case of a consolidation or merger or transfer of assets involving the
Company and in which the Company is not the surviving corporation or sells,
leases or transfers all or substantially all of its property and assets, the
surviving corporation or person purchasing, leasing or receiving such property
and assets is organized in the United States of America or a state thereof and
agrees to be bound by the terms and provisions applicable to the Company
hereunder.
SECTION 5.10. Limitations on Liens. In the case of the Company,
create, suffer to be created, or assume (directly or indirectly) any mortgage,
pledge or other lien upon any Principal Property, or permit any Restricted
Subsidiary to create, suffer to be created, or assume (directly or indirectly)
any mortgage, pledge or other lien upon any Principal Property; provided,
however, that this covenant shall not apply to any of the following:
(a) any mortgage, pledge or other lien on any Principal Property
hereafter acquired, constructed or improved by the Company or any
Restricted Subsidiary which is created or assumed to secure or provide
for the payment of any part of the purchase price of such property or
the cost of such construction or improvement, or any mortgage, pledge or
other lien on any Principal Property existing at the time of acquisition
thereof, provided, however, that the mortgage, pledge or other lien
shall not extend to any Principal Property theretofore owned by the
Company or any Restricted Subsidiary;
(b) any mortgage, pledge or other lien on any Principal Property
existing on the date of this Agreement as described in Schedule 5.10;
(c) any mortgage, pledge or other lien existing upon any property
of a company which is merged with or into or is consolidated into, or
substantially all the assets or shares of capital stock of which are
acquired by, the Company or a Restricted Subsidiary, at the time of such
merger, consolidation or acquisition, provided that such mortgage,
pledge or other lien does not extend to
<PAGE> 38
34
any other Principal Property, other than improvements to the property
subject to such mortgage, pledge or other lien;
(d) any pledge or deposit to secure payment of workers'
compensation or insurance premiums, or in connection with tenders, bids,
contracts (other than contracts for the payment of money) or leases;
(e) any pledge of, or other lien upon, any assets as security for
the payment of any tax, assessment or other similar charge by any
Governmental Authority or public body, or as security required by law or
governmental regulation as a condition to the transaction of any
business or the exercise of any privilege or right;
(f) any pledge or lien necessary to secure a stay of any legal or
equitable process in a proceeding to enforce a liability or obligation
contested in good faith by the Company or a Restricted Subsidiary or
required in connection with the institution by the Company or a
Restricted Subsidiary of any legal or equitable proceeding to enforce a
right or to obtain a remedy claimed in good faith by the Company or a
Restricted Subsidiary, or required in connection with any order or
decree in any such proceeding or in connection with any contest of any
tax or other governmental charge; or the making of any deposit with or
the giving of any form of security to any governmental agency or any
body created or approved by law or governmental regulation in order to
entitle the Company or a Restricted Subsidiary to maintain
self-insurance or to participate in any fund in connection with workers'
compensation, unemployment insurance, old age pensions or other social
security or to share in any provisions or other benefits provided for
companies participating in any such arrangement or for liability on
insurance of credits or other risks;
(g) any mechanics', carriers', workmen's, repairmen's, or other
like liens, if arising in the ordinary course of business, in respect of
obligations which are not overdue or liability for which is being
contested in good faith by appropriate proceedings;
(h) any lien or encumbrance on property in favor of the United
States of America, or of any agency, department or other instrumentality
thereof, to secure partial, progress or advance payments pursuant to the
provisions of any contract;
(i) any mortgage, pledge or other lien securing any indebtedness
incurred in any manner to finance or recover the cost to the Company or
any Restricted Subsidiary of any physical property, real or personal,
which prior to or simultaneously with the creation of such indebtedness
shall have been leased by the Company or a Restricted Subsidiary to the
United States of America or a department or agency thereof at an
aggregate rental, payable during that portion of the initial term of
such lease (without giving effect to any options of renewal or
extension) which shall be unexpired at the date of the creation of such
indebtedness, sufficient (taken together with any amounts required to be
paid by the lessee to the lessor upon any termination of such lease) to
pay in full at the stated maturity date or dates thereof the principal
of and the interest on such indebtedness;
(j) any mortgage, pledge or other lien securing indebtedness of a
Restricted Subsidiary to the Company or a Restricted Subsidiary,
provided that in the case of any sale or other disposition
<PAGE> 39
35
of such indebtedness by the Company or such Restricted Subsidiary, such
sale or other disposition shall be deemed to constitute the creation of
another mortgage, pledge or other lien not permitted by this clause (j);
(k) any mortgage, pledge or other lien affecting property of the
Company or any Restricted Subsidiary securing indebtedness of the United
States of America or a State thereof (or any instrumentality or agency
of either thereof) issued in connection with a pollution control or
abatement program required in the opinion of the Company to meet
environmental criteria of the Company or any Restricted Subsidiary and
the proceeds of which indebtedness have financed the cost of acquisition
of such program;
(l) the renewal, extension, replacement or refunding of any
mortgage, pledge, lien, deposit, charge or other encumbrance permitted
by the foregoing provisions of this covenant upon the same property
theretofore subject thereto, or the renewal, extension, replacement or
refunding of the amount secured thereby, provided that in each case such
amount outstanding at that time shall not be increased; or
(m) any other mortgage, pledge or other lien, provided that
immediately after the creation or assumption of such mortgage, pledge or
other lien, the total of (x) the aggregate principal amount of
indebtedness of the Company and all Restricted Subsidiaries secured by
all mortgages, pledges and other liens created or assumed under the
provisions of this clause (m), plus (y) the aggregate amount of
Capitalized Lease-Back Obligations of the Company and Restricted
Subsidiaries under the entire unexpired terms of all leases entered into
in connection with sale and lease-back transactions which would have
been precluded by the provisions of Section 5.11 but for the
satisfaction of the condition set forth in clause (b) thereof, shall not
exceed an amount equal to 10% of Consolidated Net Tangible Assets.
The lease of any property by the Company or a Restricted Subsidiary and rental
obligations with respect thereto (whether or not arising out of a sale and
lease-back of properties and whether or not in accordance with GAAP such
property is carried as an asset and such rental obligations are carried as
indebtedness on the Company's or a Restricted Subsidiary's balance sheet) shall
not in any event be deemed to be the creation of a mortgage, pledge or other
lien.
SECTION 5.11. Limitations on Sale and Leaseback Transactions. In
the case of the Company or any Restricted Subsidiary, enter into any arrangement
with any person providing for the leasing by the Company or any Restricted
Subsidiary of any Principal Property (except for temporary leases for a term of
not more than three years and except for leases between the Company and a
Restricted Subsidiary or between Restricted Subsidiaries), which property has
been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such person more than 120 days after the acquisition thereof or
the completion of construction and commencement of full operation thereof,
unless either (a) the Company shall apply an amount equal to the greater of the
Fair Value of such property or the net proceeds of such sale, within 120 days of
the effective date of any such arrangement, to the retirement (other than any
mandatory retirement or by way of payment at maturity) of Indebtedness or to the
acquisition, construction, development or improvement of properties, facilities
or equipment used for operating purposes which are, or upon such acquisition,
construction, development or improvement will be, a Principal Property or a part
thereof; or (b) at the time of entering into such arrangement, such Principal
<PAGE> 40
36
Property could have been subjected to a mortgage, pledge or other lien securing
indebtedness of the Company or a Restricted Subsidiary in a principal amount
equal to the Capitalized Lease-Back Obligations with respect to such Principal
Property under paragraph (m) of Section 5.10.
SECTION 5.12. Consolidated Total Debt to Consolidated EBITDA.
Permit the ratio of (a) Consolidated Total Debt to (b) Consolidated EBITDA at
the end of and for any period of four consecutive fiscal quarters to exceed 5.0
to 1.0.
ARTICLE VI
EVENTS OF DEFAULT
In case of the happening of any of the following events (each an
"Event of Default"):
(a) any representation or warranty made or deemed made in or in
connection with the execution and delivery of this Agreement or the
Borrowings hereunder shall prove to have been false or misleading in any
material respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of any
Loan when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on any
Loan or any Fee or any other amount (other than an amount referred to in
paragraph (b) above) due hereunder, when and as the same shall become
due and payable, and such default shall continue unremedied for a period
of ten days;
(d) default shall be made in the due observance or performance of
any covenant, condition or agreement contained in Section 5.01, 5.09,
5.10, 5.11 or 5.12 and, in the case of any default under Section 5.10,
such default shall continue for 30 days;
(e) default shall be made in the due observance or performance of
any covenant, condition or agreement contained herein (other than those
specified in clauses (b), (c) or (d) above) and such default shall
continue unremedied for a period of 30 days after notice thereof from
the Administrative Agent or any Lender to the Company;
(f) the Company or any Subsidiary shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of $20,000,000, beyond the
period of grace, if any, provided in the agreement or instrument under
which such Indebtedness was created, or (ii) fail to observe or perform
any other term, covenant, condition or agreement contained in any
agreement or instrument evidencing or governing any such Indebtedness,
or any other event shall occur or condition shall exist, beyond the
period of grace, if any, provided in such agreement or instrument, if
the effect of any failure referred to in this clause (ii) is to cause,
or to permit the holder or holders of such Indebtedness or a trustee on
its or
<PAGE> 41
37
their behalf (with or without the giving of notice) to cause, such
Indebtedness to become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction
seeking (i) relief in respect of the Company, or of a substantial part
of the property or assets of the Company or any Subsidiary with assets
having a gross book value in excess of $25,000,000, under Title 11 of
the United States Code, as now constituted or hereafter amended, or any
other Federal or state bankruptcy, insolvency, receivership or similar
law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Company or for a
substantial part of the property or assets of the Company or any
Subsidiary with assets having a gross book value in excess of
$25,000,000 or (iii) the winding up or liquidation of the Company; and
such proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(h) the Company or any Subsidiary with assets having a gross book
value in excess of $25,000,000 shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or any
other Federal or state bankruptcy, insolvency, receivership or similar
law, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or the filing of any petition
described in (g) above, (iii) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar
official for the Company or for a substantial part of the property or
assets of the Company, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors, (vi) become
unable, admit in writing its inability or fail generally to pay its
debts as they become due or (vii) take any action for the purpose of
effecting any of the foregoing;
(i) one or more final judgments shall be entered by any court
against the Company or any of the Subsidiaries for the payment of money
in an aggregate amount in excess of $100,000,000, and such judgment or
judgments shall not have been paid, covered by insurance, discharged or
stayed for a period of 60 days, or a warrant of attachment or execution
or similar process shall have been issued or levied against property of
the Company or any of the Subsidiaries to enforce any such judgment or
judgments;
(j) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other such ERISA
Events, could reasonably be expected to result in a Material Adverse
Effect; or
(k) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Company
or any Subsidiary with assets having a gross book value in excess of $25,000,000
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent, at the request of the
Required Lenders, shall, by notice to the Company, take either or both of the
following actions, at the same or different times: (i) terminate forthwith the
Commitments and (ii) declare the Loans then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and any unpaid
accrued Fees and all
<PAGE> 42
38
other liabilities of the Borrowers accrued hereunder, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived anything contained herein to the contrary notwithstanding; and,
in the case of any event with respect to the Company or any Subsidiary with
assets having a gross book value in excess of $25,000,000 described in paragraph
(g) or (h) above, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and any unpaid accrued Fees and all other liabilities of the Borrowers accrued
hereunder shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived anything contained herein to the contrary notwithstanding.
ARTICLE VII
GUARANTEE
The Company unconditionally and irrevocably guarantees the due
and punctual payment and performance, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, of the
Guaranteed Obligations. The Company further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from it and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Guaranteed Obligations.
The Company waives presentment to, demand of payment from and
protest to the Borrowing Subsidiaries of any of the Guaranteed Obligations, and
also waives notice of acceptance of its guarantee and notice of protest for
nonpayment. The obligations of the Company hereunder shall not be affected by
(a) the failure of any Lender to assert any claim or demand or to enforce any
right or remedy against the Borrowing Subsidiaries under the provisions of this
Agreement or otherwise; (b) any rescission, waiver, amendment or modification of
any of the terms or provisions of this Agreement, any guarantee or any other
agreement; or (c) the failure of any Lender to exercise any right or remedy
against any other guarantor of the Guaranteed Obligations.
The Company further agrees that its guarantee constitutes a
guarantee of payment when due and not of collection, and waives any right to
require that any resort be had by the Administrative Agent or any Lender to any
security, if any, held for payment of the Guaranteed Obligations or to any
balance of any deposit account or credit on its books, in favor of the Borrowing
Subsidiaries or any other person.
The obligations of the Company hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall not
be subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of the Company hereunder shall not be discharged or
impaired or otherwise affected by the failure of the Administrative Agent or any
Lender to assert any claim or demand or to enforce any remedy under this
Agreement, any guarantee or any other agreement, by any waiver or modification
of any provision thereof, by any default, failure or delay, wilful or otherwise,
in the performance of the Guaranteed Obligations, or by any other act
<PAGE> 43
39
or omission which may or might in any manner or to any extent vary the risk of
the Company or otherwise operate as a discharge of the Company as a matter of
law or equity.
To the extent permitted by applicable law, the Company waives any
defense based on or arising out of any defense available to the Borrowing
Subsidiaries, including any defense based on or arising out of any disability of
the Borrowing Subsidiaries, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrowing Subsidiaries, other than final payment in full
of the Guaranteed Obligations. The Administrative Agent and the Lenders may, at
their election, foreclose on any security held by one or more of them by one or
more judicial or non-judicial sales, or exercise any other right or remedy
available to them against the Borrowing Subsidiaries, or any security without
affecting or impairing in any way the liability of the Company hereunder except
to the extent the Guaranteed Obligations have been fully and finally paid. The
Company waives any defense arising out of any such election even though such
election operates to impair or to extinguish any right of reimbursement or
subrogation or other right or remedy of the Company against the Borrowing
Subsidiaries or any security.
The Company further agrees that its guarantee shall continue to
be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of principal of or interest on any Guaranteed Obligation is
rescinded or must otherwise be restored by any Lender upon the bankruptcy or
reorganization of any Borrowing Subsidiary or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which the Administrative Agent or any Lender may have at law or in
equity against the Company by virtue hereof, upon the failure of any Borrowing
Subsidiary to pay any Guaranteed Obligation when and as the same shall become
due, whether at maturity, by acceleration, after notice of prepayment or
otherwise, the Company hereby promises to and will, upon receipt of written
demand by the Administrative Agent or any Lender, forthwith pay or cause to be
paid to the Administrative Agent or such Lender in cash the amount of such
unpaid Guaranteed Obligation.
The Company hereby irrevocably waives and releases any and all
rights of subrogation, indemnification, reimbursement and similar rights which
it may have against or in respect of the Borrowing Subsidiaries at any time
relating to the Guaranteed Obligations, including all rights that would result
in its being deemed a "creditor" of the Borrowing Subsidiaries under the United
States Code as now in effect or hereafter amended, or any comparable provision
of any successor statute.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
In order to expedite the transactions contemplated by this
Agreement, The Chase Manhattan Bank is hereby appointed to act as Administrative
Agent on behalf of the Lenders. Each of the Lenders hereby irrevocably
authorizes the Administrative Agent to take such actions on behalf of such
Lender and to exercise such powers as are specifically delegated to the
Administrative Agent by the terms and provisions hereof, together with such
actions and powers as are reasonably incidental thereto. The Administrative
Agent is hereby expressly authorized by the Lenders, without hereby limiting any
implied
<PAGE> 44
40
authority, (a) to receive on behalf of the Lenders all payments of principal of
and interest on the Loans and all other amounts due to the Lenders hereunder,
and promptly to distribute to each Lender its proper share of each payment so
received; (b) to give notice on behalf of each of the Lenders to the Borrowers
of any Event of Default of which the Administrative Agent has actual knowledge
acquired in connection with its agency hereunder; and (c) to distribute to each
Lender copies of all notices, financial statements and other materials delivered
by the Borrowers pursuant to this Agreement as received by the Administrative
Agent.
Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall be liable as such for any action taken or
omitted by any of them except for its or his or her own gross negligence or
willful misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document delivered in connection
herewith, or be required to ascertain or to make any inquiry concerning the
performance or observance by the Borrowers of any of the terms, conditions,
covenants or agreements contained in this Agreement. The Administrative Agent
shall not be responsible to the Lenders for the due execution, genuineness,
validity, enforceability or effectiveness of this Agreement or other instruments
or agreements. The Administrative Agent may deem and treat the Lender which
makes any Loan as the holder of the indebtedness resulting therefrom for all
purposes hereof until it shall have received notice from such Lender, given as
provided herein, of the transfer thereof. The Administrative Agent shall in all
cases be fully protected in acting, or refraining from acting, in accordance
with written instructions signed by the Required Lenders and, except as
otherwise specifically provided herein, such instructions and any action or
inaction pursuant thereto shall be binding on all the Lenders. The
Administrative Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith to
be genuine and correct and to have been signed or sent by the proper person or
persons. Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall have any responsibility to the Borrowers on account of
the failure of or delay in performance or breach by any Lender of any of its
obligations hereunder or to any Lender on account of the failure of or delay in
performance or breach by any other Lender or the Borrowers of any of their
respective obligations hereunder or in connection herewith. The Administrative
Agent may execute any and all duties hereunder by or through agents or employees
and shall be entitled to rely upon the advice of legal counsel selected by it
with respect to all matters arising hereunder and shall not be liable for any
action taken or suffered in good faith by it in accordance with the advice of
such counsel.
The Lenders hereby acknowledge that the Administrative Agent
shall be under no duty to take any discretionary action permitted to be taken by
it pursuant to the provisions of this Agreement unless it shall be requested in
writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may resign at
any time by notifying the Lenders and the Company. Upon any such resignation,
the Required Lenders shall have the right to appoint a successor Administrative
Agent acceptable to the Company. If no successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a bank with an office in New York,
New York, having a combined capital and surplus of at least $500,000,000 or an
Affiliate of any such bank. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor bank, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent and the retiring Administrative Agent shall be
discharged from its duties and
<PAGE> 45
41
obligations hereunder. After the Administrative Agent's resignation hereunder,
the provisions of this Article and Section 9.05 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
With respect to the Loans made by it hereunder, the
Administrative Agent in its individual capacity and not as Administrative Agent
shall have the same rights and powers as any other Lender and may exercise the
same as though it were not the Administrative Agent, and the Administrative
Agent and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrowers or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent.
Each Lender agrees (i) to reimburse the Administrative Agent, on
demand, in the amount of its pro rata share (based on its Commitment hereunder
or, if the Commitments shall have been terminated, the amount of its outstanding
Loans) of any expenses incurred for the benefit of the Lenders by the
Administrative Agent, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, which shall not
have been reimbursed by the Borrowers and (ii) to indemnify and hold harmless
the Administrative Agent and any of its directors, officers, employees or
agents, on demand, in the amount of such pro rata share, from and against any
and all liabilities, taxes, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against it in its
capacity as the Administrative Agent in any way relating to or arising out of
this Agreement or any action taken or omitted by it under this Agreement to the
extent the same shall not have been reimbursed by the Borrowers; provided that
no Lender shall be liable to the Administrative Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence or willful
misconduct of the Administrative Agent or any of its directors, officers,
employees or agents. Each Lender agrees that any allocation made in good faith
by the Administrative Agent of expenses or other amounts referred to in this
paragraph between this Agreement and the Facility B Credit Agreement shall be
conclusive and binding for all purposes.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender 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 Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement
or any related agreement or any document furnished hereunder or thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed or sent by telecopy, as follows:
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42
(a) if to any Borrower, to ITT Corporation, 1330 Avenue of the
Americas, New York, New York 10019-5490, Attention of Ms. Elizabeth A.
Tuttle (Telecopy No. 212-489-3995);
(b) if to the Administrative Agent, to The Chase Manhattan Bank
Agency Services Corp., 140 East 45th Street, 29th Floor, New York, New
York 10017, Attention of Mr. Chris Moriarty, (Telecopy No.
212-622-0002), with a copy to The Chase Manhattan Bank at 270 Park
Avenue, New York, New York 10017, Re: ITT Corporation; and
(c) if to a Lender, to it at its address (or telecopy number) set
forth in Schedule 2.01 or in the Assignment and Acceptance pursuant to
which such Lender became a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy to such party as provided in this Section or in accordance with the
latest unrevoked direction from such party given in accordance with this
Section.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrowers herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Lenders and shall survive the making by the Lenders of the Loans regardless of
any investigation made by the Lenders or on their behalf, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any Fee or any other amount payable under this Agreement is outstanding
and unpaid or the Commitments have not been terminated. The provisions of
Sections 2.13, 2.15, 2.19 and 9.05 shall remain operative and in full force and
effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the invalidity or unenforceability
of any term or provision of this Agreement, or any investigation made by or on
behalf of the Administrative Agent or any Lender.
SECTION 9.03. Binding Effect. This Agreement shall become
effective on the Effective Date and when it shall have been executed by the
Company and the Administrative Agent and when the Administrative Agent shall
have received copies hereof (telecopied or otherwise) which, when taken
together, bear the signature of each Lender, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrowers shall not have the right to
assign any rights hereunder or any interest herein without the prior consent of
all the Lenders.
SECTION 9.04. Successors and Assigns. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of any party that are contained in this
Agreement shall bind and inure to the benefit of its successors and assigns.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans at the time owing to it);
provided, however, that (i) except in the case of an assignment to a Lender or
an Affiliate of a Lender, the Company must give its prior written consent to
such assignment (which consent, if required, shall not be unreasonably withheld
in the event an Event of Default has occurred and is continuing), (ii) (x) each
such assignment shall be made simultaneously with an assignment under the
<PAGE> 47
43
Facility B Credit Agreement, in each case on a pro rata basis, and (y) the
parties to each such assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance, and an aggregate processing and recordation
fee of $3,000, (iii) the assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire, and (iv) the amount of
the Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 and the amount of the Commitment of such Lender remaining after such
assignment shall not be less than $5,000,000 or shall be zero. Upon acceptance
and recording pursuant to paragraph (e) of this Section, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement and (B) the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto (but shall continue to be entitled to the benefits of Sections
2.13, 2.15, 2.19 and 9.05, as well as to any Fees accrued for its account
hereunder and not yet paid)). Notwithstanding the foregoing, any Lender
assigning its rights and obligations under this Agreement may retain any
Competitive Loans made by it outstanding at such time, and in such case shall
retain its rights hereunder in respect of any Loans so retained until such Loans
have been repaid in full in accordance with this Agreement.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim, (ii)
except as set forth in (i) above, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement, or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto or the financial condition of the Borrowers or the performance or
observance by the Borrowers of any obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.03 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (v) such assignee will independently and
without reliance upon the Administrative Agent, such assigning Lender or any
other Lender 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 action under this Agreement; (vi) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms of
this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at one of its offices
in The City of New York a copy of each Assignment and Acceptance delivered to it
and a register for the recordation of
<PAGE> 48
44
the names and addresses of the Lenders,
and the Commitment of, and the principal amount of the Loans owing to, each
Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive in the absence of manifest error and
the Borrowers, the Administrative Agent and the Lenders may treat each person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by each party hereto, at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee together with an
Administrative Questionnaire completed in respect of the assignee (unless the
assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) above and the written consent of the Company to
such assignment, the Administrative Agent shall (i) accept such Assignment and
Acceptance and (ii) record the information contained therein in the Register.
(f) Each Lender may sell participations to one or more banks or
other entities in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to
it); provided, however, that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) each
participating bank or other entity shall be entitled to the benefit of the cost
protection provisions contained in Sections 2.13, 2.15 and 2.19 to the same
extent as if it were the selling Lender (and limited to the amount that could
have been claimed by the selling Lender had it continued to hold the interest of
such participating bank or other entity), except that all claims made pursuant
to such Sections shall be made through such selling Lender, and (iv) the
Borrowers, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such selling Lender in connection with such Lender's
rights and obligations under this Agreement.
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrowers furnished to such Lender;
provided that, prior to any such disclosure, each such assignee or participant
or proposed assignee or participant shall execute an agreement for the benefit
of the Company whereby such assignee or participant shall agree (subject to
customary exceptions) to preserve the confidentiality of any such information.
(h) The Borrowers shall not assign or delegate any rights and
duties hereunder without the prior written consent of all Lenders.
(i) Any Lender may at any time pledge all or any portion of its
rights under this Agreement to a Federal Reserve Bank; provided that no such
pledge shall release any Lender from its obligations hereunder or substitute any
such Bank for such Lender as a party hereto. In order to facilitate such an
assignment to a Federal Reserve Bank, each Borrower shall, at the request of the
assigning Lender, duly execute and deliver to the assigning Lender a promissory
note or notes evidencing the Loans made to such Borrower by the assigning Lender
hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrowers agree to pay
all reasonable out-of-pocket expenses incurred by the Administrative Agent in
connection with entering into this Agreement or in connection with any
amendments, modifications or waivers of the provisions hereof, or
<PAGE> 49
45
incurred by the Administrative Agent or any Lender in connection with the
enforcement or protection of their rights in connection with this Agreement or
in connection with the Loans made hereunder, including the fees and
disbursements of counsel for the Administrative Agent or, in the case of
enforcement, the Lenders.
(b) The Borrowers agree to indemnify the Administrative Agent,
each Lender, each of their Affiliates and the directors, officers, employees and
agents of the foregoing (each such person being called an "Indemnitee") against,
and to hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable counsel fees and
expenses, incurred by or asserted against any Indemnitee arising out of (i) the
consummation of the transactions contemplated by this Agreement, (ii) the use of
the proceeds of the Loans or (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a final judgment of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Indemnitee.
(c) The provisions of this Section shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any investigation made by or on behalf of the
Administrative Agent or any Lender. All amounts due under this Section shall be
payable on written demand therefor.
SECTION 9.06. APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.07. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent or any Lender in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies which they would otherwise have. No waiver
of any provision of this Agreement or consent to any departure therefrom shall
in any event be effective unless the same shall be permitted by paragraph (b)
below, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or demand on any
Borrower or any Subsidiary in any case shall entitle such party to any other or
further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrowers and the Required Lenders; provided,
however, that no such agreement shall (i) decrease the principal amount of, or
extend the maturity of or any scheduled principal payment date or date for the
payment of any interest or fees on any Loan, or waive or excuse any such payment
or any part thereof, or decrease the rate of interest on any Loan, without the
prior written consent of each Lender affected thereby, (ii) increase the
Commitment or decrease the Facility Fee of any Lender or other amounts due to
any Lender without the prior written consent of such Lender, (iii) limit or
release the guarantee set forth in Article VII, or
<PAGE> 50
46
(iv) amend or modify the provisions of Section 2.16 or Section 9.04(h), the
provisions of this Section or the definition of the "Required Lenders", without
the prior written consent of each Lender; provided further, however, that no
such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent hereunder without the prior written consent of the
Administrative Agent. Each Lender shall be bound by any waiver, amendment or
modification authorized by this Section and any consent by any Lender pursuant
to this Section shall bind any assignee of its rights and interests hereunder.
SECTION 9.08. Entire Agreement. This Agreement, the agreements
referred in Section 2.06(b) and the letter agreement attached as Exhibit F
constitute the entire contract among the parties relative to the subject matter
hereof. Any previous agreement among the parties with respect to the subject
matter hereof is superseded by this Agreement. Nothing in this Agreement,
expressed or implied, is intended to confer upon any party other than the
parties hereto any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
SECTION 9.09. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 9.10. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract, and shall become
effective as provided in Section 9.03.
SECTION 9.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or obligations of the Company and any Borrowing Subsidiary now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. Each Lender agrees promptly to
notify the Company and the Administrative Agent after such setoff and
application made by such Lender, but the failure to give such notice shall not
affect the validity of such setoff and application. The rights of each Lender
under this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
SECTION 9.13. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (A)
EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN
<PAGE> 51
47
NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT
A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. SUBJECT TO THE FOREGOING AND TO PARAGRAPH (B) BELOW, NOTHING IN
THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY HERETO MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST ANY OTHER
PARTY HERETO IN THE COURTS OF ANY JURISDICTION.
(B) EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH
IT MAY NOW OR THEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY NEW YORK STATE OR
FEDERAL COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(C) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE
OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 9.01. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 9.14. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATION IN THIS SECTION.
SECTION 9.15. Addition of Borrowing Subsidiaries. Each Borrowing
Subsidiary which shall deliver to the Administrative Agent a Borrowing
Subsidiary Agreement executed by such Subsidiary and the Company shall, upon
such delivery and without further act, become a party hereto and a Borrower
hereunder with the same effect as if it had been an original party to this
Agreement.
<PAGE> 52
48
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.
ITT CORPORATION, as Borrower,
by
/s/ Elizabeth A. Tuttle
------------------------------
Name: Elizabeth A. Tuttle
Title: Senior Vice President and Treasurer
THE CHASE MANHATTAN BANK, individually and
as Administrative Agent,
by
/s/ Joan F. Garvin
------------------------------
Name: Joan F. Garvin
Title: Vice President
ARAB BANK PLC,
by
/s/ Peter Boyadjian
------------------------------
Name: Peter Boyadjian
Title: Senior Vice President
BANCA COMMERCIALE ITALIANA, NEW YORK
BRANCH,
by
/s/ Charles Dougherty
------------------------------
Name: Charles Dougherty
Title: Vice President
by
/s/ Brian Carlson
------------------------------
Name: Brian Carlson
Title: Assistant Vice President
<PAGE> 53
49
BANCA CRT S.p.A.,
by
/s/ Robert P. DeSantes
------------------------------
Name: Robert P. DeSantes
Title: Vice President and Head of Corporate
Banking
BANCA DI ROMA, NEW YORK BRANCH,
by
/s/ Francesco Vitello
------------------------------
Name: Francesco Vitello
Title: Assistant Vice President
by
/s/ Ralph L. Riehle
------------------------------
Name: Ralph L. Riehle
Title: First Vice President
BANCA NAZIONALE DEL LAVORO S.P.A.,
NEW YORK BRANCH,
by
/s/ Giuliano Violetta
------------------------------
Name: Giuliano Violetta
Title: First Vice President
by
/s/ Giulio Giovine
------------------------------
Name: Giulio Giovine
Title: Vice President
BANCA POPOLARE DI MILANO,
by
/s/ Anthony Franco
------------------------------
Name: Anthony Franco
Title: Executive Vice President &
General Manager
by
/s/ Nicholas Cinosi
------------------------------
Name: Nicholas Cinosi
Title: Vice President
<PAGE> 54
50
BANK AUSTRIA AG,
by
/s/ J. Anthony Seay
------------------------------
Name: J. Anthony Seay
Title: Vice President
by
/s/ Jeanine Ball
------------------------------
Name: Jeanine Ball
Title: Assistant Vice President
BANK OF AMERICA NT&SA,
by
/s/ Amy S. Trapp
------------------------------
Name: Amy S. Trapp
Title: Managing Director
BANK OF HAWAII,
by
/s/ Susan McCarthy
------------------------------
Name: Susan McCarthy
Title: Assistant Vice President
THE BANK OF NEW YORK,
by
/s/ Peter H. Abdill
------------------------------
Name: Peter H. Abdill
Title: Vice President
THE BANK OF NOVA SCOTIA,
by
/s/ J. Alan Edwards
------------------------------
Name: J. Alan Edwards
Title: Authorized Signatory
<PAGE> 55
51
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY,
by
/s/ Amanda S. Ryan
------------------------------
Name: Amanda S. Ryan
Title: Vice President
BANKERS TRUST COMPANY,
by
/s/ Mary Kay Coyle
------------------------------
Name: Mary Kay Coyle
Title: Managing Director
BAYERISCHE LANDESBANK GIROZENTRALE,
CAYMAN ISLANDS BRANCH,
by
/s/ W. Freudenberger
------------------------------
Name: W. Freudenberger
Title: Executive Vice President and
General Manager
by
/s/ P. Obermann
------------------------------
Name: P. Obermann
Title: Senior Vice President and
Manager Lending Division
BZW DIVISION OF BARCLAYS BANK PLC,
by
/s/ John C. Livingston
------------------------------
Name: John C. Livingston
Title: Director
CIBC, INC.,
by
/s/ Cheryl L. Root
------------------------------
Name: Cheryl L. Root
Title: Director, CIBC Wood Gundy Securities
Corp., AS AGENT
<PAGE> 56
52
CITIBANK, N.A.,
by
/s/ Elizabeth A. Polermo
------------------------------
Name: Elizabeth A. Polermo
Title: Attorney-in-Fact
COMERICA BANK,
by
/s/ Chris Georvassilis
------------------------------
Name: Chris Georvassilis
Title: Vice President
COMMERZBANK AKTIENGESELLSCHAFT,
GRAND CAYMAN BRANCH,
by
/s/ Robert J. Donohue
------------------------------
Name: Robert J. Donohue
Title: Vice President
by
/s/ Andrew R. Campbell
------------------------------
Name: Andrew R. Campbell
Title: Assistant Cashier
COMMONWEALTH BANK OF AUSTRALIA,
by
/s/ Loren I. Brenowitz
------------------------------
Name: Loren I. Brenowitz
Title: Vice President & Senior Manager
Risk Management
<PAGE> 57
53
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE,
by
/s/ Dora DeBlasi Hyduk
------------------------------
Name: Dora DeBlasi Hyduk
Title: Vice President
by
/s/ Albert M. Calo
------------------------------
Name: Albert M. Calo
Title: Vice President
CREDIT LYONNAIS, NEW YORK BRANCH,
by
/s/ Vladimir Labun
------------------------------
Name: Vladimir Labun
Title: First Vice President-Manager
CREDIT SUISSE,
by
/s/ Robert B. Potter
------------------------------
Name: Robert B. Potter
Title: Member of Senior Management
by
/s/ David W. Kratovil
------------------------------
Name: David W. Kratovil
Title: Member of Senior Management
CREDITO ITALIANO, S.P.A.,
by
/s/ Harmon P. Butler
------------------------------
Name: Harmon P. Butler
Title: First Vice President
by
/s/ Saiyed A. Abbas
------------------------------
Name: Saiyed A. Abbas
Title: Assistant Vice President
<PAGE> 58
54
THE DAI-ICHI KANGYO BANK, LTD.,
NEW YORK BRANCH,
by
/s/ Bertram Tang
------------------------------
Name: Bertram Tang
Title: Assistant Vice President
DEUTSCHE BANK AG, NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH,
by
/s/ Hans-Josef Thiele
------------------------------
Name: Hans-Josef Thiele
Title: Vice President
by
/s/ Flore F. Blaise Williams
------------------------------
Name: Flore F. Blaise Williams
Title: Vice President
DRESDNER BANK AG, NEW YORK BRANCH,
AND GRAND CAYMAN BRANCH,
by
/s/ Andrew K. Mittag
------------------------------
Name: Andrew K. Mittag
Title: Vice President
by
/s/ Anthony Berti
------------------------------
Name: Anthony Berti
Title: AT
FIRST HAWAIIAN BANK,
by
/s/ Kathryn A. Plumb
------------------------------
Name: Kathryn A. Plumb
Title: Vice President
<PAGE> 59
55
THE FIRST NATIONAL BANK OF BOSTON,
by
/s/ Paul Sassieni
------------------------------
Name: Paul Sassieni
Title: Vice President
FLEET BANK, N.A.,
by
/s/ John T. Harrison
------------------------------
Name: John T. Harrison
Title: Vice President
THE FUJI BANK, LIMITED,
by
/s/ Masanobu Kobayashi
------------------------------
Name: Masanobu Kobayashi
Title: Vice President & Manager
GENERALE BANK, NEW YORK BRANCH,
by
/s/ P. Pollaert
------------------------------
Name: P. Pollaert
Title: Senior Vice President
by
/s/ E. Matthews
------------------------------
Name: E. Matthews
Title: Senior Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
NEW YORK BRANCH,
by
/s/ John V. Veltri
------------------------------
Name: John V. Veltri
Title: Senior Vice President
<PAGE> 60
56
ISTITUTO BANCARIO SAN PAOLO DI TORINO
SPA,
by
/s/ Wendell Jones
------------------------------
Name: Wendell Jones
Title: Vice President
by
/s/ Ettore Viazzo
------------------------------
Name: Ettore Viazzo
Title: Vice President
KREDIETBANK N.V.,
by
/s/ Armen Karozichian
------------------------------
Name: Armen Karozichian
Title: Vice President
by
/s/ Robert Snauffer
------------------------------
Name: Robert Snauffer
Title: Vice President
LLOYDS BANK PLC,
by
/s/ Paul D. Briamonte
------------------------------
Name: Paul D. Briamonte
Title: Vice President
by
/s/ Theodore R. Walser
------------------------------
Name: Theodore R. Walser
Title: Senior Vice President
LTCB TRUST COMPANY,
by
/s/ Rene LeBlanc
------------------------------
Name: Rene LeBlanc
Title: Senior Vice President
<PAGE> 61
57
THE MITSUBISHI TRUST AND BANKING
CORPORATION,
by
/s/ Patricia Loret de Mola
------------------------------
Name: Patricia Loret de Mola
Title: Senior Vice President
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK,
by
/s/ George J. Stapleton
------------------------------
Name: George J. Stapleton
Title: Vice President
NATIONAL WESTMINSTER BANK PLC, NASSAU
BRANCH,
by
/s/ Anne Marie Torre
------------------------------
Name: Anne Marie Torre
Title: Vice President
NATIONSBANK, N.A.,
by
/s/ Sally L. Hazard
------------------------------
Name: Sally L. Hazard
Title: Senior Vice President
THE NORTHERN TRUST COMPANY,
by
/s/ Joseph Yacullo
------------------------------
Name: Joseph Yacullo
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION,
by
/s/ Denise D. Killen
------------------------------
Name: Denise D. Killen
Title: Vice President
<PAGE> 62
58
ROYAL BANK OF CANADA,
by
/s/ John M. Crawford
------------------------------
Name: John M. Crawford
Title: Senior Manager Corp. Banking
THE SAKURA BANK, LIMITED, NEW YORK
BRANCH,
by
/s/ Yasumasa Kikuchi
------------------------------
Name: Yasumasa Kikuchi
Title: Senior Vice President
THE SANWA BANK LIMITED, NEW YORK
BRANCH,
by
/s/ Stephen C. Small
------------------------------
Name: Stephen C. Small
Title: Vice President & Area Manager
SOCIETE GENERALE,
by
/s/ Sedare Coradin
------------------------------
Name: Sedare Coradin
Title: Vice President
THE SUMITOMO BANK, LIMITED, NEW YORK
BRANCH,
by
/s/ Yoshinori Kawamura
------------------------------
Name: Yoshinori Kawamura
Title: Joint General Manager
<PAGE> 63
59
THE SUMITOMO TRUST & BANKING CO., LTD.
LOS ANGELES AGENCY,
by
/s/ Eleanor Chan
------------------------------
Name: Eleanor Chan
Title: Manager & Vice President
SUNTRUST BANK, ATLANTA,
by
/s/ May M. Smith
------------------------------
Name: May M. Smith
Title: Banking Officer
by
/s/ Craig W. Farnsworth
------------------------------
Name: Craig W. Farnsworth
Title: Vice President & Manager
SWISS BANK CORPORATION, NEW YORK
BRANCH,
by
/s/ Karen Mayrose
------------------------------
Name: Karen Mayrose
Title: Associate Director
Banking Finance Support, N.A.
by
/s/ Ernst Schirmer
------------------------------
Name: Ernst Schirmer
Title: Director, Credit Risk Management
THE TOKAI BANK, LIMITED,
by
/s/ Stuart M. Schulman
------------------------------
Name: Stuart M. Schulman
Title: Deputy General Manager
<PAGE> 64
60
UNION BANK OF SWITZERLAND, NEW YORK
BRANCH,
by
/s/ Laurent J. Chaix
------------------------------
Name: Laurent J. Chaix
Title: Vice President
by
/s/ Robert H. Riley III
------------------------------
Name: Robert H. Riley III
Title: Managing Director
WELLS FARGO BANK, N.A.,
by
/s/ Michael Cordas
------------------------------
Name: Michael Cordas
Title: Vice President
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK AND CAYMAN
ISLANDS BRANCHES,
by
/s/ Salvatore Battinelli
------------------------------
Name: Salvatore Battinelli
Title: Vice President, Credit Department
by
/s/ Ralph White
------------------------------
Name: Ralph White
Title: Vice President
THE YASUDA TRUST AND BANKING COMPANY,
LIMITED, NEW YORK BRANCH,
by
/s/ Rohn Laudenschlager
------------------------------
Name: Rohn Laudenschlager
Title: Senior Vice President
<PAGE> 65
EXHIBIT A-1
FORM OF COMPETITIVE BID REQUEST
The Chase Manhattan Bank, as Administrative Agent
for the Lenders referred to below,
270 Park Avenue
New York, NY 10017
Attention: [ ]
Dear Ladies and Gentlemen:
The undersigned, _______________ (the "Borrower"), refers to the
364-Day Competitive Advance and Revolving Credit Facility Agreement dated as of
November 4, 1996 (as it may hereafter be amended, modified, extended or restated
from time to time, the "364-Day Agreement"), among the Borrower, the Borrowing
Subsidiaries parties thereto, the Lenders parties thereto and The Chase
Manhattan Bank, as Administrative Agent. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
364-Day Agreement. The Borrower hereby gives you notice pursuant to Section
2.03(a) of the 364-Day Agreement that it requests a Competitive Borrowing under
the 364-Day Agreement, and in that connection sets forth below the terms on
which such Competitive Borrowing is requested to be made:
(A) Date of Competitive Borrowing
(which is a Business Day) ___________________
(B) Principal amount of
Competitive Borrowing(1) ___________________
(C) Interest rate basis(2) ___________________
(D) Interest Period and the
last day thereof(3) ___________________
Upon acceptance of any or all of the Loans offered by the Lenders in
response to this request, the Borrower shall be deemed to have represented and
warranted that the conditions to lending specified in Section 4.01(b) and (c) of
the 364-Day Agreement have been satisfied.
Very truly yours,
[NAME OF BORROWER],
by
____________________________
Name:
Title: [Financial Officer]
- --------
(1) Not less than $10,000,000 (and in integral multiples of $5,000,000) or
greater than the Total Commitment then available.
(2) Eurodollar Competitive Loan or Fixed Rate Loan.
(3) Which shall be subject to the definition of "Interest Period" and end not
later than the Maturity Date.
<PAGE> 66
EXHIBIT A-2
FORM OF NOTICE OF COMPETITIVE BID REQUEST
[Name of Lender]
[Address]
[Date]
Attention: [ ]
Dear Ladies and Gentlemen:
Reference is made to the 364-Day Competitive Advance and Revolving
Credit Facility Agreement dated as of November 4, 1996 (as it may hereafter be
amended, modified, extended or restated from time to time, the "364-Day
Agreement"), among ITT Corporation [,__________] (the "Borrower"), the Borrowing
Subsidiaries parties thereto, the Lenders parties thereto and The Chase
Manhattan Bank, as Administrative Agent. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
364-Day Agreement. The Borrower made a Competitive Bid Request on ______, 19[ ],
pursuant to Section 2.03(a) of the 364-Day Agreement, and in that connection you
are invited to submit a Competitive Bid by [Date]/[Time].(1) Your Competitive
Bid must comply with Section 2.03(b) of the 364-Day Agreement and the terms set
forth below on which the Competitive Bid Request was made:
(A) Date of Competitive Borrowing ___________________
(B) Principal amount of
Competitive Borrowing ___________________
(C) Interest rate basis ___________________
(D) Interest Period and the
last day thereof ___________________
Very truly yours,
THE CHASE MANHATTAN BANK,
as Administrative Agent,
by
_______________________
Name:
Title:
- --------
(1) The Competitive Bid must be received by the Administrative Agent (i) in
the case of Eurodollar Competitive Loans, not later than 10:00 a.m., New York
City time, four Business Days before a proposed Competitive Borrowing, and (ii)
in the case of Fixed Rate Loans, not later than 10:00 a.m., New York City time,
one Business Day before a proposed Competitive Borrowing.
<PAGE> 67
EXHIBIT A-3
FORM OF COMPETITIVE BID
The Chase Manhattan Bank, as Administrative Agent
for the Lenders referred to below,
270 Park Avenue
New York, N.Y. 10017
[Date]
Attention: [ ]
Dear Ladies and Gentlemen:
The undersigned, [Name of Lender], refers to the 364-Day Competitive
Advance and Revolving Credit Facility Agreement dated as of November 4, 1996 (as
it may be amended, modified, extended or restated from time to time, the
"364-Day Agreement"), among ITT Corporation [,__________] (the "Borrower"), the
Borrowing Subsidiaries parties thereto, the Lenders named therein and The Chase
Manhattan Bank, as Administrative Agent. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
364-Day Agreement. The undersigned hereby makes a Competitive Bid pursuant to
Section 2.03(b) of the 364-Day Agreement, in response to the Competitive Bid
Request made by the Borrower on ________, 19[ ], and in that connection sets
forth below the terms on which such Competitive Bid is made:
(A) Principal Amount(1) ___________________
(B) Competitive Bid Rate(2) ___________________
(C) Interest Period and last
day thereof ___________________
The undersigned hereby confirms that it is prepared, subject to the
conditions set forth in the 364-Day Agreement, to extend credit to the Borrower
upon acceptance by the Borrower of this bid in accordance with Section 2.03(d)
of the 364-Day Agreement.
Very truly yours,
[NAME OF LENDER],
by
___________________
Name:
Title:
- --------
(1) Not less than $5,000,000 or greater than the requested Competitive
Borrowing and in integral multiples of $1,000,000. Multiple bids will be
accepted by the Administrative Agent.
(2) i.e., LIBO Rate + or -___ %, in the case of Eurodollar Competitive Loans or
___%, in the case of Fixed Rate Loans.
<PAGE> 68
EXHIBIT A-4
FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER
[Date]
The Chase Manhattan Bank, as Administrative Agent
for the Lenders referred to below
270 Park Avenue
New York, N.Y. 10017
Attention: [ ]
Dear Ladies and Gentlemen:
The undersigned, _______________ (the "Borrower"), refers to the 364-Day
Competitive Advance and Revolving Credit Facility Agreement dated as of November
4, 1996 (as it may be amended, modified, extended or restated from time to time,
the "364-Day Agreement"), among the Borrower, the Borrowing Subsidiaries parties
thereto, the Lenders parties thereto and The Chase Manhattan Bank, as
Administrative Agent for the Lenders.
In accordance with Section 2.03(c) of the 364-Day Agreement, we have
received a summary of bids in connection with our Competitive Bid Request dated
_______, and in accordance with Section 2.03(d) of the 364-Day Agreement, we
hereby accept the following bids for maturity on [date]:
Principal Amount Fixed Rate/Margin Lender
- ---------------- ----------------- ------
$ [%]/[+/-. %]
$
We hereby reject the following bids:
Principal Amount Fixed Rate/Margin Lender
- ---------------- ----------------- ------
$ [%]/[+/-. %]
$
The $__________ should be deposited in The Chase Manhattan Bank account
number [ ] on [date].
Very truly yours,
[NAME OF BORROWER],
by
_________________
Name:
Title:
<PAGE> 69
EXHIBIT A-5
FORM OF STANDBY BORROWING REQUEST
The Chase Manhattan Bank, as Administrative Agent
for the Lenders referred to below,
270 Park Avenue
New York, N.Y. 10017
[Date]
Attention: [ ]
Dear Ladies and Gentlemen:
The undersigned, _______________ (the "Borrower"), refers to the 364-Day
Competitive Advance and Revolving Credit Facility Agreement dated as of November
4, 1996 (as it may be amended, modified, extended or restated from time to time,
the "364-Day Agreement"), among the Borrower, the Borrowing Subsidiaries parties
thereto, the Lenders parties thereto and The Chase Manhattan Bank, as
Administrative Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the 364-Day Agreement.
The Borrower hereby gives you notice pursuant to Section 2.04 of the 364-Day
Agreement that it requests a Standby Borrowing under the 364-Day Agreement, and
in that connection sets forth below the terms on which such Standby Borrowing is
requested to be made:
(A) Date of Standby Borrowing
(which is a Business Day) ___________________
(B) Principal amount of
Standby Borrowing(1) ___________________
(C) Interest rate basis(2) ___________________
(D) Interest Period and the
last day thereof(3) ___________________
Upon acceptance of any or all of the Loans made by the Lenders in
response to this request, the Borrower shall be deemed to have represented and
warranted that the conditions to lending specified in Section 4.01(b) and (c) of
the 364-Day Agreement have been satisfied.
Very truly yours,
[NAME OF BORROWER],
by
_____________________
Name:
Title: [Financial Officer]
- --------
(1) Not less than $20,000,000 (and in integral multiples of $5,000,000) or
greater than the Total Commitment then available.
(2) Eurodollar Standby Loan or Fixed Rate Loan.
(3) Which shall be subject to the definition of "Interest Period" and end
not later than the Maturity Date.
<PAGE> 70
EXHIBIT C
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Dated:__________, 19__
Reference is made to the 364-Day Competitive Advance and Revolving
Credit Facility Agreement dated as of November 4, 1996 (the "364-Day
Agreement"), among ITT Corporation (the "Company"), the Borrowing Subsidiaries
parties thereto, the Lenders parties thereto (the "Lenders") and The Chase
Manhattan Bank, as Administrative Agent for the Lenders. Terms defined in the
364- Day Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the Effective Date set forth below, the interests
set forth below (the "Assigned Interest") in the Assignor's rights and
obligations under the 364-Day Agreement, including, without limitation, the
interests set forth below in the Commitment of the Assignor on the Effective
Date and the Competitive Loans and Standby Loans owing to the Assignor which are
outstanding on the Effective Date. Each of the Assignor and the Assignee hereby
makes and agrees to be bound by all the representations, warranties and
agreements set forth in Section 9.04 of the 364-Day Agreement, a copy of which
has been received by each such party. From and after the Effective Date, (i) the
Assignee shall be a party to and be bound by the provisions of the 364-Day
Agreement and, to the extent of the interests assigned by this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and (ii) the
Assignor shall, to the extent of the interests assigned by this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
364-Day Agreement.
2. This Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) if the Assignee is organized under the
laws of a jurisdiction outside the United States, the forms specified in Section
2.19(g) of the 364-Day Agreement, duly completed and executed by such Assignee,
(ii) if the Assignee is not already a Lender under the 364-Day Agreement, an
Administrative Questionnaire in the form of Exhibit B to the 364-Day Agreement
and (iii) a processing and recordation fee of $3,000 (which shall include the
assignment and acceptance processing and recordation fee arising under the
Facility B Credit Agreement occurring herewith).
3. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
<PAGE> 71
2
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment):
<TABLE>
<CAPTION>
=========================================================================================
Percentage Assigned of
Facility/Commitment (set forth,
to at least 8 decimals, as a
Principal Amount Assigned (and percentage of the Facility and
identifying information as to the aggregate Commitments of
Facility individual Competitive Loans) all Lenders thereunder)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Commitment Assigned: $____________ ___________ %
- -----------------------------------------------------------------------------------------
Standby Loans: $____________ ___________ %
- -----------------------------------------------------------------------------------------
Competitive Loans: $____________ ___________ %
=========================================================================================
</TABLE>
The terms set forth and on the reverse side Accepted:
hereof are hereby agreed to:
ITT CORPORATION,
________________________________, as by: ___________________________
Assignor, Name:
Title:
by: ____________________________
Name:
Title:
________________________________,
as Assignee,
by: ____________________________
Name:
Title:
<PAGE> 72
1
EXHIBIT D
[FORM OF]
OPINION OF COUNSEL FOR
ITT CORPORATION(1)
1. ITT Corporation (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada (ii) has all
requisite power and authority to own its property and assets and to carry on its
business as now conducted, (iii) is qualified to do business in every
jurisdiction within the United States where such qualification is required,
except where the failure so to qualify would not result in a Material Adverse
Effect on ITT Corporation, and (iv) has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Agreement
and to borrow funds thereunder.
2. The execution, delivery and performance by ITT Corporation of
the Agreement and the borrowings of ITT Corporation thereunder (collectively,
the "Transactions") (i) have been duly authorized by all requisite corporate
action and (ii) will not (a) violate (1) any provision of law, statute, rule or
regulation (including without limitation, the Margin Regulations), or of the
certificate of incorporation or other constitutive documents or by-laws of ITT
Corporation, (2) any order of any governmental authority or (3) any provision of
any indenture, agreement or other instrument to which ITT Corporation is a party
or by which it or its property is or may be bound, (b) be in conflict with,
result in a breach of or constitute (alone or with notice or lapse of time or
both) a default under any such indenture, agreement or other instrument or (c)
result in the creation or imposition of any lien upon any property or assets of
ITT Corporation.
3. The Agreement has been duly executed and delivered by ITT
Corporation and constitutes a legal, valid and binding obligation of ITT
Corporation enforceable against ITT Corporation in accordance with its terms,
subject as to the enforceability of rights and remedies to any applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws of
general application relating to or affecting the enforcement of creditors'
rights from time to time in effect.
4. No action, consent or approval of, registration or filing
with, or any other action by, any government authority is or will be required in
connection with the Transactions, except such as have been made or obtained and
are in full force and effect.
5. Neither ITT Corporation nor any of its subsidiaries is (a)
except as set forth in the next sentence, an "investment company" as defined in,
or subject to regulation under, the Investment Company Act of 1940 (the "1940
Act") or (b) a "holding company" as defined in, or subject to regulation under,
the Public Utility Holding Company Act of 1935.
- --------
(1) Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the 364-Day Competitive Advance and Revolving
Credit Facility Agreement (the "Agreement") dated as of November 4, 1996, among
ITT Corporation, the lenders listed in Schedule 2.01 thereto, and Chemical Bank,
as Administrative Agent.
<PAGE> 73
EXHIBIT E to the
Credit Agreement
BORROWING SUBSIDIARY AGREEMENT dated as of [ ],
among ITT CORPORATION, a Nevada corporation (the
"Company"), [Name of Subsidiary], a [ ] corporation
("the Subsidiary"), and The Chase Manhattan Bank, as
administrative agent (the "Administrative Agent") for the
lenders (the "Lenders") party to the 364-Day Competitive
Advance and Revolving Credit Facility Agreement dated as
of November 4, 1996, as amended (the "Agreement"), among
the Company, the Administrative Agent and the Lenders.
Under the Agreement, the Lenders have agreed, upon the terms and
subject to the conditions therein set forth, to make competitive advance and
revolving credit loans and to issue Letters of Credit to the Company and to
Subsidiaries (as defined in the Agreement) of the Company which execute and
deliver to the Administrative Agent Borrowing Subsidiary Agreements in the form
of this Borrowing Subsidiary Agreement. The Company represents that the
Subsidiary is a subsidiary (as so defined) of the Company and that the guarantee
of the Company contained in Article VII of the Agreement applies to the
obligations of the Subsidiary. In consideration of being permitted to borrow or
have Letters of Credit issued under the Agreement upon the terms and subject to
the conditions set forth therein, the Subsidiary agrees that from and after the
date of this Borrowing Subsidiary Agreement it will be, and will be liable for
the observance and performance of all the obligations of, a Borrowing Subsidiary
under the Agreement, as the same may be amended from time to time, to the same
extent as if it had been one of the original parties to the Agreement and that
it will furnish to the Administration Agent and the Lenders copies of its
financial statements on an annual basis.
IN WITNESS WHEREOF, the Company and the Subsidiary have caused
this Borrowing Subsidiary Agreement to be duly executed by their authorized
officers as of the date first appearing above.
ITT CORPORATION,
by
______________________
Name:
Title:
[NAME OF SUBSIDIARY],
by
______________________
Name:
Title:
Accepted as of the date
first appearing above:
THE CHASE MANHATTAN BANK, as Administrative
Agent,
by
______________________
Name:
Title:
<PAGE> 74
SCHEDULE 2.01
Contact Person
Name and Address of Lender and Telecopy Number Commitment
- -------------------------- ------------------- ----------
The Chase Manhattan Bank (1) Ms. Nancy Mistretta $41,666,666.64
270 Park Avenue (212) 270-6041
New York, NY 10017
Arab Bank Plc Mr. Peter Boyadjian $ 8,333,333.33
520 Madison Avenue (212) 593-4632
New York, NY 10022
Banca Commerciale Italiana (2) Mr. Charles Dougherty $15,000,000.00
New York Branch (212) 809-2124
1 William Street
New York, NY 10004
Banca CRT Mr. J. Slade Carter, Jr. $ 8,333,333.33
500 Park Avenue (212) 980-0809
New York, NY 10022
Banca di Roma S.p.A. Mr. Ralph Riehle $ 8,333,333.33
34 East 51st Street, 7th Floor (212) 407-1740
New York, NY 10005
Banca Nazionale del Lavoro (3) Mr. Giulio Giovine $21,666,666.67
New York Branch (212) 765-2978
25 W. 51st Street Rockefeller Plaza
New York, NY 10019
Banca Popolare di Milano Mr. Nicholas Cinosi $ 8,333,333.33
375 Park Avenue (212) 838-1077
New York, NY 10152
Bank Austria AG Ms. Amy Rick $ 8,333,333.33
565 Fifth Avenue (212) 880-1040
New York, NY 10017
Bank of America (4) Ms. Laura Calhoun $26,666,666.67
335 Madison Avenue (212) 503-7173
New York, NY 10017
Bank of Hawaii Ms. Alison Sierens $ 8,333,333,33
111 South King Street (808) 537-8301
P.O. Box 2900
Honolulu, HI 96813
The Bank of New York (3) Mr. Dave Judge $21,666,666.67
One Wall Street (212) 635-6999
New York, NY 10286
The Bank of Nova Scotia (4) Mr. Philip Adsetts $26,666,666.67
One Liberty Plaza (212) 225-5090/91
New York, NY 10006
<PAGE> 75
2
Contact Person
Name and Address of Lender and Telecopy Number Commitment
- -------------------------- ------------------- ----------
The Bank of Tokyo-Mitsubishi Trust Ms. Amanda Ryan $26,666,666.67
Company (4) (212) 782-6445
1251 Avenue of the Americas
12th Floor
New York, NY 10116-3138
Bankers Trust Company (4) Mr. Daniel Hebert $26,666,666.67
130 Liberty Street (212) 250-1530
New York, NY 10006
Barclays de Zoete Wedd (4) Ms. John Livingston $26,666,666.67
222 Broadway (212) 412-7511
New York, NY 10038
Bayerische Landesbank Girozentrale Ms. Joanne Cicino $15,000,000.00
(2) (212) 310-9868
111 East 50th Street
New York, NY 10022
CIBC Inc. (3) Ms. Judith Domkowski $21,666,666.67
425 Lexington Avenue (212) 856-3991
New York, NY 10017
Citibank, N.A. (4) Ms. Elizabeth Palermo $26,666,666.67
399 Park Avenue (212) 826-2375
New York, NY 10043
Comerica Bank (2) Mr. David Shirey $15,000,000.00
500 Woodward Avenue (313) 222-3330
Detroit, MI 48226-3280
Commerzbank AG (2) Mr. Robert Donohue $15,000,000.00
2 World Financial Center (212) 266-7235/7595
New York, NY 10281
Commonwealth Bank of Australia Mr. Ray DeLucia $ 8,333,333.33
599 Lexington Avenue (212) 336-7762
New York, NY 10022
Compagnie Financiere de CIC et de Ms. Martha Skidmore $ 8,333,333.33
l'Union Europeenne (212) 715-4535
520 Madison Avenue
37th Floor
New York, NY 10022
Credit Lyonnais (4) Mr. Nicholas Chapin $26,666,666.67
1301 Avenue of the Americas (212) 459-3179
18th Floor
New York, NY 10019
<PAGE> 76
3
Contact Person
Name and Address of Lender and Telecopy Number Commitment
- -------------------------- ------------------- ----------
Credit Suisse (3) Mr. Robert Potter $21,666,666.67
Tower 49 (212) 238-5439
12 East 49th Street
New York, NY 10017
Credito Italiano Mr. Harmon Butler $8,333,333.33
375 Park Avenue (212) 546-9675
New York, NY 10152
The Dai-Ichi Kangyo Bank, Ltd. (3) Mr. Bertram Tang $21,666,666.67
One World Trade Center (212) 912-1879
Suite 4911
New York, NY 10048
Deutsche Bank AG (4) Mr. Rolf-Peter Mikolayczyk $26,666,666.67
New York Branch (212) 474-8212
31 West 52nd Street
New York, NY 10019
Dresdner Bank AG (4) Mr. Anthony Berti $26,666,666.67
New York Branch (212) 429-2129
75 Wall Street
New York, NY 10005-2889
First Hawaiian Bank Ms. Kathryn Plumb $ 8,333,333.33
1132 Bishop Street (808) 525-6372
Honolulu, HI 96813
The First National Bank of Boston (2)Mr. Paul Sassieni $ 15,000,000
100 Federal Street (617) 434-1574
01-08-06
Boston, MA 02110
Fleet Bank Mr. John Harrison $ 8,333,333.33
1300 Atlantic Avenue (609) 348-1308
Atlantic City, NJ 08401
The Fuji Bank, Limited (3) Mr. Roy Tanfield $21,666,666.67
Two World Trade Center 79th Floor (212) 321-9407
New York, NY 10048
Generale Bank Mr. Doug Raihi $8,333,333.33
520 Madison Avenue (212) 750-9597
New York, NY 10022
<PAGE> 77
4
Contact Person
Name and Address of Lender and Telecopy Number Commitment
- -------------------------- ------------------- ----------
The Industrial Bank of Japan, Ltd., Mr. John Veltri $21,666,666.67
New York Branch (3) (212) 856-9450
245 Park Avenue
23rd Floor
New York, NY 10167-0037
Istituto Bancario San Paolo Bank di Mr. Wendell Jones $ 8,333,333.33
Torino S.p.A. (212) 599-5303
245 Park Avenue
New York, NY 10167
Kredietbank N.V. (2) Mr. Armen Karozichian $15,000,000.00
125 West 55th Street (212) 956-5580
New York, NY 10019
Lloyds Bank Plc Mr. Theodore Walser $ 6,666,666.67
199 Water Street (212) 607-4999
9th Floor
New York, NY 10038
Long Term Credit Bank of Japan Mr. Yoshi Nakagawa $ 8,333,333.33
165 Broadway (212) 608-2371
New York, NY 10006
The Mitsubishi Trust and Banking Ms. Patricia Loret DeMola $15,000,000.00
Corporation (2) (212) 644-6825
520 Madison Avenue
New York, NY 10022
Morgan Guaranty Trust Company of Ms. Deborah Winshel $26,666,666.67
New York (4) (212) 648-5043
60 Wall Street
New York, NY 10260-0060
National Westminster Bank Plc (3) Mr. Jordan Fragiacomo $21,666,666.67
175 Water Street (212) 602-4209
New York, NY 10038-4924
Nationsbank, N.A. (4) Ms. Sally Hazard $26,666,666.67
767 Fifth Avenue (212) 751-6909
23rd Floor
New York, NY 10153
The Northern Trust Company Mr. Joseph Yacullo $ 8,333,333.33
50 South LaSalle Street (312) 630-6062
Chicago, IL 60675
<PAGE> 78
5
Contact Person
Name and Address of Lender and Telecopy Number Commitment
- -------------------------- ------------------- ----------
PNC Bank, National Association Ms. Denise Killen $ 8,333,333.33
2 Tower Center (908) 220-3270
East Brunswick, NJ 08816
Royal Bank of Canada (4) Mr. John Crawford $26,666,666.67
One Financial Square (212) 428-6459
New York, NY 10005-3531
The Sakura Bank, Limited, (2) Mr. John Phelan $15,000,000.00
New York Branch (212) 888-7651
277 Park Avenue
New York, NY 10172
The Sanwa Bank, Ltd. (4) Mr. Stephen C. Small $26,666,666.67
New York Branch (212) 754-1304
55 East 52nd Street
New York, NY 10055
Societe Generale (4) Ms. Sedare Coradin $26,666,666.67
1221 Avenue of the Americas (212) 278-7430
New York, NY 10020
The Sumitomo Bank, Limited (4) Mr. Edward McColly $26,666,666.67
New York Branch (212) 224-5188
277 Park Avenue
New York, NY 10172
SunTrust Bank, Atlanta (2) Ms. May Smith $15,000,000.00
711 Fifth Avenue (212) 371-9386
5th Floor
New York, NY 10022
Swiss Bank Corporation Mr. Clark Worthley $ 8,333,333.33
New York Branch (212) 574-1126
222 Broadway
New York, NY 10038
The Tokai Bank, Limited (2) Mr. Stuart Schulman $15,000,000.00
55 East 52nd Street (212) 754-2170
12th Floor
New York, NY 10022
The Sumitomo Trust & Banking Co., Ms. Karen Ryan $ 8,333,333.33
Ltd. (213) 613-1083
333 South Grand Avenue
53rd Floor
Los Angeles, CA 90071
<PAGE> 79
6
Contact Person
Name and Address of Lender and Telecopy Number Commitment
- -------------------------- ------------------- ----------
Union Bank of Switzerland (4) Mr. Laurent Chaix $26,666,666.67
299 Park Avenue (212) 821-5611
New York, NY 10171
Wells Fargo Bank (3) Mr. Roy Roberts $21,666,666.67
500 Park Avenue (212) 593-5238
New York, NY 10017
Westdeutsche Landesbank Mr. Ralph White $15,000,000.00
Girozentrale (2) (212) 652-6307
1211 Avenue of the Americas
New York, NY 10036
The Yasuda Trust and Banking Co., Mr. Rohn Laudenschlager $15,000,000.00
Ltd. (2) (212) 373-5796
New York Branch
666 Fifth Avenue
Suite 801
New York, NY 10103
-----------------
TOTAL COMMITMENT $1,000,000,000.00
As numbered herein:
(1) Administrative Agent
(2) Lead Manager
(3) Managing Agent
(4) Arranger
<PAGE> 80
Schedule 5.10
ITT Corporation
Liens on Principal Properties
Sheraton Boston
Liens in favor of Citibank. N.A. to secure approximately $172 million of
outstanding indebtedness.
Sheraton Buenos Aires
Liens in favor of Overseas Private Investment Corp. to secure
approximately $28 million of indebtedness.
Park Grande Sydney
Liens in favor of Commonwealth Bank of Australia to secure approximately
$160 million of indebtedness.
<PAGE> 1
CONFORMED COPY
================================================================================
FIVE-YEAR COMPETITIVE ADVANCE AND
REVOLVING CREDIT FACILITY AGREEMENT
Dated as of November 4, 1996
among
ITT CORPORATION
THE LENDERS NAMED HEREIN
and
THE CHASE MANHATTAN BANK, as Administrative Agent
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article Section Page
- ------- ------- ----
<S> <C> <C>
I. DEFINITIONS
1.01. Defined Terms ................................................. 1
1.02. Terms Generally ............................................... 15
II. THE CREDITS
2.01. Commitments.................................................... 15
2.02. Loans ......................................................... 16
2.03. Competitive Bid Procedure ..................................... 18
2.04. Standby and Local Currency Borrowing Procedure................. 19
2.05. Conversion and Continuation of Standby Loans .................. 20
2.06. Fees ......................................................... 21
2.07. Repayment of Loans; Evidence of Debt .......................... 22
2.08. Interest on Loans ............................................. 22
2.09. Default Interest .............................................. 23
2.10. Alternate Rate of Interest .................................... 23
2.11. Termination and Reduction of Commitments....................... 23
2.12. Prepayment .................................................... 24
2.13. Reserve Requirements; Change in Circumstances.................. 24
2.14. Change in Legality ............................................ 25
2.15. Indemnity ..................................................... 26
2.16. Pro Rata Treatment ............................................ 27
2.17. Sharing of Setoffs ............................................ 27
2.18. Payments ...................................................... 27
2.19. Taxes ......................................................... 28
2.20. Duty to Mitigate; Assignment of Commitments
Under Certain Circumstances.................................. 30
2.21. Terms of Local Currency Facilities............................. 31
2.22. Currency Fluctuations, Etc..................................... 32
2.23. Letters of Credit.............................................. 34
III. REPRESENTATIONS AND WARRANTIES
3.01. Organization; Powers .......................................... 37
3.02. Authorization ................................................. 37
3.03. Enforceability ................................................ 37
3.04. Governmental Approvals ........................................ 38
3.05. Financial Statements .......................................... 38
3.06. Litigation; Compliance with Laws............................... 38
3.07. Federal Reserve Regulations.................................... 38
3.08. Investment Company Act; Public Utility Holding
Company Act ................................................. 39
</TABLE>
<PAGE> 3
2
<TABLE>
<S> <C> <C>
3.09. Use of Proceeds................................................ 39
3.10. Full Disclosure; No Material Misstatements .................... 39
3.11. Taxes ......................................................... 39
3.12. Employee Pension Benefit Plans ................................ 39
IV. CONDITIONS OF LENDING
4.01. All Extensions of Credit....................................... 40
4.02. Effective Date ................................................ 40
4.03. First Borrowing by Each Borrowing Subsidiary................... 41
V. COVENANTS
5.01. Existence...................................................... 41
5.02. Business and Properties ....................................... 41
5.03. Financial Statements, Reports, Etc............................. 42
5.04. Insurance ..................................................... 42
5.05. Obligations and Taxes ......................................... 42
5.06. Litigation and Other Notices .................................. 43
5.07. Maintaining Records; Access to Properties and Inspections...... 43
5.08. Use of Proceeds................................................ 43
5.09. Consolidations, Mergers, and Sales of Assets................... 43
5.10. Limitations on Liens .......................................... 43
5.11. Limitations on Sale and Leaseback Transactions................. 45
5.12. Consolidated Total Debt to Consolidated EBITDA................. 46
VI. EVENTS OF DEFAULT..................................................... 46
VII. GUARANTEE............................................................. 48
VIII. THE ADMINISTRATIVE AGENT ............................................. 49
IX. MISCELLANEOUS
9.01. Notices........................................................ 51
9.02. Survival of Agreement ......................................... 52
9.03. Binding Effect ................................................ 52
9.04. Successors and Assigns ........................................ 52
9.05. Expenses; Indemnity ........................................... 54
9.06. Applicable Law ................................................ 55
9.07. Waivers; Amendment ............................................ 55
9.08. Entire Agreement .............................................. 55
9.09. Severability .................................................. 56
9.10. Counterparts .................................................. 56
9.11. Headings ...................................................... 56
9.12. Right of Setoff ............................................... 56
9.13. Jurisdiction; Consent to Service of Process.................... 56
</TABLE>
<PAGE> 4
3
<TABLE>
<S> <C>
9.14. Waiver of Jury Trial .......................................... 57
9.15. Addition of Borrowing Subsidiaries............................. 57
9.16. Conversion of Currencies....................................... 57
</TABLE>
EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Competitive Bid Request
Exhibit A-2 Form of Notice of Competitive Bid Request
Exhibit A-3 Form of Competitive Bid
Exhibit A-4 Form of Competitive Bid Accept/Reject
Exhibit A-5 Form of Standby Borrowing Request
Exhibit B Administrative Questionnaire
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Opinion of Counsel for ITT Corporation
Exhibit E Form of Borrowing Subsidiary Agreement
Exhibit F Form of Issuing Bank Agreement
Exhibit G Form of Local Currency Addendum
Exhibit H Form of Letter Agreement
Schedule 2.01 Commitments
Schedule 5.10 Existing Liens
<PAGE> 5
FIVE-YEAR COMPETITIVE ADVANCE AND REVOLVING CREDIT
FACILITY AGREEMENT (as it may be amended, supplemented or
otherwise modified, the "Agreement") dated as of November 4,
1996, among ITT CORPORATION, a Nevada corporation (the
"Company"), each Borrowing Subsidiary party hereto, the
lenders listed in Schedule 2.01 (together with their permitted
assignees, the "Lenders"), The Chase Manhattan Bank, as
issuing bank (in such capacity, the initial "Issuing Bank"),
and THE CHASE MANHATTAN BANK, a New York banking corporation,
as administrative agent for the Lenders (in such capacity, the
"Administrative Agent").
The Lenders have been requested to extend credit to the
Borrowers (such term and each other capitalized term used but not otherwise
defined herein having the meaning assigned to it in Article I) to enable them to
borrow on a standby revolving credit basis on and after the date hereof and at
any time and from time to time prior to the Maturity Date a principal amount not
in excess of $2,000,000,000 at any time outstanding. The Lenders have also been
requested to provide procedures pursuant to which the Borrowers may invite the
Lenders to bid on an uncommitted basis on short-term borrowings by the Borrowers
and issuances of letters of credit for the Borrowers. The proceeds of such
borrowings are to be used for the repurchase, refinancing or repayment of
indebtedness, as well as for working capital and other general corporate
purposes. The letters of credit shall support payment obligations incurred in
the ordinary course of business by the Borrowers. The Lenders are willing to
extend credit on the terms and subject to the conditions herein set forth.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any ABR Standby Loan.
"ABR Standby Loan" shall mean any Standby Loan bearing
interest at a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
"Administrative Fees" shall have the meaning assigned to such
term in Section 2.06(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit B hereto.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly or indirectly controls or is controlled by
or is under common control with the person specified.
<PAGE> 6
2
"Aggregate Credit Exposure" shall mean the aggregate amount of
the Lenders' Credit Exposures.
"Agreement Currency" shall have the meaning assigned to such
term in Section 9.16(b).
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof, "Prime
Rate" shall mean the rate of interest per annum publicly announced from time to
time by the Administrative Agent as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective on the
date such change is publicly announced as effective. "Federal Funds Effective
Rate" shall mean, for any day, the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as released on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so released for any
day which is a Business Day, the arithmetic average (rounded upwards to the next
1/100th of 1%), as determined by the Administrative Agent, of the quotations for
the day of such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective on the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"Applicable Percentage" shall mean on any date, with respect
to Eurocurrency Loans or with respect to the Facility Fee, as the case may be,
the applicable percentage set forth below under the caption "Eurocurrency
Spread" or "Facility Fee Percentage", as the case may be, based upon the Ratings
in effect on such date:
<TABLE>
<CAPTION>
Category 1 Eurocurrency Spread Facility Fee Percentage
- ---------- ------------------- -----------------------
<S> <C> <C>
AA- or higher by D&P; .115% .060%
AA- or higher by Fitch;
Aa3 or higher by Moody's;
AA- or higher by S&P
Category 2
- ----------
A+ or A by D&P; .130% .070%
A+ or A by Fitch;
A1 or A2 by Moody's;
A+ or A by S&P
</TABLE>
<PAGE> 7
3
<TABLE>
Category 3
- ----------
<S> <C> <C>
A- by D&P; .145% .080%
A- by Fitch;
A3 by Moody's;
A- by S&P
Category 4
- ----------
BBB+ by D&P; .160% .090%
BBB+ by Fitch;
Baa1 by Moody's;
BBB+ by S&P
Category 5
- ----------
BBB by D&P; .225% .125%
BBB by Fitch;
Baa2 by Moody's;
BBB by S&P
Category 6
- ----------
BBB- or lower or unrated by D&P; .250% .150%
BBB- or lower or unrated by Fitch;
Baa3 or lower or unrated by Moody's;
BBB- or lower or unrated by S&P
</TABLE>
For purposes of the foregoing, if all the Ratings shall fall within two adjacent
Categories, then (i) if no Rating is below Category 5, the Applicable Percentage
will be determined by reference to the higher of such Categories and (ii)
otherwise, the Applicable Percentage will be determined by reference to Category
6. If the Ratings shall fall in more than two Categories or in two Categories
that are not adjacent, then one Rating from each of the highest Category and the
lowest Category in which Ratings shall fall shall be excluded and (x) if the
lower of the remaining Ratings is in Category 5 or above, the Applicable
Percentage will be determined by reference to the higher of the remaining
Ratings, and (y) otherwise, the Applicable Percentage will be determined by
reference to Category 6. Each such change in the Applicable Percentage shall
apply to all outstanding Eurocurrency Loans and to L/C Participation Fees and
Facility Fees accruing during the period commencing on the effective date of
such change and ending on the date immediately preceding the effective date of
the next such change. If the rating system of any Rating Agency shall change,
the parties hereto shall negotiate in good faith to amend the references to
specific ratings in this definition to reflect such changed rating system.
"Applicable Share" of any Lender at any time shall mean the
percentage of the Total Commitment represented by such Lender's Commitment. If
the Commitments shall be terminated pursuant to Article VI, the Applicable
Shares of the Lenders shall, subject only to assignments pursuant to Section
9.04, be based upon the Commitments in effect immediately prior to such
termination.
<PAGE> 8
4
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee in the form of Exhibit C.
"Available Commitment" shall mean, as to any Lender at any
time, an amount equal to such Lender's Commitment at such time minus the
aggregate of all such Lender's Local Currency Loans (Dollar Equivalent)
outstanding at such time.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Board of Directors" shall mean the Board of Directors of a
Borrower or any duly authorized committee thereof.
"Borrower" shall mean the Company or any Borrowing Subsidiary.
"Borrowing" shall mean a group of Loans of a single Type made
by the Lenders (or, in the case of a Competitive Borrowing, by the Lender or
Lenders whose Competitive Bids have been accepted pursuant to Section 2.03) on a
single date and as to which a single Interest Period is in effect.
"Borrowing Date" shall mean any date on which a Borrowing is
made hereunder.
"Borrowing Subsidiary" shall mean any Restricted Subsidiary
which shall have executed and delivered to the Administrative Agent for
distribution to each Lender a Borrowing Subsidiary Agreement.
"Borrowing Subsidiary Agreement" shall mean an agreement, in
the form of Exhibit E hereto, duly executed by the Company and a Subsidiary.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks are
open for business in New York City; provided, however, that, when used in
connection with a Eurocurrency Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in deposits in the applicable
currency in the London interbank market, and, when used in connection with
determining any date on which any amount is to be paid or made available in a
Local Currency, the term "Business Day" shall also exclude any day on which
commercial banks and foreign exchange markets are not open for business in the
principal financial center in the country of such Local Currency.
"Calculation Date" shall mean the last Business Day of each
calendar week.
"Capitalized Lease-Back Obligation" shall mean with respect to
a Principal Property, at any date as of which the same is to be determined, the
total net rental obligations of the Company or a Restricted Subsidiary under a
lease of such Principal Property, entered into as part of an arrangement to
which the provisions of Section 5.11 are applicable (or would have been
applicable had such Restricted Subsidiary been a Restricted Subsidiary at the
time it entered into such lease), discounted to the date of computation at the
rate of interest per annum implicit in the lease (determined in accordance with
GAAP). The amount of the net rental obligation for any calendar year under any
lease shall be the sum of the rental and other payments required to be paid in
such calendar year by the lessee thereunder, not including, however, any amounts
required to be paid by such lessee (whether or not therein designated as rental
or
<PAGE> 9
5
additional rental) on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges.
A "Change in Control" shall be deemed to have occurred if (a)
any person or group of persons shall have acquired beneficial ownership of more
than 30% of the outstanding Voting Shares of the Company (within the meaning of
Section 13(d) or 14(d) of the Exchange Act and the applicable rules and
regulations thereunder), or (b) during any period of 12 consecutive months,
commencing after the Effective Date, individuals who on the first day of such
period were directors of the Company (together with any replacement or
additional directors who were nominated or elected by a majority of directors
then in office) cease to constitute a majority of the Board of Directors of the
Company.
"Code" shall mean the Internal Revenue Code of 1986, as the
same may be amended from time to time.
"Commitment" shall mean, with respect to each Lender, the
commitment of such Lender hereunder as set forth as of the Effective Date in
Schedule 2.01 under the heading "Commitment" or in an Assignment and Acceptance
delivered by such Lender under Section 9.04 as such Lender's Commitment may be
permanently terminated or reduced from time to time pursuant to Section 2.11 or
pursuant to one or more assignments under Section 9.04. The Commitment of each
Lender shall automatically and permanently terminate on the Maturity Date if not
terminated earlier pursuant to the terms hereof.
"Competitive Bid" shall mean an offer by a Lender to make a
Competitive Loan pursuant to Section 2.03.
"Competitive Bid Accept/Reject Letter" shall mean a
notification made by a Borrower pursuant to Section 2.03(d) in the form of
Exhibit A-4.
"Competitive Bid Rate" shall mean, as to any Competitive Bid,
(i) in the case of a Eurocurrency Loan, the Margin, and (ii) in the case of a
Fixed Rate Loan, the fixed rate of interest offered by the Lender making such
Competitive Bid.
"Competitive Bid Request" shall mean a request made pursuant
to Section 2.03(a) in the form of Exhibit A-1.
"Competitive Borrowing" shall mean a Borrowing consisting of a
Competitive Loan or concurrent Competitive Loans from the Lender or Lenders
whose Competitive Bids for such Borrowing have been accepted under the bidding
procedure described in Section 2.03.
"Competitive Loan" shall mean a Loan made pursuant to the
bidding procedure described in Section 2.03. Each Competitive Loan shall be a
Eurocurrency Competitive Loan or a Fixed Rate Loan.
"Competitive Loan Exposure" shall mean, with respect to any
Lender at any time, the sum of the aggregate principal amount of all outstanding
Competitive Loans made by such Lender.
"Consolidated EBITDA" shall mean, for any period, the sum of
(a) Consolidated Net Income, (b) provisions for taxes based on income, (c)
Consolidated Interest Expense, (d) total depreciation
<PAGE> 10
6
expense and (e) total amortization expense, all of the foregoing as determined
on a consolidated basis for the Company and the Subsidiaries in accordance with
GAAP.
"Consolidated Interest Expense" shall mean, for any period,
the gross interest expense of the Company and the Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" shall mean, for any period, net
income or loss of the Company and the Subsidiaries for such period determined on
a consolidated basis in accordance with GAAP.
"Consolidated Net Tangible Assets" shall mean the total of all
assets appearing on a consolidated balance sheet of the Company and its
Restricted Subsidiaries, prepared in accordance with GAAP (and as of a date not
more than 90 days prior to the date as of which Consolidated Net Tangible Assets
are to be determined), less the sum of the following items as shown on said
consolidated balance sheet:
(i) the book amount of all segregated intangible assets,
including such items as good will, trademarks, trademark rights, trade
names, trade name rights, copyrights, patents, patent rights and
licenses and unamortized debt discount and expense less unamortized
debt premium;
(ii) all depreciation, valuation and other reserves;
(iii) current liabilities;
(iv) any minority interest in the shares of stock (other than
Preferred Stock) and surplus of Restricted Subsidiaries of the Company;
(v) the investment of the Company and its Restricted
Subsidiaries in any Unrestricted Subsidiary of the Company;
(vi) the total indebtedness of the Company and its Restricted
Subsidiaries incurred in any manner to finance or recover the cost to
the Company or any Restricted Subsidiary of any physical property, real
or personal, which prior to or simultaneously with the creation of such
indebtedness shall have been leased by the Company or a Restricted
Subsidiary to the United States of America or a department or agency
thereof at an aggregate rental, payable during that portion of the
initial term of such lease (without giving effect to any options of
renewal or extension) which shall be unexpired at the date of the
creation of such indebtedness, sufficient (taken together with any
amounts required to be paid by the lessee to the lessor upon any
termination of such lease) to pay in full at the stated maturity date
or dates thereof the principal of and the interest on such
indebtedness;
(vii) deferred income and deferred liabilities; and
(viii) other items deductible under GAAP.
"Consolidated Total Debt" shall mean, as at any date of
determination, all Indebtedness of the Company and its Subsidiaries determined
on a consolidated basis in accordance with GAAP.
<PAGE> 11
7
"Credit Exposure" shall mean, with respect to any Lender at
any time, the aggregate principal amount at such time of all outstanding Loans
of such Lender, plus the aggregate amount at such time of such Lender's L/C
Exposure.
"D&P" shall mean Duff & Phelps Credit Rating Co. or any of its
successors.
"Default" shall mean any event or condition which upon notice,
lapse of time or both would constitute an Event of Default.
"Dollars" or "$" shall mean lawful money of the United States
of America.
"Dollar Borrowing" shall mean a Borrowing comprised of Dollar
Loans.
"Dollar Equivalent" shall mean, on any date of determination,
with respect to any amount in any Local Currency, the equivalent in Dollars of
such amount, determined by the Administrative Agent using the Exchange Rate with
respect to such Local Currency then in effect as determined pursuant to Section
2.22(a).
"Dollar Facility Excess" shall have the meaning assigned to
such term in Section 2.22(d).
"Dollar Facility Overage" shall mean an amount equal to the
excess of (a) the Total Commitment over (b) the aggregate amount of all Local
Currency Facility Maximum Borrowing Amounts (determined, if applicable, after
giving effect to any reduction therein made pursuant to Section 2.22(c)).
"Dollar Loan" shall mean any Loan denominated in Dollars.
"Dollar Standby Credit Excess" shall have the meaning assigned
to such term in Section 2.22(c).
"Dollar Standby Credit Overage" shall mean, with respect to
any Lender, an amount equal to the excess, if any, of (a) such Lender's
Commitment over (b) the aggregate Local Currency Lender Maximum Borrowing
Amounts of such Lender with respect to all Local Currency Addenda to which such
Lender or any of its Affiliates is a party.
"Dollar Standby Extensions of Credit" shall mean, with respect
to any Lender at any time, (i) the aggregate principal amount of all Standby
Loans made by such Lender then outstanding and (ii) the aggregate L/C Exposure.
"Effective Date" shall mean the first date on or after
November 4, 1996, on which the conditions set forth in Section 4.02 are
satisfied.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) that, together with the Company, is treated as a single
employer under Section 414(b) or (c) of the Code, or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
<PAGE> 12
8
"ERISA Event" shall mean (a) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued thereunder, with
respect to a Plan; (b) the adoption of any amendment to a Plan that would
require the provision of security pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; (c) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (d) the filing pursuant to Section
412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of
the minimum funding standard with respect to any Plan; (e) the incurrence of any
liability under Title IV of ERISA with respect to the termination of any Plan or
the withdrawal or partial withdrawal of the Company or any of its ERISA
Affiliates from any Plan or Multiemployer Plan; (f) the receipt by the Company
or any ERISA Affiliate from the PBGC or a plan administrator of any notice
relating to the intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (g) the receipt by the Company or any ERISA Affiliate of
any notice that Withdrawal Liability is being imposed or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA; and (h) the occurrence of a "prohibited
transaction" with respect to which the Company or any of its Subsidiaries is a
"disqualified person" (within the meaning of Section 4975) of the Code, or with
respect to which the Company or any such Subsidiary could otherwise be liable.
"Eurocurrency Borrowing" shall mean a Borrowing comprised of
Eurocurrency Loans.
"Eurocurrency Competitive Loan" shall mean any Competitive
Loan bearing interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"Eurocurrency Loan" shall mean any Eurocurrency Competitive
Loan, Eurocurrency Standby Loan or Eurocurrency Local Currency Loan.
"Eurocurrency Local Currency Loan" shall mean any Local
Currency Loan bearing interest at a rate determined by reference to the LIBO
Rate in accordance with the provisions of Article II.
"Eurocurrency Standby Loan" shall mean any Standby Loan
bearing interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned to such
term in Article VI.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exchange Rate" shall mean, with respect to any Local Currency
on a particular date, the rate at which such Local Currency may be exchanged
into Dollars, as set forth on such date on the Reuters currency page more
particularly described in the Local Currency Addendum for Loans to be made in
such Local Currency. In the event that such rate does not appear on any Reuters
currency page, the Exchange Rate with respect to such Local Currency shall be
determined by reference to such other publicly available service for displaying
exchange rates as may be agreed upon by the Administrative Agent and the Company
or, in the absence of such agreement, such Exchange Rate shall instead be the
Administrative Agent's spot rate of exchange in the London interbank market
where its foreign currency exchange operations in respect of such Local Currency
are then being conducted, at or about 10:00 A.M., local time, at such date for
the purchase of Dollars with such Local Currency, for delivery two Business Days
later; provided, however, that if at the time of any such determination, for any
reason, no such spot rate is being quoted, the Administrative Agent may use any
reasonable method it deems applicable to determine such rate, and such
determination shall be conclusive absent manifest error.
<PAGE> 13
9
"Existing Credit Facilities" shall mean the 364-Day
Competitive Advance and Revolving Credit Facility Agreement dated as of November
10, 1995 and the Five-Year Competitive Advance and Revolving Credit Facility
Agreement dated as of November 10, 1995, among the Company, certain lenders and
The Chase Manhattan Bank, as Administrative Agent and as Issuing Bank, as
applicable.
"Facility A Credit Agreement" shall mean the $1,000,000,000
364-Day Competitive Advance and Revolving Credit Facility Agreement dated the
date hereof among the parties hereto, as such agreement may be amended,
supplemented or modified from time to time.
"Facility Fee" shall have the meaning assigned to such term in
Section 2.06(a).
"Fair Value", when used with respect to property, shall mean
the fair value as determined in good faith by the board of directors of the
Company.
"Fees" shall mean the Facility Fee, the Administrative Fees,
the L/C Participation Fees and the Issuing Bank Fees.
"Financial Officer" of any corporation shall mean the chief
financial officer, principal accounting officer, treasurer, associate or
assistant treasurer or director of treasury services of such corporation.
"Fitch" shall mean Fitch Investors Service, Inc. or any of its
successors.
"Fixed Rate Borrowing" shall mean a Borrowing comprised of
Fixed Rate Loans.
"Fixed Rate Loan" shall mean any Competitive Loan bearing
interest at a fixed percentage rate per annum (the "Fixed Rate") (expressed in
the form of a decimal to no more than four decimal places) specified by the
Lender making such Loan in its Competitive Bid.
"GAAP" shall mean generally accepted accounting principles,
applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guaranteed Obligations" shall mean the principal of and
interest on the Loans made to, and all other obligations, monetary or otherwise
(including fee and reimbursement obligations in respect of Letters of Credit)
of, the Borrowing Subsidiaries hereunder or under any Local Currency Addendum.
"Indebtedness" of any person shall mean all indebtedness
representing money borrowed or the deferred purchase price of property (other
than trade accounts payable) or any capitalized lease obligation, which in any
case is created, assumed, incurred or guaranteed in any manner by such
corporation or for which such corporation is responsible or liable (whether by
agreement to purchase indebtedness of, or to supply funds to or invest in,
others or otherwise).
"Interest Payment Date" shall mean (a) with respect to any
Loan, the last day of each Interest Period applicable thereto, (b) with respect
to a Eurocurrency Loan with an Interest Period of more than three months'
duration or a Fixed Rate Loan with an Interest Period of more than 90 days'
duration,
<PAGE> 14
10
each day that would have been an Interest Payment Date for such Loan had
successive Interest Periods of three months' duration or 90 days' duration, as
the case may be, been applicable to such Loan and, in addition, the date of any
prepayment of each Loan or conversion of such Loan to a Loan of a different Type
and (c) with respect to any Local Currency Loan, such days as shall be specified
in the applicable Local Currency Addendum.
"Interest Period" shall mean (a) as to any Eurocurrency
Borrowing, the period commencing on the date of such Borrowing or on the last
day of the immediately preceding Interest Period applicable to such Borrowing,
as the case may be, and ending on the numerically corresponding day (or, if
there is no numerically corresponding day, on the last day) in the calendar
month that is 1, 2, 3 or 6 months thereafter, as the Borrower may elect, (b) as
to any ABR Borrowing, the period commencing on the date of such Borrowing or on
the last day of the immediately preceding Interest Period applicable to such
Borrowing, as the case may be, and ending on the earliest of (i) the next
succeeding March 31, June 30, September 30 or December 31, (ii) the Maturity
Date, and (iii) the date such Borrowing is converted to a Borrowing of a
different Type in accordance with Section 2.05 or repaid or prepaid in
accordance with Section 2.07 or Section 2.12, (c) as to any Fixed Rate
Borrowing, the period commencing on the date of such Borrowing and ending on the
date specified in the Competitive Bids in which the offers to make the Fixed
Rate Loans comprising such Borrowing were extended, which shall not be earlier
than seven days after the date of such Borrowing or later than 360 days after
the date of such Borrowing and (d) as to any Local Currency Borrowing, such
periods as shall be specified in the applicable Local Currency Addendum;
provided, however, that if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of Eurocurrency Loans only, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day. Interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.
"Issuing Bank" shall mean The Chase Manhattan Bank and any
other Lender that may become an Issuing Bank pursuant to Section 2.23(i) or
2.23(j).
"Issuing Bank Agreement" shall mean an agreement in
substantially the form of Exhibit F.
"Issuing Bank Fees" shall have the meaning assigned to such
term in Section 2.06(c).
"Judgment Currency" shall have the meaning assigned to such
term in Section 9.16(b).
"L/C Commitment" shall mean, with respect to any Issuing Bank,
the Commitment of such Issuing Bank to issue Letters of Credit pursuant to
Section 2.23.
"L/C Disbursement" shall mean a payment or disbursement made
by an Issuing Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit at such time plus
(b) the aggregate principal amount of all L/C Disbursements that have not yet
been reimbursed at such time. The L/C Exposure of any Lender at any time shall
mean its Applicable Share of the aggregate L/C Exposure at such time.
"L/C Participation Fee" shall have the meaning assigned to
such term in Section 2.06(c).
<PAGE> 15
11
"Letter of Credit" shall mean any letter of credit issued
pursuant to Section 2.23.
"LIBO Rate" shall mean, with respect to any Eurocurrency
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the rate at which dollar deposits
or deposits in the applicable Local Currency approximately equal in principal
amount to (i) in the case of a Standby Borrowing that is a Eurocurrency
Borrowing, the Administrative Agent's portion of such Eurocurrency Borrowing,
(ii) in the case of a Competitive Borrowing, a principal amount that would have
been the Administrative Agent's portion of such Competitive Borrowing had such
Competitive Borrowing been a Standby Borrowing and (iii) in the case of a Local
Currency Borrowing, such Borrowing, and for a maturity comparable to such
Interest Period, are offered to the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" shall mean, with respect to any property or asset, any
mortgage, deed of trust, lien, pledge, security interest, charge or other
encumbrance on, of or in such property or asset.
"Loan" shall mean a Competitive Loan, a Local Currency Loan or
a Standby Loan, whether made as a Eurocurrency Loan, an ABR Loan or a Fixed Rate
Loan, as permitted hereby.
"Loan Documents" shall mean this Agreement, the Letters of
Credit, the Borrowing Subsidiary Agreements, any Issuing Bank Agreements, the
Local Currency Addenda and promissory notes, if any issued pursuant to Section
9.04(i).
"Local Currency" shall mean any currency other than Dollars as
to which an Exchange Rate may be calculated.
"Local Currency Addendum" shall mean a local currency addendum
between a Borrower and one or more Local Currency Lenders, substantially in the
form of Exhibit G, and the documentation referred to therein, to the extent not
inconsistent with this Agreement.
"Local Currency Borrowing" shall mean a Borrowing comprised of
Local Currency Loans.
"Local Currency Credit Event" shall mean each Borrowing under
a Local Currency Addendum.
"Local Currency Equivalent" shall mean, on any date of
determination, with respect to any amount in Dollars, the equivalent in the
relevant Local Currency of such amount, determined by the Administrative Agent
using the Exchange Rate with respect to such Local Currency then in effect as
determined pursuant to Section 2.22(a).
"Local Currency Facility Maximum Borrowing Amount" shall have
the meaning assigned to such term in Section 2.21(b).
"Local Currency Lender" shall mean any Lender (or any
Affiliate, branch or agency thereof) party to a Local Currency Addendum. In the
event any agency or Affiliate of a Lender shall be party to a Local Currency
Addendum, such agency, branch or Affiliate shall, to the extent of any
<PAGE> 16
12
commitment extended and any Loans made by it, have all the rights of such Lender
hereunder; provided, that such Lender shall continue to the exclusion of such
agency or Affiliate to have all the voting and consensual rights vested in it by
the terms hereof.
"Local Currency Lender Maximum Borrowing Amount" shall have
the meaning assigned to such term in Section 2.21(b).
"Local Currency Loan" shall mean any Loan, denominated in a
currency other than Dollars, made to a Borrower pursuant to Section 2.01(b) and
a Local Currency Addendum.
"Local Currency Loans (Dollar Equivalent)" shall mean the
Dollar Equivalent of the relevant Local Currency Loans.
"Local Currency Standby Borrowing" shall mean any Standby
Borrowing comprised of Local Currency Loans.
"Margin" shall mean, as to any Eurocurrency Competitive Loan,
the margin (expressed as a percentage rate per annum in the form of a decimal to
no more than four decimal places) to be added to or subtracted from the LIBO
Rate in order to determine the interest rate applicable to such Loan, as
specified in the Competitive Bid relating to such Loan.
"Margin Regulations" shall mean Regulations G, T, U and X of
the Board as from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Margin Stock" shall have the meaning given such term under
Regulation U of the Board.
"Material Adverse Effect" shall mean a materially adverse
effect on the business, assets, operations or condition, financial or otherwise,
of the Company and Subsidiaries taken as a whole.
"Maturity Date" shall mean the fifth anniversary of the date
hereof.
"Moody's" shall mean Moody's Investors Service, Inc. or any of
its successors.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Company or any ERISA
Affiliate (other than one considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Code Section 414) is making or accruing an obligation
to make contributions, or has within any of the preceding five plan years made
or accrued an obligation to make contributions.
"Notice of Competitive Bid Request" shall mean a notification
made pursuant to Section 2.03(a) in the form of Exhibit A-2.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
<PAGE> 17
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"person" shall mean any natural person, corporation, limited
liability company, business trust, joint venture, association, company,
partnership or government, or any agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 307 of ERISA, and in respect of which any
Borrower or any ERISA Affiliate is (or, if such plans were terminated, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
"Preferred Stock" shall mean any capital stock entitled by its
terms to a preference (a) as to dividends or (b) upon a distribution of assets.
"Principal Property" shall mean any single facility or other
property owned by the Company or any Restricted Subsidiary having a gross book
value in excess of 2% of Consolidated Net Tangible Assets, except any such
property or portion thereof which the board of directors of the Company by
resolution declares is not of material importance to the total business
conducted by the Company and its Restricted Subsidiaries as an entirety.
"Rating Agencies" shall mean D&P, Fitch, Moody's and S&P.
"Ratings" shall mean the ratings from time to time established
by the Rating Agencies for senior, unsecured, non-credit-enhanced long-term debt
of the Company.
"Register" shall have the meaning given such term in Section
9.04(d).
"Regulation D" shall mean Regulation D of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Reportable Event" shall mean any reportable event as defined
in Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate that is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Code Section 414).
"Required Lenders" shall mean, at any time, Lenders having
Commitments representing at least 66-2/3% of the Total Commitment or, for
purposes of acceleration pursuant to clause (ii) of Article VI, Lenders holding
Loans and L/C Exposures representing at least 66-2/3% of the aggregate principal
amount of the Loans outstanding and L/C Exposures. For purposes of determining
the Required Lenders, any amounts denominated in a Local Currency shall be
translated into Dollars at the Exchange Rates in effect on the first Reset Date
to occur in each calendar month.
"Reset Date" shall have the meaning assigned to such term in
Section 2.22(a).
"Responsible Officer" of any corporation shall mean any
executive officer or Financial Officer of such corporation and any other officer
or similar official thereof responsible for the administration of the
obligations of such corporation in respect of this Agreement.
"Restricted Subsidiary" shall mean any Subsidiary other than
an Unrestricted Subsidiary.
<PAGE> 18
14
"S&P" shall mean Standard and Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc. or any of its successors.
"SEC" shall mean the Securities and Exchange Commission.
"Standby Borrowing" shall mean a Borrowing consisting of
simultaneous Standby Loans from each of the Lenders.
"Standby Borrowing Request" shall mean a request made pursuant
to Section 2.04 in the form of Exhibit A-5.
"Standby Credit Exposure" shall mean, with respect to any
Lender at any time, the sum of the aggregate principal amount at such time of
all outstanding Standby Loans of such Lender and the aggregate Dollar Equivalent
of the principal amount of all outstanding Local Currency Loans of such Lender
(and each agency, branch or Affiliate of such Lender acting as a Local Currency
Lender).
"Standby Loans" shall mean the revolving loans made pursuant
to Section 2.04(a). Each Standby Loan shall be in Dollars and shall be a
Eurocurrency Standby Loan or an ABR Loan.
"subsidiary" shall mean, with respect to any person (the
"parent"), any corporation, association or other business entity of which
securities or other ownership interests representing more than 50% of the
ordinary voting power are, at the time as of which any determination is being
made, owned or controlled by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" shall mean a subsidiary of the Company.
"Total Commitment" shall mean, at any time, the aggregate
amount of Commitments of all the Lenders, as in effect at such time.
"Transactions" shall have the meaning assigned to such term in
Section 3.02.
"Type", when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined and the currency in which such Loan or
the Loans comprising such Borrowing are denominated. For purposes hereof, "Rate"
shall include the LIBO Rate, the Alternate Base Rate and the Fixed Rate, and
currency shall include Dollars and any Local Currency permitted hereunder.
"Unrestricted Subsidiary" shall mean (a) any Subsidiary which
has been designated an Unrestricted Subsidiary by resolution of the board of
directors of the Company (which resolution has been communicated in a notice
delivered by the Company to the Administrative Agent for distribution to the
Lenders) as an Unrestricted Subsidiary, other than any such Subsidiary as to
which such a designation has been rescinded by resolution of said board of
directors and not thereafter, or after some subsequent such rescission, restored
by resolution of said board, or (b) any Subsidiary 50% or less of the Voting
Shares of which is owned directly by the Company and/or one or more Restricted
Subsidiaries. A Subsidiary may not be designated as (or otherwise permitted to
become) an Unrestricted Subsidiary unless, immediately after such Subsidiary
becomes an Unrestricted Subsidiary, such Subsidiary would not own any capital
stock of, or hold any indebtedness of, any Restricted Subsidiary. A designation
as an Unrestricted Subsidiary
<PAGE> 19
15
may not be rescinded (or an Unrestricted Subsidiary otherwise permitted to
become a Restricted Subsidiary) unless such Subsidiary (i) is not a party to any
lease which it would have been prohibited by this Agreement from entering into
had it been a Restricted Subsidiary at the time it entered into such lease,
unless (x) such Subsidiary had not been a Restricted Subsidiary prior to its
entering into such lease, or (y) the property subject to such lease shall be
owned by the Company and/or one or more Subsidiaries, or (z) such Subsidiary
would not be prohibited by this Agreement from entering into such lease
immediately after it becomes a Restricted Subsidiary, and (ii) does not have
outstanding upon any of its property any mortgage, pledge or other lien which it
would be prohibited by this Agreement from creating, suffering to be created, or
assuming, immediately after it becomes a Restricted Subsidiary.
"Voting Shares" shall mean, as to a particular corporation or
other person, outstanding shares of stock or other equity interests of any class
of such person entitled to vote in the election of directors, or otherwise to
participate in the direction of the management and policies, of such person,
excluding shares or interests entitled so to vote or participate only upon the
happening of some contingency.
SECTION 1.02. Terms Generally. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections , Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided,
however, that for purposes of determining compliance with any covenant set forth
in Article V, such terms shall be construed in accordance with GAAP as in effect
on the date hereof applied on a basis consistent with the application used in
preparing the Company's audited financial statements referred to in Section
3.05.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments. (a) Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
each Lender agrees, severally and not jointly, to make Standby Loans to the
Borrowers, at any time and from time to time on and after the date hereof and
until the earlier of the Maturity Date and the termination of the Commitment of
such Lender.
(b) Subject to the terms and conditions and relying upon the
representations and warranties set forth herein and in the applicable Local
Currency Addendum, each Local Currency Lender agrees, severally and not jointly,
to make Local Currency Loans to the Borrowers at any time and from time to time
on and after the execution of the applicable Local Currency Addendum and until
earlier of the Maturity Date and the termination of the Commitment (or the
commitment under such Local Currency Addendum) of such Local Currency Lender.
(c) Notwithstanding anything to the contrary contained in this
Agreement, in no event may Standby Loans or Local Currency Loans be borrowed
under this Article II if, after giving effect thereto (and to any concurrent
repayment or prepayment of Loans), (i) the sum of the aggregate Standby
<PAGE> 20
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Credit Exposures, the aggregate Competitive Loan Exposures and the aggregate L/C
Exposures would exceed the Total Commitment then in effect, (ii) the sum of the
Standby Credit Exposure and the L/C Exposure of any Lender would exceed such
Lender's Commitment or (iii) the Dollar Equivalent of the aggregate principal
amount of the outstanding Local Currency Loans of any Local Currency Lender
denominated in a specified Local Currency would exceed the applicable Local
Currency Facility Maximum Borrowing Amount or any Local Currency Lender Maximum
Borrowing Amount.
Within the foregoing limits, the Borrowers may borrow, pay or
prepay and reborrow Standby Loans and Local Currency Loans hereunder, on and
after the Effective Date and prior to the Maturity Date, subject to the terms,
conditions and limitations set forth herein.
SECTION 2.02. Loans. (a) Each Standby Loan shall be made as
part of a Borrowing consisting of Standby Loans made by the Lenders ratably in
accordance with their respective Available Commitments; provided, however, that
the failure of any Lender to make any Standby Loan shall not in itself relieve
any other Lender of its obligation to lend hereunder (it being understood,
however, that no Lender shall be responsible for the failure of any other Lender
to make any Loan required to be made by such other Lender). Each Local Currency
Loan shall be made as part of a Borrowing consisting of Local Currency Loans
made by the Local Currency Lenders ratably in accordance with the applicable
Local Currency Lender Maximum Borrowing Amounts, provided, however, that the
failure of any Local Currency Lender to make any Local Currency Loan shall not
in itself relieve any other Local Currency Lender of its obligation to lend
hereunder (it being understood, however, that no Local Currency Lender shall be
responsible for the failure of any other Local Currency Lender to make any Local
Currency Loan required to be made by such other Local Currency Lender). Each
Competitive Loan shall be made in accordance with the procedures set forth in
Section 2.03. The Loans comprising any Borrowing shall be (i) in the case of
Competitive Loans, in an aggregate principal amount which is an integral
multiple of $1,000,000 and not less than $5,000,000, (ii) in the case of Standby
Loans, in an aggregate principal amount which is an integral multiple of
$5,000,000 and not less than $20,000,000 (or an aggregate principal amount equal
to the remaining balance of the Available Commitments) and (iii) in the case of
Local Currency Loans, in an aggregate principal amount which complies with the
requirements set forth in the applicable Local Currency Addendum. All Standby
Loans and Competitive Loans made pursuant to this Article II shall be
denominated in Dollars.
(b) Each Competitive Borrowing shall be comprised entirely of
Eurocurrency Competitive Loans or Fixed Rate Loans, and each Standby Borrowing
shall be comprised entirely of Eurocurrency Standby Loans or ABR Loans, as the
Borrower may request pursuant to Section 2.03 or 2.04, as applicable. Each
Lender may at its option make any Eurocurrency Loan by causing any domestic or
foreign branch, agency or Affiliate of such Lender to make such Loan; provided
that any exercise of such option shall not affect the obligation of the Borrower
to repay such Loan in accordance with the terms of this Agreement. Borrowings of
more than one Type may be outstanding at the same time. For purposes of the
foregoing, Loans having different Interest Periods, regardless of whether they
commence on the same date, shall be considered separate Loans.
(c) Subject to Section 2.05 and, in the case of any Local
Currency Loan, to any alternative procedures set forth in the applicable Local
Currency Addendum, each Lender shall make each Loan to be made by it hereunder
on the proposed date thereof by wire transfer of immediately available funds to
the Administrative Agent in New York, New York, not later than 12:00 noon, New
York City time, and the Administrative Agent shall by 2:00 p.m., New York City
time, credit the amounts so received to the account or accounts specified from
time to time in one or more notices delivered by the
<PAGE> 21
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Company to the Administrative Agent or, if a Borrowing shall not occur on such
date because any condition precedent herein specified shall not have been met,
return the amounts so received to the respective Lenders. Competitive Loans
shall be made by the Lender or Lenders whose Competitive Bids therefor are
accepted pursuant to Section 2.03 in the amounts so accepted. Standby Loans and
Local Currency Loans shall be made by the Lenders and the Local Currency
Lenders, as applicable, pro rata in accordance with Section 2.16. Unless the
Administrative Agent shall have received notice from a Lender prior to the date
(or, in the case of ABR Borrowings, on the date) of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender's portion
of such Borrowing, the Administrative Agent may assume that such Lender has made
such portion available to the Administrative Agent on the date of such Borrowing
in accordance with this paragraph (c) and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount in the required currency. If and to the extent that such
Lender shall not have made such portion available to the Administrative Agent,
such Lender and the Borrower severally agree to repay to the Administrative
Agent forthwith on demand such corresponding amount together with interest
thereon in such currency, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Lender, a rate determined by the Administrative Agent to represent
its cost of overnight funds. If such Lender shall repay to the Administrative
Agent such corresponding amount, such amount shall constitute such Lender's Loan
as part of such Borrowing for purposes of this Agreement.
(d) Each Competitive Loan shall be a Eurocurrency Competitive
Loan or a Fixed Rate Loan. Each Standby Loan shall be a Eurocurrency Standby
Loan or an ABR Standby Loan. Each Local Currency Loan shall be a Eurocurrency
Local Currency Loan or shall bear interest at a rate specified in the applicable
Loan Currency Addendum.
(e) If any Issuing Bank shall not have received from a
Borrower the payment required to be made by Section 2.23(e) within two hours
after such Borrower shall have received notice from such Issuing Bank that
payment of a draft presented under any Letter of Credit will be made, or, if the
Borrower shall have received such notice later than 10:00 a.m., New York City
time, on any Business Day, not later than 10:00 a.m., New York City time, on the
immediately following Business Day, as provided in Section 2.23(e), such Issuing
Bank will promptly notify the Administrative Agent of the L/C Disbursement and
the Administrative Agent will promptly notify each Lender of such L/C
Disbursement and its Applicable Share thereof. Each Lender shall pay by wire
transfer of immediately available funds to the Administrative Agent not later
than 2:00 p.m., New York City time, on such date (or, if such Lender shall have
received such notice later than 12:00 (noon), New York City time, on any day,
not later than 10:00 a.m., New York City time, on the immediately following
Business Day), an amount equal to such Lender's Applicable Share of such L/C
Disbursement (it being understood that such amount shall be deemed to constitute
an ABR Loan of such Lender and shall bear interest as provided herein), and the
Administrative Agent will promptly pay to the Issuing Bank any amounts so
received by it from the Lenders. The Administrative Agent will promptly pay to
the Issuing Bank any amounts received by it from the Borrower pursuant to
Section 2.23(e) prior to the time that any Lender makes any payment pursuant to
this paragraph 2.02(e); any such amounts received by the Administrative Agent
thereafter will be promptly remitted by the Administrative Agent to the Lenders
that shall have made such payments and to the Issuing Bank, as their interests
may appear. If any Lender shall not have made its Applicable Share of such L/C
Disbursement available to the Administrative Agent as provided above, such
Lender and the Borrowers severally agree to pay interest on such amount, for
each day from and including the date such amount is required to be paid in
accordance with this paragraph to but excluding the date such amount is paid, to
the
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Administrative Agent at (i) in the case of the Borrowers, a rate per annum equal
to the interest rate applicable to Loans pursuant to Section 2.08, and (ii) in
the case of such Lender, for the first such day, the Federal Funds Effective
Rate, and for each day thereafter, the Alternate Base Rate.
SECTION 2.03. Competitive Bid Procedure. (a) In order to
request Competitive Bids, a Borrower (the "Applicable Borrower") shall hand
deliver or telecopy to the Administrative Agent a duly completed Competitive Bid
Request in the form of Exhibit A-1 hereto, to be received by the Administrative
Agent (i) in the case of a Eurocurrency Competitive Loan, not later than 10:00
a.m., New York City time, four Business Days before a proposed Competitive
Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later than 10:00
a.m., New York City time, one Business Day before a proposed Competitive
Borrowing. No ABR Loan shall be requested in, or made pursuant to, a Competitive
Bid Request. A Competitive Bid Request that does not conform substantially to
the format of Exhibit A-1 may be rejected in the Administrative Agent's sole
discretion, and the Administrative Agent shall promptly notify the Borrower of
such rejection by telecopy. Each Competitive Bid Request shall refer to this
Agreement and specify (w) whether the Borrowing then being requested is to be a
Eurocurrency Borrowing or a Fixed Rate Borrowing, (x) the date of such Borrowing
(which shall be a Business Day) and the aggregate principal amount thereof which
shall be in a minimum principal amount of $10,000,000 and in an integral
multiple of $5,000,000 and (y) the Interest Period with respect thereto (which
may not end after the Maturity Date). Promptly after its receipt of a
Competitive Bid Request that is not rejected as aforesaid, the Administrative
Agent shall telecopy to the Lenders a Notice of Competitive Bid Request inviting
the Lenders to bid, on the terms and conditions of this Agreement, to make
Competitive Loans.
(b) Each Lender invited to bid may, in its sole discretion,
make one or more Competitive Bids to the Applicable Borrower responsive to such
Borrower's Competitive Bid Request. Each Competitive Bid by a Lender must be
received by the Administrative Agent by telecopy, in the form of Exhibit A-3
hereto, (i) in the case of a Eurocurrency Competitive Loan, not later than 9:30
a.m., New York City time, three Business Days before a proposed Competitive
Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later than 9:30
a.m., New York City time, on the day of a proposed Competitive Borrowing. A
Lender may submit multiple bids to the Administrative Agent. Competitive Bids
that do not conform substantially to the format of Exhibit A-3 may be rejected
by the Administrative Agent, and the Administrative Agent shall notify the
Lender making such nonconforming bid of such rejection as soon as practicable.
Each Competitive Bid shall refer to this Agreement and specify (x) the principal
amount (which shall be in a minimum principal amount of $5,000,000 and in an
integral multiple of $1,000,000 and which may equal the entire principal amount
of the Competitive Borrowing requested) of the Competitive Loan or Loans that
the Lender is willing to make, (y) the Competitive Bid Rate or Rates at which
the Lender is prepared to make the Competitive Loan or Loans and (z) the
Interest Period and the last day thereof. If any Lender invited to bid shall
elect not to make a Competitive Bid, such Lender shall so notify the
Administrative Agent by telecopy (I) in the case of Eurocurrency Competitive
Loans, not later than 9:30 a.m., New York City time, three Business Days before
a proposed Competitive Borrowing, and (II) in the case of Fixed Rate Loans, not
later than 9:30 a.m., New York City time, on the day of a proposed Competitive
Borrowing; provided, however, that failure by any Lender to give such notice
shall not cause such Lender to be obligated to make any Competitive Loan as part
of such Competitive Borrowing. A Competitive Bid submitted by a Lender pursuant
to this paragraph (b) shall be irrevocable.
(c) The Administrative Agent shall as promptly as practicable
notify the Borrower, by telecopy, of all the Competitive Bids made, the
Competitive Bid Rate and the principal amount of each Competitive Loan in
respect of which a Competitive Bid was made and the identity of the Lender that
made
<PAGE> 23
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each bid. The Administrative Agent shall send a copy of all Competitive Bids to
the Borrower for its records as soon as practicable after completion of the
bidding process set forth in this Section 2.03.
(d) The Borrower may in its sole and absolute discretion,
subject only to the provisions of this paragraph (d), accept or reject any
Competitive Bid referred to in paragraph (c) above. The Borrower shall notify
the Administrative Agent by telephone, confirmed by telecopy in the form of a
Competitive Bid Accept/Reject Letter, whether and to what extent it has decided
to accept or reject any of or all the bids referred to in paragraph (c) above
not more than one hour after it shall have been notified of such bids by the
Administrative Agent pursuant to such paragraph (c); provided, however, that (i)
the failure of the Borrower to give such notice shall be deemed to be a
rejection of all the bids referred to in paragraph (c) above, (ii) the Borrower
shall not accept a bid made at a particular Competitive Bid Rate if it has
decided to reject a bid made at a lower Competitive Bid Rate, (iii) the
aggregate amount of the Competitive Bids accepted by the Borrower shall not
exceed the principal amount specified in the Competitive Bid Request, (iv) if
the Borrower shall accept a bid or bids made at a particular Competitive Bid
Rate but the amount of such bid or bids shall cause the total amount of bids to
be accepted to exceed the amount specified in the Competitive Bid Request, then
the Borrower shall accept a portion of such bid or bids in an amount equal to
the amount specified in the Competitive Bid Request less the amount of all other
Competitive Bids accepted with respect to such Competitive Bid Request, which
acceptance, in the case of multiple bids at such Competitive Bid Rate, shall be
made pro rata in accordance with the amount of each such bid at such Competitive
Bid Rate, and (v) except pursuant to clause (iv) above, no bid shall be accepted
for a Competitive Loan unless such Competitive Loan is in a minimum principal
amount of $5,000,000 and an integral multiple of $1,000,000; provided further,
however, that if a Competitive Loan must be in an amount less than $5,000,000
because of the provisions of clause (iv) above, such Competitive Loan may be for
a minimum of $1,000,000 or any integral multiple thereof, and in calculating the
pro rata allocation of acceptances of portions of multiple bids at a particular
Competitive Bid Rate pursuant to clause (iv) the amounts shall be rounded to
integral multiples of $1,000,000 in a manner which shall be in the discretion of
the Borrower. A notice given pursuant to this paragraph (d) shall be
irrevocable.
(e) The Administrative Agent shall promptly notify each
bidding Lender whether or not its Competitive Bid has been accepted (and if so,
in what amount and at what Competitive Bid Rate) by telecopy, and each
successful bidder will thereupon become bound, subject to the other applicable
conditions hereof, to make the Competitive Loan in respect of which its bid has
been accepted.
(f) No Competitive Borrowing shall be requested or made
hereunder if after giving effect thereto any of the conditions set forth in
paragraph (c) of Section 2.01 would not be met.
(g) If the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Lender, it shall submit such bid directly
to the Applicable Borrower one quarter of an hour earlier than the latest time
at which the other Lenders are required to submit their bids to the
Administrative Agent pursuant to paragraph (b) above.
(h) All notices required by this Section 2.03 shall be given
in accordance with Section 9.01.
SECTION 2.04. Standby and Local Currency Borrowing Procedure.
(a) In order to request a Standby Borrowing, a Borrower shall hand deliver or
telecopy to the Administrative Agent a duly completed Standby Borrowing Request
in the form of Exhibit A-5 (i) in the case of a Eurocurrency Standby
<PAGE> 24
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Loan, not later than 10:30 a.m., New York City time (or, if the Standby
Borrowing request is delivered or telecopied to the Administrative Agent in
London, 9:30 a.m., London time), three Business Days before such Borrowing, and
(ii) in the case of an ABR Borrowing, not later than 10:30 a.m., New York City
time, on the day of such Borrowing. No Fixed Rate Loan shall be requested or
made pursuant to a Standby Borrowing Request. Such notice shall be irrevocable
and shall in each case specify (A) whether the Borrowing then being requested is
to be a Eurocurrency Standby Loan or an ABR Borrowing; (B) the date of such
Standby Borrowing (which shall be a Business Day) and the amount thereof; and
(C) if such Borrowing is to be a Eurocurrency Standby Loan, the Interest Period
with respect thereto, which shall not end after the Maturity Date. If no
election as to the Type of Standby Borrowing is specified in any such notice,
then the requested Standby Borrowing shall be an ABR Borrowing. If no Interest
Period with respect to any Eurocurrency Standby Loan is specified in any such
notice, then the Borrower shall be deemed to have selected an Interest Period of
one month's duration. Notwithstanding any other provision of this Agreement to
the contrary, no Standby Borrowing shall be requested if the Interest Period
with respect thereto would end after the Maturity Date. The Administrative Agent
shall promptly advise each of the Lenders of any notice given pursuant to this
Section 2.04 and of each Lender's portion of the requested Borrowing.
(b) In order to request a Local Currency Borrowing, a Borrower
shall give the notice required under the applicable Local Currency Addendum and
shall simultaneously deliver a copy of such notice to the Administrative Agent.
SECTION 2.05. Conversion and Continuation of Standby Loans.
Each Borrower shall have the right at any time upon prior irrevocable notice to
the Administrative Agent (i) not later than 10:30 a.m., New York City time, on
the day of the conversion, to convert all or any part of any Eurocurrency
Standby Loan into an ABR Standby Loan, and (ii) not later than 10:30 a.m., New
York City time, three Business Days prior to conversion or continuation, to
convert any ABR Standby Loan into a Eurocurrency Standby Loan or to continue any
Eurocurrency Standby Loan as a Eurocurrency Standby Loan for an additional
Interest Period, subject in each case to the following:
(a) if less than all the outstanding principal amount of any
Standby Borrowing shall be converted or continued, the aggregate
principal amount of the Standby Borrowing converted or continued shall
be an integral multiple of $5,000,000 and not less than $20,000,000;
(b) accrued interest on a Standby Borrowing (or portion
thereof) being converted shall be paid by the Borrower at the time of
conversion;
(c) if any Eurocurrency Standby Loan is converted at a time
other than the end of the Interest Period applicable thereto, the
Borrower shall pay, upon demand, any amounts due to the Lenders
pursuant to Section 2.15;
(d) any portion of a Standby Borrowing maturing or required to
be repaid in less than one month may not be converted into or continued
as a Eurocurrency Standby Loan;
(e) any portion of a Eurocurrency Standby Loan which cannot be
continued as a Eurocurrency Standby Loan by reason of clause (d) above
shall be automatically converted at the end of the Interest Period in
effect for such Eurocurrency Standby Loan into an ABR Borrowing;
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(f) no Interest Period may be selected for any Eurocurrency
Standby Borrowing that would end later than the Maturity Date; and
(g) at any time when there shall have occurred and be
continuing any Default or Event of Default, no Standby Loan may be
converted into or continued as a Eurocurrency Standby Loan.
Each notice pursuant to this Section 2.05 shall be irrevocable
and shall refer to this Agreement and specify (i) the identity and amount of the
Standby Borrowing to be converted or continued, (ii) whether such Standby
Borrowing is to be converted to or continued as a Eurocurrency Standby Loan or
an ABR Standby Loan, (iii) if such notice requests a conversion, the date of
such conversion (which shall be a Business Day) and (iv) if such Standby
Borrowing is to be converted to or continued as a Eurocurrency Standby Loan, the
Interest Period with respect thereto. If no Interest Period is specified in any
such notice with respect to any conversion to or continuation as a Eurocurrency
Standby Loan, the Borrower shall be deemed to have selected an Interest Period
of one month's duration. If no notice shall have been given in accordance with
this Section 2.05 to convert or continue any Standby Borrowing, such Standby
Borrowing shall, at the end of the Interest Period applicable thereto (unless
repaid pursuant to the terms hereof), automatically be continued into a new
Interest Period as an ABR Standby Loan.
SECTION 2.06. Fees. (a) The Company agrees to pay to each
Lender, through the Administrative Agent, on each March 31, June 30, September
30 and December 31 (with the first payment being due on December 31, 1996) and
on each date on which the Commitment of such Lender shall be terminated as
provided herein, a facility fee (a "Facility Fee"), at a rate per annum equal to
the Applicable Percentage from time to time in effect on the amount of the
Commitment of such Lender, whether used or unused, during the preceding quarter
(or other period commencing on the Effective Date, or ending with the Maturity
Date or any date on which the Commitment of such Lender shall be terminated).
All Facility Fees shall be computed on the basis of the actual number of days
elapsed in a year of 365 or 366 days, as the case may be. The Facility Fee due
to each Lender shall commence to accrue on the Effective Date, and shall cease
to accrue on the earlier of the Maturity Date and the termination of the
Commitment of such Lender as provided herein.
(b) The Company agrees to pay the Administrative Agent, for
its own account, the administrative and other fees separately agreed to by the
Company and the Administrative Agent (the "Administrative Fees").
(c) The Company agrees to pay (i) to each Lender, through the
Administrative Agent, on each March 31, June 30, September 30 and December 31
and on the date on which the Commitment of such Lender shall be terminated as
provided herein, a fee (an "L/C Participation Fee") calculated on such Lender's
average daily L/C Exposure (excluding the portion thereof attributable to
unreimbursed L/C Disbursements) during the preceding quarter (or shorter period
commencing with the Effective Date or ending with the Maturity Date or the date
on which the Commitment of such Lender shall be terminated) at a rate equal to
the Applicable Percentage from time to time applicable for purposes of
determining the interest rate on Borrowings comprised of Eurocurrency Loans
pursuant to Section 2.08, and (ii) to the Issuing Bank with respect to each
Letter of Credit the fees agreed upon by the Company and such Issuing Bank in
the applicable Issuing Bank Agreement plus, in connection with the issuance,
amendment or transfer of any Letter of Credit or any L/C Disbursement, the
Issuing Bank's customary documentary and processing charges (collectively, the
"Issuing Bank Fees"). All L/C Participation Fees and Issuing Bank Fees shall be
computed on the basis of the actual number of days elapsed in a year of 360
days. Notwithstanding the foregoing, in the case of any Letter of Credit that
will expire later than the first
<PAGE> 26
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anniversary of the issuance, amendment, renewal or extension thereof, the L/C
Participation Fee and Issuing Bank Fees shall be increased by an amount to be
agreed upon prior to such issuance, amendment, renewal or extension by the
applicable Borrower, the applicable Issuing Bank and the Required Lenders.
(d) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders except that the Issuing Bank Fees shall be paid
directly to the applicable Issuing Bank and the Administrative Fees shall be
paid pursuant to paragraph (b) above. Once paid, none of the Fees shall be
refundable under any circumstances.
SECTION 2.07. Repayment of Loans; Evidence of Debt. (a) Each
Borrower hereby agrees that the outstanding principal balance of each Standby
Loan or Local Currency Loan shall be payable on the Maturity Date (unless an
earlier date is specified in the Local Currency Addendum relating to such Local
Currency Loan) and that the outstanding principal balance of each Competitive
Loan shall be payable on the last day of the Interest Period applicable thereto.
Each Loan shall bear interest on the outstanding principal balance thereof as
set forth in Section 2.08.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which
it will record (i) the amount of each Loan made hereunder, the currency of each
Loan, the Borrower of each Loan, the Type of each Loan made and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from each Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Administrative Agent hereunder
from each Borrower and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) of this Section 2.07 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of the Borrowers to repay the Loans in
accordance with their terms.
SECTION 2.08. Interest on Loans. (a) Subject to the provisions
of Section 2.09, the Loans comprising each Eurocurrency Borrowing shall bear
interest (computed on the basis of the actual number of days elapsed over a year
of 360 days) at a rate per annum equal to (i) in the case of each Eurocurrency
Standby Loan, the LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Percentage from time to time in effect, (ii) in the case of
each Eurocurrency Competitive Loan, the LIBO Rate for the Interest Period in
effect for such Borrowing plus the Margin offered by the Lender making such Loan
and accepted by the Borrower pursuant to Section 2.03 and (iii) in the case of
each Eurocurrency Local Currency Loan, the LIBO Rate for the Interest Period in
effect for such Loan plus any spread specified in the applicable Local Currency
Addendum.
(b) Subject to the provisions of Section 2.09, the Loans
comprising each ABR Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 365 or
<PAGE> 27
23
366 days, as the case may be, for periods during which the Alternate Base Rate
is determined by reference to the Prime Rate and 360 days for other periods) at
a rate per annum equal to the Alternate Base Rate.
(c) Subject to the provisions of Section 2.09, each Fixed Rate
Loan shall bear interest at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to the fixed rate
of interest offered by the Lender making such Loan and accepted by the Borrower
pursuant to Section 2.03.
(d) Subject to the provisions of Section 2.09, any Local
Currency Loan that is not a Eurocurrency Loan shall bear interest at the rate or
rates per annum set forth in the applicable Local Currency Addendum.
(e) Interest on each Loan shall be payable on each Interest
Payment Date applicable to such Loan except as otherwise provided in this
Agreement or in an applicable Local Currency Addendum. The applicable LIBO Rate
or Alternate Base Rate for each Interest Period or day within an Interest
Period, as the case may be, shall be determined by the Administrative Agent, and
such determination shall be conclusive absent manifest error.
SECTION 2.09. Default Interest. If a Borrower shall default in
the payment of the principal of or interest on any Loan or any other amount
becoming due hereunder, whether by scheduled maturity, notice of prepayment,
acceleration or otherwise, such Borrower shall on demand from time to time from
the Administrative Agent pay interest, to the extent permitted by law, on such
defaulted amount up to (but not including) the date of actual payment (after as
well as before judgment) at a rate per annum (computed as provided in Section
2.08(b)) equal to the Alternate Base Rate plus 2% (or, in the case of Local
Currency Loans, such other rate as may be specified in the applicable Local
Currency Addendum).
SECTION 2.10. Alternate Rate of Interest. In the event, and on
each occasion, that on the day two Business Days prior to the commencement of
any Interest Period for a Eurocurrency Borrowing, the Administrative Agent shall
have determined (i) that deposits in the currency and principal amounts of the
Eurocurrency Loans comprising such Borrowing are not generally available in the
London market or (ii) that reasonable means do not exist for ascertaining the
LIBO Rate, the Administrative Agent shall, as soon as practicable thereafter,
give telecopy notice of such determination to the Borrower and the Lenders. In
the event of any such determination under clause (i) or (ii) above, until the
Administrative Agent shall have advised the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (x) any request by a
Borrower for a Eurocurrency Competitive Loan pursuant to Section 2.03 shall be
of no force and effect and shall be denied by the Administrative Agent, (y) any
request by a Borrower for a Eurocurrency Standby Loan pursuant to Section
2.04(a) shall be deemed to be a request for an ABR Borrowing and (z) any request
for a Eurocurrency Local Currency Loan pursuant to Section 2.04(b) and to a
Local Currency Addendum shall be deemed to be a request for a Local Currency
Loan bearing interest by reference to the rate specified in the applicable Local
Currency Addendum (provided that if the requested Eurocurrency Local Currency
Loan was to be made pursuant to a Local Currency Addendum in which no rate is
specified such request shall be of no force and effect and shall be denied by
the Administrative Agent). In the event the Required Lenders notify the
Administrative Agent that the rates at which Dollar deposits are being offered
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining Eurocurrency Loans in Dollars during such Interest Period, the
Administrative Agent shall notify the applicable Borrower of such notice and
until the Required Lenders shall have advised the Administrative Agent that the
circumstances giving rise to such notice no longer exist, any request by such
Borrower for a Eurocurrency Standby Loan shall be deemed a request for an
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ABR Borrowing. Each determination by the Administrative Agent hereunder shall be
made in good faith and shall be conclusive absent manifest error.
SECTION 2.11. Termination and Reduction of Commitments. (a)
The Commitments shall be automatically terminated on the Maturity Date.
(b) Upon at least three Business Days' prior irrevocable
telecopy notice to the Administrative Agent, the Company may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Total Commitment; provided, however, that (i) each partial reduction of the
Total Commitment shall be in an integral multiple of $10,000,000 and in a
minimum principal amount of $50,000,000 and (ii) no such termination or
reduction shall be made (A) which would reduce the Total Commitment to an amount
less than the sum of the aggregate Standby Credit Exposures, Competitive Loan
Exposures and L/C Exposures or (B) which would reduce any Lender's Commitment to
an amount that is less than the sum of such Lender's Standby Credit Exposure and
L/C Exposure.
(c) Each reduction in the Total Commitment hereunder shall be
made ratably among the Lenders in accordance with their respective Commitments.
The Borrowers shall pay to the Administrative Agent for the account of the
Lenders, on the date of each reduction or termination of the Total Commitment,
the Facility Fees on the amount of the Commitments terminated accrued through
the date of such termination or reduction.
SECTION 2.12. Prepayment. (a) Each Borrower shall have the
right at any time and from time to time to prepay any Standby Borrowing or Local
Currency Borrowing, as the case may be, in whole or in part, upon giving
telecopy notice (or telephone notice promptly confirmed by telecopy) to the
Administrative Agent: (i) before 10:00 a.m., New York City time, three Business
Days prior to prepayment, in the case of Eurocurrency Standby Loans, and (ii)
before 10:00 a.m., New York City time, one Business Day prior to prepayment, in
the case of ABR Standby Loans and (iii) in the case of Local Currency Loans, by
such time as shall be specified in the applicable Local Currency Addendum;
provided, however, that each partial prepayment shall be in an amount which is
(x) in the case of any Standby Borrowing, an integral multiple of $10,000,000
and not less than $50,000,000, and (ii) in the case of any Local Currency
Borrowing, an amount in which prepayments are permitted to be made under the
applicable Local Currency Addendum. No prepayment may be made in respect of any
Competitive Borrowing.
(b) On the date of any termination or reduction of the
Commitments pursuant to Section 2.11, the Borrowers shall pay or prepay so much
of the Standby Borrowings as shall be necessary in order that the sum of the
aggregate Competitive Loan Exposures, Standby Credit Exposures and L/C Exposures
will not exceed the Total Commitment, after giving effect to such termination or
reduction.
(c) Each notice of prepayment shall specify the prepayment
date and the principal amount of each Borrowing (or portion thereof) to be
prepaid, shall be irrevocable and shall commit the applicable Borrower to prepay
such Borrowing (or portion thereof) by the amount stated therein on the date
stated therein. All prepayments under this Section 2.12 shall be subject to
Section 2.15 but otherwise without premium or penalty. All prepayments under
this Section 2.12 shall be accompanied by accrued interest on the principal
amount being prepaid to the date of payment.
SECTION 2.13. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
<PAGE> 29
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interpretation or administration thereof (whether or not having the force of
law) shall result in the imposition, modification or applicability of any
reserve, special deposit or similar requirement against assets of, deposits with
or for the account of or credit extended by any Lender or any Issuing Bank, or
shall result in the imposition on any Lender or the London interbank market of
any other condition affecting this Agreement, such Lender's Commitment or any
Eurocurrency Loan or Fixed Rate Loan made by such Lender or any Letter of
Credit, and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurocurrency Loan or Fixed Rate Loan or
of issuing or maintaining any Letter of Credit or to reduce the amount of any
sum received or receivable by such Lender or such Issuing Bank hereunder
(whether of principal, interest or otherwise) by an amount deemed by such Lender
or such Issuing Bank to be material, then such additional amount or amounts as
will compensate such Lender, or such Issuing Bank, as the case may be, for such
additional costs or reduction will be paid by the Borrowers to such Lender, or
such Issuing Bank, as the case may be, upon demand. Notwithstanding the
foregoing, no Lender or Issuing Bank shall be entitled to request compensation
under this paragraph with respect to any Competitive Loan or Letter of Credit if
the change giving rise to such request was applicable to such Lender or Issuing
Bank at the time of submission of the Competitive Bid or L/C Competitive Bid
pursuant to which such Competitive Loan or Letter of Credit was made or issued.
(b) If any Lender or any Issuing Bank shall have determined
that the adoption of any law, rule, regulation or guideline arising out of the
July 1988 report of the Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital Measurement and Capital
Standards", or the adoption after the date hereof of any other law, rule,
regulation or guideline regarding capital adequacy, or any change in any of the
foregoing or in the interpretation or administration of any of the foregoing by
any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or Issuing
Bank (or any lending office of such Lender or such Issuing Bank) or any Lender's
or Issuing Bank's holding company with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's or Issuing Bank's capital or on the capital of
such Lender's or Issuing Bank's holding company, if any, as a consequence of
this Agreement, such Lender's Commitment or the Loans made or Letters of Credit
issued by such Lender or Issuing Bank pursuant hereto to a level below that
which such Lender or Issuing Bank or such Lender's or Issuing Bank's holding
company could have achieved but for such adoption, change or compliance (taking
into consideration such Lender's or Issuing Bank's policies and the policies of
such Lender's or Issuing Bank's holding company with respect to capital
adequacy) by an amount deemed by such Lender or Issuing Bank to be material,
then from time to time such additional amount or amounts as will compensate such
Lender or Issuing Bank for such reduction will be paid by the Borrowers to such
Lender or Issuing Bank.
(c) A certificate of any Lender or Issuing Bank setting forth
such amount or amounts as shall be necessary to compensate such Lender or
Issuing Bank or its holding company, as applicable, as specified in paragraph
(a) or (b) above, as the case may be, shall be delivered to the Company and
shall be conclusive absent manifest error. The Borrowers shall pay such Lender
or Issuing Bank the amount shown as due on any such certificate delivered by it
within 10 days after its receipt of the same.
(d) Failure on the part of any Lender or Issuing Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital with respect to any period shall
not constitute a waiver of such Lender's or Issuing Bank's right to demand
compensation with respect to such period or any other period; provided, however,
that no Lender or Issuing Bank shall be entitled to compensation under this
Section 2.13 for any costs incurred or reductions
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suffered with respect to any date unless it shall have notified the Company that
it will demand compensation for such costs or reductions under paragraph (c)
above not more than 90 days after the later of (i) such date and (ii) the date
on which it shall have become aware of such costs or reductions. The protection
of this Section shall be available to each Lender and Issuing Bank regardless of
any possible contention of the invalidity or inapplicability of the law, rule,
regulation, guideline or other change or condition which shall have occurred or
been imposed.
SECTION 2.14. Change in Legality. (a) Notwithstanding any
other provision herein, if any change in any law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
or any of its Affiliates which shall be party to a Local Currency Addendum to
make or maintain any Eurocurrency Loan or Local Currency Loan or to give effect
to its obligations as contemplated hereby with respect to any Eurocurrency Loan
or Local Currency Loan, or shall limit the convertibility into Dollars of any
Local Currency (or make such conversion commercially impracticable), then, by
written notice to the Company and to the Administrative Agent, such Lender may:
(i) declare that Eurocurrency Loans or Loans in any affected
Local Currency will not thereafter be made by such Lender hereunder,
whereupon such Lender shall not submit a Competitive Bid in response to
a request for a Eurocurrency Competitive Loan, any request for a
Eurocurrency Standby Loan shall, as to such Lender only, be deemed a
request for an ABR Loan, and any request for a Local Currency Borrowing
in such Local Currency shall be disregarded, unless such declaration
shall be subsequently withdrawn; and
(ii) require that all outstanding Eurocurrency Loans in
Dollars made by it be converted to ABR Loans and that all outstanding
Local Currency Loans made by it in the affected Local Currency be
promptly prepaid, in which event all such Eurocurrency Loans in Dollars
shall be automatically converted to ABR Loans as of the effective date
of such notice as provided in paragraph (b) below and all such Local
Currency Loans shall be promptly prepaid.
In the event any Lender shall exercise its rights under (i) or (ii) above with
respect to Eurocurrency Loans in Dollars, all payments and prepayments of
principal which would otherwise have been applied to repay the Eurocurrency
Loans that would have been made by such Lender or the converted Eurocurrency
Loans, of such Lender shall instead be applied to repay the ABR Loans made by
such Lender in lieu of, or resulting from the conversion of, such Eurocurrency
Loans.
(b) For purposes of this Section 2.14, a notice by any Lender
shall be effective as to each Eurocurrency Loan or Local Currency Loan, if
lawful, on the last day of the Interest Period currently applicable to such
Eurocurrency Loan or Local Currency Loan; in all other cases such notice shall
be effective on the date of receipt.
SECTION 2.15. Indemnity. The Borrowers shall indemnify each
Lender against any out-of-pocket loss or expense which such Lender may sustain
or incur as a consequence of (a) any failure to borrow or to refinance, convert
or continue any Loan hereunder after irrevocable notice of such borrowing,
refinancing, conversion or continuation has been given pursuant to Section 2.03,
2.04 or 2.05 or pursuant to any Local Currency Addendum, (b) any payment,
prepayment or conversion, or assignment required under Section 2.20, of a
Eurocurrency Loan required by any other provision of this Agreement or otherwise
made or deemed made on a date other than the last day of the Interest Period, if
any, applicable thereto, (c) any default in payment or prepayment of the
principal amount of any Loan or any part thereof
<PAGE> 31
27
or interest accrued thereon, as and when due and payable (at the due date
thereof, whether by scheduled maturity, acceleration, irrevocable notice of
prepayment or otherwise) or (d) the occurrence of any Event of Default,
including, in each such case, any loss or reasonable expense sustained or
incurred or to be sustained or incurred in liquidating or employing deposits
from third parties acquired to effect or maintain such Loan or any part thereof
as a Eurocurrency Loan. Such loss or reasonable expense shall include an amount
equal to the excess, if any, as reasonably determined by such Lender, of (i) its
cost of obtaining the funds for the Loan being paid, prepaid, refinanced or not
borrowed (assumed to be the LIBO Rate applicable thereto) for the period from
the date of such payment, prepayment, refinancing or failure to borrow or
refinance to the last day of the Interest Period for such Loan (or, in the case
of a failure to borrow or refinance the Interest Period for such Loan which
would have commenced on the date of such failure) over (ii) the amount of
interest (as reasonably determined by such Lender) that would be realized by
such Lender in reemploying the funds so paid, prepaid or not borrowed or
refinanced for such period or Interest Period, as the case may be. A certificate
of any Lender setting forth any amount or amounts which such Lender is entitled
to receive pursuant to this Section shall be delivered to such Borrower and
shall be conclusive absent manifest error.
SECTION 2.16. Pro Rata Treatment. Except as required under
Sections 2.14 and 2.20, each payment of the Facility Fees and each reduction of
the Commitments shall be allocated pro rata among the Lenders in accordance with
their respective Commitments (or, if such Commitments shall have expired or been
terminated, in accordance with the respective principal amounts of their
outstanding Standby Loans). Except as required under Section 2.14, each payment
or repayment of principal of any Standby Borrowing and each refinancing or
conversion of any Standby Borrowing shall be allocated pro rata among the
Lenders in such Borrowing in accordance with the respective principal amounts of
their outstanding Standby Loans comprising such Borrowing, and each payment of
interest on any Standby Borrowing shall be allocated pro rata among the Lenders
participating in such a Borrowing in accordance with the respective amounts of
accrued and unpaid interest on their outstanding Standby Loans comprising such
Borrowing. Each payment of principal of any Competitive Borrowing shall be
allocated pro rata among the Lenders participating in such Borrowing in
accordance with the respective principal amounts of their outstanding
Competitive Loans comprising such Borrowing. Each payment of interest on any
Competitive Borrowing shall be allocated pro rata among the Lenders
participating in such Borrowing in accordance with the respective amounts of
accrued and unpaid interest on their outstanding Competitive Loans comprising
such Borrowing. For purposes of determining the Available Commitments of the
Lenders at any time, each outstanding Competitive Borrowing shall be deemed to
have utilized the Commitments of the Lenders (including those Lenders which
shall not have made Loans as part of such Competitive Borrowing) pro rata in
accordance with their respective Commitments. Each Lender agrees that in
computing such Lender's portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Lender's percentage of
such Borrowing to the next higher or lower whole Dollar amount.
SECTION 2.17. Sharing of Setoffs. Each Lender agrees that if
it shall, through the exercise of a right of banker's lien, setoff or
counterclaim, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of any Standby Loan or Loans as a
result of which the unpaid principal portion of its Standby Loans shall be
proportionately less than the unpaid principal portion of the Standby Loans of
any other Lender, it shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, a participation in the Standby Loans of such other Lender,
so
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that the aggregate unpaid principal amount of the Standby Loans and
participations in the Standby Loans held by each Lender shall be in the same
proportion to the aggregate unpaid principal amount of all Standby Loans then
outstanding as the principal amount of its Standby Loans prior to such exercise
of banker's lien, setoff or counterclaim or other event was to the principal
amount of all Standby Loans outstanding prior to such exercise of banker's lien,
setoff or counterclaim or other event; provided, however, that, if any such
purchase or purchases or adjustments shall be made pursuant to this Section 2.17
and the payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or adjustments shall be rescinded to the extent of such recovery
and the purchase price or prices or adjustment restored without interest. Any
Lender holding a participation in a Standby Loan deemed to have been so
purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing to such Lender by reason
thereof as fully as if such Lender had made a Standby Loan in the amount of such
participation.
SECTION 2.18. Payments. (a) The Borrowers shall make each
payment (including principal of or interest on any Borrowing or any L/C
Disbursement and any Fees or other amounts) hereunder from an account in the
United States not later than 12:00 noon, local time at the place of payment, on
the date when due in immediately available funds to the Administrative Agent at
its offices at 270 Park Avenue, New York, New York (or, in the case of Local
Currency Loans, such other time and place as shall be specified in the
applicable Local Currency Addendum). Each such payment (other than principal of
and interest on Local Currency Loans) shall be made in Dollars.
(b) Whenever any payment (including principal of or interest
on any Borrowing or any Fees or other amounts) hereunder shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.
SECTION 2.19. Taxes. (a) Any and all payments to the Lenders
hereunder shall be made, in accordance with Section 2.18, free and clear of and
without deduction for any and all current or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding (i) income taxes imposed on the income of the Administrative Agent,
any Lender or any Issuing Bank (or any transferee or assignee thereof, including
a participation holder (any such entity a "Transferee")) and (ii) franchise
taxes imposed on the income, assets or net worth of the Administrative Agent,
any Lender or any Issuing Bank (or Transferee), in each case by the jurisdiction
under the laws of which the Administrative Agent, such Lender or such Issuing
Bank (or Transferee) is organized or doing business (other than as a result of
entering into this Agreement, performing any obligations hereunder, receiving
any payments hereunder or enforcing any rights hereunder), or any political
subdivision thereof (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities, collectively or individually, "Taxes").
If any Borrower shall be required to deduct any Taxes from or in respect of any
sum payable hereunder to any Lender (or any Transferee), the Administrative
Agent or any Issuing Bank, (i) the sum payable shall be increased by the amount
(an "additional amount") necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.19) such Lender (or Transferee), the Administrative Agent or such Issuing Bank
(as the case may be) shall receive an amount equal to the sum it would have
received had no such deductions been made, (ii) such Borrower shall make such
deductions and (iii) such Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrowers shall pay to the relevant
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or
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property taxes, charges or similar levies that arise from any payment made
hereunder or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or any other Loan Document ("Other Taxes").
(c) The Borrowers shall indemnify each Lender (or Transferee),
the Administrative Agent and each Issuing Bank for the full amount of Taxes and
Other Taxes paid by such Lender (or Transferee), the Administrative Agent or
such Issuing Bank, as the case may be, and any liability (including penalties,
interest and expenses (including reasonable attorney's fees and expenses))
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability prepared by a Lender
(or Transferee), Issuing Bank or the Administrative Agent on its behalf, absent
manifest error, shall be final, conclusive and binding for all purposes. Such
indemnification shall be made within 30 days after the date any Lender (or
Transferee), an Issuing Bank or the Administrative Agent, as the case may be,
makes written demand therefor, which written demand shall be made within 60 days
of the date such Lender (or Transferee), such Issuing Bank or the Administrative
Agent receives written demand for payment of such Taxes or Other Taxes from the
relevant Governmental Authority.
(d) If a Lender (or Transferee), an Issuing Bank or the
Administrative Agent shall become aware that it is entitled to claim a refund
from a Governmental Authority in respect of Taxes or Other Taxes as to which it
has been indemnified by the Borrowers, or with respect to which the Borrowers
have paid additional amounts, pursuant to this Section 2.19, it shall promptly
notify the Borrowers of the availability of such refund claim and shall, within
30 days after receipt of a request by the Borrowers, make a claim to such
Governmental Authority for such refund at the Borrowers' expense. If a Lender
(or Transferee), an Issuing Bank or the Administrative Agent receives a refund
(including pursuant to a claim for refund made pursuant to the preceding
sentence) in respect of any Taxes or Other Taxes as to which it has been
indemnified by the Borrowers or with respect to which the Borrowers have paid
additional amounts pursuant to this Section 2.19, it shall within 30 days from
the date of such receipt pay over such refund to the Borrowers (but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrowers
under this Section 2.19 with respect to the Taxes or Other Taxes giving rise to
such refund), net of all out-of-pocket expenses of such Lender (or Transferee),
such Issuing Bank or the Administrative Agent and without interest (other than
interest paid by the relevant Governmental Authority with respect to such
refund); provided, however, that the Borrowers, upon the request of such Lender
(or Transferee), such Issuing Bank or the Administrative Agent, agree to repay
the amount paid over to the Borrowers (plus penalties, interest or other
charges) to such Lender (or Transferee), such Issuing Bank or the Administrative
Agent in the event such Lender (or Transferee), such Issuing Bank or the
Administrative Agent is required to repay such refund to such Governmental
Authority.
(e) As soon as practicable after the date of any payment of
Taxes or Other Taxes by the Borrowers to the relevant Governmental Authority,
the Borrowers will deliver to the Administrative Agent, at its address referred
to in Section 9.01, the original or a certified copy of a receipt issued by such
Governmental Authority evidencing payment thereof.
(f) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 2.19
shall survive the payment in full of the principal of and interest on all Loans
made hereunder and the expiration or cancellation of all Letters of Credit and
the payment of all L/C Disbursements thereunder.
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(g) Each Lender and Issuing Bank (or Transferee) that is
organized under the laws of a jurisdiction other than the United States, any
State thereof or the District of Columbia (a "Non-U.S. Lender") shall deliver to
the Company and the Administrative Agent two copies of either United States
Internal Revenue Service Form 1001 or Form 4224, or, in the case of a Non-U.S.
Lender or Issuing Bank claiming exemption from U.S. Federal withholding tax
under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest", a Form W-8, or any subsequent versions thereof or
successors thereto (and, if such Non-U.S. Lender or Issuing Bank delivers a Form
W-8, a certificate representing that such Non-U.S. Lender or Issuing Bank is not
a bank for purposes of Section 881(c) of the Code, is not a 10 percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Company and is not a controlled foreign corporation related to the Company
(within the meaning of Section 864(d)(4) of the Code)), properly completed and
duly executed by such Non-U.S. Lender or Issuing Bank claiming complete
exemption from, or reduced rate of, U.S. Federal withholding tax on payments by
the Company under this Agreement. Such forms shall be delivered by each Non-U.S.
Lender or Issuing Bank on or before the date it becomes a party to this
Agreement (or, in the case of a Transferee that is a participation holder, on or
before the date such participation holder becomes a Transferee hereunder) and on
or before the date, if any, such Non-U.S. Lender or Issuing Bank changes its
applicable lending office by designating a different lending office (a "New
Lending Office"). In addition, each Non-U.S. Lender or Issuing Bank shall
deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Non-U.S. Lender or Issuing Bank. Notwithstanding
any other provision of this Section 2.19(g), a Non-U.S. Lender or Issuing Bank
shall not be required to deliver any form pursuant to this Section 2.19(g) that
such Non-U.S. Lender or Issuing Bank is not legally able to deliver.
(h) The Company shall not be required to indemnify any
Non-U.S. Lender or Issuing Bank, or to pay any additional amounts to any
Non-U.S. Lender or Issuing Bank, in respect of United States Federal withholding
tax pursuant to paragraph (a) or (c) above to the extent that (i) the obligation
to withhold amounts with respect to United States Federal withholding tax
existed on the date such Non-U.S. Lender or Issuing Bank became a party to this
Agreement (or, in the case of a Transferee that is a participation holder, on
the date such participation holder became a Transferee hereunder) or, with
respect to payments to a New Lending Office, the date such Non-U.S. Lender or
Issuing Bank designated such New Lending Office with respect to a Loan;
provided, however, that this clause (i) shall not apply to any Transferee or New
Lending Office that becomes a Transferee or New Lending Office as a result of an
assignment, participation, transfer or designation made at the request of the
Company; and provided further, however, that this clause (i) shall not apply to
the extent the indemnity payment or additional amounts any Transferee, or Lender
(or Transferee) or Issuing Bank through a New Lending Office, would be entitled
to receive (without regard to this clause (i)) do not exceed the indemnity
payment or additional amounts that the person making the assignment,
participation or transfer to such Transferee, or Lender (or Transferee) or
Issuing Bank making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation or (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non-U.S. Lender or Issuing Bank to comply
with the provisions of paragraph (g) above.
(i) Any Lender (or Transferee) or Issuing Bank claiming any
indemnity payment or additional amounts payable pursuant to this Section 2.19
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to file any certificate or document reasonably requested in writing by the
Company or to change the jurisdiction of its applicable lending office if the
making of such a filing or change would avoid the need for or reduce the amount
of any such indemnity payment or additional amounts that may thereafter accrue
and would not, in the sole determination of such Lender (or Transferee) or
Issuing Bank, be otherwise disadvantageous to such Lender (or Transferee) or
Issuing Bank.
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(j) Nothing contained in this Section 2.19 shall require any
Lender (or Transferee), any Issuing Bank or the Administrative Agent to make
available any of its tax returns (or any other information that it deems to be
confidential or proprietary).
SECTION 2.20. Duty to Mitigate; Assignment of Commitments
Under Certain Circumstances. (a) Any Lender (or Transferee) or Issuing Bank
claiming any additional amounts payable pursuant to Section 2.13 or Section 2.19
or exercising its rights under Section 2.14 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document requested by the Company or to change the jurisdiction of its
applicable lending office if the making of such a filing or change would avoid
the need for or reduce the amount of any such additional amounts which may
thereafter accrue or avoid the circumstances giving rise to such exercise and
would not, in the sole determination of such Lender (or Transferee) or Issuing
Bank, be otherwise disadvantageous to such Lender (or Transferee) or Issuing
Bank.
(b) In the event that any Lender or Issuing Bank shall have
delivered a notice or certificate pursuant to Section 2.13 or 2.14, or the
Company shall be required to make additional payments to any Lender or Issuing
Bank under Section 2.19, the Company shall have the right, at its own expense,
upon notice to such Lender or Issuing Bank and the Administrative Agent, to
require such Lender or Issuing Bank to transfer and assign without recourse,
representation or warranty (in accordance with and subject to the restrictions
contained in Section 9.04) all interests, rights and obligations contained
hereunder to another financial institution approved by the Administrative Agent
(which approval shall not be unreasonably withheld) which shall assume such
obligations; provided that (i) no such assignment shall conflict with any law,
rule or regulation or order of any Governmental Authority and (ii) the assignee
or the Company, as the case may be, shall pay to the affected Lender or Issuing
Bank in immediately available funds on the date of such assignment the principal
of and interest accrued to the date of payment on the Loans and L/C
Disbursements made by it hereunder and all other amounts accrued for its account
or owed to it hereunder and shall cause all Letters of Credit issued by it to be
canceled on such date.
SECTION 2.21. Terms of Local Currency Facilities. (a) The
Company may in its discretion from time to time elect to borrow, or elect that
one or more Borrowing Subsidiaries may borrow, Local Currency Loans on a
revolving basis from any one or more Local Currency Lenders, with the consent of
each such Local Currency Lender in its sole discretion, by delivering a Local
Currency Addendum to the Administrative Agent and the Local Currency Lenders
(through the Administrative Agent), executed by the Company, each such Borrowing
Subsidiary and each such Local Currency Lender; provided, however, that on the
effective date of such election, and after giving effect thereto, (i) an
Exchange Rate with respect to each Local Currency covered by such Local Currency
Addendum shall be determinable by reference to the Reuters currency pages (or
comparable publicly available screen), (ii) no Default or Event of Default shall
have occurred and be continuing and (iii) the aggregate amount of all Local
Currency Facility Maximum Borrowing Amounts under all Local Currency Addenda at
the time in effect shall not exceed $750,000,000. Each Borrower and, by agreeing
to any Local Currency Addendum, each relevant Local Currency Lender,
acknowledges and agrees that each reference in this Agreement to any Lender
shall, to the extent applicable, be deemed to be a reference to such Local
Currency Lender, subject to the second sentence of the definition of such term.
(b) Each Local Currency Addendum shall set forth (i) the
maximum amount (expressed in Dollars and without duplication) available to be
borrowed from all Local Currency Lenders under such Local Currency Addendum (as
the same may be reduced from time to time pursuant to Section 2.22(c) or (d), a
"Local Currency Facility Maximum Borrowing Amount") and (ii) with respect to
each Local
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Currency Lender party to such Local Currency Addendum, the maximum amount
(expressed in Dollars and without duplication) available to be borrowed from
such Local Currency Lender thereunder (as the same may be reduced from time to
time pursuant to Section 2.22(c) or (d), a "Local Currency Lender Maximum
Borrowing Amount"). In no event shall the aggregate of all Local Currency Lender
Maximum Borrowing Amounts in respect of any Local Currency Lender at any time
exceed such Lender's Commitment. Except as provided in Section 2.21(c), the
making of Local Currency Loans by a Local Currency Lender under a Local Currency
Addendum shall under no circumstances reduce the amount available to be borrowed
from such Lender under any other Local Currency Addendum to which such Lender is
a party.
(c) Except as otherwise required by applicable law, in no
event shall the Local Currency Lenders have the right to accelerate the Local
Currency Loans outstanding under any Local Currency Addendum, or to terminate
their commitments (if any) thereunder to make Local Currency Loans prior to the
stated termination date in respect thereof, except that such Local Currency
Lenders shall, in each case, have such rights upon an acceleration of the Loans
and a termination of the Commitments pursuant to Article VI, respectively. No
Local Currency Loan may be made if (i) an Exchange Rate with respect to such
Local Currency cannot be determined, (ii) a Default or an Event of Default shall
have occurred and be continuing or would result therefrom or (iii) after giving
effect thereto, (A) the sum of the aggregate principal amount of the Dollar
Loans (other than Competitive Loans) and Local Currency Loans (Dollar
Equivalent) of any Lender (and the Affiliates of such Lender that are Local
Currency Lenders) then outstanding and the L/C Exposure of such Lender would
exceed such Lender's Commitment, (B) the Dollar Equivalent of the aggregate
principal amount of outstanding Local Currency Loans denominated in a specified
Local Currency would exceed the applicable Local Currency Facility Maximum
Borrowing Amount or (C) the sum of the aggregate Standby Credit Exposures, the
aggregate L/C Exposures and the aggregate Competitive Loan Exposures would
exceed the Total Commitment.
(d) The applicable Borrower and the applicable Local Currency
Lenders, or, if so specified in the relevant Local Currency Addendum, an agent
acting on their behalf, shall furnish to the Administrative Agent, promptly
following the making, payment or prepayment of each Local Currency Loan, and at
any other time at the request of the Administrative Agent, a statement setting
forth the outstanding Local Currency Loans made under such Local Currency
Addendum.
(e) The applicable Borrower shall furnish to the
Administrative Agent copies of any amendment, supplement or other modification
to the terms of any Local Currency Addendum promptly after the effectiveness
thereof.
(f) The Company may terminate any Local Currency Addendum, if
there are not any Loans outstanding thereunder, in its sole discretion (or, if
there are Loans outstanding thereunder, with the consent of each Local Currency
Lender party thereto), by written notice to the Administrative Agent, which
notice shall be executed by the Company, each relevant Borrowing Subsidiary and,
if their consent is required, each such Local Currency Lender. Once notice of
such termination is received by the Administrative Agent, such Local Currency
Addendum and the loans and other obligations outstanding thereunder shall
immediately cease to be subject to the terms of this Agreement.
SECTION 2.22. Currency Fluctuations, etc. (a) Not later than
1:00 p.m., New York City time, on each Calculation Date, the Administrative
Agent shall (i) determine the Exchange Rate as of such Calculation Date with
respect to each Local Currency covered by a Local Currency Addendum and (ii)
give notice thereof to the Lenders, the Company and the relevant Borrowing
Subsidiaries. The
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Exchange Rates so determined shall become effective on the first Business Day
immediately following the relevant Calculation Date (a "Reset Date") and shall
remain effective until the next succeeding Reset Date.
(b) Not later than 5:00 p.m., New York City time, on each
Reset Date and each Borrowing Date, the Administrative Agent shall (i) determine
the Dollar Equivalent of the Local Currency Loans then outstanding (after giving
effect to any Local Currency Loans to be made or repaid on such date) and (ii)
notify the Lenders, the Company and the relevant Borrowing Subsidiaries of the
results of such determination.
(c) If, on any Reset Date or any Borrowing Date (after giving
effect to (i) any Loans to be made or repaid on such date and (ii) any
amendment, supplement or other modification to any Local Currency Addendum
effective on such date of which the Administrative Agent has received notice),
the aggregate outstanding Dollar Standby Extensions of Credit of any Lender
exceeds the Dollar Standby Credit Overage of such Lender (the amount of such
excess being called the "Dollar Standby Credit Excess"), then such Lender's
Local Currency Lender Maximum Borrowing Amount under each Local Currency
Addendum to which such Lender is a party shall be reduced on such date by an
amount equal to the product of such Dollar Standby Credit Excess times a
fraction the numerator of which shall equal the Local Currency Lender Maximum
Borrowing Amount under such Local Currency Addendum and the denominator of which
shall equal the aggregate of the Local Currency Lender Maximum Borrowing Amounts
of such Lender. After giving effect to any such reduction in Local Currency
Lender Maximum Borrowing Amounts, the Local Currency Facility Maximum Borrowing
Amount with respect to each Local Currency Addendum shall in turn be reduced to
an amount equal to the aggregate of the Local Currency Lender Maximum Borrowing
Amounts of all Lenders party to such Local Currency Addendum. Reductions in
Local Currency Facility Maximum Borrowing Amounts and Local Currency Lender
Maximum Borrowing Amounts pursuant to this Section 2.22(c) shall be effective
until the amount thereof shall be recalculated by the Administrative Agent on
the next succeeding Reset Date or Borrowing Date, and shall not be deemed to
reduce the stated amount of any commitment of any Local Currency Lender in
respect of any Local Currency Addendum.
(d) If, on any Reset Date or Borrowing Date (after giving
effect to (i) any Loans to be made or repaid on such date, (ii) any amendment,
supplement or other modification to any Local Currency Addendum effective on
such date of which the Administrative Agent has received notice and (iii) any
reduction in the Local Currency Facility Maximum Borrowing Amounts pursuant to
Section 2.22(c) effective on such date), the sum of (A) the aggregate
outstanding Dollar Standby Extensions of Credit of all the Lenders, (B) the
aggregate L/C Exposures and (C) the aggregate Competitive Loan Exposures exceed
the Dollar Facility Overage (the amount of such excess being called the "Dollar
Facility Excess"), then the Local Currency Facility Maximum Borrowing Amount
under each Local Currency Addendum shall be reduced on such date by an amount
equal to the product of such Dollar Facility Excess times a fraction the
numerator of which shall equal the Local Currency Facility Maximum Borrowing
Amount under such Local Currency Addendum and the denominator of which shall
equal the aggregate of the Local Currency Facility Maximum Borrowing Amounts
with respect to all Local Currency Addenda. Each such reduction in the Local
Currency Facility Maximum Borrowing Amount under a Local Currency Addendum shall
in turn reduce the respective Local Currency Lender Maximum Borrowing Amounts of
each Local Currency Lender party to such Local Currency Addendum, pro rata on
the basis of the respective Local Currency Lender Maximum Borrowing Amounts of
such Local Currency Lenders immediately prior to such reduction. Reductions in
Local Currency Facility Maximum Borrowing Amounts and Local Currency Lender
Maximum Borrowing Amounts pursuant to this Section 2.22(d) shall be effective
until the amount thereof shall be recalculated by the Administrative Agent on
the next succeeding Reset Date or Borrowing
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Date, and shall not be deemed to reduce the stated amount of any commitment of
any Local Currency Lender in respect of any Local Currency Addendum.
(e) If, on any Reset Date, the Dollar Equivalent of the Local
Currency Loans outstanding under a Local Currency Addendum exceeds 105% of the
Local Currency Facility Maximum Borrowing Amount with respect thereto (after
giving effect to any reductions therein effected pursuant to Section 2.22(c) or
(d) on such date), then the relevant Borrower shall, within three Business Days
after notice thereof from the Administrative Agent, (i) increase the Local
Currency Facility Maximum Borrowing Amount with respect to such Local Currency
Facility in accordance with Section 2.21(e) and/or (ii) prepay Local Currency
Loans, in either case in an aggregate amount such that, after giving effect
thereto, (x) the Dollar Equivalent of all such Local Currency Loans shall be
equal to or less than such Local Currency Facility Maximum Borrowing Amount and
(y) the Dollar Equivalent of the Local Currency Loans of each relevant Local
Currency Lender shall be equal to or less than such Local Currency Lender's
Local Currency Lender Maximum Borrowing Amount with respect to such Local
Currency Addendum.
(f) If, on any Reset Date, the Standby Credit Exposure of any
Lender exceeds 105% of such Lender's Commitment, then, within three Business
Days after notice thereof from the Administrative Agent, the Company shall
prepay and/or cause the relevant Borrowing Subsidiaries to prepay the Loans in
accordance with this Agreement, in an aggregate amount such that, after giving
effect thereto, the Standby Credit Exposure of such Lender shall be equal to or
less than such Lender's Commitment.
(g) The Administrative Agent shall promptly notify the
relevant Lenders of the amount of any reductions in Local Currency Facility
Maximum Borrowing Amounts or Local Currency Lender Maximum Borrowing Amounts
required pursuant to this Section 2.22.
SECTION 2.23. Letters of Credit. (a) General. The Borrowers
may request the issuance of Letters of Credit, in a form reasonably acceptable
to the Administrative Agent and the applicable Issuing Bank, appropriately
completed, for the accounts of the Borrowers, at any time and from time to time
while the Commitments remain in effect. All Letters of Credit shall be
denominated in Dollars. This Section shall not be construed to impose an
obligation upon any Issuing Bank to issue any Letter of Credit that is
inconsistent with the terms and conditions of this Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of Credit (or to amend,
renew or extend an existing Letter of Credit), the applicable Borrower shall
hand deliver or telecopy to the applicable Issuing Bank and the Administrative
Agent (reasonably in advance of the requested date of issuance, amendment,
renewal or extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, the date of
issuance, amendment, renewal or extension, the date on which such Letter of
Credit is to expire (which shall comply with paragraph 2.23(c) below), the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare such Letter of
Credit. Following receipt of such notice and prior to the issuance of the
requested Letter of Credit or the applicable amendment, renewal or extension,
the Administrative Agent shall notify the Borrowers, each Lender and the
applicable Issuing Bank of the amount of the Aggregate Credit Exposure after
giving effect to (i) the issuance, amendment, renewal or extension of such
Letter of Credit, (ii) the issuance or expiration of any other Letter of Credit
that is to be issued or will expire prior to the requested date of issuance of
such Letter of Credit and (iii) the borrowing or repayment of any Loans that
(based upon notices delivered to the Administrative Agent by the Borrowers) are
to be borrowed or repaid prior to the requested date of issuance of such Letter
of Credit. A Letter of Credit shall be issued, amended,
<PAGE> 39
35
renewed or extended only if, and upon issuance, amendment, renewal or extension
of each Letter of Credit, the Borrowers shall be deemed to represent and warrant
that, (i) after giving effect to such issuance, amendment, renewal or extension
(A) the L/C Exposure shall not exceed $350,000,000 and (B) the Aggregate Credit
Exposure shall not exceed the Total Commitment and (ii) in the case of a Letter
of Credit that will expire later than the first anniversary of such issuance,
amendment, renewal or extension, the applicable Borrower, the applicable Issuing
Bank and the Required Lenders shall have reached agreement on the fees to be
applicable thereto as contemplated by the last sentence of Section 2.06(c).
(c) Expiration Date. Each Letter of Credit shall expire at the
close of business on the earlier of the date five years after the date of the
issuance of such Letter of Credit and the date that is five Business Days prior
to the Maturity Date, unless such Letter of Credit expires by its terms on an
earlier date; provided that a Letter of Credit shall not be issued (nor shall a
Letter of Credit be amended, renewed or extended) that would result in the
Aggregate Credit Exposure exceeding the Total Commitment. Compliance with the
foregoing proviso shall be determined based upon the assumption that (i) each
Letter of Credit remains outstanding and undrawn in accordance with its terms
until its expiration date (taking into account any rights of renewal or
extension that do not require written notice by or consent of the applicable
Issuing Bank, in its sole discretion, in order to effect such renewal or
extension) and (ii) the Commitments will not be reduced voluntarily pursuant to
Section 2.11(b).
(d) Participations. By the issuance of a Letter of Credit and
without any further action on the part of the applicable Issuing Bank or the
Lenders, the applicable Issuing Bank hereby grants to each Lender, and each such
Lender hereby acquires from the applicable Issuing Bank, a participation in such
Letter of Credit equal to such Lender's Applicable Share from time to time of
the aggregate amount available to be drawn under such Letter of Credit,
effective upon the issuance of such Letter of Credit. In consideration and in
furtherance of the foregoing, each Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, for the account of the applicable
Issuing Bank, such Lender's Applicable Share from time to time of each L/C
Disbursement made by such Issuing Bank and not reimbursed by the Borrower (or,
if applicable, another party pursuant to its obligations under any other Loan
Document) forthwith on the date due as provided in Section 2.02(e). Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of a Default or an Event of Default, and that each
such payment shall be made without any offset, abatement, withholding or
reduction whatsoever.
(e) Reimbursement. If an Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, the applicable Borrower shall pay
to the Administrative Agent such L/C Disbursement not later than two hours after
the Borrower shall have received notice from such Issuing Bank that payment of
such draft will be made, or, if the Borrower shall have received such notice
later than 10:00 a.m., New York City time, on any Business Day, not later than
10:00 a.m., New York City time, on the immediately following Business Day.
(f) Obligations Absolute. The Borrowers' obligations to
reimburse L/C Disbursements as provided in paragraph 2.23(e) above shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under any and all circumstances
whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;
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36
(ii) any amendment or waiver of or any consent to departure
from all or any of the provisions of any Letter of Credit or any Loan
Document;
(iii) the existence of any claim, setoff, defense or other
right that the Borrowers, any other party guaranteeing, or otherwise
obligated with, the Borrowers, any Subsidiary or other Affiliate
thereof or any other person may at any time have against the
beneficiary under any Letter of Credit, any Issuing Bank, the
Administrative Agent or any Lender or any other person, whether in
connection with this Agreement, any other Loan Document or any other
related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(v) payment by the applicable Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of
any Issuing Bank, the Lenders, the Administrative Agent or any other
person or any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of
this Section , constitute a legal or equitable discharge of the
Borrowers' obligations hereunder.
Without limiting the generality of the foregoing, it is
expressly understood and agreed that the absolute and unconditional obligation
of the Borrowers hereunder to reimburse L/C Disbursements will not be excused by
the gross negligence or wilful misconduct of any Issuing Bank. However, the
foregoing shall not be construed to excuse any Issuing Bank from liability to
the Borrowers to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrowers to the
extent permitted by applicable law) suffered by the Borrowers that are caused by
such Issuing Bank's gross negligence or wilful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof; it is understood that each Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary and, in
making any payment under any Letter of Credit (i) an Issuing Bank's exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and whether
or not any other statement or any other document presented pursuant to such
Letter of Credit proves to be forged or invalid or any statement therein proves
to be inaccurate or untrue in any respect whatsoever and (ii) any noncompliance
in any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute wilful
misconduct or gross negligence of an Issuing Bank.
(g) Disbursement Procedures. The applicable Issuing Bank
shall, promptly following its receipt thereof, examine all documents purporting
to represent a demand for payment under a Letter of Credit. Such Issuing Bank
shall as promptly as possible give telephonic notification, confirmed by
telecopy, to the Administrative Agent and the applicable Borrower of such demand
for payment and whether such Issuing Bank has made or will make an L/C
Disbursement thereunder; provided that any
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37
failure to give or delay in giving such notice shall not relieve the Borrower of
its obligation to reimburse the Issuing Bank and the Lenders with respect to any
such L/C Disbursement. The Administrative Agent shall promptly give each Lender
notice thereof.
(h) Interim Interest. If an Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower shall
reimburse such L/C Disbursement in full on such date, the unpaid amount thereof
shall bear interest for the account of such Issuing Bank, for each day from and
including the date of such L/C Disbursement, to but excluding the earlier of the
date of payment or the date on which interest shall commence to accrue thereon
as provided in paragraph 2.02(e) above, at the rate per annum that would apply
to such amount if such amount were an ABR Loan.
(i) Resignation or Removal of an Issuing Bank. An Issuing Bank
may resign at any time by giving 180 days' prior written notice to the
Administrative Agent, the Lenders and the Borrowers, and may be removed at any
time by the Borrowers by notice to the Issuing Bank, the Administrative Agent
and the Lenders. Subject to the next succeeding paragraph, upon the acceptance
of any appointment as an Issuing Bank hereunder by a successor Issuing Bank,
such successor shall succeed to and become vested with all the interests, rights
and obligations of the retiring Issuing Bank and the retiring Issuing Bank shall
be discharged from its obligations to issue additional Letters of Credit
hereunder. At the time such removal or resignation shall become effective, the
Borrowers shall pay all accrued and unpaid fees pursuant to Section 2.06(c)(ii).
The acceptance of any appointment as an Issuing Bank hereunder by a successor
Lender shall be evidenced by an agreement entered into by such successor, in a
form satisfactory to the Borrowers and the Administrative Agent, and, from and
after the effective date of such agreement, (i) such successor Lender shall have
all the rights and obligations of the previous Issuing Bank under this Agreement
and the other Loan Documents and (ii) references herein and in the other Loan
Documents to the term "Issuing Bank" shall be deemed to refer to such successor
or to any previous Issuing Bank, or to such successor and all previous Issuing
Banks, as the context shall require. After the resignation or removal of an
Issuing Bank hereunder, the retiring Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement and the other Loan Documents with respect to Letters of
Credit issued by it prior to such resignation or removal, but shall not be
required to issue additional Letters of Credit.
(j) Additional Issuing Banks. The Borrowers may, at any time
and from time to time with the consent of the Administrative Agent (which
consent shall not be unreasonably withheld) and such Lender, designate one or
more additional Lenders to act as an issuing bank under the terms of the
Agreement. Any Lender designated as an issuing bank pursuant to this paragraph
2.23(j) shall, upon entering into an Issuing Bank Agreement with the Company, be
deemed to be an "Issuing Bank" (in addition to being a Lender) in respect of
Letters of Credit issued or to be issued by such Lender, and, with respect to
such Letters of Credit, such term shall thereafter apply to the other Issuing
Banks and such Lender.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to each of the Lenders
that:
SECTION 3.01. Organization; Powers. Each Borrower and each of
the Subsidiaries (a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
all requisite power and authority to own its property and assets and to carry on
its business as now conducted and as proposed to be conducted, (c) is qualified
to do business in every jurisdiction where such qualification is required,
except where the failure so to qualify would not result in a Material Adverse
Effect, and (d) in the case of each Borrower, has the corporate power and
authority to execute, deliver and perform its obligations under the Loan
Documents and to borrow hereunder and thereunder.
SECTION 3.02. Authorization. The execution, delivery and
performance by the Borrowers of this Agreement, the Issuing Bank Agreements, the
promissory notes, if any, issued pursuant to Section 9.04(i) and each Local
Currency Addendum (and by the Borrowing Subsidiaries of each Borrowing
Subsidiary Agreement) and the Borrowings hereunder (collectively, the
"Transactions") (a) have been duly authorized by all requisite corporate action
and (b) will not (i) violate (A) any provision of any law, statute, rule or
regulation (including the Margin Regulations) or of the certificate of
incorporation or other constitutive documents or by-laws of the Borrowers, (B)
any order of any Governmental Authority or (C) any provision of any indenture,
agreement or other instrument to which any Borrower is a party or by which it or
any of its property is or may be bound, (ii) be in conflict with, result in a
breach of or constitute (alone or with notice or lapse of time or both) a
default under any such indenture, agreement or other instrument or (iii) result
in the creation or imposition of any lien upon any property or assets of any
Borrower.
SECTION 3.03. Enforceability. This Agreement and each Loan
Document to which a Borrower is a party constitutes a legal, valid and binding
obligation of each Borrower enforceable in accordance with its terms.
SECTION 3.04. Governmental Approvals. No action, consent or
approval of, registration or filing with or other action by any Governmental
Authority, other than those which have been taken, given or made, as the case
may be, is or will be required with respect to any Borrower in connection with
the Transactions.
SECTION 3.05. Financial Statements. (a) The Company has
heretofore furnished to the Administrative Agent and the Lenders copies of its
combined balance sheet and statement of income and cash flow as of and for the
year ended December 31, 1995, and the six months ended June 30, 1996. Such
financial statements present fairly, in all material respects, the consolidated
combined financial condition and the results of operations of the Company and
the Subsidiaries as of such dates and for such periods in accordance with GAAP.
(b) As of the Effective Date, there has been no material
adverse change in the consolidated financial condition of the Company and the
Subsidiaries taken as a whole from the financial condition reported in the
financial statements referenced in paragraph (a) of this Section 3.05.
<PAGE> 43
39
SECTION 3.06. Litigation; Compliance with Laws. (a) As of the
Effective Date, there are no actions, proceedings or investigations filed or (to
the knowledge of the Borrowers) threatened affecting any Borrower or any
Subsidiary in any court or before any Governmental Authority or arbitration
board or tribunal which question the validity or legality of this Agreement, the
Transactions or any action taken or to be taken pursuant to this Agreement and
no order or judgment has been issued or entered restraining or enjoining any
Borrower or any Subsidiary from the execution, delivery or performance of this
Agreement nor is there any other action, proceeding or investigation filed or
(to the knowledge of any Borrower or any Subsidiary) threatened against any
Borrower or any Subsidiary in any court or before any Governmental Authority or
arbitration board or tribunal which would be reasonably likely to result in a
Material Adverse Effect or materially restrict the ability of any Borrower to
comply with its obligations under the Loan Documents.
(b) Neither any Borrower nor any Subsidiary is in violation of
any law, rule or regulation (including any law, rule or regulation relating to
the protection of the environment or to employee health or safety), or in
default with respect to any judgment, writ, injunction or decree of any
Governmental Authority, where such violation or default would be reasonably
likely to result in a Material Adverse Effect.
(c) No exchange control law or regulation materially restricts
any Borrower from complying with its obligations in respect of any Loan or
Letter of Credit or otherwise under this Agreement or any Local Currency
Addendum.
SECTION 3.07. Federal Reserve Regulations. (a) Neither any
Borrower nor any Subsidiary that will receive proceeds of the Loans hereunder is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry Margin Stock or to refund indebtedness originally incurred for
such purpose, or for any other purpose which entails a violation of, or which is
inconsistent with, the provisions of the Margin Regulations.
SECTION 3.08. Investment Company Act; Public Utility Holding
Company Act. No Borrower is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 (the "1940 Act")
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.09. Use of Proceeds. All proceeds of the Loans and
Letters of Credit shall be used for the purposes referred to in the recitals to
this Agreement.
SECTION 3.10. Full Disclosure; No Material Misstatements. None
of the representations or warranties made by any Borrower in connection with
this Agreement as of the date such representations and warranties are made or
deemed made, and no report, financial statement or other information furnished
by or on behalf of any Borrower to the Administrative Agent or any Lender
pursuant to or in connection with this Agreement or the credit facilities
established hereby, contains or will contain any material misstatement of fact
or omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were or
will be made, not misleading.
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40
SECTION 3.11. Taxes. Each Borrower and each of the material
Subsidiaries have filed or caused to be filed all Federal, state and local tax
returns which are required to be filed by them, and have paid or caused to be
paid all taxes shown to be due and payable on such returns or on any assessments
received by any of them, other than any taxes or assessments the validity of
which is being contested in good faith by appropriate proceedings, and with
respect to which appropriate accounting reserves have to the extent required by
GAAP been set aside.
SECTION 3.12. Employee Pension Benefit Plans. The present
aggregate value of accumulated benefit obligations of all unfunded and
underfunded pension plans of the Company and its Subsidiaries (based on those
assumptions used for disclosure in corporate financial statements in accordance
with GAAP) did not, as of December 31, 1995, exceed by more than $77,000,000 the
value of the assets of all such plans. Of such $77,000,000, $28,000,000 is
attributable to employee pension plans in countries where the funding of such
obligations is not required or customary and $49,000,000 relates to domestic
pension plans where funding is not permitted under current tax regulations. In
these cases the Company has recorded book reserves to meet the obligations.
ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Lenders to make Loans and of the
Issuing Banks to issue Letters of Credit hereunder are subject to the
satisfaction of the following conditions:
SECTION 4.01. All Extensions of Credit. On the date of each
Borrowing and on the date of each issuance of a Letter of Credit:
(a) The Administrative Agent shall have received a notice of
such Borrowing as required by Section 2.03 or Section 2.04, as
applicable, or, in the case of the issuance of a Letter of Credit, the
applicable Issuing Bank shall have been selected to issue such Letter
of Credit as contemplated by Section 2.23.
(b) The representations and warranties set forth in Article
III hereof shall be true and correct in all material respects on and as
of the date of such Borrowing or issuance of a Letter of Credit with
the same effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to an
earlier date.
(c) At the time of and immediately after such Borrowing or
issuance of a Letter of Credit no Event of Default or Default shall
have occurred and be continuing.
Each Borrowing and issuance of a Letter of Credit shall be deemed to constitute
a representation and warranty by each Borrower on the date of such Borrowing or
issuance of a Letter of Credit as to the matters specified in paragraphs (b) and
(c) of this Section 4.01.
SECTION 4.02. Effective Date. On the Effective Date:
(a) The Administrative Agent shall have received a favorable
written opinion of Margaret M. Foran, Esq., dated the Effective Date and
addressed to the Lenders and satisfactory to the Lenders, the
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Administrative Agent and Cravath, Swaine & Moore, counsel for the Administrative
Agent, to the effect set forth in Exhibit D hereto.
(b) The Administrative Agent shall have received (i) a copy of
the certificate of incorporation, including all amendments thereto, of the
Company, certified as of a recent date by the Secretary of State of its state of
incorporation, and a certificate as to the good standing of the Company as of a
recent date from such Secretary of State; (ii) a certificate of the Secretary or
an Assistant Secretary of the Company dated the Effective Date and certifying
(A) that attached thereto is a true and complete copy of the by-laws of the
Company as in effect on the Effective Date and at all times since a date prior
to the date of the resolutions described in clause (B) below, (B) that attached
thereto is a true and complete copy of resolutions duly adopted by the Board of
Directors of the Company authorizing the execution, delivery and performance of
this Agreement and the Borrowings hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect, (C) that
the certificate of incorporation referred to in clause (i) above has not been
amended since the date of the last amendment thereto shown on the certificate of
good standing furnished pursuant to such clause (i) and (D) as to the incumbency
and specimen signature of each officer executing this Agreement or any other
document delivered in connection herewith on behalf of the Company; and (iii) a
certificate of another officer of the Company as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the certificate
pursuant to (ii) above.
(c) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by a Financial Officer of the
Company, confirming compliance with the conditions precedent set forth in
paragraphs (b) and (c) of Section 4.01.
(d) The principal of and accrued and unpaid interest on any
loans outstanding under the Existing Credit Facilities shall have been paid in
full, all other amounts due in respect of the Existing Credit Facilities shall
have been paid in full and the commitments to lend under the Existing Credit
Facilities shall have been permanently terminated.
(e) The Administrative Agent shall have received any Fees or
other amounts due and payable on or prior to the Effective Date.
SECTION 4.03. First Borrowing by Each Borrowing Subsidiary. On
or prior to the first date on which Loans are made to or Letters of Credit are
issued for the benefit of any Borrowing Subsidiary:
(a) The Lenders and any Issuing Banks shall have received the
favorable written opinion of counsel satisfactory to the Administrative
Agent, addressed to the Lenders and satisfactory to the Lenders, the
Administrative Agent and Cravath, Swaine & Moore, counsel for the
Administrative Agent, to the effect set forth in Exhibit D hereto.
(b) Each Lender and any Issuing Banks shall have received a
copy of the Borrowing Subsidiary Agreement executed by such Borrowing
Subsidiary.
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ARTICLE V
COVENANTS
A. Affirmative Covenants. Each Borrower covenants and agrees
with each Lender and the Administrative Agent that so long as this Agreement
shall remain in effect or the principal of or interest on any Loan, any Fees or
any other amounts payable hereunder shall be unpaid or any Letters of Credit
have not been canceled or have not expired or any amounts drawn thereunder have
not been reimbursed in full, unless the Required Lenders shall otherwise consent
in writing, it will, and will cause each of the Subsidiaries to:
SECTION 5.01. Existence. Do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence,
rights and franchises, except as expressly permitted under Section 5.09;
provided, however, that nothing in this Section shall prevent the abandonment or
termination of the existence, rights or franchises of any Subsidiary or any
rights or franchises of any Borrower if such abandonment or termination is in
the best interests of the Borrowers and is not disadvantageous in any material
respect to the Lenders.
SECTION 5.02. Business and Properties. Comply in all material
respects with all applicable laws, rules, regulations and orders of any
Governmental Authority (including any of the foregoing relating to the
protection of the environment or to employee health and safety), whether now in
effect or hereafter enacted; and at all times maintain and preserve all property
material to the conduct of its business and keep such property in good repair,
working order and condition and from time to time make, or cause to be made, all
needful and proper repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in connection therewith
may be properly conducted at all times.
SECTION 5.03. Financial Statements, Reports, Etc. In the case
of the Company, furnish to the Administrative Agent for distribution to each
Lender:
(a) within 120 days after the end of each fiscal year, its
consolidated balance sheet and the related consolidated statements of
income and cash flows showing its consolidated financial condition as
of the close of such fiscal year and the consolidated results of its
operations during such year, all audited by Arthur Andersen LLP or
other independent certified public accountants of recognized national
standing selected by the Company and accompanied by an opinion of such
accountants to the effect that such consolidated financial statements
fairly present its financial condition and results of operations on a
consolidated basis in accordance with GAAP (it being agreed that the
requirements of this paragraph may be satisfied by the delivery
pursuant to paragraph (d) below of an annual report on Form 10-K
containing the foregoing);
(b) within 90 days after the end of each of the first three
fiscal quarters of each fiscal year, its consolidated balance sheet and
related consolidated statements of income and cash flow showing its
consolidated financial condition as of the close of such fiscal quarter
and the consolidated results of its operations during such fiscal
quarter and the then elapsed portion of the fiscal year, all certified
by one of its Financial Officers as fairly presenting its financial
condition and results of operations on a consolidated basis in
accordance with GAAP, subject to normal year-end audit adjustments (it
being agreed that the requirements of this paragraph may be satisfied
<PAGE> 47
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by the delivery pursuant to paragraph (d) below of a quarterly report
on Form 10-Q containing the foregoing);
(c) concurrently with any delivery of financial statements
under paragraph (a) or (b) above, a certificate of a Financial Officer
certifying that, to the best of such Financial Officer's knowledge, no
Event of Default or Default has occurred or, if such an Event of
Default or Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with
respect thereto;
(d) promptly after the same become publicly available, copies
of all reports on forms 10- K, 10-Q and 8-K filed by it with the SEC,
or any Governmental Authority succeeding to any of or all the functions
of the SEC, or, in the case of the Company, copies of all reports
distributed to its shareholders, as the case may be;
(e) promptly, from time to time, such other information as any
Lender shall reasonably request through the Administrative Agent; and
(f) concurrently with any delivery of financial statements
under paragraph (a) or (b) above, calculations of the financial test
referred to in Section 5.12.
SECTION 5.04. Insurance. Keep its insurable properties
adequately insured at all times by financially sound and reputable insurers, and
maintain such other insurance, to such extent and against such risks, including
fire and other risks insured against by extended coverage, as is customary with
companies similarly situated and in the same or similar businesses (it being
understood that the Borrowers and their Subsidiaries may self-insure to the
extent customary with companies similarly situated and in the same or similar
businesses).
SECTION 5.05. Obligations and Taxes. Pay and discharge
promptly when due all taxes, assessments and governmental charges imposed upon
it or upon its income or profits or in respect of its property, as well as all
other material liabilities, in each case before the same shall become delinquent
or in default and before penalties accrue thereon, unless and to the extent that
the same are being contested in good faith by appropriate proceedings and
adequate reserves with respect thereto shall, to the extent required by GAAP,
have been set aside.
SECTION 5.06. Litigation and Other Notices. Give the
Administrative Agent prompt written notice of the following (which the
Administrative Agent shall promptly provide to the Lenders):
(a) the filing or commencement of, or any written threat or
written notice of intention of any person to file or commence, any
action, suit or proceeding which could reasonably be expected to result
in a Material Adverse Effect;
(b) any Event of Default or Default, specifying the nature and
extent thereof and the action (if any) which is proposed to be taken
with respect thereto; and
(c) any change in any of the Ratings.
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections. Maintain financial records in accordance with GAAP and, upon
reasonable notice, at all reasonable times, permit any
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authorized representative designated by the Administrative Agent to visit and
inspect the properties of the Company and of any material Subsidiary and to
discuss the affairs, finances and condition of the Company and any material
Subsidiary with a Financial Officer of the Company and such other officers as
the Company shall deem appropriate.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans
only for the purposes set forth in the recitals to this Agreement.
B. Negative Covenants. Each Borrower covenants and agrees with
each Lender and the Administrative Agent that so long as this Agreement shall
remain in effect or the principal of or interest on any Loan, any Fees or any
other amounts payable hereunder shall be unpaid or any Letters of Credit have
not been canceled or have not expired or any amounts drawn thereunder have not
been reimbursed in full, unless the Required Lenders shall otherwise consent in
writing, it will not, and will not cause or permit any of the Subsidiaries to:
SECTION 5.09. Consolidations, Mergers, and Sales of Assets.
Consolidate or merge with or into any other person or sell, lease or transfer
all or substantially all of its property and assets, or agree to do any of the
foregoing, unless (a) no Default or Event of Default has occurred and is
continuing or would have occurred immediately after giving effect thereto, and
(b) in the case of a consolidation or merger or transfer of assets involving the
Company and in which the Company is not the surviving corporation or sells,
leases or transfers all or substantially all of its property and assets, the
surviving corporation or person purchasing, leasing or receiving such property
and assets is organized in the United States of America or a state thereof and
agrees to be bound by the terms and provisions applicable to the Company
hereunder.
SECTION 5.10. Limitations on Liens. In the case of the
Company, create, suffer to be created, or assume (directly or indirectly) any
mortgage, pledge or other lien upon any Principal Property, or permit any
Restricted Subsidiary to create, suffer to be created, or assume (directly or
indirectly) any mortgage, pledge or other lien upon any Principal Property;
provided, however, that this covenant shall not apply to any of the following:
(a) any mortgage, pledge or other lien on any Principal
Property hereafter acquired, constructed or improved by the Company or
any Restricted Subsidiary which is created or assumed to secure or
provide for the payment of any part of the purchase price of such
property or the cost of such construction or improvement, or any
mortgage, pledge or other lien on any Principal Property existing at
the time of acquisition thereof, provided, however, that the mortgage,
pledge or other lien shall not extend to any Principal Property
theretofore owned by the Company or any Restricted Subsidiary;
(b) any mortgage, pledge or other lien on any Principal
Property existing on the date of this Agreement as described in
Schedule 5.10;
(c) any mortgage, pledge or other lien existing upon any
property of a company which is merged with or into or is consolidated
into, or substantially all the assets or shares of capital stock of
which are acquired by, the Company or a Restricted Subsidiary, at the
time of such merger, consolidation or acquisition, provided that such
mortgage, pledge or other lien does not extend to any other Principal
Property, other than improvements to the property subject to such
mortgage, pledge or other lien;
<PAGE> 49
45
(d) any pledge or deposit to secure payment of workers'
compensation or insurance premiums, or in connection with tenders,
bids, contracts (other than contracts for the payment of money) or
leases;
(e) any pledge of, or other lien upon, any assets as security
for the payment of any tax, assessment or other similar charge by any
Governmental Authority or public body, or as security required by law
or governmental regulation as a condition to the transaction of any
business or the exercise of any privilege or right;
(f) any pledge or lien necessary to secure a stay of any legal
or equitable process in a proceeding to enforce a liability or
obligation contested in good faith by the Company or a Restricted
Subsidiary or required in connection with the institution by the
Company or a Restricted Subsidiary of any legal or equitable proceeding
to enforce a right or to obtain a remedy claimed in good faith by the
Company or a Restricted Subsidiary, or required in connection with any
order or decree in any such proceeding or in connection with any
contest of any tax or other governmental charge; or the making of any
deposit with or the giving of any form of security to any governmental
agency or any body created or approved by law or governmental
regulation in order to entitle the Company or a Restricted Subsidiary
to maintain self-insurance or to participate in any fund in connection
with workers' compensation, unemployment insurance, old age pensions or
other social security or to share in any provisions or other benefits
provided for companies participating in any such arrangement or for
liability on insurance of credits or other risks;
(g) any mechanics', carriers', workmen's, repairmen's, or
other like liens, if arising in the ordinary course of business, in
respect of obligations which are not overdue or liability for which is
being contested in good faith by appropriate proceedings;
(h) any lien or encumbrance on property in favor of the United
States of America, or of any agency, department or other
instrumentality thereof, to secure partial, progress or advance
payments pursuant to the provisions of any contract;
(i) any mortgage, pledge or other lien securing any
indebtedness incurred in any manner to finance or recover the cost to
the Company or any Restricted Subsidiary of any physical property, real
or personal, which prior to or simultaneously with the creation of such
indebtedness shall have been leased by the Company or a Restricted
Subsidiary to the United States of America or a department or agency
thereof at an aggregate rental, payable during that portion of the
initial term of such lease (without giving effect to any options of
renewal or extension) which shall be unexpired at the date of the
creation of such indebtedness, sufficient (taken together with any
amounts required to be paid by the lessee to the lessor upon any
termination of such lease) to pay in full at the stated maturity date
or dates thereof the principal of and the interest on such
indebtedness;
(j) any mortgage, pledge or other lien securing indebtedness
of a Restricted Subsidiary to the Company or a Restricted Subsidiary,
provided that in the case of any sale or other disposition of such
indebtedness by the Company or such Restricted Subsidiary, such sale or
other disposition shall be deemed to constitute the creation of another
mortgage, pledge or other lien not permitted by this clause (j);
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46
(k) any mortgage, pledge or other lien affecting property of
the Company or any Restricted Subsidiary securing indebtedness of the
United States of America or a State thereof (or any instrumentality or
agency of either thereof) issued in connection with a pollution control
or abatement program required in the opinion of the Company to meet
environmental criteria of the Company or any Restricted Subsidiary and
the proceeds of which indebtedness have financed the cost of
acquisition of such program;
(l) the renewal, extension, replacement or refunding of any
mortgage, pledge, lien, deposit, charge or other encumbrance permitted
by the foregoing provisions of this covenant upon the same property
theretofore subject thereto, or the renewal, extension, replacement or
refunding of the amount secured thereby, provided that in each case
such amount outstanding at that time shall not be increased; or
(m) any other mortgage, pledge or other lien, provided that
immediately after the creation or assumption of such mortgage, pledge
or other lien, the total of (x) the aggregate principal amount of
indebtedness of the Company and all Restricted Subsidiaries secured by
all mortgages, pledges and other liens created or assumed under the
provisions of this clause (m), plus (y) the aggregate amount of
Capitalized Lease-Back Obligations of the Company and Restricted
Subsidiaries under the entire unexpired terms of all leases entered
into in connection with sale and lease-back transactions which would
have been precluded by the provisions of Section 5.11 but for the
satisfaction of the condition set forth in clause (b) thereof, shall
not exceed an amount equal to 10% of Consolidated Net Tangible Assets.
The lease of any property by the Company or a Restricted Subsidiary and rental
obligations with respect thereto (whether or not arising out of a sale and
lease-back of properties and whether or not in accordance with GAAP such
property is carried as an asset and such rental obligations are carried as
indebtedness on the Company's or a Restricted Subsidiary's balance sheet) shall
not in any event be deemed to be the creation of a mortgage, pledge or other
lien.
SECTION 5.11. Limitations on Sale and Leaseback Transactions.
In the case of the Company or any Restricted Subsidiary, enter into any
arrangement with any person providing for the leasing by the Company or any
Restricted Subsidiary of any Principal Property (except for temporary leases for
a term of not more than three years and except for leases between the Company
and a Restricted Subsidiary or between Restricted Subsidiaries), which property
has been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such person more than 120 days after the acquisition thereof or
the completion of construction and commencement of full operation thereof,
unless either (a) the Company shall apply an amount equal to the greater of the
Fair Value of such property or the net proceeds of such sale, within 120 days of
the effective date of any such arrangement, to the retirement (other than any
mandatory retirement or by way of payment at maturity) of Indebtedness or to the
acquisition, construction, development or improvement of properties, facilities
or equipment used for operating purposes which are, or upon such acquisition,
construction, development or improvement will be, a Principal Property or a part
thereof; or (b) at the time of entering into such arrangement, such Principal
Property could have been subjected to a mortgage, pledge or other lien securing
indebtedness of the Company or a Restricted Subsidiary in a principal amount
equal to the Capitalized Lease-Back Obligations with respect to such Principal
Property under paragraph (m) of Section 5.10.
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SECTION 5.12. Consolidated Total Debt to Consolidated EBITDA.
Permit the ratio of (a) Consolidated Total Debt to (b) Consolidated EBITDA at
the end of and for any period of four consecutive fiscal quarters to exceed 5.0
to 1.0.
ARTICLE VI
EVENTS OF DEFAULT
In case of the happening of any of the following events (each
an "Event of Default"):
(a) any representation or warranty made or deemed made in or
in connection with the execution and delivery of this Agreement or any
Local Currency Addenda or the Borrowings or issuances of Letters of
Credit hereunder shall prove to have been false or misleading in any
material respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of
any Loan or the reimbursement with respect to any L/C Disbursement when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise;
(c) default shall be made in the payment of any interest on
any Loan or L/C Disbursement or any Fee or any other amount (other than
an amount referred to in paragraph (b) above) due hereunder, when and
as the same shall become due and payable, and such default shall
continue unremedied for a period of ten days;
(d) default shall be made in the due observance or performance
of any covenant, condition or agreement contained in Section 5.01,
5.09, 5.10, 5.11 or 5.12 or in any Local Currency Addendum and, in the
case of any default under Section 5.10, such default shall continue for
30 days;
(e) default shall be made in the due observance or performance
of any covenant, condition or agreement contained herein or in any
other Loan Document (other than those specified in clauses (b), (c) or
(d) above) and such default shall continue unremedied for a period of
30 days after notice thereof from the Administrative Agent or any
Lender to the Company;
(f) the Company or any Subsidiary shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of $20,000,000, beyond the
period of grace, if any, provided in the agreement or instrument under
which such Indebtedness was created or (ii) fail to observe or perform
any other term, covenant, condition or agreement contained in any
agreement or instrument evidencing or governing any such Indebtedness,
or any other event shall occur or condition shall exist, beyond the
period of grace, if any, provided in such agreement or instrument, if
the effect of any failure referred to in this clause (ii) is to cause,
or to permit the holder or holders of such Indebtedness or a trustee on
its or their behalf (with or without the giving of notice) to cause,
such Indebtedness to become due prior to its stated maturity;
<PAGE> 52
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(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Company, or of a
substantial part of the property or assets of the Company or any
Subsidiary with assets having a gross book value in excess of
$25,000,000, under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Company or for a substantial
part of the property or assets of the Company or any Subsidiary with
assets having a gross book value in excess of $25,000,000 or (iii) the
winding up or liquidation of the Company; and such proceeding or
petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
(h) the Company or any Subsidiary with assets having a gross
book value in excess of $25,000,000 shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or any
other Federal or state bankruptcy, insolvency, receivership or similar
law, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or the filing of any petition
described in (g) above, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for the Company or for a substantial part of the property or
assets of the Company, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors, (vi) become
unable, admit in writing its inability or fail generally to pay its
debts as they become due or (vii) take any action for the purpose of
effecting any of the foregoing;
(i) one or more final judgments shall be entered by any court
against the Company or any of the Subsidiaries for the payment of money
in an aggregate amount in excess of $100,000,000, and such judgment or
judgments shall not have been paid, covered by insurance, discharged or
stayed for a period of 60 days, or a warrant of attachment or execution
or similar process shall have been issued or levied against property of
the Company or any of the Subsidiaries to enforce any such judgment or
judgments;
(j) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other such ERISA
Events, could reasonably be expected to result in a Material Adverse
Effect; or
(k) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Company
or any Subsidiary with assets having a gross book value in excess of $25,000,000
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent, at the request of the
Required Lenders, shall, by notice to the Company, take any or all of the
following actions, at the same or different times: (i) terminate forthwith the
Commitments, (ii) declare the Loans then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of the Borrowers accrued hereunder,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived anything contained herein to the contrary
notwithstanding, (iii) require the Borrowers to deposit with the Administrative
Agent cash collateral in an amount equal to the aggregate L/C Exposures to
secure the Borrowers' reimbursement obligations under Section 2.23; and, in the
case of any event with respect to the Company or any Subsidiary having a gross
book value in
<PAGE> 53
49
excess of $25,000,000 described in paragraph (g) or (h) above, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of the Borrowers accrued hereunder shall automatically become due
and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived anything contained herein to the
contrary notwithstanding, and the Borrowers shall deposit with the
Administrative Agent cash collateral in an amount equal to the aggregate L/C
Exposure to secure the Borrowers' reimbursement obligations under Section 2.23.
ARTICLE VII
GUARANTEE
The Company unconditionally and irrevocably guarantees the due
and punctual payment and performance, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, of the
Guaranteed Obligations. The Company further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from it and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Guaranteed Obligations.
The Company waives presentment to, demand of payment from and
protest to the Borrowing Subsidiaries of any of the Guaranteed Obligations, and
also waives notice of acceptance of its guarantee and notice of protest for
nonpayment. The obligations of the Company hereunder shall not be affected by
(a) the failure of any Lender to assert any claim or demand or to enforce any
right or remedy against the Borrowing Subsidiaries under the provisions of this
Agreement or otherwise; (b) any rescission, waiver, amendment or modification of
any of the terms or provisions of this Agreement, any guarantee or any other
agreement; or (c) the failure of any Lender to exercise any right or remedy
against any other guarantor of the Guaranteed Obligations.
The Company further agrees that its guarantee constitutes a
guarantee of payment when due and not of collection, and waives any right to
require that any resort be had by the Administrative Agent or any Lender to any
security, if any, held for payment of the Guaranteed Obligations or to any
balance of any deposit account or credit on its books, in favor of the Borrowing
Subsidiaries or any other person.
The obligations of the Company hereunder shall not be subject
to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of the Company hereunder shall
not be discharged or impaired or otherwise affected by the failure of the
Administrative Agent or any Lender to assert any claim or demand or to enforce
any remedy under this Agreement, any guarantee or any other agreement, by any
waiver or modification of any provision thereof, by any default, failure or
delay, wilful or otherwise, in the performance of the Guaranteed Obligations, or
by any other act or omission which may or might in any manner or to any extent
vary the risk of the Company or otherwise operate as a discharge of the Company
as a matter of law or equity.
<PAGE> 54
50
To the extent permitted by applicable law, the Company waives
any defense based on or arising out of any defense available to the Borrowing
Subsidiaries, including any defense based on or arising out of any disability of
the Borrowing Subsidiaries, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrowing Subsidiaries, other than final payment in full
of the Guaranteed Obligations. The Administrative Agent and the Lenders may, at
their election, foreclose on any security held by one or more of them by one or
more judicial or non-judicial sales, or exercise any other right or remedy
available to them against the Borrowing Subsidiaries, or any security without
affecting or impairing in any way the liability of the Company hereunder except
to the extent the Guaranteed Obligations have been fully and finally paid. The
Company waives any defense arising out of any such election even though such
election operates to impair or to extinguish any right of reimbursement or
subrogation or other right or remedy of the Company against the Borrowing
Subsidiaries or any security.
The Company further agrees that its guarantee shall continue
to be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of principal of or interest on any Guaranteed Obligation is
rescinded or must otherwise be restored by any Lender upon the bankruptcy or
reorganization of any Borrowing Subsidiary or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which the Administrative Agent or any Lender may have at law or in
equity against the Company by virtue hereof, upon the failure of any Borrowing
Subsidiary to pay any Guaranteed Obligation when and as the same shall become
due, whether at maturity, by acceleration, after notice of prepayment or
otherwise, the Company hereby promises to and will, upon receipt of written
demand by the Administrative Agent or any Lender, forthwith pay or cause to be
paid to the Administrative Agent or such Lender in cash the amount of such
unpaid Guaranteed Obligation.
The Company hereby irrevocably waives and releases any and all
rights of subrogation, indemnification, reimbursement and similar rights which
it may have against or in respect of the Borrowing Subsidiaries at any time
relating to the Guaranteed Obligations, including all rights that would result
in its being deemed a "creditor" of the Borrowing Subsidiaries under the United
States Code as now in effect or hereafter amended, or any comparable provision
of any successor statute.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
In order to expedite the transactions contemplated by this
Agreement, The Chase Manhattan Bank is hereby appointed to act as Administrative
Agent on behalf of the Lenders and the Issuing Banks. Each of the Lenders and
the Issuing Banks hereby irrevocably authorizes the Administrative Agent to take
such actions on behalf of such Lender or Issuing Bank and to exercise such
powers as are specifically delegated to the Administrative Agent by the terms
and provisions hereof, together with such actions and powers as are reasonably
incidental thereto. The Administrative Agent is hereby expressly authorized by
the Lenders and the Issuing Banks, without hereby limiting any implied
authority, (a) to receive on behalf of the Lenders and the Issuing Banks all
payments of principal of and interest on the Loans and all other amounts due to
the Lenders and the Issuing Banks hereunder, and promptly to distribute to each
Lender or Issuing Bank its proper share of each payment so received; (b) to give
notice on behalf of each of the Lenders to the Borrowers of any Event of Default
of which the
<PAGE> 55
51
Administrative Agent has actual knowledge acquired in connection with its agency
hereunder; and (c) to distribute to each Lender copies of all notices, financial
statements and other materials delivered by the Borrowers pursuant to this
Agreement as received by the Administrative Agent.
Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall be liable as such for any action taken or
omitted by any of them except for its or his or her own gross negligence or
willful misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document delivered in connection
herewith, or be required to ascertain or to make any inquiry concerning the
performance or observance by the Borrowers of any of the terms, conditions,
covenants or agreements contained in this Agreement. The Administrative Agent
shall not be responsible to the Lenders for the due execution, genuineness,
validity, enforceability or effectiveness of this Agreement or other instruments
or agreements. The Administrative Agent may deem and treat the Lender which
makes any Loan as the holder of the indebtedness resulting therefrom for all
purposes hereof until it shall have received notice from such Lender, given as
provided herein, of the transfer thereof. The Administrative Agent shall in all
cases be fully protected in acting, or refraining from acting, in accordance
with written instructions signed by the Required Lenders and, except as
otherwise specifically provided herein, such instructions and any action or
inaction pursuant thereto shall be binding on all the Lenders. The
Administrative Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith to
be genuine and correct and to have been signed or sent by the proper person or
persons. Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall have any responsibility to the Borrowers on account of
the failure of or delay in performance or breach by any Lender or Issuing Bank
of any of its obligations hereunder or to any Lender or Issuing Bank on account
of the failure of or delay in performance or breach by any other Lender or
Issuing Bank or the Borrowers of any of their respective obligations hereunder
or in connection herewith. The Administrative Agent may execute any and all
duties hereunder by or through agents or employees and shall be entitled to rely
upon the advice of legal counsel selected by it with respect to all matters
arising hereunder and shall not be liable for any action taken or suffered in
good faith by it in accordance with the advice of such counsel.
The Lenders hereby acknowledge that the Administrative Agent
shall be under no duty to take any discretionary action permitted to be taken by
it pursuant to the provisions of this Agreement unless it shall be requested in
writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may resign at
any time by notifying the Lenders and the Company. Upon any such resignation,
the Required Lenders shall have the right to appoint a successor Administrative
Agent acceptable to the Company. If no successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a bank with an office in New York,
New York, having a combined capital and surplus of at least $500,000,000 or an
Affiliate of any such bank. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor bank, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After the Administrative
Agent's resignation hereunder, the provisions of this Article and Section 9.05
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Administrative Agent.
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With respect to the Loans made by it hereunder, the
Administrative Agent in its individual capacity and not as Administrative Agent
shall have the same rights and powers as any other Lender and may exercise the
same as though it were not the Administrative Agent, and the Administrative
Agent and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrowers or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent.
Each Lender agrees (i) to reimburse the Administrative Agent,
on demand, in the amount of its pro rata share (based on its Commitment
hereunder or, if the Commitments shall have been terminated, the amount of its
outstanding Loans and L/C Exposure) of any expenses incurred for the benefit of
the Lenders by the Administrative Agent, including counsel fees and compensation
of agents and employees paid for services rendered on behalf of the Lenders,
which shall not have been reimbursed by the Borrowers and (ii) to indemnify and
hold harmless the Administrative Agent and any of its directors, officers,
employees or agents, on demand, in the amount of such pro rata share, from and
against any and all liabilities, taxes, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against it in
its capacity as the Administrative Agent in any way relating to or arising out
of this Agreement or any action taken or omitted by it under this Agreement to
the extent the same shall not have been reimbursed by the Borrowers; provided
that no Lender shall be liable to the Administrative Agent for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross negligence or
wilful misconduct of the Administrative Agent or any of its directors, officers,
employees or agents. Each Lender agrees that any allocation made in good faith
by the Administrative Agent of expenses or other amounts referred to in this
paragraph between this Agreement and the Facility A Credit Agreement shall be
conclusive and binding for all purposes.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender 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 Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement
or any related agreement or any document furnished hereunder or thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed or sent by telecopy, as follows:
(a) if to any Borrower, to ITT Corporation, 1330 Avenue of the
Americas, New York, New York 10019-5490, Attention of Ms. Elizabeth A.
Tuttle (Telecopy No. 212-489-3995);
(b) if to the Administrative Agent, to The Chase Manhattan
Bank Agency Services Corp., 140 East 45th Street, 29th Floor, New York,
New York 10017, Attention of Mr. Chris Moriarty, (Telecopy No.
212-622-0002), with a copy to The Chase Manhattan Bank at 270 Park
Avenue, New York, New York 10017, Re: ITT Corporation; and
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53
(c) if to a Lender, to it at its address (or telecopy number)
set forth in Schedule 2.01 or in the Assignment and Acceptance pursuant
to which such Lender became a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy to such party as provided in this Section or in accordance with the
latest unrevoked direction from such party given in accordance with this
Section.
SECTION 9.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by the Borrowers herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement shall be considered to have been relied upon by
the Lenders and the Issuing Banks and shall survive the making by the Lenders of
the Loans and issuance of Letters of Credit regardless of any investigation made
by the Lenders or the Issuing Banks or on their behalf, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any Fee or any other amount payable under this Agreement is outstanding
and unpaid, any Letter of Credit is outstanding or the Commitments have not been
terminated. The provisions of Sections 2.13, 2.15, 2.19 and 9.05 shall remain
operative and in full force and effect regardless of the expiration of the term
of this Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of any Letter of Credit, the
expiration of the Commitments, the invalidity or unenforceability of any term or
provision of this Agreement, or any investigation made by or on behalf of the
Administrative Agent or any Lender.
SECTION 9.03. Binding Effect. This Agreement shall become
effective on the Effective Date and when it shall have been executed by the
Company and the Administrative Agent and when the Administrative Agent shall
have received copies hereof (telecopied or otherwise) which, when taken
together, bear the signature of each Lender, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrowers shall not have the right to
assign any rights hereunder or any interest herein without the prior consent of
all the Lenders.
SECTION 9.04. Successors and Assigns. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of any party that are contained in this
Agreement shall bind and inure to the benefit of its successors and assigns.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans at the time owing to it);
provided, however, that (i) except in the case of an assignment to a Lender or
an Affiliate of a Lender, the Company must give its prior written consent to
such assignment (which consent, if required, shall not be unreasonably withheld
in the event an Event of Default has occurred and is continuing), (ii) (x) each
such assignment shall be made simultaneously with an assignment under the
Facility A Credit Agreement, in each case on a pro rata basis, and (y) the
parties to each such assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance, and an aggregate processing and recordation
fee of $3,000, (iii) the assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire, and (iv) the amount of
the Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 and the amount of the Commitment of such Lender remaining after such
assignment shall not be less than $5,000,000 or shall be zero. Upon acceptance
and recording pursuant to paragraph (e) of this
<PAGE> 58
54
Section, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five Business Days after the
execution thereof, (A) the assignee thereunder shall be a party hereto and, to
the extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement and (B) the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto (but shall continue to be entitled
to the benefits of Sections 2.13, 2.15, 2.19 and 9.05, as well as to any Fees
accrued for its account hereunder and not yet paid)). Notwithstanding the
foregoing, any Lender assigning its rights and obligations under this Agreement
may retain any Competitive Loans made by it outstanding at such time, and in
such case shall retain its rights hereunder in respect of any Loans so retained
until such Loans have been repaid in full in accordance with this Agreement.
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim, (ii)
except as set forth in (i) above, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement, or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto or the financial condition of the Borrowers or the performance or
observance by the Borrowers of any obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.03 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (v) such assignee will independently and
without reliance upon the Administrative Agent, such assigning Lender or any
other Lender 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 action under this Agreement; (vi) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms of
this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at one of its
offices in The City of New York a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and the principal amount of the Loans owing
to, each Lender pursuant to the terms hereof from time to time (the "Register").
The entries in the Register shall be conclusive in the absence of manifest error
and the Borrowers, the Administrative Agent, the Issuing Banks and the Lenders
may treat each person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by each party hereto, at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee together with an
Administrative Questionnaire completed in respect of the
<PAGE> 59
55
assignee (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) above and the
written consent of the Company to such assignment, the Administrative Agent
shall (i) accept such Assignment and Acceptance and (ii) record the information
contained therein in the Register.
(f) Each Lender may sell participations to one or more banks
or other entities in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to
it); provided, however, that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) each
participating bank or other entity shall be entitled to the benefit of the cost
protection provisions contained in Sections 2.13, 2.15 and 2.19 to the same
extent as if it were the selling Lender (and limited to the amount that could
have been claimed by the selling Lender had it continued to hold the interest of
such participating bank or other entity), except that all claims made pursuant
to such Sections shall be made through such selling Lender, and (iv) the
Borrowers, the Administrative Agent, the Issuing Banks and the other Lenders
shall continue to deal solely and directly with such selling Lender in
connection with such Lender's rights and obligations under this Agreement.
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrowers furnished to such Lender;
provided that, prior to any such disclosure, each such assignee or participant
or proposed assignee or participant shall execute an agreement for the benefit
of the Company whereby such assignee or participant shall agree (subject to
customary exceptions) to preserve the confidentiality of any such information.
(h) The Borrowers shall not assign or delegate any rights and
duties hereunder without the prior written consent of all Lenders.
(i) Any Lender may at any time pledge all or any portion of
its rights under this Agreement to a Federal Reserve Bank; provided that no such
pledge shall release any Lender from its obligations hereunder or substitute any
such Bank for such Lender as a party hereto. In order to facilitate such an
assignment to a Federal Reserve Bank, each Borrower shall, at the request of the
assigning Lender, duly execute and deliver to the assigning Lender a promissory
note or notes evidencing the Loans made to such Borrower by the assigning Lender
hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrowers agree to
pay all reasonable out-of-pocket expenses incurred by the Administrative Agent
in connection with entering into this Agreement or in connection with any
amendments, modifications or waivers of the provisions hereof, or incurred by
the Administrative Agent or any Lender in connection with the enforcement or
protection of their rights in connection with this Agreement or in connection
with the Loans made or Letters of Credit issued hereunder or under any Local
Currency Addendum, including the fees and disbursements of counsel for the
Administrative Agent or, in the case of enforcement, the Lenders.
(b) The Borrowers agree to indemnify the Administrative Agent,
the Issuing Banks, each Lender, each of their Affiliates and the directors,
officers, employees and agents of the foregoing (each such person being called
an "Indemnitee") against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including reasonable
counsel fees and expenses, incurred by or asserted against any Indemnitee
arising out of (i) the consummation of the transactions contemplated by this
Agreement, (ii) the use of the proceeds of the Loans or issuance of Letters of
Credit
<PAGE> 60
56
or (iii) any claim, litigation, investigation or proceeding relating to any of
the foregoing, whether or not any Indemnitee is a party thereto; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses are determined by
a final judgment of a court of competent jurisdiction to have resulted from the
gross negligence or willful misconduct of such Indemnitee.
(c) The provisions of this Section shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of any Letter of Credit, the
invalidity or unenforceability of any term or provision of this Agreement or any
investigation made by or on behalf of the Administrative Agent, the Issuing
Banks or any Lender. All amounts due under this Section shall be payable on
written demand therefor.
SECTION 9.06. APPLICABLE LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE
WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS
OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY
CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500
(THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS,
THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.07. Waivers; Amendment. (a) No failure or delay of
the Administrative Agent, the Issuing Banks or any Lender in exercising any
power or right hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Banks and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies which
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice or demand on any Borrower or any Subsidiary in any case shall
entitle such party to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrowers and the Required Lenders; provided,
however, that no such agreement shall (i) decrease the principal amount of, or
extend the maturity of or any scheduled principal payment date or date for the
payment of any interest or fees on any Loan or for reimbursement of any L/C
Disbursement, or waive or excuse any such payment or any part thereof, or
decrease the rate of interest on any Loan or L/C Disbursement, without the prior
written consent of each Lender affected thereby, (ii) increase the Commitment or
decrease the Facility Fee, L/C Participation Fee of any Lender or other amounts
due to any Lender without the prior written consent of such Lender, (iii) limit
or release the guarantee set forth in Article VII, or (iv) amend or modify the
provisions of Section 2.16 or Section 9.04(h), the provisions of this Section or
the definition of the "Required Lenders", without the prior written consent of
each Lender; provided further, however, that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent or
the Issuing Banks hereunder without the prior written consent of the
Administrative Agent or the Issuing
<PAGE> 61
57
Banks. Each Lender shall be bound by any waiver, amendment or modification
authorized by this Section and any consent by any Lender pursuant to this
Section shall bind any assignee of its rights and interests hereunder.
SECTION 9.08. Entire Agreement. This Agreement, the agreements
referenced in Section 2.06(b) and the letter agreement attached as Exhibit H
constitute the entire contract among the parties relative to the subject matter
hereof. Any previous agreement among the parties with respect to the subject
matter hereof is superseded by this Agreement. Nothing in this Agreement,
expressed or implied, is intended to confer upon any party other than the
parties hereto any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
SECTION 9.09. Severability. In the event any one or more of
the provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 9.10. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract, and shall become
effective as provided in Section 9.03.
SECTION 9.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or obligations of the Company and any Borrowing Subsidiary
now or hereafter existing under this Agreement held by such Lender, irrespective
of whether or not such Lender shall have made any demand under this Agreement
and although such obligations may be unmatured. Each Lender agrees promptly to
notify the Company and the Administrative Agent after such setoff and
application made by such Lender, but the failure to give such notice shall not
affect the validity of such setoff and application. The rights of each Lender
under this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
SECTION 9.13. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (A)
EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK CITY, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY LOCAL CURRENCY ADDENDA OR ANY LETTER OF CREDIT,
OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW
<PAGE> 62
58
YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF
THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. SUBJECT TO THE FOREGOING AND TO
PARAGRAPH (B) BELOW, NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY
PARTY HERETO MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT, ANY LOCAL CURRENCY ADDENDUM OR ANY LETTER OF CREDIT AGAINST ANY
OTHER PARTY HERETO IN THE COURTS OF ANY JURISDICTION.
(B) EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY
OBJECTION WHICH IT MAY NOW OR THEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY
LOCAL CURRENCY ADDENDUM OR ANY LETTER OF CREDIT IN ANY NEW YORK STATE OR FEDERAL
COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(C) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 9.01. NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 9.14. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATION IN THIS SECTION.
SECTION 9.15. Addition of Borrowing Subsidiaries. Each
Borrowing Subsidiary which shall deliver to the Administrative Agent a Borrowing
Subsidiary Agreement executed by such Subsidiary and the Company shall, upon
such delivery and without further act, become a party hereto and a Borrower
hereunder with the same effect as if it had been an original party to this
Agreement.
SECTION 9.16. Conversion of Currencies. (a) If, for the
purpose of obtaining judgment in any court, it is necessary to convert a sum
owing hereunder in one currency into another currency, each party hereto agrees,
to the fullest extent that it may effectively do so, that the rate of exchange
used shall be that at which in accordance with normal banking procedures in the
relevant jurisdiction the first currency could be purchased with such other
currency on the Business Day immediately preceding the day on which final
judgment is given.
<PAGE> 63
59
(b) The obligations of the Borrowers in respect of any sum due
to any party hereto or any holder of the obligations owing hereunder (the
"Applicable Creditor") shall, notwithstanding any judgment in a currency (the
"Judgment Currency") other than the currency in which such sum is stated to be
due hereunder (the "Agreement Currency"), be discharged only to the extent that,
on the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, the
<PAGE> 64
60
Borrowers agree, as a separate obligation and notwithstanding any such judgment,
to indemnify the Applicable Creditor against such loss. The obligations of the
Borrowers contained in this Section 9.16 shall survive the termination of this
Agreement and the payment of all other amounts owing hereunder.
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.
ITT CORPORATION, as Borrower,
by /s/ Elizabeth A. Tuttle
------------------------------------------
Name: Elizabeth A. Tuttle
Title: Senior Vice President and Treasurer
THE CHASE MANHATTAN BANK, individually and
as Administrative Agent,
by /s/ Joan F. Garvin
------------------------------------------
Name: Joan F. Garvin
Title: Vice President
ARAB BANK PLC,
by /s/ Peter Boyadjian
------------------------------------------
Name: Peter Boyadjian
Title: Senior Vice President
BANCA COMMERCIALE ITALIANA, NEW YORK
BRANCH,
by /s/ Charles Dougherty
------------------------------------------
Name: Charles Dougherty
Title: Vice President
by /s/ Brian Carlson
------------------------------------------
Name: Brian Carlson
Title: Assistant Vice President
<PAGE> 65
61
BANCA CRT S.p.A.,
by /s/ Robert P. DeSantes
------------------------------------------
Name: Robert P. DeSantes
Title: Vice President and Head of Corporate
Banking
BANCA DI ROMA, NEW YORK BRANCH,
by /s/ Francesco Vitello
------------------------------------------
Name: Francesco Vitello
Title: Assistant Vice President
by /s/ Ralph L. Riehle
------------------------------------------
Name: Ralph L. Riehle
Title: First Vice President
BANCA NAZIONALE DEL LAVORO S.P.A.,
NEW YORK BRANCH,
by /s/ Giuliano Violetta
------------------------------------------
Name: Giuliano Violetta
Title: First Vice President
by /s/ Giulio Giovine
------------------------------------------
Name: Giulio Giovine
Title: Vice President
BANCA POPOLARE DI MILANO,
by /s/ Anthony Franco
------------------------------------------
Name: Anthony Franco
Title: Executive Vice President &
General Manager
by /s/ Nicholas Cinosi
------------------------------------------
Name: Nicholas Cinosi
Title: Vice President
<PAGE> 66
62
BANK AUSTRIA AG,
by /s/ J. Anthony Seay
------------------------------------------
Name: J. Anthony Seay
Title: Vice President
by /s/ Jeanine Ball
------------------------------------------
Name: Jeanine Ball
Title: Assistant Vice President
BANK OF AMERICA NT&SA,
by /s/ Amy S. Trapp
------------------------------------------
Name: Amy S. Trapp
Title: Managing Director
BANK OF HAWAII,
by /s/ Susan McCarthy
------------------------------------------
Name: Susan McCarthy
Title: Assistant Vice President
THE BANK OF NEW YORK,
by /s/ Peter H. Abdill
------------------------------------------
Name: Peter H. Abdill
Title: Vice President
THE BANK OF NOVA SCOTIA,
by /s/ J. Alan Edwards
------------------------------------------
Name: J. Alan Edwards
Title: Authorized Signatory
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
by /s/ Amanda S. Ryan
------------------------------------------
Name: Amanda S. Ryan
Title: Vice President
<PAGE> 67
63
BANKERS TRUST COMPANY,
by /s/ Mary Kay Coyle
------------------------------------------
Name: Mary Kay Coyle
Title: Managing Director
BAYERISCHE LANDESBANK GIROZENTRALE,
CAYMAN ISLANDS BRANCH,
by /s/ W. Freudenberger
------------------------------------------
Name: W. Freudenberger
Title: Executive Vice President and
General Manager
by /s/ P. Obermann
------------------------------------------
Name: P. Obermann
Title: Senior Vice President and
Manager Lending Division
BZW DIVISION OF BARCLAYS BANK PLC,
by /s/ John C. Livingston
------------------------------------------
Name: John C. Livingston
Title: Director
CIBC, INC.,
by /s/ Cheryl L. Root
------------------------------------------
Name: Cheryl L. Root
Title: Director, CIBC Wood Gundy Securities
Corp., AS AGENT
CITIBANK, N.A.,
by /s/ Elizabeth A. Polermo
------------------------------------------
Name: Elizabeth A. Polermo
Title: Attorney-in-Fact
<PAGE> 68
64
COMERICA BANK,
by /s/ Chris Georvassilis
------------------------------------------
Name: Chris Georvassilis
Title: Vice President
COMMERZBANK AKTIENGESELLSCHAFT,
GRAND CAYMAN BRANCH,
by /s/ Robert J. Donohue
------------------------------------------
Name: Robert J. Donohue
Title: Vice President
by /s/ Andrew R. Campbell
------------------------------------------
Name: Andrew R. Campbell
Title: Assistant Cashier
COMMONWEALTH BANK OF AUSTRALIA,
by /s/ Loren I. Brenowitz
------------------------------------------
Name: Loren I. Brenowitz
Title: Vice President & Senior Manager
Risk Management
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE,
by /s/ Dora DeBlasi Hyduk
------------------------------------------
Name: Dora DeBlasi Hyduk
Title: Vice President
by /s/ Albert M. Calo
------------------------------------------
Name: Albert M. Calo
Title: Vice President
CREDIT LYONNAIS, NEW YORK BRANCH,
by /s/ Vladimir Labun
------------------------------------------
Name: Vladimir Labun
Title: First Vice President-Manager
<PAGE> 69
65
CREDIT SUISSE,
by /s/ Robert B. Potter
------------------------------------------
Name: Robert B. Potter
Title: Member of Senior Management
by /s/ David W. Kratovil
------------------------------------------
Name: David W. Kratovil
Title: Member of Senior Management
CREDITO ITALIANO, S.P.A.,
by /s/ Harmon P. Butler
------------------------------------------
Name: Harmon P. Butler
Title: First Vice President
by /s/ Saiyed A. Abbas
------------------------------------------
Name: Saiyed A. Abbas
Title: Assistant Vice President
THE DAI-ICHI KANGYO BANK, LTD.,
NEW YORK BRANCH,
by /s/ Bertram Tang
------------------------------------------
Name: Bertram Tang
Title: Assistant Vice President
DEUTSCHE BANK AG, NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH,
by /s/ Hans-Josef Thiele
------------------------------------------
Name: Hans-Josef Thiele
Title: Vice President
by /s/ Flore F. Blaise Williams
------------------------------------------
Name: Flore F. Blaise Williams
Title: Vice President
<PAGE> 70
66
DRESDNER BANK AG, NEW YORK BRANCH,
AND GRAND CAYMAN BRANCH,
by /s/ Andrew K. Mittag
------------------------------------------
Name: Andrew K. Mittag
Title: Vice President
by /s/ Anthony Berti
------------------------------------------
Name: Anthony Berti
Title: AT
FIRST HAWAIIAN BANK,
by /s/ Kathryn A. Plumb
------------------------------------------
Name: Kathryn A. Plumb
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
by /s/ Paul Sassieni
------------------------------------------
Name: Paul Sassieni
Title: Vice President
FLEET BANK, N.A.,
by /s/ John T. Harrison
------------------------------------------
Name: John T. Harrison
Title: Vice President
THE FUJI BANK, LIMITED,
by /s/ Masanobu Kobayashi
------------------------------------------
Name: Masanobu Kobayashi
Title: Vice President & Manager
<PAGE> 71
67
GENERALE BANK, NEW YORK BRANCH,
by /s/ P. Pollaert
------------------------------------------
Name: P. Pollaert
Title: Senior Vice President
by /s/ E. Matthews
------------------------------------------
Name: E. Matthews
Title: Senior Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
NEW YORK BRANCH,
by /s/ John V. Veltri
------------------------------------------
Name: John V. Veltri
Title: Senior Vice President
ISTITUTO BANCARIO SAN PAOLO DI TORINO
SPA,
by /s/ Wendell Jones
------------------------------------------
Name: Wendell Jones
Title: Vice President
by /s/ Ettore Viazzo
------------------------------------------
Name: Ettore Viazzo
Title: Vice President
KREDIETBANK N.V.,
by /s/ Armen Karozichian
------------------------------------------
Name: Armen Karozichian
Title: Vice President
by /s/ Robert Snauffer
------------------------------------------
Name: Robert Snauffer
Title: Vice President
<PAGE> 72
68
LLOYDS BANK PLC,
by /s/ Paul D. Briamonte
------------------------------------------
Name: Paul D. Briamonte
Title: Vice President
by /s/ Theodore R. Walser
------------------------------------------
Name: Theodore R. Walser
Title: Senior Vice President
LTCB TRUST COMPANY,
by /s/ Rene LeBlanc
------------------------------------------
Name: Rene LeBlanc
Title: Senior Vice President
THE MITSUBISHI TRUST AND BANKING
CORPORATION,
by /s/ Patricia Loret de Mola
------------------------------------------
Name: Patricia Loret de Mola
Title: Senior Vice President
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK,
by /s/ George J. Stapleton
------------------------------------------
Name: George J. Stapleton
Title: Vice President
NATIONAL WESTMINSTER BANK PLC, NASSAU
BRANCH,
by /s/ Anne Marie Torre
------------------------------------------
Name: Anne Marie Torre
Title: Vice President
<PAGE> 73
69
NATIONSBANK, N.A.,
by /s/ Sally L. Hazard
------------------------------------------
Name: Sally L. Hazard
Title: Senior Vice President
THE NORTHERN TRUST COMPANY,
by /s/ Joseph Yacullo
------------------------------------------
Name: Joseph Yacullo
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION,
by /s/ Denise D. Killen
------------------------------------------
Name: Denise D. Killen
Title: Vice President
ROYAL BANK OF CANADA,
by /s/ John M. Crawford
------------------------------------------
Name: John M. Crawford
Title: Senior Manager Corp. Banking
THE SAKURA BANK, LIMITED, NEW YORK
BRANCH,
by /s/ Yasumasa Kikuchi
------------------------------------------
Name: Yasumasa Kikuchi
Title: Senior Vice President
THE SANWA BANK LIMITED, NEW YORK
BRANCH,
by /s/ Stephen C. Small
------------------------------------------
Name: Stephen C. Small
Title: Vice President & Area Manager
<PAGE> 74
70
SOCIETE GENERALE,
by /s/ Sedare Coradin
------------------------------------------
Name: Sedare Coradin
Title: Vice President
THE SUMITOMO BANK, LIMITED, NEW YORK
BRANCH,
by /s/ Yoshinori Kawamura
------------------------------------------
Name: Yoshinori Kawamura
Title: Joint General Manager
THE SUMITOMO TRUST & BANKING CO., LTD.
LOS ANGELES AGENCY,
by /s/ Eleanor Chan
------------------------------------------
Name: Eleanor Chan
Title: Manager & Vice President
SUNTRUST BANK, ATLANTA,
by /s/ May M. Smith
------------------------------------------
Name: May M. Smith
Title: Banking Officer
by /s/ Craig W. Farnsworth
------------------------------------------
Name: Craig W. Farnsworth
Title: Vice President & Manager
<PAGE> 75
71
SWISS BANK CORPORATION, NEW YORK
BRANCH,
by /s/ Karen Mayrose
------------------------------------------
Name: Karen Mayrose
Title: Associate Director
Banking Finance Support, N.A.
by /s/ Ernst Schirmer
------------------------------------------
Name: Ernst Schirmer
Title: Director, Credit Risk Management
THE TOKAI BANK, LIMITED,
by /s/ Stuart M. Schulman
------------------------------------------
Name: Stuart M. Schulman
Title: Deputy General Manager
UNION BANK OF SWITZERLAND, NEW YORK
BRANCH,
by /s/ Laurent J. Chaix
------------------------------------------
Name: Laurent J. Chaix
Title: Vice President
by /s/ Robert H. Riley III
------------------------------------------
Name: Robert H. Riley III
Title: Managing Director
WELLS FARGO BANK, N.A.,
by /s/ Michael Cordas
------------------------------------------
Name: Michael Cordas
Title: Vice President
<PAGE> 76
72
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK AND CAYMAN
ISLANDS BRANCHES,
by /s/ Salvatore Battinelli
------------------------------------------
Name: Salvatore Battinelli
Title: Vice President, Credit Department
by /s/ Ralph White
------------------------------------------
Name: Ralph White
Title: Vice President
THE YASUDA TRUST AND BANKING COMPANY,
LIMITED, NEW YORK BRANCH,
by /s/ Rohn Laudenschlager
------------------------------------------
Name: Rohn Laudenschlager
Title: Senior Vice President
<PAGE> 77
EXHIBIT A-1
FORM OF COMPETITIVE BID REQUEST
The Chase Manhattan Bank, as Administrative Agent
for the Lenders referred to below,
270 Park Avenue
New York, NY 10017
Attention: [ ]
Dear Ladies and Gentlemen:
The undersigned, _______________ (the "Borrower"), refers to
the Five-Year Competitive Advance and Revolving Credit Facility Agreement dated
as of November 4, 1996 (as it may be amended, modified, extended or restated
from time to time, the "5-Year Agreement"), among the Borrower, the Borrowing
Subsidiaries parties thereto, the Lenders parties thereto and The Chase
Manhattan Bank, as Administrative Agent. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
5-Year Agreement. The Borrower hereby gives you notice pursuant to Section
2.03(a) of the 5-Year Agreement that it requests a Competitive Borrowing under
the 5- Year Agreement, and in that connection sets forth below the terms on
which such Competitive Borrowing is requested to be made:
(A) Date of Competitive Borrowing
(which is a Business Day) ________________
(B) Principal amount of
Competitive Borrowing(1) ________________
(C) Interest rate basis(2) ________________
(D) Interest Period and the
last day thereof(3) ________________
Upon acceptance of any or all of the Loans offered by the Lenders in
response to this request, the Borrower shall be deemed to have represented and
warranted that the conditions to lending specified in Section 4.01(b) and (c) of
the 5-Year Agreement have been satisfied.
Very truly yours,
[NAME OF BORROWER],
by
--------------------
Name:
Title: [Financial Officer]
- -------------------------
(1)Not less than $10,000,000 (and in integral multiples of $5,000,000) or
greater than the Total Commitment then available.
(2)Eurocurrency Competitive Loan or Fixed Rate Loan.
(3)Which shall be subject to the definition of "Interest Period" and end not
later than the Maturity Date.
<PAGE> 78
EXHIBIT A-2
FORM OF NOTICE OF COMPETITIVE BID REQUEST
[Name of Lender]
[Address]
[Date]
Attention: [ ]
Dear Ladies and Gentlemen:
Reference is made to the Five-Year Competitive Advance and Revolving
Credit Facility Agreement dated as of November 4, 1996 (as it may hereafter be
amended, modified, extended or restated from time to time, the "5-Year
Agreement"), among ITT Corporation [,__________] (the "Borrower"), the Borrowing
Subsidiaries parties thereto, the Lenders parties thereto and The Chase
Manhattan Bank, as Administrative Agent. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
5-Year Agreement. The Borrower made a Competitive Bid Request on , 19[ ],
pursuant to Section 2.03(a) of the 5-Year Agreement, and in that connection you
are invited to submit a Competitive Bid by [Date]/[Time].(1) Your Competitive
Bid must comply with Section 2.03(b) of the 5-Year Agreement and the terms set
forth below on which the Competitive Bid Request was made:
(A) Date of Competitive Borrowing ______________
(B) Principal amount of ______________
Competitive Borrowing
(C) Interest rate basis ______________
(D) Interest Period and the ______________
last day thereof
Very truly yours,
THE CHASE MANHATTAN BANK,
as Administrative Agent,
by
--------------------
Name:
Title:
- -----------------------
(1)The Competitive Bid must be received by the Administrative Agent (i) in the
case of Eurocurrency Competitive Loans, not later than 10:00 a.m., New York City
time, four Business Days before a proposed Competitive Borrowing, and (ii) in
the case of Fixed Rate Loans, not later than 10:00 a.m., New York City time, one
Business Day before a proposed Competitive Borrowing.
<PAGE> 79
EXHIBIT A-3
FORM OF COMPETITIVE BID
The Chase Manhattan Bank, as Administrative Agent
for the Lenders referred to below,
270 Park Avenue
New York, N.Y. 10017
[Date]
Attention: [ ]
Dear Ladies and Gentlemen:
The undersigned, [Name of Lender], refers to the Five-Year Competitive
Advance and Revolving Credit Facility Agreement dated as of November 4, 1996 (as
it may be amended, modified, extended or restated from time to time, the "5-Year
Agreement"), among ITT Corporation (the "Borrower"), the Borrowing Subsidiaries
parties thereto, the Lenders parties thereto and The Chase Manhattan Bank, as
Administrative Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the 5-Year Agreement.
The undersigned hereby makes a Competitive Bid pursuant to Section 2.03(b) of
the 5-Year Agreement, in response to the Competitive Bid Request made by the
Borrower on _________________, 19[ ], and in that connection sets forth below
the terms on which such Competitive Bid is made:
(A) Principal Amount(1) ______________
(B) Competitive Bid Rate(2) ______________
(C) Interest Period and last
day thereof ______________
The undersigned hereby confirms that it is prepared, subject to the
conditions set forth in the 5-Year Agreement, to extend credit to the Borrower
upon acceptance by the Borrower of this bid in accordance with Section 2.03(d)
of the 5-Year Agreement.
Very truly yours,
[NAME OF LENDER],
by
--------------------------
Name:
Title:
- --------
(1)Not less than $5,000,000 or greater than the requested Competitive Borrowing
and in integral multiples of $1,000,000. Multiple bids will be accepted by the
Administrative Agent.
(2)i.e., LIBO Rate + or _____%, in the case of Eurocurrency Competitive Loans
or _____%, in the case of Fixed Rate Loans.
<PAGE> 80
EXHIBIT A-4
FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER
[Date]
The Chase Manhattan Bank, as Administrative Agent
for the Lenders referred to below
270 Park Avenue
New York, N.Y. 10017
Attention: [ ]
Dear Ladies and Gentlemen:
The undersigned, _______________ (the "Borrower"), refers to the
Five-Year Competitive Advance and Revolving Credit Facility Agreement dated as
of November 4, 1996 (as it may be amended, modified, extended or restated from
time to time, the "5-Year Agreement"), among the Borrower, the Borrowing
Subsidiaries parties thereto, the Lenders parties thereto and The Chase
Manhattan Bank, as Administrative Agent for the Lenders.
In accordance with Section 2.03(c) of the 5-Year Agreement, we have
received a summary of bids in connection with our Competitive Bid Request dated
___________________, and in accordance with Section 2.03(d) of the 5-Year
Agreement, we hereby accept the following bids for maturity on [date]:
<TABLE>
<CAPTION>
Principal Amount Fixed Rate/Margin Lender
- ---------------- ----------------- ------
<S> <C> <C>
$ [%]/[+/-. %]
$
</TABLE>
We hereby reject the following bids:
<TABLE>
<CAPTION>
Principal Amount Fixed Rate/Margin Lender
- ---------------- ----------------- ------
<S> <C> <C>
$ [%]/[+/-. %]
$
</TABLE>
The $__________ should be deposited in The Chase Manhattan Bank account
number [ ] on [date].
Very truly yours,
[NAME OF BORROWER],
by
------------------------
Name:
Title:
<PAGE> 81
EXHIBIT A-5
FORM OF STANDBY BORROWING REQUEST
The Chase Manhattan Bank, as Administrative Agent
for the Lenders referred to below,
270 Park Avenue
New York, N.Y. 10017
[Date]
Attention: [ ]
Dear Ladies and Gentlemen:
The undersigned, _______________ (the "Borrower"), refers to
the Five-Year Competitive Advance and Revolving Credit Facility Agreement dated
as of November 4, 1996 (as it may be amended, modified, extended or restated
from time to time, the "5-Year Agreement"), among the Borrower, the Borrowing
Subsidiaries parties thereto, the Lenders parties thereto and The Chase
Manhattan Bank, as Administrative Agent. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
5-Year Agreement. The Borrower hereby gives you notice pursuant to Section 2.04
of the 5-Year Agreement that it requests a Standby Borrowing under the 5-Year
Agreement, and in that connection sets forth below the terms on which such
Standby Borrowing is requested to be made:
(A) Date of Standby Borrowing
(which is a Business Day) ______________
(B) Principal amount of
Standby Borrowing(1) ______________
(C) Interest rate basis(2) ______________
(D) Interest Period and the
last day thereof(3) ______________
Upon acceptance of any or all of the Loans made by the Lenders in
response to this request, the Borrower shall be deemed to have represented and
warranted that the conditions to lending specified in Section 4.01(b) and (c) of
the 5-Year Agreement have been satisfied.
Very truly yours,
[NAME OF BORROWER],
by
----------------------
Name:
Title: [Financial Officer]
- -----------------------
(1)Not less than $20,000,000 (and in integral multiples of $5,000,000) or
greater than the Total Commitment then available.
(2)Eurocurrency Standby Loan or Fixed Rate Loan.
(3)Which shall be subject to the definition of "Interest Period" and end not
later than the Maturity Date.
<PAGE> 82
EXHIBIT C
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Dated:_________, 19__
Reference is made to the Five-Year Competitive Advance and Revolving
Credit Facility Agreement dated as of November 4, 1996 (the "5-Year Agreement"),
among ITT Corporation (the "Company"), the Borrowing Subsidiaries parties
thereto, the Lenders parties thereto (the "Lenders") and The Chase Manhattan
Bank, as Administrative Agent for the Lenders. Terms defined in the 5-Year
Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the Effective Date set forth below, the interests
set forth below (the "Assigned Interest") in the Assignor's rights and
obligations under the 5-Year Agreement, including, without limitation, the
interests set forth below in the Commitment of the Assignor on the Effective
Date and the Competitive Loans and Standby Loans owing to the Assignor which are
outstanding on the Effective Date. Each of the Assignor and the Assignee hereby
makes and agrees to be bound by all the representations, warranties and
agreements set forth in Section 9.04 of the 5-Year Agreement, a copy of which
has been received by each such party. From and after the Effective Date, (i) the
Assignee shall be a party to and be bound by the provisions of the 5-Year
Agreement and, to the extent of the interests assigned by this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and (ii) the
Assignor shall, to the extent of the interests assigned by this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
5-Year Agreement.
2. This Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) if the Assignee is organized under the
laws of a jurisdiction outside the United States, the forms specified in Section
2.19(g) of the 5-Year Agreement, duly completed and executed by such Assignee,
(ii) if the Assignee is not already a Lender under the 5-Year Agreement, an
Administrative Questionnaire in the form of Exhibit B to the 5-Year Agreement
and (iii) a processing and recordation fee of $3,000 (which shall include the
assignment and acceptance processing and recordation fee arisung under the
Facility A Credit Agreement occurring herewith).
3. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
<PAGE> 83
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment):
<TABLE>
<CAPTION>
==================================================================================================================
Percentage Assigned of
Facility/Commitment (set forth,
to at least 8 decimals, as a
Principal Amount Assigned (and percentage of the Facility and
identifying information as to the aggregate Commitments of
Facility individual Competitive Loans) all Lenders thereunder)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Commitment Assigned:
$____________ ___________ %
- ------------------------------------------------------------------------------------------------------------------
Standby Loans: $____________ ___________ %
- ------------------------------------------------------------------------------------------------------------------
Competitive Loans: $____________ ___________ %
==================================================================================================================
</TABLE>
The terms set forth and on the reverse side Accepted:
hereof are hereby agreed to:
ITT CORPORATION,
________________________________, as by: ___________________________
Assignor, Name:
Title:
by: ____________________________
Name:
Title:
________________________________,
as Assignee,
by: ____________________________
Name:
Title:
<PAGE> 84
EXHIBIT D
[FORM OF]
OPINION OF COUNSEL FOR
ITT CORPORATION(1)
1. ITT Corporation (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada (ii)
has all requisite power and authority to own its property and assets and to
carry on its business as now conducted, (iii) is qualified to do business in
every jurisdiction within the United States where such qualification is
required, except where the failure so to qualify would not result in a Material
Adverse Effect on ITT Corporation, and (iv) has all requisite corporate power
and authority to execute, deliver and perform its obligations under the
Agreement and to borrow funds thereunder.
2. The execution, delivery and performance by ITT Corporation
of the Agreement and the borrowings of ITT Corporation thereunder (collectively,
the "Transactions") (i) have been duly authorized by all requisite corporate
action and (ii) will not (a) violate (1) any provision of law, statute, rule or
regulation (including without limitation, the Margin Regulations), or of the
certificate of incorporation or other constitutive documents or by-laws of ITT
Corporation, (2) any order of any governmental authority or (3) any provision of
any indenture, agreement or other instrument to which ITT Corporation is a party
or by which it or its property is or may be bound, (b) be in conflict with,
result in a breach of or constitute (alone or with notice or lapse of time or
both) a default under any such indenture, agreement or other instrument or (c)
result in the creation or imposition of any lien upon any property or assets of
ITT Corporation.
3. The Agreement has been duly executed and delivered by ITT
Corporation and constitutes a legal, valid and binding obligation of ITT
Corporation enforceable against ITT Corporation in accordance with its terms,
subject as to the enforceability of rights and remedies to any applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws of
general application relating to or affecting the enforcement of creditors'
rights from time to time in effect.
4. No action, consent or approval of, registration or filing
with, or any other action by, any government authority is or will be required in
connection with the Transactions, except such as have been made or obtained and
are in full force and effect.
5. Neither ITT Corporation nor any of its subsidiaries is (a)
except as set forth in the next sentence, an "investment company" as defined in,
or subject to regulation under, the Investment Company Act of 1940 (the "1940
Act") or (b) a "holding company" as defined in, or subject to regulation under,
the Public Utility Holding Company Act of 1935.
- ------------------------------------
(1)Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Five-Year Competitive Advance and
Revolving Credit Facility Agreement (the "Agreement") dated as of November 4,
1996, among ITT Corporation, the lenders listed in Schedule 2.01 thereto, and
Chemical Bank, as Administrative Agent.
<PAGE> 85
EXHIBIT E to the
Credit Agreement
BORROWING SUBSIDIARY AGREEMENT dated as of
[ ], among ITT CORPORATION, a Nevada corporation
(the "Company"), [Name of Subsidiary], a [ ]
corporation ("the Subsidiary"), and The Chase
Manhattan Bank, as administrative agent (the
"Administrative Agent") for the lenders (the
"Lenders") party to the 5-Year Competitive Advance
and Revolving Credit Facility Agreement dated as of
November 4, 1996, as amended (the "Agreement"),
among the Company, the Administrative Agent and the
Lenders.
Under the Agreement, the Lenders have agreed, upon the terms
and subject to the conditions therein set forth, to make competitive advance and
revolving credit loans and to issue Letters of Credit to the Company and to
Subsidiaries (as defined in the Agreement) of the Company which execute and
deliver to the Administrative Agent Borrowing Subsidiary Agreements in the form
of this Borrowing Subsidiary Agreement. The Company represents that the
Subsidiary is a subsidiary (as so defined) of the Company and that the guarantee
of the Company contained in Article VII of the Agreement applies to the
obligations of the Subsidiary. In consideration of being permitted to borrow or
have Letters of Credit issued under the Agreement upon the terms and subject to
the conditions set forth therein, the Subsidiary agrees that from and after the
date of this Borrowing Subsidiary Agreement it will be, and will be liable for
the observance and performance of all the obligations of, a Borrowing Subsidiary
under the Agreement, as the same may be amended from time to time, to the same
extent as if it had been one of the original parties to the Agreement and that
it will furnish to the Administrative Agent and the Lenders copies of its
financial statements on an annual basis.
IN WITNESS WHEREOF, the Company and the Subsidiary have caused
this Borrowing Subsidiary Agreement to be duly executed by their authorized
officers as of the date first appearing above.
ITT CORPORATION,
by
----------------------
Name:
Title:
[NAME OF SUBSIDIARY],
by
----------------------
Name:
Title:
Accepted as of the date
first appearing above:
THE CHASE MANHATTAN BANK, as Administrative
Agent,
by
----------------------
Name:
Title:
<PAGE> 86
EXHIBIT F to the
Credit Agreement
ISSUING BANK AGREEMENT dated as of [ ],
1995, between ITT CORPORATION, a Nevada corporation
("ITT") and the financial institution identified on
Schedule I hereto as the Issuing Bank (the "Issuing
Bank").
Reference is made to the 5-Year Competitive Advance and
Revolving Credit Facility Agreement dated as of November 4, 1996 (as amended,
modified, extended or restated from time to time, the "Credit Agreement"), among
ITT, the Borrowing Subsidiaries parties thereto, the Lenders named therein and
The Chase Manhattan Bank, as Administrative Agent. ITT and the Issuing Bank
desire to enter into this Agreement in order to provide for Letters of Credit to
be issued by the Issuing Bank as contemplated by the Credit Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Defined Terms. Capitalized terms used herein and
not otherwise defined herein shall have the respective meanings specified in the
Credit Agreement. The provisions of Section 1.02 of the Credit Agreement shall
apply to this Agreement as though set forth herein.
SECTION 2. Letter of Credit Commitment. The Issuing Bank
hereby agrees to be an "Issuing Bank" under, and, subject to the terms and
conditions hereof and of the Credit Agreement, to issue Letters of Credit under,
the Credit Agreement; provided, however, that Letters of Credit issued by the
Issuing Bank hereunder shall be subject to the limitations, if any, set forth on
Schedule I hereto, in addition to the limitations set forth in the Credit
Agreement.
SECTION 3. Issuance Procedure. In order to request the
issuance of a Letter of Credit hereunder, the Account Party (or ITT on behalf of
the applicable Account Party) shall hand deliver or telecopy a notice
(specifying the information required by Section 2.23(b) of the Credit Agreement)
to the Issuing Bank, at its address or telecopy number specified on Schedule I
hereto (or such other address or telecopy number as the Issuing Bank may specify
by notice to ITT), not later than the time of day (local time at such address)
specified on Schedule I hereto prior to the proposed date of issuance of such
Letter of Credit. A copy of such notice shall be sent, concurrently, by the
applicable Account Party (or ITT on behalf of the applicable Account Party) to
the Administrative Agent in the manner specified for Borrowing Requests under
the Credit Agreement. Upon receipt of such notice, the Issuing Bank shall
consult the Administrative Agent by telephone in order to determine (i) whether
the conditions specified in the last sentence of Section 2.23(b) of the Credit
Agreement will be satisfied in connection with the issuance of such Letter of
Credit and (ii) whether the requested expiration date for such Letter of Credit
complies with the proviso to Section 2.23(c) of the Credit Agreement.
SECTION 4. Issuing Bank Fees, Interest and Payments. The
Issuing Bank Fees payable to the Issuing Bank in respect of Letters of Credit
issued hereunder are specified on Schedule I hereto (and such fees shall be in
addition to the Issuing Bank's customary documentary and processing charges in
connection with the issuance, amendment or transfer of any Letter of Credit
issued hereunder). Each payment of Issuing Bank Fees payable hereunder shall be
made not later than 12:00 (noon), local time at the place of payment, on the
date when due, in immediately available funds, to the account of the Issuing
Bank specified on Schedule I hereto (or to such other account of the Issuing
Bank as it may specify by notice to ITT).
SECTION 5. Credit Agreement Terms. Notwithstanding any
provision hereof which may be construed to the contrary, it is expressly
understood and agreed that (a) this Agreement is supplemental to the Credit
Agreement and is intended to constitute an Issuing Bank Agreement, as
<PAGE> 87
3
defined therein (and, as such, constitutes an integral part of the Credit
Agreement as though the terms of this Agreement were set forth in the Credit
Agreement), (b) each Letter of Credit issued hereunder and each and every L/C
Disbursement made under any such Letter of Credit shall constitute a "Letter of
Credit" and an "L/C Disbursement", respectively, for all purposes of the Credit
Agreement and the other Loan Documents, (c) the Issuing Bank's commitment to
issue Letters of Credit hereunder and each and every Letter of Credit requested
or issued hereunder shall be subject to the terms and conditions of the Credit
Agreement and entitled to the benefits of the Loan Documents and (d) the terms
and conditions of the Credit Agreement are hereby incorporated herein as though
set forth herein in full and shall supersede any contrary provisions hereof.
SECTION 6. Assignment. The Issuing Bank may not assign its
commitment to issue Letters of Credit hereunder without the consent of ITT and
prior notice to the Administrative Agent. In the event of an assignment by the
Issuing Bank of all its other interests, rights and obligations under the Credit
Agreement, then the Issuing Bank's commitment to issue Letters of Credit
hereunder shall terminate unless the Issuing Bank, ITT and the Administrative
Agent otherwise agree.
SECTION 7. Effectiveness. This Agreement shall not be
effective until counterparts hereof executed on behalf of each of ITT and the
Issuing Bank have been delivered to and accepted by the Administrative Agent.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
ITT CORPORATION,
by
----------------------
Name:
Title:
[ISSUING BANK],
by
-----------------------
Name:
Title:
Accepted:
THE CHASE MANHATTAN BANK, as
Administrative Agent,
by
----------------------------
Name:
Title:
<PAGE> 88
SCHEDULE I to
Issuing Bank Agreement
A. Issuing Bank:
B. Issuing Bank's Address and
Telecopy Number for Notices:
C. Time of Day by Which Notices A notice requesting the issuance of a
Must be Received Letter of Credit must be received by the
Issuing Bank by 10:00 a.m. (New York
time) not less than five Business Days
prior to the proposed date of issuance.
D. Special Terms: The aggregate L/C Exposure in respect of
Letters of Credit issued pursuant to
this Agreement shall not exceed $[ ].
E. Issuing Bank Fees: [ ]% per annum on the average daily
undrawn amount of the Scheduled Letters
of Credit, payable on the same dates
that L/C Participation Fees are payable
under the Credit Agreement.
F. Issuing Bank's Account for
Payment of Issuing Bank Fees:
<PAGE> 89
EXHIBIT G
[FORM OF]
LOCAL CURRENCY ADDENDUM
To: The Chase Manhattan Bank, as Administrative Agent
From: ITT Corporation
1. This Local Currency Addendum is being delivered to you
pursuant to Section 2.21(b) of the 5-Year Competitive Bid and Revolving Credit
Facility, dated as of November 4, 1996, among ITT Corporation, the Borrowing
Subsidiaries parties thereto, the Lenders parties thereto and The Chase
Manhattan Bank, as Administrative Agent (as the same may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement").
Terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement.
2. The effective date (the "Effective Date") of this Local
Currency Addendum will be [ ].
LOCAL CURRENC(Y)(IES):
LOCAL CURRENCY FACILITY
MAXIMUM BORROWING AMOUNT: $
LOCAL CURRENCY Local Currency Lender
LENDERS: Name of Lender Maximum Borrowing Amount
$
LIST OF DOCUMENTATION GOVERNING
LOCAL CURRENCY FACILITY
(THE "DOCUMENTATION"):(2)
3. The Company hereby represents and warrants that (i) as of
the Effective Date, an Exchange Rate with respect to each Local Currency is
determinable by reference to the Reuters currency pages (or comparable publicly
available screen), (ii) the Documentation complies in all respects with the
requirements of Section 2.21 of the Credit Agreement and (iii)___________
- --------------------------------
(2)Copies of the Documentation must accompany the Local Currency Addendum,
together with, if applicable, an English translation thereof (provided, that the
Company may instead furnish a summary term sheet in English so long as an
English translation of the Documentation is furnished to the Administrative
Agent or its counsel within 90 days after the date of delivery of the Local
Currency Addendum).
<PAGE> 90
2
of__________(3) contains an express acknowledgement that such Local Currency
Loan shall be subject to the provisions of Sections 2.21 and 2.22 of the Credit
Agreement.
ITT CORPORATION
By_________________________________________
Title:
Accepted and Acknowledged:
THE CHASE MANHATTAN BANK, as Administrative Agent
By______________________________________
Title:
[ ], as Local Currency Lender
By ______________________________
Title:
- -------------------------
(3)Provide citation to relevant provision from the Documentation.
<PAGE> 91
SCHEDULE 2.01
<TABLE>
<CAPTION>
Contact Person
Name and Address of Lender and Telecopy Number Commitment
- -------------------------- ------------------- ----------
<S> <C> <C>
The Chase Manhattan Bank (1) Ms. Nancy Mistretta $83,333,333.36
270 Park Avenue (212) 270-6041
New York, NY 10017
Arab Bank Plc Mr. Peter Boyadjian $16,666,666.67
520 Madison Avenue (212) 593-4632
New York, NY 10022
Banca Commerciale Italiana (2) Mr. Charles Dougherty $30,000,000.00
New York Branch (212) 809-2124
1 William Street
New York, NY 10004
Banca CRT Mr. J. Slade Carter, Jr. $16,666,666.67
500 Park Avenue (212) 980-0809
New York, NY 10022
Banca di Roma S.p.A. Mr. Ralph Riehle $16,666,666.67
34 East 51st Street, 7th Floor (212) 407-1740
New York, NY 10005
Banca Nazionale del Lavoro Mr. Giulio Giovine $43,333,333.33
New York Branch (3) (212) 765-2978
25 W. 51st Street Rockefeller Plaza
New York, NY 10019
Banca Popolare di Milano Mr. Nicholas Cinosi $16,666,666.67
375 Park Avenue (212) 838-1077
New York, NY 10152
Bank Austria AG Ms. Amy Rick $16,666,666.67
565 Fifth Avenue (212) 880-1040
New York, NY 10017
Bank of America (4) Ms. Laura Calhoun $53,333,333.33
335 Madison Avenue (212) 503-7173
New York, NY 10017
Bank of Hawaii Ms. Alison Sierens $16,666,666.67
111 South King Street (808) 537-8301
P.O. Box 2900
Honolulu, HI 96813
The Bank of New York (3) Mr. Dave Judge $43,333,333.33
One Wall Street (212) 635-6999
New York, NY 10286
The Bank of Nova Scotia (4) Mr. Philip Adsetts $53,333,333.33
One Liberty Plaza (212) 225-5090/91
New York, NY 10006
</TABLE>
<PAGE> 92
2
<TABLE>
<CAPTION>
Contact Person
Name and Address of Lender and Telecopy Number Commitment
- -------------------------- ------------------- ----------
<S> <C> <C>
The Bank of Tokyo-Mitsubishi Trust Ms. Amanda Ryan $53,333,333.33
Company (4) (212) 782-6445
1251 Avenue of the Americas
12th Floor
New York, NY 10116-3138
Bankers Trust Company (4) Mr. Daniel Hebert $53,333,333.33
130 Liberty Street (212) 250-1530
New York, NY 10006
Barclays de Zoete Wedd (4) Mr. John Livingston $53,333,333.33
222 Broadway (212) 412-7511
New York, NY 10038
Bayerische Landesbank Girozentrale Ms. Joanne Cicino $30,000,000.00
(2) (212) 310-9868
111 East 50th Street
New York, NY 10022
CIBC, Inc. (3) Ms. Judith Domkowski $43,333,333.33
425 Lexington Avenue (212) 856-3991
New York, NY 10017
Citibank, N.A. (4) Ms. Elizabeth Palermo $53,333,333.33
399 Park Avenue (212) 826-2375
New York, NY 10043
Comerica Bank (2) Mr. David Shirey $30,000,000.00
500 Woodward Avenue (313) 222-3330
Detroit, MI 48226-3280
Commerzbank AG (2) Mr. Robert Donohue $30,000,000.00
2 World Financial Center (212) 266-7235/7595
New York, NY 10281
Commonwealth Bank of Australia Mr. Ray DeLucia $16,666,666.67
599 Lexington Avenue (212) 336-7762
New York, NY 10022
Compagnie Financiere de CIC et de Ms. Martha Skidmore $16,666,666.67
l'Union Europeenne (212) 715-4535
520 Madison Avenue
37th Floor
New York, NY 10022
Credit Lyonnais (4) Mr. Nicholas Chapin $53,333,333.33
1301 Avenue of the Americas (212) 459-3179
18th Floor
New York, NY 10019
</TABLE>
<PAGE> 93
3
<TABLE>
<CAPTION>
Contact Person
Name and Address of Lender and Telecopy Number Commitment
- -------------------------- ------------------- ----------
<S> <C> <C>
Credit Suisse (3) Mr. Robert Potter $43,333,333.33
Tower 49 (212) 238-5439
12 East 49th Street
New York, NY 10017
Credito Italiano Mr. Harmon Butler $16,666,666.67
375 Park Avenue (212) 546-9675
New York, NY 10152
The Dai-Ichi Kangyo Bank, Ltd. (3) Mr. Bertram Tang $43,333,333.33
One World Trade Center (212) 912-1879
Suite 4911
New York, NY 10048
Deutsche Bank AG (4) Mr. Rolf-Peter Mikolayczyk $53,333,333.33
New York Branch (212) 474-8212
31 West 52nd Street
New York, NY 10019
Dresdner Bank AG (4) Mr. Anthony Berti $ 53,333,333.33
New York Branch (212) 429-2129
75 Wall Street
New York, NY 10005-2889
First Hawaiian Bank Ms. Kathryn Plumb $16,666,666.67
1132 Bishop Street (808) 525-6372
Honolulu, HI 96813
The First National Bank of Boston (2) Mr. Paul Sassieni $30,000,000.00
100 Federal Street (617) 434-0819
01-08-06
Boston, MA 02110
Fleet Bank Mr. John Harrison $16,666,666.67
1300 Atlantic Avenue (609) 348-1308
Atlantic City, NJ 08401
The Fuji Bank, Limited (3) Mr. Roy Tanfield $43,333,333.33
Two World Trade Center 79th Floor (212) 321-9407
New York, NY 10048
Generale Bank Mr. Doug Raihi $16,666,666.67
520 Madison Avenue (212) 750-9597
New York, NY 10022
</TABLE>
<PAGE> 94
4
<TABLE>
<CAPTION>
Contact Person
Name and Address of Lender and Telecopy Number Commitment
- -------------------------- ------------------- ----------
<S> <C> <C>
The Industrial Bank of Japan, Ltd., Mr. John Veltri $43,333,333.33
(3) (212) 856-9450
New York Branch
245 Park Avenue
23rd Floor
New York, NY 10167-0037
Istituto Bancario San Paolo Bank di Mr. Wendell Jones $16,666,666.67
Torino S.p.A. (212) 599-5303
245 Park Avenue
New York, NY 10167
Kredietbank N.V. (2) Mr. Armen Karozichian $30,000,000.00
125 West 55th Street (212) 956-5580
New York, NY 10019
Lloyds Bank Plc Mr. Theodore Walser $13,333,333.33
199 Water Street (212) 607-4999
9th Floor
New York, NY 10038
Long Term Credit Bank of Japan Mr. Yoshi Nakagawa $16,666,666.67
165 Broadway (212) 608-2371
New York, NY 10006
The Mitsubishi Trust and Banking Ms. Patricia Loret DeMola $30,000,000.00
Corporation (2) (212) 644-6825
520 Madison Avenue
New York, NY 10022
Morgan Guaranty Trust Company of Ms. Deborah Winshel $53,333,333.33
New York (4) (212) 648-5043
60 Wall Street
New York, NY 10260-0060
National Westminster Bank Plc (3) Mr. Jordan Fragiacomo $43,333,333.33
175 Water Street (212) 602-4209
New York, NY 10038-4924
Nationsbank, N.A. (4) Ms. Sally Hazard $53,333,333.33
767 Fifth Avenue (212) 751-6909
23rd Floor
New York, NY 10153
The Northern Trust Company Mr. Joseph Yacullo $16,666,666.67
50 South LaSalle Street (312) 630-6062
Chicago, IL 60675
</TABLE>
<PAGE> 95
5
<TABLE>
<CAPTION>
Contact Person
Name and Address of Lender and Telecopy Number Commitment
- -------------------------- ------------------- ----------
<S> <C> <C>
PNC Bank, National Association Ms. Denise Killen $16,666,666.67
2 Tower Center (908) 220-3270
East Brunswick, NJ 08816
Royal Bank of Canada (4) Mr. John Crawford $53,333,333.33
One Financial Square (212) 428-6459
New York, NY 10005-3531
The Sakura Bank, Limited, Mr. John Phelan $30,000,000.00
New York Branch (2) (212) 888-7651
277 Park Avenue
New York, NY 10172
The Sanwa Bank, Ltd. (4) Mr. Stephen C. Small $53,333,3333.33
New York Branch (212) 754-1304
55 East 52nd Street
New York, NY 10055
Societe Generale (4) Ms. Sedare Coradin $53,333,333.33
1221 Avenue of the Americas (212) 278-7430
New York, NY 10020
The Sumitomo Bank, Limited (4) Mr. Edward McColly $53,333,333.33
New York Branch (212) 224-5188
277 Park Avenue
New York, NY 10172
SunTrust Bank, Atlanta (2) Ms. May Smith $30,000,000.00
711 Fifth Avenue (212) 371-9386
5th Floor
New York, NY 10022
Swiss Bank Corporation Mr. Clark Worthley $16,666,666.67
New York Branch (212) 574-1126
222 Broadway
New York, NY 10038
The Tokai Bank, Limited (2) Mr. Stuart Schulman $30,000,000.00
55 East 52nd Street (212) 754-2170
12th Floor
New York, NY 10022
The Sumitomo Trust & Banking Co., Ma. Karen Ryan $16,666,666.67
Ltd. Los Angeles Agency (213) 613-1083
333 South Grand Avenue
53rd Floor
Los Angeles, CA 90071
</TABLE>
<PAGE> 96
6
<TABLE>
<CAPTION>
Contact Person
Name and Address of Lender and Telecopy Number Commitment
- -------------------------- ------------------- ----------
<S> <C> <C>
Union Bank of Switzerland (4) Mr. Laurent Chaix $53,333,333.33
299 Park Avenue (212) 821-5611
New York, NY 10171
Wells Fargo Bank (3) Mr. Roy Roberts $43,333,333.33
500 Park Avenue (212) 593-5238
New York, NY 10017
Westdeutsche Landesbank Mr. Ralph White $30,000,000.00
Girozentrale (2) (212) 652-6307
1211 Avenue of the Americas
New York, NY 10036
The Yasuda Trust and Banking Co., Mr. Rohn Laudenschlager $30,000,000.00
Ltd. (2) (212) 373-5796
New York Branch
666 Fifth Avenue
Suite 801
New York, NY 10103
--------------
TOTAL COMMITMENT $2,000,000,000
</TABLE>
As numbered herein:
(1) Administrative Agent
(2) Lead Manager
(3) Managing Agent
(4) Arranger
<PAGE> 1
EXHIBIT 12
ITT CORPORATION AND SUBSIDIARIES
CALCULATION OF RATIO OF EARNINGS TO TOTAL FIXED CHARGES
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30,
---------------
1996 1995
---- ----
<S> <C> <C>
Earnings:
Net Income.................................................................. $183 $103
Add:
Adjustment for distributions in excess of equity earnings and losses
(a).................................................................... 7 13
Income taxes.............................................................. 153 69
Minority equity in net income............................................. 29 16
Amortization of interest capitalized...................................... 2 2
---- ----
374 203
---- ----
Fixed Charges:
Interest and other financial charges...................................... 222 254
Interest factor attributable to rentals (b)............................... 20 19
---- ----
242 273
---- ----
Earnings, as adjusted....................................................... $616 $476
==== ====
Fixed Charges:
Fixed charges above....................................................... $242 $273
Interest capitalized...................................................... 8 5
---- ----
Total fixed charges....................................................... $250 $278
==== ====
Ratio:
Earnings, as adjusted, to total fixed charges............................. 2.46 1.71
==== ====
</TABLE>
- ---------------
NOTES:
a) The adjustment represents distributions in excess of undistributed earnings
and losses of companies in which at least 20% but less than 50% equity is
owned.
b) The interest factor attributable to rentals consists of one third of rental
charges, deemed by the Corporation to be representative of the interest
factor inherent in rents.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
September 30, 1996 Financial Statements included in Form 10-Q and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 175
<SECURITIES> 631
<RECEIVABLES> 827
<ALLOWANCES> 118
<INVENTORY> 97
<CURRENT-ASSETS> 1,736
<PP&E> 5,380
<DEPRECIATION> 771
<TOTAL-ASSETS> 9,167
<CURRENT-LIABILITIES> 1,350
<BONDS> 4,164
0
0
<COMMON> 2,896
<OTHER-SE> 151
<TOTAL-LIABILITY-AND-EQUITY> 9,167
<SALES> 0
<TOTAL-REVENUES> 4,805
<CGS> 0
<TOTAL-COSTS> 4,278
<OTHER-EXPENSES> (9)
<LOSS-PROVISION> 38
<INTEREST-EXPENSE> 171
<INCOME-PRETAX> 365
<INCOME-TAX> 153
<INCOME-CONTINUING> 183
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 183
<EPS-PRIMARY> 1.54
<EPS-DILUTED> 1.54
</TABLE>
