<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: June 28, 1994
-------------
(Date of Earliest Event Reported)
RPM, INC.
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(Exact Name of Registrant as Specified in its Charter)
Ohio 0-5132 34-6550857
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
P.O. Box 777, 2628 Pearl Road, Medina, Ohio 44258
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (216) 273-5090
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Item 2. Acquisition or Disposition of Assets.
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On June 28, 1994, RPM, Inc., an Ohio corporation (the "Company"),
acquired Rust-Oleum Corporation, an Illinois corporation ("Rust-Oleum"),
through the merger (the "Merger") of the Company's wholly owned subsidiary, RPM
of Illinois, Inc., an Illinois corporation ("Subsidiary"), with and into
Rust-Oleum, whereby Rust-Oleum became a wholly owned subsidiary of the Company.
The Merger was accomplished pursuant to an Agreement and Plan of Merger, dated
May 3, 1994, and as amended as of June 24, 1994 (the "Merger Agreement"), by
and among the Company, Subsidiary, Rust-Oleum, and certain principal
stockholders of Rust-Oleum (the "Principal Stockholders"). A copy of the
Merger Agreement is filed as an Exhibit hereto.
Rust-Oleum manufactures, distributes and markets protective coatings and
specialty chemicals, including consumer rust-preventative coatings. RPM
intends to continue to use the assets acquired through the purchase of
Rust-Oleum in the manner in which they were previously used by Rust-Oleum.
As consideration for the acquisition of Rust-Oleum, the Company paid the
stockholders of Rust-Oleum an aggregate of $176,500,000 in cash (the "Cash
Consideration"). The consideration paid by the Company in connection with the
acquisition was determined through arm's length negotiations among the parties.
The Cash Consideration was paid to the Rust-Oleum stockholders at the
closing of the Merger pursuant to an advance under a $300,000,000 three-year
revolving credit facility, dated as of June 23, 1994, with National City Bank
and The First National Bank of Chicago, as Co-Agents, and The Chase Manhattan
Bank (National Association), as Administrative Agent (the "Credit Facility").
In addition, the Company's existing credit facility with a group of banks was
terminated and approximately $47,000,000 outstanding thereunder was repaid
pursuant to an advance under the Credit Facility. The total principal amount
advanced under the Credit Facility currently bears interest at an average rate
of 5.3% per annum. A copy of the Credit Facility is filed as an Exhibit
hereto.
There are no material relationships between Rust-Oleum and the Company or
any of their affiliates, directors or officers.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Financial Statements of Businesses Acquired.*
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(b) Pro Forma Financial Information.*
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<TABLE>
<CAPTION>
(c) Exhibits.
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Exhibit No.
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<S> <C>
2.1 Agreement and Plan of Merger, dated May 3, 1994 (without
Exhibits and Schedules), by and among the Company, Subsidiary,
Rust-Oleum and the Principal Stockholders.....................
2.1.1 First Amendment to Agreement and Plan of Merger, dated as of
June 24, 1994 (without Exhibits and Schedules), by and among
the Company, Subsidiary, Rust-Oleum and the Principal
Stockholders..................................................
23.1** Consent of KPMG Peat Marwick..................................
99.1 Credit Agreement, dated as of June 23, 1994, by and among the
Company, National City Bank and The First National Bank of
Chicago, as Co-Agents, and The Chase Manhattan Bank (National
Association), as Administrative Agent.........................
<FN>
___________________
* The financial statements for Rust-Oleum for the periods specified in Rule
3-05(b) of Regulation S-X, and the pro forma financial information required
pursuant to Article 11 of Regulation S-X currently are not available and
will be filed as soon as is practicable, but not later than 60 days after
the date that this Report is due.
** To be filed by amendment.
</TABLE>
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SIGNATURES
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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.
RPM, INC.
Frank C. Sullivan
_______________________________
Frank C. Sullivan,
Vice President and Chief
Financial Officer
DATE: July 12, 1994
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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AMONG
RPM, INC.
RPM OF ILLINOIS, INC.
RUST-OLEUM CORPORATION
AND
CERTAIN SHAREHOLDERS OF RUST-OLEUM CORPORATION
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Page
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TABLE OF CONTENTS
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Parties and Recitals . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
THE MERGER
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Section 1.1 The Merger . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Effective Time . . . . . . . . . . . . . . . . . . . 2
Section 1.3 Effects of the Merger . . . . . . . . . . . . . . . 2
Section 1.4 Articles of Incorporation
and By-laws . . . . . . . . . . . . . . . . . . . 2
Section 1.5 Directors . . . . . . . . . . . . . . . . . . . . . 2
Section 1.6 Officers . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.7 Conversion of Securities . . . . . . . . . . . . . . 3
Section 1.8 Parent to Make Cash Available . . . . . . . . . . . 3
Section 1.9 No Further Ownership Rights
in Class A Common Stock . . . . . . . . . . . . . 4
Section 1.10 Closing of Company Transfer Books . . . . . . . . . 4
Section 1.11 Dissenting Shares . . . . . . . . . . . . . . . . . 4
Section 1.12 Lost Certificates . . . . . . . . . . . . . . . . . 5
Section 1.13 Further Assurances . . . . . . . . . . . . . . . . . 5
Section 1.14 Closing . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PARENT
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Section 2.1 Organization, Standing and Power . . . . . . . . . . 6
Section 2.2 Authority; Non-Contravention . . . . . . . . . . . . 6
Section 2.3 Interested Shareholder . . . . . . . . . . . . . . . 8
Section 2.4 Financial Ability . . . . . . . . . . . . . . . . . 8
Section 2.5 Brokers . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
Section 3.1 Organization, Standing and Power . . . . . . . . . . 8
Section 3.2 Capital Structure . . . . . . . . . . . . . . . . . 9
Section 3.3 Title to Common Stock . . . . . . . . . . . . . . . 9
Section 3.4 Authority; Non-Contravention . . . . . . . . . . . . 10
Section 3.5 Financial Statements . . . . . . . . . . . . . . . . 11
Section 3.6 Absence of Certain Changes or Events
Since Balance Sheet Date . . . . . . . . . . . . . 11
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Page
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Section 3.7 Minimum Net Worth . . . . . . . . . . . . . . . . . 12
Section 3.8 Title to Real Estate . . . . . . . . . . . . . . . . 13
Section 3.9 Availability of Material Contracts. . . . . . . . . 13
Section 3.10 Executive Compensation & Benefit Plans . . . . . . . 13
Section 3.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.12 Patents, Trade Names, Trademarks
and Other Rights . . . . . . . . . . . . . . . . . 14
Section 3.13 Environmental Matters . . . . . . . . . . . . . . . 15
Section 3.14 Litigation . . . . . . . . . . . . . . . . . . . . . 17
Section 3.15 Collective Bargaining Arrangements . . . . . . . . . 17
Section 3.16 Brokers . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IV
REPRESENTATIONS AND WARRANTIES REGARDING SUB
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Section 4.1 Organization and Standing . . . . . . . . . . . . . 17
Section 4.2 Capital Structure . . . . . . . . . . . . . . . . . 18
Section 4.3 Authority; Non-Contravention . . . . . . . . . . . . 18
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
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Section 5.1 Conduct of Business by the Company
Pending the Merger . . . . . . . . . . . . . . . . 19
Section 5.2 Conduct of Business of Sub
Pending the Merger . . . . . . . . . . . . . . . . 21
ARTICLE VI
ADDITIONAL AGREEMENTS
---------------------
Section 6.1 Stockholder Approval . . . . . . . . . . . . . . . . 21
Section 6.2 Access to Information . . . . . . . . . . . . . . . 22
Section 6.3 Fees and Expenses . . . . . . . . . . . . . . . . . 23
Section 6.4 Reasonable Efforts . . . . . . . . . . . . . . . . . 23
Section 6.5 Public Announcements . . . . . . . . . . . . . . . . 24
Section 6.6 Transfer Taxes . . . . . . . . . . . . . . . . . . . 24
Section 6.7 Indemnification of Directors
and Officers . . . . . . . . . . . . . . . . . . . 24
Section 6.8 Cafeteria Plan . . . . . . . . . . . . . . . . . . . 25
Section 6.9 Termination of Employees . . . . . . . . . . . . . . 25
Section 6.10 Improvements Act Filings . . . . . . . . . . . . . . 25
Section 6.11 Financial Statements . . . . . . . . . . . . . . . . 26
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ARTICLE VII
CONDITIONS PRECEDENT TO THE MERGER
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Section 7.1 Conditions to Each Party's Obligation
to Effect the Merger . . . . . . . . . . . . . . . 26
(a) Stockholder Approval . . . . . . . . . . . . 26
(b) No Order . . . . . . . . . . . . . . . . . . . 26
(c) Improvements Act Waiting Period . . . . . . . 26
(d) Escrow Agreement . . . . . . . . . . . . . . . 26
(e) Other Approvals . . . . . . . . . . . . . . . 26
Section 7.2 Conditions to Obligation of the Company
to Effect the Merger . . . . . . . . . . . . . . . 27
(a) Performance of Obligations;
Representations and Warranties . . . . . . 27
(b) Officers' Certificate . . . . . . . . . . . . 27
(c) Opinion of Counsel . . . . . . . . . . . . . . 27
(d) Solvency Certificate . . . . . . . . . . . . . 27
(e) Other Documents . . . . . . . . . . . . . . . 27
Section 7.3 Conditions to Obligations of Parent
and Sub to Effect the Merger . . . . . . . . . . . 27
(a) Performance of Obligations;
Representations and Warranties . . . . . . 28
(b) Third Party Consents . . . . . . . . . . . . 28
(c) Officers Certificate . . . . . . . . . . . . 28
(d) Opinion of Sidley & Austin . . . . . . . . . . 28
(e) Opinion of Katten, Muchin & Zavis . . . . . . 28
(f) Opinion of General Counsel of Company . . . . 28
(g) Other Documents . . . . . . . . . . . . . . . 28
(h) Certain Company Loans . . . . . . . . . . . . 29
(i) Termination of Supplemental
Pension Plan . . . . . . . . . . . . . . . 29
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
Section 8.1 Termination . . . . . . . . . . . . . . . . . . . . . 29
Section 8.2 Effect of Termination . . . . . . . . . . . . . . . . 30
Section 8.3 Amendment . . . . . . . . . . . . . . . . . . . . . . 30
Section 8.4 Waiver . . . . . . . . . . . . . . . . . . . . . . . 30
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ARTICLE IX
GENERAL PROVISIONS
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Section 9.1 Non-Survival of Representations,
Warranties and Agreements . . . . . . . . . . . . 31
Section 9.2 Several Liability . . . . . . . . . . . . . . . . . 31
Section 9.3 Provisions Relating to
Tax Representation . . . . . . . . . . . . . . . 31
Section 9.4 Notices . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.5 Interpretation . . . . . . . . . . . . . . . . . . 34
Section 9.6 Counterparts . . . . . . . . . . . . . . . . . . . 34
Section 9.7 Entire Agreement; No Third-Party
Beneficiaries . . . . . . . . . . . . . . . . . . 34
Section 9.8 Governing Law . . . . . . . . . . . . . . . . . . . 34
Section 9.9 Assignment . . . . . . . . . . . . . . . . . . . . 35
Section 9.10 Severability . . . . . . . . . . . . . . . . . . . 35
Section 9.11 Enforcement of this Agreement . . . . . . . . . . . 35
Section 9.12 Trustee Liability . . . . . . . . . . . . . . . . . 35
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AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER, dated as of May 3, 1994 (this
"Agreement"), among RPM, Inc., an Ohio corporation, ("Parent"), RPM of
Illinois, Inc. an Illinois corporation and a wholly-owned subsidiary of Parent
("Sub"), Rust-Oleum Corporation, an Illinois corporation (the "Company") (Sub
and the Company being hereinafter collectively referred to as the "Constituent
Corporations") and the individuals and other entities set forth on Exhibit I
hereto (the "Named Shareholders").
W I T N E S S E T H:
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WHEREAS, the respective Boards of Directors of Parent, Sub and
the Company have approved and declared advisable the merger of Sub and the
Company (the "Merger"), upon the terms and subject to the conditions set forth
herein, whereby each issued and outstanding share of Class A Common Stock, no
par value, of the Company ("Class A Common Stock") not owned directly or
indirectly by the Company will be converted into an amount per share equal to
the Total Merger Consideration (as hereinafter defined) divided by the total
number of issued and outstanding shares of Class A Common Stock at the
Effective Time (as hereinafter defined);
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties and agreements in connection with the Merger and
also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties agree
as follows:
ARTICLE I
THE MERGER
Section 1.1 THE MERGER. Upon the terms and subject to the
conditions hereof, and in accordance with the provisions of the Business
Corporation Act of the State of Illinois (the "IBCA"), Sub shall be merged with
and into the Company at the Effective Time (as hereinafter defined). At the
election of Parent, any direct wholly-owned subsidiary of Parent may be
substituted for Sub as a constituent corporation in the Merger. In such event,
the parties agree to execute an appropriate amendment to this Agreement in
order to reflect the foregoing.
<PAGE> 7
Following the Merger, the separate corporate existence of Sub shall cease
and the Company shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and obligations of
Sub in accordance with the IBCA.
Section 1.2 EFFECTIVE TIME. As soon as practicable after the
satisfaction or waiver of the conditions to the Merger set forth herein,
Articles of Merger shall be executed by each Constituent Corporation and filed
with the Secretary of State of the State of Illinois in accordance with the
requirements of the IBCA. The Merger shall become effective when the
Certificate of Merger (the "Certificate of Merger") with respect to the Merger
is issued by the Secretary of State of the State of Illinois; PROVIDED,
HOWEVER, that, this Agreement may be amended to provide for a later date of
effectiveness of the Merger not more than 30 days after the date the
Certificate of Merger is issued by the Secretary of State of the State of
Illinois. When used in this Agreement, the term "Effective Time" shall mean
the later of the date and time at which the Certificate of Merger is issued by
the Secretary of State of the State of Illinois or such later time established
by any such amendment.
Section 1.3 EFFECTS OF THE MERGER. The Merger shall have the
effects set forth in Section 11.50 of the IBCA.
Section 1.4 ARTICLES OF INCORPORATION AND BY-LAWS. The
Articles of Incorporation and By-laws of Sub, as in effect immediately prior to
the Effective Time, shall be the Articles of Incorporation and By-laws of the
Surviving Corporation until thereafter changed or amended as provided therein
or by applicable law.
Section 1.5 DIRECTORS. The directors of Sub immediately
prior to the Effective Time shall become the directors of the Surviving
Corporation and shall hold office until their respective successors are duly
elected and qualified, or their earlier death, resignation or removal.
Section 1.6 OFFICERS. The officers of the Company
immediately prior to the Effective Time shall become the officers of the
Surviving Corporation and shall hold office until their respective successors
are duly elected and qualified, or until their earlier death, resignation or
removal; provided, however, that at the Effective Time Messrs. Donald C.
Fergusson, Leonard P. Judy, Wilbert B. Bartelt, Jeffrey A. Bott, Michael T.
Murphy, James J. Mahoney, Richard W. Manning and William R. McCarrell will
cease being Chairman of the Board and President, Chief Executive Officer,
Executive Vice President, Vice President - Finance & Treasurer, Vice President
and Secretary & General
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Counsel, Vice President - Consumer Business Group, Vice President - Operations
and President & General Manager of Rust-Oleum Concrete Protection Systems,
Inc., respectively, and Messrs. Thomas C. Sullivan and James A. Karman will
become President, and Treasurer and Secretary, respectively.
Section 1.7 CONVERSION OF SECURITIES. As of the Effective
Time, by virtue of the Merger and without any action on the part of any
shareholder of the Company:
(a) All shares of Common Stock (as hereinafter defined) that
are held in the treasury of the Company or by any wholly-owned
Subsidiary (as hereinafter defined) of the Company shall be cancelled
and retired without payment of any consideration therefor and without
any conversion thereof and shall cease to exist.
(b) Each issued and outstanding share of capital stock of Sub
shall be converted into and become one fully paid and nonassessable
share of Common Stock, without par value of the Surviving Corporation.
(c) Each share of Class A Common Stock issued and outstanding
immediately prior to the Effective Time (other than shares to be
cancelled in accordance with Section 1.7(a) and other than Dissenting
Shares (as defined in Section 1.11), if any) shall be converted into
the right to receive an amount of cash equal to $176,500,000, minus
the aggregate of any dividends paid by the Company after the date
hereof (the "Total Merger Consideration"), divided by the total number
of issued and outstanding shares of Class A Common Stock at the
Effective Time.
Section 1.8 PARENT TO MAKE CASH AVAILABLE. Parent shall make
available to Sub, which in turn shall make available to Bank One Evanston, NA
as Exchange Agent hereunder (the "Exchange Agent") on the date of the Effective
Time, cash equal to the Total Merger Consideration. As soon as practicable
after the Effective Time, the Exchange Agent shall distribute to holders of
shares of Class A Common Stock converted into the right to receive cash
pursuant to Section 1.7, upon surrender to the Exchange Agent of one or more
certificates representing shares of Class A Common Stock (the "Certificates")
for cancellation, a check for an amount equal to the Total Merger Consideration
divided by the total number of issued and outstanding shares of Class A Common
Stock at the Effective Time, for each share of Class A Common Stock so
converted. In no event shall the holder of any such surrendered Certificates
be entitled to receive interest on any of the funds to be received in the
Merger. If such check is to be sent to a person other than the
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person in whose name the Certificates are registered, it shall be a condition
of the exchange that the person requesting such exchange shall pay to the
Exchange Agent any transfer or other taxes required by reason of the delivery
of such check to a person other than the registered holder of the Certificates
surrendered, or shall establish to the satisfaction of the Exchange Agent that
such tax has been paid or is not applicable. Notwithstanding the foregoing,
neither the Exchange Agent nor any party hereto shall be liable to a holder of
a Certificate for any amount paid to a public official pursuant to any
applicable abandoned property, escheat or similar law.
Section 1.9 NO FURTHER OWNERSHIP RIGHTS IN CLASS A COMMON
STOCK. All cash paid upon the surrender for exchange of Certificates in
accordance with the terms hereof shall be deemed to have been paid in full
satisfaction of all rights pertaining to the shares of Class A Common Stock,
subject, however, to the Surviving Corporation's obligation to pay any
dividends or make any other distribution with a record date prior to the
Effective Time which may have been declared or made by the Company on such
shares of Class A Common Stock in accordance with the terms of this Agreement.
Section 1.10 CLOSING OF COMPANY TRANSFER BOOKS. At the
Effective Time, the stock transfer books of the Company shall be closed and no
transfer of shares of Class A Common Stock shall thereafter be made. If, after
the Effective Time, Certificates are presented to the Surviving Corporation,
they shall be cancelled and exchanged as provided in this Article I.
Section 1.11 DISSENTING SHARES. Notwithstanding anything in
this Agreement to the contrary, shares of Class A Common Stock which
immediately prior to the Effective Time are held by shareholders who have
properly exercised dissenters' rights under Sections 11.65 and 11.70 of the
IBCA (the "Dissenting Shares") shall not be converted into the right to receive
cash as provided in Section 1.7(c) hereof, but the holders of Dissenting Shares
shall be entitled to receive such consideration as shall be determined pursuant
to Sections 11.65 and 11.70 of the IBCA; PROVIDED, HOWEVER, that, if any such
holder shall withdraw or lose such holder's right to dissent and payment under
the IBCA, such holder's outstanding Shares shall thereupon be deemed to have
been converted as of the Effective Time into the right to receive cash, without
any interest thereon, as provided in Section 1.7(c) and such Shares shall no
longer be Dissenting Shares. The Company shall give Parent prompt notice of
any demands for payment under Section 11.70 of the IBCA received by the
Company. Except as required by applicable law, prior to the Effective Time,
the Company shall not, except with the prior written consent of Parent, make
any
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<PAGE> 10
payment with respect to, or settle or offer to settle, any such demands.
Section 1.12 LOST CERTIFICATES. In the event any Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the person claiming such certificate to be lost, stolen or
destroyed, the Exchange Agent shall pay to such person the amount of cash
payable to the holder of such lost, stolen or destroyed certificate determined
in accordance with Section 1.7(c). When authorizing such payment in exchange
for any lost, stolen or destroyed Certificate, the person to whom the cash is
to be paid shall, as a condition precedent to the payment thereof, give the
Surviving Corporation a bond satisfactory to the Surviving Corporation in such
sum as it may direct or otherwise indemnify the Surviving Corporation in a
manner satisfactory to the Surviving Corporation against any claim that may be
made against Parent, Sub or the Surviving Corporation with respect to the
Certificate alleged to have been lost, stolen or destroyed.
Section 1.13 FURTHER ASSURANCES. If at any time after the
Effective Time the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments or assurances or any other acts or things are
necessary, desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation, its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties or assets
of either of the Constituent Corporations, or (b) otherwise to carry out the
purposes of this Agreement, the Surviving Corporation and its proper officers
and directors or their designees shall be authorized to execute and deliver, in
the name and on behalf of either of the Constituent Corporations in the Merger,
all such deeds, bills of sale, assignments and assurances and do, in the name
and on behalf of such Constituent Corporations, all such other acts and things
necessary, desirable or proper to vest, perfect or confirm its right, title or
interest in, to or under any of the rights, privileges, powers, franchises,
properties or assets of such Constituent Corporation and otherwise to carry out
the purposes of this Agreement.
Section 1.14 CLOSING. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Sidley & Austin, One First National Plaza, Chicago, Illinois at 10:00 A.M.,
local time, on the second business day after the day on which the last of the
conditions set forth in Article VII hereof shall have been fulfilled or waived
or at such other time and place as Parent and the Company shall agree.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PARENT
----------------------------------------
Parent represents and warrants to the Company and to each
Named Shareholder as follows:
Section 2.1 ORGANIZATION, STANDING AND POWER. Parent is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Ohio and has the requisite corporate power and authority
to carry on its business as now being conducted. Parent is duly qualified to
do business, and is in good standing, in each jurisdiction where the character
of its properties owned or held under lease or the nature of its activities
makes such qualification necessary, except where the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse Effect.
For purposes of this Agreement (a) "Material Adverse Change" or "Material
Adverse Effect" means, when used with respect to Parent or the Company, as the
case may be, any change or effect that is or, so far as can reasonably be
determined, may be materially adverse to the assets, condition (financial or
otherwise) or results of operations of Parent and its Subsidiaries taken as a
whole, or the Company and its Subsidiaries taken as a whole, as the case may
be, and (b) "Subsidiary" means any corporation, partnership, joint venture or
other legal entity of which Parent or the Company, as the case may be (either
alone or through or together with any other Subsidiary), owns, directly or
indirectly, 50% or more of the stock or other equity interests the holders of
which are generally entitled to vote for the election of the board of directors
or other governing body of such corporation, partnership, joint venture or
other legal entity.
Section 2.2 AUTHORITY; NON-CONTRAVENTION. (a) Parent has
all requisite power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Parent and the consummation by Parent of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Parent. Without limiting the foregoing, no vote or approval by
the stockholders of Parent of this Agreement or the transactions contemplated
hereby is required pursuant to any law, rule or regulation, the Articles of
Incorporation or Code of Regulations of Parent, the rules of any securities
exchange on which any securities of Parent are listed, any contract, agreement
or other instrument or otherwise. This Agreement has been duly executed and
delivered by Parent and (assuming the valid authorization, execution and
delivery of this Agreement by the Company) constitutes a valid and binding
obligation of Parent enforceable against Parent in accordance with its terms.
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<PAGE> 12
(b) The execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated hereby and compliance with
the provisions hereof will not, conflict with, or result in any violation of,
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or to the loss of a material benefit under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the properties or
assets of Parent under, any provision of (i) the Articles of Incorporation or
Code of Regulations (true and complete copies of which as of the date hereof
have been delivered to the Company) of Parent, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Parent or
(iii) any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Parent or any of its respective properties or assets, other than,
in the case of clauses (ii) or (iii), any such conflicts, violations, defaults,
rights, liens, security interests, charges or encumbrances that, individually
or in the aggregate, would not have a Material Adverse Effect on Parent,
materially impair the ability of Parent to perform its obligations hereunder or
prevent the consummation of any of the transactions contemplated hereby.
(c) No filing or registration with, or authorization, consent
or approval of, any domestic (federal and state), foreign or supranational
court, commission, governmental body, regulatory agency, authority or tribunal
(a "Governmental Entity") is required by or with respect to Parent in
connection with the execution and delivery of this Agreement by Parent or is
necessary for the consummation of the Merger and the other transactions
contemplated by this Agreement, except for (i) in connection, or in compliance,
with the provisions of laws governing creation of Sub, (ii) the filing of the
Articles of Merger with the Secretary of State of the State of Illinois and
appropriate documents with the relevant authorities of other states in which
the Company is qualified to do business, (iii) such filings and consents as may
be required under any environmental, health or safety law or regulation
pertaining to any notification, disclosure or required approval triggered by
the Merger or the transactions contemplated by this Agreement, (iv) such
filings as may be required in connection with the Transfer Taxes described in
Section 6.6, (v) such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under the
corporation, takeover or "Blue Sky" laws of various states, (vi) such filings
and approvals as may be required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "Improvements Act") and (vii) such other
consents, orders, authorizations, registrations,
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declarations and filings the failure of which to be obtained or made would not,
individually or in the aggregate have a Material Adverse Effect on Parent,
materially impair the ability of Parent to perform its obligations hereunder or
prevent the consummation of any of the transactions contemplated hereby.
Section 2.3 INTERESTED SHAREHOLDER. Neither Parent nor any
affiliate of Parent is an "Interested Shareholder" as defined in Section
7.85(c)(2) of the IBCA or an "interested shareholder" as defined in Section
11.75(c)(6) of the IBCA.
Section 2.4 FINANCIAL ABILITY. Parent has the financial
ability to consummate the transactions contemplated by this Agreement and has
furnished the Company with evidence thereof.
Section 2.5 BROKERS. No broker, investment banker or other
person is entitled to any broker's, finder's or other similar fee or commission
in connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent or Sub other than any broker,
investment banker or other person the fees and expenses of which, to the extent
payable, have been or will be paid or caused to be paid by Parent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
---------------------------------
THE COMPANY AND CERTAIN SHAREHOLDERS
------------------------------------
The Company and each Named Shareholder represent and warrant
to Parent and Sub, except as set forth in the Disclosure Letter from the
Company to Parent dated as of the date hereof relating to this Agreement (the
"Disclosure Letter") as follows:
Section 3.1 ORGANIZATION, STANDING AND POWER. The Company
is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Illinois and has the requisite corporate power and
authority to carry on its business as now being conducted. The Company is duly
qualified to do business, and is in good standing, in each jurisdiction where
the character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary, except where the failure to be
so qualified would not, individually or in the aggregate, have a Material
Adverse Effect on the Company. The Disclosure Letter includes a list of all of
the Company's Subsidiaries, all of which are wholly-owned.
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Section 3.2 CAPITAL STRUCTURE. The authorized capital stock
of the Company consists of 10,000,000 shares of Class A Common Stock and
1,000,000 shares of Class B Common Stock, no par value ("Class B Common
Stock"). The Class A Common Stock and the Class B Common Stock are hereinafter
referred to as the "Common Stock". At the time of close of business on April
30, 1994, (i) 6,639,285 shares of Class A Common Stock and 473,225 shares of
Class B Common Stock were issued and outstanding and (ii) no shares of Common
Stock were held by the Company in its treasury. All outstanding shares of
capital stock of the Company are, and all shares of capital stock which are to
be issued by the Company as contemplated by Section 6.1 of this Agreement will
be, validly issued, fully paid and nonassessable and not subject to preemptive
rights. At the date hereof, the issued and outstanding shares of capital stock
of the Company are held of record as shown in the Disclosure Letter. Section
6.1 of this Agreement contemplates that each outstanding share of Class B
Common Stock will be converted into one share of Class A Common Stock prior to
the Effective Time. Except for the obligations of the Company under the
Rust-Oleum Corporation 1984 Long-Term Incentive Program, as amended (the "LTI
Program"), and the Company's Articles of Incorporation, and as contemplated by
Section 6.1 of this Agreement, there are no options, warrants, rights,
commitments, agreements, arrangements or undertakings of any kind to which the
Company is a party or by which it is bound obligating the Company to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other voting securities of the Company. There are no
outstanding stock appreciation rights ("SARs"). True and correct copies of
the LTI Program and all amendments thereto have been furnished to Parent.
Section 3.3 TITLE TO COMMON STOCK. Each of the Named
Shareholders is the beneficial owner of the number of shares of Class A Common
Stock set forth opposite his, her or its name in Schedule 3.2 of the Disclosure
Letter, free and clear of any liens, encumbrances, claims, limitations or
restrictions other than such as may exist under the agreements or instruments,
as amended, referred to on such Schedule 3.2, or under the partnership
agreements, as amended, with respect to the partnerships referred to in such
Schedule 3.2. The Rust-Oleum Corporation 1984 Voting Trust, Renewed and
Extended as of January 19, 1993 is the record owner of the number of shares of
Class A Common Stock set forth opposite its name in Schedule 3.2 of the
Disclosure Letter, free and clear of any liens, encumbrances, claims,
limitations or restrictions other than any which may arise from the terms of
the instrument creating such voting trust.
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<PAGE> 15
Section 3.4 AUTHORITY; NON-CONTRAVENTION. (a) The Board of
Directors of the Company has approved this Agreement and directed that it be
submitted to the shareholders of the Company, and the Company has all requisite
power and authority to enter into this Agreement and, subject to approval of
this Agreement by the shareholders of the Company, to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company, subject to such approval of this Agreement by the
shareholders of the Company. This Agreement has been duly executed and
delivered by the Company and (assuming the valid authorization, execution and
delivery of this Agreement by Parent and Sub) constitutes a valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms.
(b) The execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated hereby and compliance with
the provisions hereof will not, conflict with, or result in any violation of,
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or to the loss of a material benefit under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the properties or
assets of the Company under, any provision of (i) the Articles of Incorporation
or By-laws of the Company (true and complete copies of which as of the date
hereof have been delivered to Parent), (ii) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to the Company or (iii) any
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to the Company or any of its properties or assets, other than, in the case of
clause (ii) or (iii), any such conflicts, violations, defaults, rights, liens,
security interests, charges or encumbrances that, individually or in the
aggregate, would not have a Material Adverse Effect on the Company, materially
impair the ability of the Company to perform its obligations hereunder or
prevent the consummation of any of the transactions contemplated hereby.
(c) No filing or registration with, or authorization, consent
or approval of, any Governmental Entity is required by or with respect to the
Company in connection with the execution and delivery of this Agreement by the
Company or the consummation by the Company of the transactions contemplated
hereby, except for (i) the filing of the Articles of Merger with the Secretary
of State of the State of Illinois and appropriate documents with the relevant
authorities of other states in which the Company is
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<PAGE> 16
qualified to do business, (ii) such filings and consents as may be required
under any environmental, health or safety law or regulation pertaining to any
notification, disclosure or required approval triggered by the Merger or the
transactions contemplated by this Agreement, (iii) such filings as may be
required in connection with the Transfer Taxes described in Section 6.6, (iv)
such other consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under the corporation, takeover or
"Blue Sky" laws of various states, (v) such filings and approvals as may be
required under the Improvements Act, and (vi) such other consents, approvals,
orders, authorizations, registrations, declarations and filings the failure of
which to be obtained or made would not, individually or in the aggregate, have
a Material Adverse Effect on the Company, materially impair the ability of the
Company to perform its obligations hereunder or prevent the consummation of any
of the transactions contemplated hereby.
Section 3.5 FINANCIAL STATEMENTS. Included in the Disclosure
Letter are true and correct copies of (i) the consolidated balance sheets of
the Company and its Subsidiaries as at October 31, 1992 and 1993 (such balance
sheet as of October 31, 1993 being herein called the "1993 Balance Sheet") and
the related statements of income, of shareholders' investment and of cash flows
for the fiscal years then ended, together with appropriate notes to such
financial statements, all accompanied by the report thereon of KPMG Peat
Marwick, independent certified public accountants, and (ii) the unaudited
consolidated balance sheet of the Company and its Subsidiaries as of March 31,
1994 and the related statement of income for the five months period then ended.
Such balance sheets and statements of income, of shareholders' investment and
of cash flows, subject in the case of unaudited statements to normal year-end
adjustments and to any other adjustments described therein, have been prepared
in accordance with generally accepted accounting principles consistently
applied and present fairly the financial position of the Company and its
Subsidiaries as at the date of such balance sheets and the results of
operations and changes in financial position for the fiscal periods then ended.
3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS SINCE BALANCE
SHEET DATE. Between March 31, 1994 and the date hereof there has been:
(a) no increase in the indebtedness for borrowed money
incurred by the Company and no incurrence of any other obligation or
liability (fixed or contingent) except for trade obligations and
borrowings for seasonal working capital requirements, in each case
incurred in the ordinary course of business consistent with past
practice;
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<PAGE> 17
(b) no Material Adverse Change with respect to the
Company;
(c) no sale, transfer or other disposition by the Company
or mortgage or pledge of, or imposition of any lien, charge or
encumbrance on, any of its properties or assets, other than
transactions (including the sale of capital assets) in the ordinary
course of business consistent with past practice;
(d) no contribution to the capital of the Company, no
dividend or other distribution or payment in respect of, and no
subdivision, consolidation or other recapitalization of, the capital
stock of the Company and no declaration or authorization of any of the
foregoing;
(e) no proceedings with respect to the merger, consolidation,
liquidation or reorganization of the Company; and
(f) no loan by the Company to any shareholder, director,
officer or employee of the Company other than travel, expense or other
advances to employees in the ordinary course of business consistent
with the past practice.
3.7 MINIMUM NET WORTH. Net Worth shall be no less than
$30,000,000 at the Effective Time. For purposes of this Section 3.7 the
following terms shall have the meanings ascribed below: (a) "Net Worth" shall
mean the consolidated net worth of the Company and its Subsidiaries calculated
by deducting (i) the total liabilities determined in accordance with generally
accepted accounting principles consistent with the methods and principles used
to prepare the financial statements of the Company as of March 31, 1994
described in Section 3.5 (the "Agreed Accounting Principles"), from (ii) the
total assets determined in accordance with the Agreed Accounting Principles.
For the purposes hereof, Net Worth shall be calculated without reflection of
any expenses or expense accruals relating to (i) any costs or expenses incurred
in connection with this Agreement or the transactions contemplated hereby, (ii)
any costs or expenses incurred in connection with or arising as a result of the
termination of the Rust-Oleum Corporation Supplemental Pension Plan as required
by Section 7.3(g), (iii) any compensation expense associated with awards under
Section 12 or Section 13 of the Rust-Oleum Corporation 1984 Long-Term Incentive
Program, as amended, and (iv) any expense arising from the termination of any
employees of the Company on or prior to the Effective Time at the direction of
Parent as provided in Section 6.9. It is understood that the shareholders of
the Company or
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<PAGE> 18
any of them shall be entitled, but shall not be obligated, to make one or more
contributions to the capital of the Company for the purpose of satisfying the
foregoing representation and warranty. It is further understood that on or
prior to the Effective Time the Company shall be entitled to reverse any and
all previously accrued provisions for income taxes payable, and the full
benefit of any such reversal shall be reflected in Net Worth at the Effective
Time for the purposes of determining compliance with this Section 3.7.
Section 3.8 TITLE TO REAL ESTATE. The Disclosure Letter
contains a list of each parcel of real estate owned by the Company (the "Real
Estate"). The Company has good and marketable title to all of the Real Estate,
subject to no mortgage, lien, security interest or other encumbrance of any
kind except for (i) liens for taxes not yet due and payable or (ii) such
easements, restrictions, defects in title, covenants and similar charges that
do not render title to the property unmarketable or interfere in any material
respect with the existing use of the property subject thereto.
Section 3.9 AVAILABILITY OF MATERIAL CONTRACTS. Included in
the Disclosure Letter is a list of all loan or credit agreements, notes, bonds,
mortgages, indentures, leases or other contracts, agreements or instruments,
and all permits, concessions, franchises or licenses, in each case, which are
applicable to the Company and which are believed by the management of the
Company to be material to the business or assets of the Company. Parent, by
its execution of this Agreement, acknowledges that it has been provided the
opportunity to review copies of any and all items on such list that it may have
requested. For the purposes hereof, the management of the Company shall be
limited to the eight most senior executives of the Company as identified in the
Disclosure Letter.
Section 3.10 EXECUTIVE COMPENSATION AND BENEFIT PLANS. (a)
Included in the Disclosure Letter is a list of all material plans, programs,
agreements and other arrangements providing any remuneration or benefits to any
current management level employee of the Company, true and correct copies of
which have been made available to Parent. Such list also includes the current
annual salary and amounts paid under the LTI Program for fiscal year ended
October 31, 1993, under the Company's Short-Term Incentive Plan (the "STIP")
and under the Company's CBG Regional Sales Directors Short-Term Incentive
Program, for fiscal year ended October 31, 1993 to each such management level
employee.
(b) Neither the Company nor any Subsidiary of the Company
maintains, or is required to contribute to, any "employee pension benefit plan"
(as such term is defined in Section 3(2) of
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the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), on
behalf of any employees of the Company or any Subsidiary of the Company other
than a plan provided to Parent as described in Section 3.10(a). The Company
has made available to Parent, with respect to each of such plans correct and
complete copies of (i) all plan documents, amendments and trust agreements,
(ii) the most recent Annual Report (Form 5500 Series) and accompanying
schedules, as filed and (iii) the current summary plan description.
(c) The Company does not contribute, and is not obligated to
contribute, to any multiemployer plan (within the meaning of section 4001 of
ERISA) with respect to employees of the Company or any Subsidiary of the
Company.
Section 3.11 TAXES. The Company and each of the Subsidiaries
has filed all Tax Returns required to have been filed on or before the date
hereof, and all Taxes required to have been paid on or before the date hereof
by the Company and each Subsidiary have been timely paid. Neither the Company
nor any of the Subsidiaries has agreed in writing to waive any statute of
limitations in respect of Taxes of the Company or such Subsidiary. The Tax
Returns referred to above relating to United States federal and state income
Taxes have been examined by the Internal Revenue Service or the appropriate
state taxing authority or the period for assessment of the Taxes in respect of
which such Tax Returns were required to be filed has expired. No issues that
have been raised in writing by the relevant taxing authority in connection with
the examination of the Tax Returns referred to above are currently pending.
All deficiencies asserted or assessments made in writing as a result of any
examination of the Tax Returns referred to above by a taxing authority have
been paid in full. For the purposes of this Section 3.11, "Subsidiaries" shall
mean the Subsidiaries of the Company listed in the Disclosure Letter; "Tax"
(and, with correlative meaning, "Taxes") shall mean any federal, state, local
or foreign income, gross receipts, property, sales, use, license, excise,
franchise, employment, payroll, withholding, alternative or add-on minimum, ad
valorem, transfer or excise tax, or any other tax, custom, duty, governmental
fee or other like assessment or charge of any kind whatsoever, together with
any interest or penalty, imposed by any governmental authority; and "Tax
Return" shall mean any return, report or similar statement required to be filed
with respect to any Tax (including any attached schedules), including, without
limitation, any information return, claim for refund, amended return and
declaration of estimated Tax.
Section 3.12 PATENTS, TRADE NAMES, TRADEMARKS AND OTHER
RIGHTS. (a) The Disclosure Letter contains as of the date
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of this Agreement a list and description of (i) all United States and foreign
patents and patent applications, all United States, state and foreign
trademarks, service marks and trade names for which registrations have been
issued or applied for, and all other United States, state and foreign
trademarks, service marks and trade names, owned by the Company or in which the
Company holds any right, license or interest (other than such trademarks,
service marks and trade names which have not been used by the Company since
January 1, 1993); (ii) all material agreements, commitments, contracts,
understandings, licenses, assignments and indemnities relating or pertaining to
any asset, property or right of the character described in the preceding clause
to which the Company is a party; (iii) all material licenses or agreements
pertaining to know-how, trade secrets, inventions, disclosures or uses of ideas
to which the Company is a party; and (iv) all registered assumed or fictitious
names under which the Company is conducting business.
(b) No proceedings are pending or, to the knowledge of the
Company, threatened against the Company which challenge the validity or
ownership of any trademark, trade name or servicemark or the ownership of any
other right or property referred to in this Section 3.12, and to the knowledge
of the Company there is not any infringing use of any of the same by any other
person.
(c) To the knowledge of the Company, the operations,
activities, products, equipment, machinery or processes of the Company do not
infringe the patents, trademarks, servicemarks, trade names, copyrights or
other property rights of any other person.
Section 3.13 ENVIRONMENTAL MATTERS. (a) Except where
failure to comply or resulting liability would not have a Material Adverse
Effect on the Company, to the knowledge of the Company:
(i) neither the Company nor any Subsidiary of the Company has
received during the past five years any notice of violation by the
Company or any such Subsidiary of any Environmental Law from any
governmental authority which has not been complied with;
(ii) since January 1, 1989, no notice under applicable
Environmental Laws reporting the accidental release of any hazardous
substance into the environment has been filed by or on behalf of the
Company or any of its Subsidiaries;
(iii) neither the Company nor any Subsidiary of the Company
has received any notice from any governmental authority alleging that
the Company or any Subsidiary of the
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Company is a liable party under the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 ET
SEQ. ("CERCLA"), any state superfund laws or laws relating to
environmental clean-up.
For the purposes hereof, "Environmental Laws" shall mean federal and state laws
and regulations governing the protection of the environment, such as the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section Section 9601, ET SEQ., as amended (CERCLA); the Resource Conversation
and Recovery Act, as amended, 42 U.S.C. Section Section 6901 ET SEQ.; the Clean
Water Act, 33 U.S.C. Section Section 1251 ET SEQ.; the Clean Air Act, 42 U.S.C.
Section Section 7401 ET SEQ.; the Toxic Substances Control Act, 15 U.S.C.
Section Section 2601 ET SEQ.; and the Safe Drinking Water Act, 42 U.S.C.
Section Section 300f through 300j.
(b) Prior to the Effective Time, Parent, at its sole cost and
expense shall have the right to perform, and the Company shall grant reasonable
access necessary to perform, an inspection of each or any parcel included in
the Real Estate. The Company shall provide reasonable information as requested
by Parent to confirm the Company's compliance with Environmental Laws. This
inspection and review shall be known as the "Phase I Environmental Assessment".
If requested by Parent, the Company shall allow ambient air quality, soil,
surface water and groundwater sampling at the Real Estate, or any parcel
included the Real Estate (the "Phase II Environmental Assessment"). If
Parent determines to conduct any Phase II Environmental Assessment, Parent
shall submit to the Company for approval its proposed scope of work. The Phase
II Environmental Assessment shall be completed prior to the Effective Time.
Parent has provided the Company with the names of each consultant or contractor
to be employed by Parent to conduct the Phase I and the Phase II Environmental
Assessment. Parent and the Company shall cooperate to assert and maintain any
available privileges, including attorney-client privilege, regarding the
information and reports generated during the Phase I and the Phase II
Environmental Assessments. Parent shall arrange with those performing any
Environmental Assessment to submit to the Company, simultaneously with
submission to Parent, all analytical results, draft reports or final reports of
any Phase I and Phase II Environmental Assessment that may be performed. No
final report of any Environmental Assessment shall be prepared until Parent and
the Company have approved the final draft, which approval shall not be
unreasonably withheld. Neither Parent nor the Company shall disclose any
information, draft report or final report prepared during any Phase I or Phase
II Environmental Assessment to any party, including governmental authorities,
without the written consent of the other, unless disclosure is necessary to
enforce the terms of this Agreement or required by valid legal process. Parent
shall conduct the activities
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authorized by this Section 3.13(b) in such a manner so as not to interfere
unreasonably with the Company's ongoing operations and shall use reasonable
efforts to minimize any disruption to such operations. Parent shall restore
the Real Estate to substantially the same condition it was in prior to the
Environmental Assessments.
Section 3.14 LITIGATION. As of the date hereof, there are no
lawsuits, claims, suits, proceedings or investigations pending or, to the
knowledge of the Company, threatened against the Company which are reasonably
expected to have a Material Adverse Effect on the Company.
Section 3.15 COLLECTIVE BARGAINING ARRANGEMENTS. The Company
is not a party to or bound by any employee collective bargaining agreement; nor
is the Company a party to or affected by or, to the knowledge of the Company,
threatened with, any dispute or controversy with a union or with respect to
unionization or collective bargaining involving the employees of the Company.
Section 3.16 BROKERS. No broker, investment banker or other
person, other than Lehman Brothers, Inc., the fees and expenses of which will
be paid by the Company, is entitled to any broker's, finder's or other similar
fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company.
Pursuant to an engagement letter between the Company and Lehman Brothers, Inc.,
the Company has agreed to pay Lehman Brothers, Inc. the sum of $1,400,000 upon
consummation of the Merger, a copy of which will be delivered to Parent prior
to the Effective Time.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES REGARDING SUB
--------------------------------------------
Parent and Sub jointly and severally represent and warrant to
the Company and to each Named Shareholder as follows:
Section 4.1 ORGANIZATION AND STANDING. Sub is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Illinois. Sub was organized solely for the purpose of Parent's
acquisition of the Company and engaging in the transactions contemplated by
this Agreement and has not engaged in any business since it was incorporated
which is not in connection with the acquisition of the Company and with this
Agreement.
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Section 4.2 CAPITAL STRUCTURE. The authorized capital stock
of Sub consists of 1,000 Common Shares, without par value, 100 of which are
validly issued and outstanding, fully paid and nonassessable and are owned by
Parent free and clear of all liens, claims and encumbrances.
Section 4.3 AUTHORITY; NON-CONTRAVENTION. (a) Sub has the
requisite power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement, the performance by Sub of its obligations hereunder and the
consummation of the transactions contemplated hereby have been duly authorized
by its Board of Directors and Parent as its sole shareholder, and, except for
the corporate filings required by state law, no other corporate proceedings on
the part of Sub are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Sub and (assuming the due authorization, execution and delivery
hereof by the Company) constitutes a valid and binding obligation of Sub
enforceable against Sub in accordance with its terms.
(b) The execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated hereby and compliance with
the provisions hereof will not, conflict with, or result in any violation of,
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or to the loss of a material benefit under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the properties or
assets of Sub under, any provision of (i) the Certificate of Incorporation or
By-laws (true and complete copies of which as of the date hereof have been
delivered to the Company) of Sub, (ii) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to Sub or (iii) any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Sub or
any of its properties or assets, other than, in the case of clauses (ii) or
(iii), any such conflicts, violations, defaults, rights, liens, security
interests, charges or encumbrances that, individually or in the aggregate,
would not have a Material Adverse Effect on Sub, materially impair the ability
of Sub to perform its obligations hereunder or prevent the consummation of any
of the transactions contemplated hereby.
(c) No filing or registration with, or authorization,
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<PAGE> 24
consent or approval of, any Governmental Entity is required by or with respect
to the Sub in connection with the execution and delivery of this Agreement by
the Sub or the consummation by the Sub of the transactions contemplated hereby,
except for (i) the filing of the Articles of Merger with the Secretary of State
of the State of Illinois and (ii) such filings and approvals as may be required
under the Improvements Act.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
-----------------------------------------
Section 5.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE
MERGER. During the period from the date of this Agreement through the
Effective Time, the Company shall, and shall cause its Subsidiaries to, in all
material respects carry on their respective businesses in, and not enter into
any material transaction other than in accordance with, the ordinary course
and, to the extent consistent therewith, use all reasonable efforts to preserve
intact their current business organizations, keep available the services of
their current officers and employees and preserve their relationships with
customers, suppliers and others having business dealings with them. Without
limiting the generality of the foregoing, and, except as otherwise expressly
contemplated by this Agreement including the Disclosure Letter, the Company
shall not, and shall not permit any of its Subsidiaries to, without the prior
written consent of Parent:
(a) (x) declare, set aside or pay any dividends on, or make
any other actual, constructive or deemed distributions in respect of,
any of its capital stock, or otherwise make any payments to
shareholders of the Company in their capacity as such, other than (1)
ordinary quarterly dividends by the Company consistent with past
practice in an amount not in excess of $.165 per share of Common
Stock, (2) dividends declared prior to the date of this Agreement or
(3) dividends payable to the Company declared by any of the Company's
Subsidiaries; (y) split, combine or reclassify any of its capital
stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital
stock (other than the conversion of the Class B Common Stock into
shares of Class A Common Stock as contemplated by Section 6.1); or (z)
purchase, redeem or otherwise acquire any shares of capital stock of
the Company or any of its Subsidiaries or any other securities thereof
or any rights, warrants or options to acquire any such shares or other
securities;
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(b) issue, deliver, sell, pledge, dispose of or otherwise encumber any
shares of its capital stock, any other voting securities or equity equivalent
or any securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities or equity
equivalent (other than, in the case of the Company, the issuance of Common
Stock during the period from the date of this Agreement through the Effective
Time (y) in accordance with the terms of the LTI Program or (z) in connection
with the vesting of any Class B Common Stock or the conversion of Class B
Common Stock into Class A Common Stock as contemplated by Section 6.1);
(c) amend its Articles of Incorporation or amend in any material
respects its By-laws;
(d) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the assets of or equity in, or by any
other manner, any business or any corporation, partnership, association or
other business organization or division thereof or otherwise acquire or agree
to acquire any assets, in each case that are material, individually or in the
aggregate, to the Company and its Subsidiaries taken as a whole;
(e) except in the ordinary course of business consistent with past
practice, sell, lease or otherwise dispose of or agree to sell, lease or
otherwise dispose of, any of its assets that are material, individually or in
the aggregate, to the Company and its Subsidiaries taken as a whole;
(f) except in the ordinary course of business consistent with past
practice, (y) incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities or guarantee any debt
securities of others or (z) make any loans, advances or capital contributions
to, or investments in, any other person, other than to the Company or any
wholly-owned Subsidiary of the Company;
(g) alter through merger, liquidation, reorganization, restructuring
or in any other fashion the corporate structure or ownership of any Subsidiary
of the Company; or
(h) enter into or adopt, or amend any existing, severance plan,
agreement or arrangement or, other than
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in the ordinary course of business, enter into or amend any employee
benefit plan or employment or consulting agreement (including, without
limitation, the plans, programs, agreements and arrangements referred
to in Section 3.10) except compensation increases to employees other
than management level employees associated with promotions and annual
reviews in the ordinary course of business.
Section 5.2 CONDUCT OF BUSINESS OF SUB PENDING THE MERGER.
During the period from the date of this Agreement through the Effective Time,
Sub shall not engage in any activities of any nature except as provided in or
contemplated by this Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
---------------------
Section 6.1 STOCKHOLDER APPROVAL. Within one business day of
the termination or expiration of the waiting period under the Improvements Act,
the holders of all of the outstanding shares of Class A Common Stock shall
execute a consent in writing pursuant to Section 7.10(a) of the IBCA approving
a proposal to convert, effective upon the execution of such consent by the
holders of all of the outstanding shares of Class A Common Stock, all of the
outstanding shares of Class B Common Stock into an equal number of shares of
Class A Common Stock as provided in the Company's Articles of Incorporation.
Promptly after the execution of the foregoing consent by the holders of all of
the outstanding shares of Class A Common Stock, the Company shall deliver to
all shareholders of the Company entitled to vote upon the Merger a notice in
writing informing such shareholders of the proposed execution of a written
consent pursuant to Section 7.10(a) of the IBCA with respect to the Merger.
Promptly thereafter, but at least five days after the delivery of the foregoing
notice, holders of at least two-thirds of the outstanding Class A Common Stock
shall execute a consent in writing pursuant to Section 7.10(a) of the IBCA
approving this Agreement. Promptly after the effective date of such consent as
provided above, the Company shall give written notice of the taking of the
action contained in such consent without a meeting to all holders of Common
Stock who did not execute such consent. Such notice shall include (i) a copy
of the Descriptive Memorandum dated February, 1994, (ii) the consolidated
financial statements of the Company and its Subsidiaries referred to in Section
3.5 and (iii) the fairness opinion delivered by Lehman Brothers, Inc. In
addition, such notice shall inform such
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shareholders of their right to dissent and the procedure to dissent.
Section 6.2. ACCESS TO INFORMATION. (a) The Company shall,
and shall cause each of its Subsidiaries to, afford to Parent, and to Parent's
accountants, counsel, financial advisers and other representatives, reasonable
access and permit them to make such inspections as they may reasonably require
during normal business hours during the period from the date of this Agreement
through the Effective Time to all their respective properties, books,
contracts, commitments and records and, during such period, the Company shall,
and shall cause each of its Subsidiaries to, furnish promptly to Parent (i)
access to each report, schedule, registration statement and other document
filed by it during such period pursuant to the requirements of federal or state
laws and (ii) all other information concerning its business, properties and
personnel as Parent may reasonably request. In no event shall the Company be
required to supply to Parent, or to Parent's accountants, counsel, financial
advisors or other representatives, any information relating to indications of
interest from, or discussions with, any other potential acquirors of the
Company which were received or conducted prior to the date hereof.
(b) Except as required by law, Parent and its directors,
officers, employees, associates, agents and advisors (collectively
"Representatives") will hold, and Parent will cause its subsidiaries and
affiliates to hold, any information concerning the Company (whether prepared by
the Company, its advisors or otherwise and irrespective of the form of
communication) which has been or will be furnished to it or its Representatives
by or on behalf of the Company (the "Evaluation Material") in confidence and
will not disclose any of the Evaluation Material in any manner whatsoever and
will ensure that such subsidiaries, affiliates and Representatives do not
disclose such information to others without the prior written consent of the
Company; provided, however, that Parent may disclose Evaluation material only
to such of its subsidiaries, affiliates and Representatives who need to know
such information. Evaluation Material shall be deemed to include all notes,
analyses, compilations, studies, interpretations or other documents prepared by
Parent or its subsidiaries, affiliates or Representatives which contain,
reflect or are based upon, in whole or in part, the information furnished to
Parent or its subsidiaries, affiliates or Representatives. Neither Parent nor
any of its Subsidiaries, affiliates or Representatives shall use any Evaluation
Material in any manner that is detrimental to the Company, including without
limitation, by using any Evaluation Material in connection with any
solicitation of any of the customers of the Company or otherwise for the
purpose of
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obtaining a competitive advantage. In the event of termination of this
Agreement for any reason, Parent shall, and shall cause its subsidiaries,
affiliates and Representatives to, promptly return or destroy all Evaluation
Material and any copies made of such documents. Parent FURTHER agrees not to,
and to cause its subsidiaries, affiliates and Representatives to whom it has
made the Evaluation Material available or with whom it has discussed the
Company or its employees not to, solicit to employ any of the current officers
or employees of the Company so long as they are employed by the Company without
obtaining prior written consent of the Company. In the event that this
Agreement terminates, Parent agrees that this Section 6.2(b) shall survive for
a period of three years from the date hereof.
Section 6.3 FEES AND EXPENSES. (a) Whether or not the Merger
is consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses. In the event that the Merger is
consummated, the Company agrees that all costs and expenses incurred by the
Company in connection with this Agreement and the transactions contemplated
hereby shall be reflected on the books and records of the Company as expenses
applicable to the period ending at the Effective Time.
(b) To the extent that the costs and expenses of Lehman
Brothers, Sidley & Austin and Hewitt Associates incurred by the Company in
connection with this transaction exceed $2,000,000, such costs and expenses
shall be paid by the Named Shareholders.
Section 6.4 REASONABLE EFFORTS. Upon the terms and subject
to the conditions set forth in this Agreement, each of the parties agrees to
use all reasonable efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger and the other
transactions contemplated by this Agreement, including (a) the obtaining of all
necessary actions or non-actions, waivers, consents and approvals from
Governmental Entities and the making of all necessary registrations and filings
and the taking of all reasonable steps as may be necessary to obtain an
approval or waiver from, or to avoid an action or proceeding by any
Governmental Entity, (b) the obtaining of all necessary consents, approvals or
waivers from holders of Class A Common Stock and third parties, (c) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby, including
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seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed, and (d) the execution and
delivery of any additional instruments necessary to consummate the transactions
contemplated by this Agreement.
Section 6.5 PUBLIC ANNOUNCEMENTS. Parent and Sub, on the one
hand, and the Company, on the other hand, will consult with each other before
issuing any press release or otherwise making any public statements with
respect to the transactions contemplated by this Agreement, and shall not issue
any such press release or make any such public statement prior to such
consultation, except as may be required by applicable law or by obligations
pursuant to any listing agreement with any national securities exchange.
Section 6.6 TRANSFER TAXES. Parent, Sub and the Company
agree that the Company (prior to the Merger) and the Surviving Corporation
(following the Merger) will pay, and will indemnify the holders of the Common
Stock against, any real property transfer or gains tax, stamp tax, stock
transfer tax, or other similar tax imposed on the Merger or the surrender of
the Common Stock pursuant to the Merger (collectively, "Transfer Taxes"), and
any penalties or interest with respect to the Transfer Taxes. The Company
agrees to cooperate with Sub and Parent in the filing of any returns with
respect to the Transfer Taxes, including supplying promptly upon request by
Parent a complete list of all real property interests held by the Company or
its Subsidiaries and any information with respect to such property that is
reasonably necessary to complete such returns. Not later than ten (10) days
prior to the Effective Time, Parent shall deliver to the Company a schedule
setting forth the portion of the Merger consideration to be allocated to any
real property owned by the Company, and shall consider in good faith changes to
such schedule requested by the Company. The shareholders of the Company shall
be deemed to have agreed to be bound by the allocation established pursuant to
this Section 6.6 in the preparation of any return with respect to the Transfer
Taxes. Parent, Sub and the Company expressly agree that the provisions of this
Section 6.6 are intended to be for the benefit of each party to this Agreement
and those persons holding Common Stock at the Effective Time.
Section 6.7 INDEMNIFICATION OF DIRECTORS AND OFFICERS. From
and after the Effective Time, the Surviving Corporation shall indemnify and
hold harmless all past and present officers and directors of the Company and of
its Subsidiaries for acts or omissions occurring at or prior to the Effective
Time and shall advance reasonable litigation expenses incurred by such officers
and directors in connection with defending any action arising out
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of such acts or omissions to the fullest extent permitted by the IBCA.
Section 6.8 CAFETERIA PLAN. Parent shall cause to be
maintained through December 31, 1994 each cafeteria plan of the Company within
the meaning of Section 125 of the Code so as to prevent the forfeiture of
unused participant account balances under the plan.
Section 6.9 TERMINATION OF EMPLOYEES. (a) Subject to the
receipt by the Company of an agreement, in form and substance satisfactory to
the Company, from Parent indemnifying all officers, directors, employees,
agents and other representatives of the Company, as well as each Named
Shareholder, against all liabilities, costs and expenses, including any and all
fees and expenses of counsel and other costs of defense or investigation,
resulting from or arising in connection with any action taken pursuant to or
otherwise contemplated by this Section 6.9, the Company agrees to terminate,
effective as of the Effective Time, the employment with the Company of any
employee of the Company the termination of whom is requested by Parent in
writing. The parties hereto acknowledge that the rights of individual
employees under applicable law or otherwise will be given due consideration in
the implementation of this Section 6.9.
(b) In the event the Merger is consummated, the Company
agrees that all severance and other costs and expenses incurred by the Company
in connection with the termination of any employee of the Company pursuant to
Section 6.9(a) shall be reflected on the books and records of the Company as
expenses applicable to the period ending at the Effective Time.
Section 6.10 IMPROVEMENTS ACT FILINGS. Parent and the
Company shall promptly (and, in any event, by May 15, 1994) make their
respective filings, and shall thereafter promptly make any required
submissions, under the Improvements Act with respect to the Merger. Each of
Parent, Sub and the Company will use its best efforts to cause the satisfaction
of the waiting period under the Improvements Act. Parent and the Company will
furnish to each other such necessary information and reasonable assistance as
may be requested in connection with their respective preparation of necessary
filings or submissions to any governmental agency, including, without
limitation, any filings necessary under the provisions of the Improvements Act.
The Company and Parent will supply each other with copies of all
correspondence, filings or communications (or memoranda setting forth the
substance thereof) between either of them or their respective representatives
and the Federal Trade Commission, the Antitrust Division of the United States
Department of Justice or any other governmental agency or authority or members
of their
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respective staffs with respect to this Agreement or the transactions
contemplated hereby.
6.11 FINANCIAL STATEMENTS. The Company shall use reasonable
efforts to assist Parent in obtaining the services of KPMG Peat Marwick and any
required consent to the use of their report regarding audited financial
statements of the Company as of the Effective Time in such form that they can
be used in connection with Parent's required filings with the Securities and
Exchange Commission. The fees and expenses of KPMG Peat Marwick and all other
costs and expenses associated with the preparation of such audited financial
statements shall be paid by Parent.
ARTICLE VII
CONDITIONS PRECEDENT TO THE MERGER
----------------------------------
Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT
THE MERGER. The respective obligations of each party to effect the Merger
shall be subject to the fulfillment at or prior to the Effective Time of the
following conditions:
(a) STOCKHOLDER APPROVAL. This Agreement shall have been
approved by the requisite consent of the holders of Class A Common
Stock as contemplated by Section 6.1(a).
(b) NO ORDER. No Governmental Entity or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or
entered any law, rule, regulation, executive order, decree, injunction
or other order which is then in effect and has the effect of making
the Merger or the transactions contemplated hereby illegal.
(c) IMPROVEMENTS ACT WAITING PERIOD. The applicable waiting
period under the Improvements Act shall have expired or been
terminated.
(d) ESCROW AGREEMENT. The Parent and Named Shareholders
depositing $1,000,000 thereunder shall have executed the Escrow
Agreement (as hereinafter defined).
(e) OTHER APPROVALS. All authorizations, consents, orders,
declarations or approvals of, or filings with, or terminations or
expirations of waiting periods imposed by, any Governmental Entity,
the failure to obtain which would have a Material Adverse Effect on
Parent (assuming the Merger had taken place) shall have been obtained,
shall have occurred or shall have been filed.
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Section 7.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT
THE MERGER. The obligation of the Company to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
additional conditions:
(a) PERFORMANCE OF OBLIGATIONS; REPRESENTATIONS AND
WARRANTIES. Parent and Sub shall have performed in all material
respects each of their agreements contained in this Agreement required
to be performed on or prior to the Effective Time, each of the
representations and warranties of Parent and Sub contained in this
Agreement that is qualified by materiality shall be true and correct
on and as of the Effective Time as if made on and as of such date and
each of the representations and warranties that is not so qualified
shall be true and correct in all material respects on and as of the
Effective Time as if made on and as of such date, in each case except
as contemplated or permitted by this Agreement.
(b) OFFICERS' CERTIFICATE. Parent shall have furnished to
the Company a certificate, dated the Effective Time, signed by the
appropriate officers of Parent, certifying to the effect that to the
best of the knowledge and belief of each of them, the conditions set
forth in this Section 7.2, insofar as they relate to Parent, have been
satisfied in full.
(c) OPINION OF COUNSEL. The Company shall have received an
opinion of Calfee, Halter & Griswold, in form and substance
satisfactory to the Company, dated the Effective Time, substantially
to the effect set forth in Exhibit II.
(d) SOLVENCY CERTIFICATE. Parent and Sub shall have
furnished a certificate in the form reasonably satisfactory to the
Company and its counsel with respect to the solvency of the Parent and
Sub on and after the consummation of the transactions contemplated
hereby.
(e) OTHER DOCUMENTS. Parent and Sub shall have furnished to
the Company at the Closing such other customary documents,
certificates or instruments as the Company may reasonably request
evidencing compliance by Parent and Sub with the terms of this
Agreement.
Section 7.3 CONDITIONS TO OBLIGATIONS OF PARENT AND SUB TO
EFFECT THE MERGER. The obligations of Parent and Sub to effect the Merger
shall be subject to the fulfillment at or prior to the Effective Time of the
following additional conditions:
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(a) PERFORMANCE OF OBLIGATIONS; REPRESENTATIONS AND
WARRANTIES. The Company shall have performed in all material respects
each of its agreements contained in this Agreement required to be
performed on or prior to the Effective Time, each of the
representations and warranties of the Company contained in this
Agreement that is qualified by materiality shall be true and correct
on and as of the Effective Time as if made on and as of such date and
each of the representations and warranties that is not so qualified
shall be true in all material respects on and as of the Effective Time
as if made on and as of such date, in each case except as contemplated
or permitted by this Agreement.
(b) THIRD PARTY CONSENTS. All required authorizations,
consents or approvals of any third party (other than a Governmental
Entity), the failure to obtain which would have a Material Adverse
Effect on Parent (assuming the Merger had taken place), shall have
been obtained.
(c) OFFICERS' CERTIFICATE. The Company shall have furnished
to Parent a certificate, dated the Effective Time, signed by the
appropriate officers of the Company, certifying to the effect that to
the best of the knowledge and belief of each of them, the conditions
set forth in this Section 7.3, insofar as they relate to the Company,
have been satisfied.
(d) OPINION OF SIDLEY & AUSTIN. Parent shall have received
an opinion of Sidley & Austin, special counsel to the Company, in
form and substance satisfactory to Parent, dated the Effective Time,
substantially to the effect set forth in Exhibit III.
(e) OPINION OF KATTEN, MUCHIN & ZAVIS. Parent shall have
received an opinion of Katten, Muchin & Zavis, special counsel to
certain Named Shareholders in form and substance satisfactory to
Parent, dated the Effective Time, substantially to the effect set
forth in Exhibit IV.
(f) OPINION OF GENERAL COUNSEL OF COMPANY. Parent shall have
received an opinion of Michael T. Murphy, Secretary and General
Counsel of the Company, in form and substance satisfactory to Parent,
dated the Effective Time, substantially to the effect set forth in
Exhibit V.
(g) OTHER DOCUMENTS. The Company shall have furnished to
Parent at the Closing such other customary documents, certificates or
instruments as Parent may reasonably request
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evidencing compliance by the Company with the terms of this Agreement.
(h) CERTAIN COMPANY LOANS. All loans by the Company to the
persons listed in Schedule 7.3 to the Disclosure Letter shall have
been repaid in full.
(i) TERMINATION OF SUPPLEMENTAL PENSION PLAN. The Company
shall have terminated the Rust-Oleum Corporation Supplemental Pension
Plan.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
Section 8.1 TERMINATION. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after any approval by
the shareholders of the Company:
(a) by mutual consent of Parent and the Company;
(b) by Parent if (i) the Company shall have failed to comply
in any material respect with any of its covenants or agreements
contained in this Agreement required to be complied with by the
Company prior to the date of such termination, which failure to comply
has not been cured within five business days following receipt by the
Company of notice of such failure to comply or (ii) the shareholders
of the Company shall have failed to approve this Agreement on or
before December 31, 1994;
(c) by the Company if Parent shall have failed to comply in
any material respect with any of its covenants or agreements contained
in this Agreement required to be complied with by Parent prior to the
date of such termination, which failure to comply has not been cured
within five business days following receipt by Parent of notice of
such failure to comply or;
(d) by either Parent or the Company if (i) the Merger has not
been effected on or prior to the close of business on December 31,
1994; PROVIDED, HOWEVER, that the right to terminate this Agreement
pursuant to this clause shall not be available to any party whose
failure to fulfill any obligation of this Agreement has been the cause
of, or resulted in, the failure of the Merger to have occurred on or
prior to the aforesaid date, or (ii) any court of competent
jurisdiction or any governmental, administrative or regulatory
authority, agency or body shall have issued an
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order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other
action shall have become final and nonappealable; or
(e) by either Parent or the Company if there has been (i) a
material breach by the other of any representation or warranty that is
not qualified as to materiality or (ii) a breach by the other of any
representation or warranty that is qualified as to materiality, in
each case which breach has not been cured within five business days
following receipt by the breaching party of notice of the breach.
Section 8.2 EFFECT OF TERMINATION. (a) In the event of
termination of this Agreement by either Parent or the Company, as provided in
Section 8.1, this Agreement shall forthwith become void and there shall be no
liability hereunder on the part of the Company, any Named Shareholder, Parent
or Sub or their respective officers or directors (except as set forth in
Section 6.2(b), Section 6.3 and Section 6.5 which shall survive the
termination); PROVIDED, HOWEVER, that nothing contained in this Section 8.2
shall relieve any party hereto from any liability for any breach of any
covenant or agreement contained in this Agreement.
(b) Unless the Closing occurs, the sole and exclusive remedy
of Parent, Sub and the Company for the breach by any other party hereto of any
representation or warranty contained in Articles II, III or IV hereof, as
applicable, shall be to terminate this Agreement as provided in Section 8.1.
Section 8.3 AMENDMENT. This Agreement may be amended by the
parties hereto, by or pursuant to action taken by their respective Boards of
Directors, at any time before or after approval of the Merger by the
shareholders of the Company but, after any such approval by shareholders of the
Company, no amendment shall be made which in any way materially adversely
affects the rights of such shareholders, without the further approval of such
shareholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
Section 8.4 WAIVER. At any time prior to the Effective Time,
the parties hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any of the
agreements or conditions contained herein which may legally be waived. Any
agreement on the part of a party
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hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE IX
GENERAL PROVISIONS
------------------
Section 9.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. None of the representations, warranties or agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time, except (i) the representation set forth in Section
3.3 (which shall survive indefinitely), (ii) the representation set forth in
Section 3.11 (which shall survive for a period of six years from the Effective
Time) and (iii) for the provisions of Article I and Sections 6.3, 6.6, 6.7, and
6.8 which shall survive indefinitely.
Section 9.2 SEVERAL LIABILITY. Notwithstanding anything
contained in this Agreement to the contrary, the liability of the Named
Shareholders under Section 3.3 shall be several and not joint or joint and
several and shall be determined as if such representation and warranty applied
only to such Named Shareholder and to the shares of Class A Common Stock set
forth opposite its name in Schedule 3.2 of the Disclosure Letter.
Section 9.3 PROVISIONS RELATING TO TAX REPRESENTATION. (a)
To secure the obligations of the Company and the Named Shareholders with
respect to any amount owing by the Company or the Named Shareholders pursuant
to this Agreement as a result of a breach of the representation and warranty
set forth in Section 3.11 (hereinafter, "Tax Losses"), at the Effective Time
the Named Shareholders shall, collectively, deposit, or, if prior to the
Effective Time the trustees under the Rust-Oleum Corporation 1984 Voting Trust
Agreement, Renewed and Extended as of January 19, 1993 (the "Voting Trust")
shall have provided notice to the Exchange Agent that the Voting Trust shall
have been amended to permit the Exchange Agent to deposit funds only out of
funds otherwise distributable to the Named Shareholders under the Voting Trust,
the Exchange Agent shall deposit, an amount of cash equal to One Million
Dollars ($1,000,000) pursuant to an escrow agreement to be entered into among
Parent and each Named Stockholder depositing funds thereunder (the "Escrow
Agreement"). The Escrow Agreement shall provide for the investment of the
funds deposited thereunder in accordance with instructions from Donald C.
Fergusson, the retention of all income earned upon such funds until the
termination of the Escrow Agreement, the termination of the Escrow Agreement to
be no later than six years
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from the Effective Time, and the disbursement of the funds held on deposit
under the Escrow Agreement. If funds held pursuant to the Escrow Agreement are
insufficient to satisfy Tax Losses, the Named Shareholders shall remain liable
for such Tax Losses in accordance with, and subject to the limitations of, this
Agreement. In no event shall a Named Shareholder be liable with respect to any
Tax Loss relating to a breach of the representation and warranty set forth in
Section 3.11 unless and until reasonable documentation is provided to the Named
Shareholders substantiating such Tax Loss. It is understood that prior to the
Effective Time the Named Shareholders will enter into an agreement providing
for contribution among themselves to the liabilities with respect to the
representations and warranties contained in Section 3.11 in proportion to the
amount of proceeds received by them, respectively.
(b) Parent shall (and after the Effective Time shall cause
the Company and each of the Subsidiaries to) promptly notify the Named
Shareholders in writing upon receipt by Parent, the Company or any of the
Subsidiaries (or any affiliate or agent thereof) of notice of any pending or
threatened federal, state, local or foreign Tax audits, examinations or
assessments which could affect the liability of the Company or any of the Named
Shareholders for a breach of the representation and warranty set forth in
Section 3.11. The Named Shareholders, acting collectively or through an agent
or other representative, shall have the sole right to represent the Company's
or any Subsidiary's interests in any Tax audit or administrative or court
proceeding relating (in whole or in part) to Taxes for which the Company or the
Named Shareholders could be liable pursuant to Section 3.11, and to employ
counsel of the Named Shareholders' choice at the Named Shareholders' expense.
Upon the reasonable request of Parent, the Named Shareholders, acting
collectively or through an agent or other representative, agree to provide
Parent information in reasonable detail regarding the progress of any such Tax
audit or administrative proceeding or court proceeding and to give good faith
consideration to any comments or suggestions of Parent with respect thereto, it
being understood that such consultation and consideration shall not in any way
limit or restrict the discretion of the Named Shareholders in the conduct of
such Tax audit or administrative proceeding or court proceeding. Neither
Parent (nor, after the Effective Time, the Company or any of the Subsidiaries)
nor any affiliate or agent thereof shall agree to settle any claim relating (in
whole or in part) to Taxes for which the Company and the Named Shareholders
could be liable pursuant to Section 3.11 without the prior written consent of
each of the Named Shareholders. Notwithstanding Section 9.1, the agreements in
this paragraph (b) shall survive indefinitely.
(c) After the Effective Time, each of the Parent, the Company
and each Subsidiary (and each affiliate and agent
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thereof) shall cooperate fully in preparing for any audits of, or disputes with
taxing authorities regarding, any Taxes for which the Company and the Named
Shareholders could be liable pursuant to Section 3.11, including, without
limitation, supplying the Named Shareholders or their designated representative
with all necessary documents then in the possession of the Company or any
Subsidiary or affiliate thereof. Neither the Company nor any Subsidiary shall,
after the Effective Time, destroy or dispose of any documents relating to Taxes
for which the Company and the Named Shareholders may be liable pursuant to
Section 3.11 without first offering to deliver the same to the Named
Shareholders. Notwithstanding Section 9.1, the agreements in this paragraph
(c) shall survive indefinitely.
(d) All payments owing by the Named Shareholders in
accordance with the terms of this Agreement as a result of a breach of the
representation and warranty set forth in Section 3.11 shall be reduced by (i)
any Taxes of the Company or any Subsidiary paid on or before the date hereof
that are refunded to the Parent, the Company or any Subsidiary (or any
affiliate or agent thereof) (or are used to reduce future Tax obligations of
any thereof) and (ii) any net Tax benefits arising from the same circumstances
that gave rise to such payments by the Named Shareholders. Notwithstanding
Section 9.1, the agreements in this paragraph (d) shall survive indefinitely.
Section 9.4 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, sent by overnight courier or telecopied (with a confirmatory copy
sent by overnight courier) to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
RPM, Inc.
2628 Pearl Road
Medina, Ohio 44258
Attention: Thomas C. Sullivan, Chairman
with copies to:
Calfee, Halter & Griswold
800 Superior Avenue
Suite 1800
Cleveland, Ohio 44114
Attention: William A. Papenbrock
-33-
<PAGE> 39
(b) if to the Company, to
Rust-Oleum Corporation
11 Hawthorn Parkway
Vernon Hills, IL 60061
Attention: Donald C. Fergusson, Chairman
with a copy to:
Thomas A. Cole
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
(c) If to any Named Shareholder, to
c/o Donald C. Fergusson
Rust-Oleum Corporation
11 Hawthorn Parkway
Vernon Hills, Illinois 60061
Section 9.5 INTERPRETATION. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation." As used herein the "knowledge"
of the Company shall mean the actual knowledge of any one of the eight most
senior executives of the Company as identified in the Disclosure Letter.
Section 9.6 COUNTERPARTS. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties.
Section 9.7 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES.
This Agreement, including the documents and instruments referred to herein, (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (b) except for provisions of Sections 1.8, 6.6, 6.7
and 6.8, is not intended to confer upon any person other than the parties any
rights or remedies hereunder.
Section 9.8 GOVERNING LAW. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Illinois,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
-34-
<PAGE> 40
Section 9.9 ASSIGNMENT. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties without the prior written consent of the other parties, except that Sub
may assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect
wholly-owned subsidiary of Parent, but no such assignment shall relieve Sub of
any of its obligations hereunder. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable
by, the parties and their respective successors and assigns.
Section 9.10 SEVERABILITY. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule
of law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby are not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions be consummated as originally
contemplated to the fullest extent possible.
Section 9.11 ENFORCEMENT OF THIS AGREEMENT. The parties
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically the terms and provisions hereof
in any court of the United States or any state having jurisdiction, this being
in addition to any other remedy to which they are entitled at law or in equity.
Section 9.12 TRUSTEE LIABILITY. The parties hereto
acknowledge and agree that any trustee who is a signatory to this Agreement is
not acting in his/her individual capacity when signing on behalf of a trust,
but is acting solely as trustee of that trust and shall not be liable
personally to any other party for an actual or alleged breach of any provision
contained in this Agreement. Each party agrees to look solely to the estate of
the respective trust, and not to the trustee in such trustee's individual
capacity, for any damages, or other remedy for such trust's breach of any
provision contained in this Agreement.
-35-
<PAGE> 41
IN WITNESS WHEREOF, the undersigned have set their hands to
this Agreement or have caused this Agreement to be signed by their respective
officers thereunto duly authorized all as of the date first written above.
RPM, INC.
By Thomas C. Sullivan
------------------------
Thomas C. Sullivan,
Chairman of the Board and
Chief Executive Officer
Attest:
William A. Papenbrock
- - -----------------------------
Name: William A. Papenbrock
Title: Assistant Secretary
RPM OF ILLINOIS, INC.
By Thomas C. Sullivan
----------------------
Thomas C. Sullivan,
President
Attest:
William A. Papenbrock
- - ----------------------------
Name: William A. Papenbrock
Title: Assistant Secretary
RUST-OLEUM CORPORATION
By Donald C. Fergusson
----------------------
Donald C. Fergusson
Chairman and President
Attest:
Michael T. Murphy
- - -----------------------------
Name: Michael T. Murphy
Title: Secretary
-36-
<PAGE> 42
DCF INVESTMENTS, L. P.,
A DELAWARE LIMITED
PARTNERSHIP
By: MPF Dynasty Trust for
Donald, General Partner
By: Donald C. Fergusson
-----------------------
Donald C. Fergusson,
not individually but
solely as Trustee
JFP INVESTMENTS, L. P.,
A DELAWARE LIMITED
PARTNERSHIP
By: MPF Dynasty Trust for
Jeanne, General Partner
By: Jeanne F. Pettry
-----------------------
Jeanne F. Pettry,
not individually but
solely as Trustee
SEF INVESTMENTS, L. P.,
A DELAWARE LIMITED
PARTNERSHIP
By: BAH Dynasty Trust for
Sue, General Partner
By: Sue Ellen Fergusson
-----------------------
Sue Ellen Fergusson,
not individually but
solely as Trustee
LAM INVESTMENTS, L. P.,
A DELAWARE LIMITED
PARTNERSHIP
By: BAH Dynasty Trust for
Laurel, General Partner
By: Laurel McKahan
-----------------------
Laurel McKahan
not individually but
solely as Trustee
<PAGE> 43
THE JFP DYNASTY TRUST
U/A/D 12/29/93
By: Sue Ellen Fergusson
---------------------------
Sue Ellen Fergusson,
not individually but
solely as Trustee
THE JEANNE F. PETTRY 1988
FAMILY GIFT TRUST
By: Jeanne F. Pettry
---------------------------
Jeanne F. Pettry,
not individually but
solely as Trustee
THE DONALD C. FERGUSSON
1988 FAMILY GIFT TRUST
By: Donald C. Fergusson
---------------------------
Donald C. Fergusson,
not individually but
solely as Trustee
JEANNE F. PETTRY
Jeanne F. Pettry
---------------------------
Jeanne F. Pettry
DONALD C. FERGUSSON
Donald C. Fergusson
---------------------------
Donald C. Fergusson
<PAGE> 1
EXHIBIT 2.1.1
AMENDMENT NO. 1 TO THE
AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AMENDMENT NO. 1 is made and entered into as of the 22nd day of
June, 1994 by and among RPM, Inc., an Ohio corporation ("Parent"), RPM of
Illinois, Inc., an Illinois corporation and a wholly-owned subsidiary of Parent
("Sub"), Rust-Oleum Corporation, an Illinois corporation (the "Company") (Sub
and the Company being hereinafter collectively referred to as the "Constituent
Corporations") and the individuals and other entities set forth on Exhibit I
hereto (the "Named Shareholders").
W I T N E S S E T H:
--------------------
WHEREAS, Parent, Sub, the Company and the Named Shareholders are
parties to the certain agreement and plan of merger dated as of May 3, 1994
(the "Agreement");
WHEREAS, the Section 8.3 of the Agreement provides that the Agreement
may be amended in writing by the parties thereto, by or pursuant to action
taken by their respective Boards of Directors, at any time before or after
approval of the Merger by the shareholders of the Company;
WHEREAS, Parent, Sub and the Company desire to make certain amendments
to the Agreement;
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved and declared advisable this Amendment No. 1 to the
Agreement which was requested by the Secretary of State of the State of
Illinois;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
SECTION 1. Amendments to the Agreement.
---------------------------
1.01. The second and third sentences of Section 1.1 of the Agreement
are deleted in their entirety.
1.02. The second and third sentences of Section 1.2 of the Agreement
are deleted in their entirety and the following two sentences are substituted:
"The Merger shall become effective when the Certificate of Merger (the
"Certificate of Merger") with respect to the Merger is issued by the
Secretary of State of the State of Illinois. When used in this Agreement,
the term "Effective Time" shall mean the time at which the
<PAGE> 2
Certificate of Merger is issued by the Secretary of State of the State
of Illinois."
1.03. The first and only sentence of Section 1.4 of the
Agreement is deleted in its entirety and the following sentence is substituted:
"The Articles of Incorporation and By-laws of the Company shall
continue to be the Articles of Incorporation and By-laws of the
Surviving Corporation until thereafter changed or amended as provided
therein or by applicable law."
1.04. The first and only sentence of Section 1.7(a) of the
Agreement is deleted in its entirety and the following sentence is substituted:
"All shares of Common Stock (as hereinafter defined) that are held in
the treasury of the Company, if any, or by any wholly-owned
Subsidiary (as hereinafter defined) of the Company shall be cancelled
and retired without payment of any consideration therefor and without
any conversion thereof and shall cease to exist."
1.05. The first and only sentence of Section 1.7(b) of the
Agreement is deleted in its entirety and the following sentence is substituted:
"Each issued and outstanding share of capital stock of Sub shall be
converted into and become one fully paid and nonassessable share of
Class A Common Stock, without par value, of the Surviving
Corporation."
1.06. The words "M&I First National Bank" are substituted for
the words "Bank One Evanston, NA" in the first sentence of Section 1.8 of the
Agreement.
1.07. The first sentence of Section 8.3 of the Agreement is
deleted in its entirety and the following sentence is substituted:
"This Agreement may be amended by the parties hereto, by or pursuant
to action taken by their respective Boards of Directors, at any time
before or after approval of the Merger by the shareholders of the
Company but, after any such approval by shareholders of the Company,
no amendment shall be made which in any way materially adversely
affects the rights of such shareholders, without the further approval
of such shareholders; PROVIDED, HOWEVER, that this Agreement may not
be amended once the Articles of Merger have been filed with the
Secretary of State of the State of Illinois. This Agreement may not
be amended except by an instrument in writing signed on behalf of each
of the parties hereto."
-2-
<PAGE> 3
SECTION 2. REFERENCE TO AND EFFECT ON AGREEMENT.
2.01. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings given to such terms in the Agreement.
2.02. Each reference in the Agreement to "this Agreement",
"hereunder", "hereof", "herein", or words of like import shall mean and be a
reference to the Agreement as amended hereby, and each reference to the
Agreement in any other document, instrument or agreement shall mean and be a
reference to the Agreement as amended hereby.
2.03 Except as specifically amended above, the Agreement
shall remain in full force and effect.
SECTION 3. EXECUTION IN COUNTERPARTS. This Amendment No. 1
may be executed in any number of counterparts, each of which when so executed
and delivered shall be deemed to be an original and all of which taken together
shall constitute but one and the same instrument.
SECTION 4. HEADINGS. Section headings in this Amendment No.
1 are included herein for convenience of reference only and shall not
constitute part of this Amendment No. 1 for any other purpose.
-3-
<PAGE> 4
IN WITNESS WHEREOF, the undersigned have set their hands to this
Agreement or have caused this Agreement to be signed by their respective
officers thereunto duly authorized all as of the date first written above.
RPM, INC.
By Thomas C. Sullivan
--------------------------
Thomas C. Sullivan,
Chairman of the Board and
Chief Executive Officer
Attest:
William A. Papenbrock
- - -----------------------------
Name: William A. Papenbrock
Title: Assistant Secretary
RPM OF ILLINOIS, INC.
By Thomas C. Sullivan
----------------------
Thomas C. Sullivan,
President
Attest:
William A. Papenbrock
- - ----------------------------
Name: William A. Papenbrock
Title: Assistant Secretary
RUST-OLEUM CORPORATION
By Donald C. Fergusson
----------------------
Donald C. Fergusson
Chairman and President
Attest:
Michael T. Murphy
- - -----------------------------
Name: Michael T. Murphy
Title: Secretary
-4-
<PAGE> 5
DCF INVESTMENTS, L. P.,
A DELAWARE LIMITED
PARTNERSHIP
By: MPF Dynasty Trust for
Donald, General Partner
By: Donald C. Fergusson
------------------------
Donald C. Fergusson,
not individually but
solely as Trustee
JFP INVESTMENTS, L. P.,
A DELAWARE LIMITED
PARTNERSHIP
By: MPF Dynasty Trust for
Jeanne, General Partner
By: Jeanne F. Pettry
------------------------
Jeanne F. Pettry,
not individually but
solely as Trustee
SEF INVESTMENTS, L. P.,
A DELAWARE LIMITED
PARTNERSHIP
By: BAH Dynasty Trust for
Sue, General Partner
By: Sue Ellen Fergusson
------------------------
Sue Ellen Fergusson,
not individually but
solely as Trustee
LAM INVESTMENTS, L. P.,
A DELAWARE LIMITED
PARTNERSHIP
By: BAH Dynasty Trust for
Laurel, General Partner
By: Laurel McKahan
------------------------
Laurel McKahan
not individually but
solely as Trustee
<PAGE> 6
THE JFP DYNASTY TRUST
U/A/D 12/29/93
By: Sue Ellen Fergusson
-------------------------
Sue Ellen Fergusson,
not individually but
solely as Trustee
THE JEANNE F. PETTRY 1988
FAMILY GIFT TRUST
By: Jeanne F. Pettry
-------------------------
Jeanne F. Pettry,
not individually but
solely as Trustee
THE DONALD C. FERGUSSON
1988 FAMILY GIFT TRUST
By: Donald C. Fergusson
-------------------------
Donald C. Fergusson,
not individually but
solely as Trustee
JEANNE F. PETTRY
Jeanne F. Pettry
--------------------------
Jeanne F. Pettry
DONALD C. FERGUSSON
Donald C. Fergusson
--------------------------
Donald C. Fergusson
<PAGE> 1
EXHIBIT 99.1
************************************************************
RPM, INC.
CREDIT AGREEMENT
Dated as of June 23, 1994
$300,000,000
NATIONAL CITY BANK
and
THE FIRST NATIONAL BANK OF CHICAGO
as Co-Agents
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
as Administrative Agent
************************************************************
<PAGE> 2
TABLE OF CONTENTS
Page
----
RECITALS . . . . . . . . . . . . . . . . . . . . . . 1
Section 1 Definitions and Accounting Matters . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . 13
1.03 Types of Loans . . . . . . . . . . . . . . . 13
Section 2 Commitments . . . . . . . . . . . . . . . . 13
2.01 Loans . . . . . . . . . . . . . . . . . . . 13
2.02 Reductions of Commitments . . . . . . . . . 14
2.03 Fees . . . . . . . . . . . . . . . . . . . . 14
2.04 Lending Offices . . . . . . . . . . . . . . . 15
2.05 Several Obligations . . . . . . . . . . . . 15
2.06 Notes . . . . . . . . . . . . . . . . . . . 15
2.07 Use of Proceeds . . . . . . . . . . . . . . 15
Section 3 Borrowings, Conversions and Prepayments . . 16
3.01 Borrowings . . . . . . . . . . . . . . . . . 16
3.02 Prepayments and Conversions . . . . . . . . 16
Section 4 Payments of Principal and Interest . . . . . 16
4.01 Repayment of Loans . . . . . . . . . . . . . 16
4.02 Interest . . . . . . . . . . . . . . . . . . 16
Section 5 Payments; Pro Rata Treatment;
Computations; Etc. . . . . . . . . . . . . . 18
5.01 Payments . . . . . . . . . . . . . . . . . . 18
5.02 Pro Rata Treatment . . . . . . . . . . . . . 19
5.03 Computations . . . . . . . . . . . . . . . . 19
5.04 Minimum and Maximum Amounts; Types . . . . . 19
5.05 Certain Notices . . . . . . . . . . . . . . 20
5.06 Non-Receipt of Funds by the
Administrative Agent . . . . . . . . . . . 21
5.07 Sharing of Payments, Etc. . . . . . . . . . 21
5.08 Taxes . . . . . . . . . . . . . . . . . . . 22
i
<PAGE> 3
Page
----
Section 6 Yield Protection and Illegality . . . . . . 24
6.01 Additional Costs . . . . . . . . . . . . . . 24
6.02 Limitation on Types of Loans . . . . . . . . 26
6.03 Illegality . . . . . . . . . . . . . . . . . 27
6.04 Substitute Base Rate Loans . . . . . . . . . 27
6.05 Compensation . . . . . . . . . . . . . . . . 27
6.06 Capital Adequacy . . . . . . . . . . . . . . 28
6.07 Substitution of Lender. . . . . . . . . . . . 28
Section 7 Conditions Precedent . . . . . . . . . . . . 29
7.01 Initial Loans . . . . . . . . . . . . . . . 29
7.02 Initial and Subsequent Loans . . . . . . . . 30
Section 8 Representations and Warranties . . . . . . . 31
8.01 Corporate Existence . . . . . . . . . . . . 31
8.02 Information . . . . . . . . . . . . . . . . 31
8.03 Litigation . . . . . . . . . . . . . . . . . 32
8.04 No Breach . . . . . . . . . . . . . . . . . 33
8.05 Corporate Action . . . . . . . . . . . . . . 33
8.06 Approvals . . . . . . . . . . . . . . . . . 33
8.07 Regulations U and X . . . . . . . . . . . . 34
8.08 ERISA . . . . . . . . . . . . . . . . . . . 34
8.09 Taxes . . . . . . . . . . . . . . . . . . . 34
8.10 Subsidiaries . . . . . . . . . . . . . . . . 34
8.11 Investment Company Act . . . . . . . . . . . 35
8.12 Public Utility Holding Company Act . . . . . 35
8.13 Ownership and Use of Properties . . . . . . 35
8.14 Environmental Matters . . . . . . . . . . . 35
Section 9 Covenants . . . . . . . . . . . . . . . . . 36
9.01 Information . . . . . . . . . . . . . . . . 36
9.02 Taxes and Claims . . . . . . . . . . . . . . 38
9.03 Insurance . . . . . . . . . . . . . . . . . 38
9.04 Maintenance of Existence; Conduct
of Business . . . . . . . . . . . . . . . . 38
9.05 Maintenance of and Access to Properties . . 39
9.06 Compliance with Applicable Laws . . . . . . 39
9.07 Litigation . . . . . . . . . . . . . . . . . 39
9.08 Leverage Ratio . . . . . . . . . . . . . . 39
9.09 Interest Coverage Ratio . . . . . . . . . . 39
9.10 Mergers, Asset Dispositions, Etc. . . . . . 40
9.11 Liens . . . . . . . . . . . . . . . . . . . 40
9.12 Investments . . . . . . . . . . . . . . . . 41
ii
<PAGE> 4
Page
----
9.13 Transactions with Affiliates . . . . . . . . 41
9.14 Lines of Business . . . . . . . . . . . . . 42
9.15 Environmental Matters . . . . . . . . . . . 42
9.16 Lease Payments . . . . . . . . . . . . . . . 42
Section 10 Defaults . . . . . . . . . . . . . . . . . 43
10.01 Events of Default . . . . . . . . . . . . . 43
Section 11 The Administrative Agent . . . . . . . . . . 46
11.01 Appointment, Powers and Immunities . . . . . 46
11.02 Reliance by Administrative Agent . . . . . . 46
11.03 Defaults . . . . . . . . . . . . . . . . . . 47
11.04 Rights as a Lender . . . . . . . . . . . . . 47
11.05 Indemnification . . . . . . . . . . . . . . 48
11.06 Non-Reliance on Administrative Agent
and Other Lenders . . . . . . . . . . . . 48
11.07 Failure to Act . . . . . . . . . . . . . . . 49
11.08 Resignation or Removal of
Administrative Agent . . . . . . . . . . . 49
11.09 Co-Agents . . . . . . . . . . . . . . . . . 49
Section 12 Miscellaneous . . . . . . . . . . . . . . . 50
12.01 Waiver . . . . . . . . . . . . . . . . . . . 50
12.02 Notices . . . . . . . . . . . . . . . . . . 50
12.03 Expenses, Etc. . . . . . . . . . . . . . . . 50
12.04 Indemnification . . . . . . . . . . . . . . 50
12.05 Amendments, Etc. . . . . . . . . . . . . . . 51
12.06 Successors and Assigns . . . . . . . . . . . 51
12.07 Confidentiality . . . . . . . . . . . . . . 53
12.08 Survival . . . . . . . . . . . . . . . . . . 53
12.09 Captions . . . . . . . . . . . . . . . . . . 53
12.10 Counterparts; Integration . . . . . . . . . 53
12.11 GOVERNING LAW; SUBMISSION TO
JURISDICTION; WAIVER OF JURY TRIAL . . . . 54
iii
<PAGE> 5
Schedules
---------
PRICING SCHEDULE
SCHEDULE I - Subsidiaries and Joint Ventures
Exhibits
--------
EXHIBIT A - Form of Note
EXHIBIT B-1 - Form of Opinion of Counsel to
the Company
EXHIBIT B-2 - Form of Opinion of General Counsel
of the Company
EXHIBIT C - Form of Opinion of Special Counsel to
the Administrative Agent
EXHIBIT D - Form of Extension Agreement
iv
<PAGE> 6
CREDIT AGREEMENT
AGREEMENT dated as of June 23, 1994 among: RPM,
INC., a corporation duly organized and validly existing
under the laws of the State of Ohio (together with its
successors, the "COMPANY"); each of the lenders which is or
which may from time to time become a signatory hereto
(individually, together with its successors, a "LENDER" and,
collectively, together with their respective successors, the
"LENDERS"; NATIONAL CITY BANK and THE FIRST NATIONAL BANK
OF CHICAGO, as co-agents for the Lenders (in such capacity,
the "CO-AGENTS"); and THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as administrative agent for the Lenders (in
such capacity, together with its successors in such
capacity, the "ADMINISTRATIVE AGENT").
The parties hereto agree as follows:
Section 1. DEFINITIONS AND ACCOUNTING MATTERS.
1.01 CERTAIN DEFINED TERMS. As used herein, the
following terms shall have the following meanings (all terms
defined in this Section 1.01 or in other provisions of this
Agreement in the singular to have the same meanings when
used in the plural and VICE VERSA):
"ACCEPTABLE INSURER" means an insurance company
(i) having an A.M. Best rating of "A" or better and being in
a financial size category of X or larger (as such category
is defined as of the date hereof) or (ii) otherwise
acceptable to the Majority Lenders.
"ACQUIRED BUSINESS" shall mean substantially all
of the stock of Rust-Oleum Corporation.
"ACQUISITION" shall mean the acquisition by the
Company of the Acquired Business and all other transactions
contemplated by the Acquisition Documents to be consummated
on or before the Closing Date.
"ACQUISITION DOCUMENTS" shall mean the Agreement
and Plan of Merger dated May 3, 1994 between the Company and
certain Shareholders of Rust-Oleum Corporation, including
the exhibits and schedules thereto, and all material
agreements, documents and instruments executed and delivered
by or addressed to or specifically required by the Company
pursuant to or in connection with any of the foregoing.
"ADJUSTED CD RATE", for any CD Loans, shall mean
for the Interest Period for such Loans a rate per annum
<PAGE> 7
determined by the Administrative Agent pursuant to the
following formula:
[ CDBR ]
ACDR = -------------- + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate for the Interest
Period for such Loans (rounded
upward, if necessary, to the
next higher 1/100 of 1%)
DRP = Domestic Reserve Percentage
AR = Assessment Rate
"AFFILIATE" shall mean, as to any Person, any
other Person which directly or indirectly controls, or is
under common control with, or is controlled by, such Person
and, if such Person is an individual, any member of the
immediate family (including parents, siblings, spouse,
children, stepchildren, nephews, nieces and grandchildren)
of such individual and any trust whose principal beneficiary
is such individual or one or more members of such immediate
family and any Person who is controlled by any such member
or trust. As used in this definition, "CONTROL" (including,
with correlative meanings, "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH") shall mean possession, directly or
indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of
securities or partnership or other ownership interests, by
contract or otherwise), PROVIDED that, in any event, any
Person which owns directly or indirectly more than 5% of the
securities having ordinary voting power for the election of
directors or other governing body of a corporation or more
than 5% of the partnership or other ownership interests of
any other Person (other than as a limited partner of such
other Person) will be deemed to control such corporation or
other Person.
"APPLICABLE LENDING OFFICE" shall mean, for each
Lender and for each Type of Loan, the Lending Office of such
Lender (or of an affiliate of such Lender) designated for
such Type of Loan below its name on the signature pages
hereof or such other office of such Lender (or of an
affiliate of such Lender) as such Lender may from time to
time specify to the Administrative Agent and the Company as
the office by which its Loans of such Type are to be made
and/or issued and maintained.
"APPLICABLE MARGIN" shall mean, with respect to
any Loan, the rate per annum (calculated as a function of
the Type of such Loan) determined in accordance with the
Pricing Schedule.
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<PAGE> 8
"ASSESSMENT RATE" shall mean, for any day, the
annual assessment rate in effect on such day which is
payable by a member of the Bank Insurance Fund classified as
adequately capitalized and within supervisory subgroup "A"
(or a comparable successor assessment risk classification)
within the meaning of 12 C.F.R. Section 327.3(d) (or any successor
provision) to the Federal Deposit Insurance Corporation (or
any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of such institution in the
United States. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change
in the Assessment Rate.
"BANKRUPTCY CODE" shall mean the United States
Bankruptcy Code, as now or hereafter in effect, or any
successor statute.
"BASE RATE" shall mean, with respect to any Base
Rate Loan for any day, the rate per annum equal to the
higher as of such day of (i) the Federal Funds Rate plus 1/2
of 1% or (ii) the Prime Rate.
"BASE RATE LOANS" shall mean Loans which bear
interest at a rate based upon the Base Rate.
"BASIC DOCUMENTS" shall mean this Agreement, the
Notes and the Acquisition Documents.
"BUSINESS DAY" shall mean any day other than a day
on which commercial banks are authorized or required to
close in New York City and, where such term is used in the
definition of "Quarterly Date" in this Section 1.01 or if
such day relates to a borrowing of, a payment or prepayment
of principal of or interest on, a conversion of or into, or
an Interest Period for, a Eurodollar Loan or a notice by the
Company with respect to any such borrowing, payment,
prepayment, conversion or Interest Period, which is also a
day on which dealings in Dollar deposits are carried out in
the London interbank market.
"CAPITAL LEASE OBLIGATIONS" shall mean, as to any
Person, the obligations of such Person to pay rent or other
amounts under a lease of (or other agreement conveying the
right to use) real and/or personal property to the extent
such obligations are required to be classified and accounted
for as a capital lease on a balance sheet of such Person
under GAAP (including Statement of Financial Accounting
Standards No. 13 of the Financial Accounting Standards
Board) and, for purposes of this Agreement, the amount of
such obligations shall be the capitalized amount thereof,
determined in accordance with GAAP (including such Statement
No. 13).
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<PAGE> 9
"CD BASE RATE" shall mean, with respect to any CD
Loans, the arithmetic mean, as calculated by the
Administrative Agent, of the respective rates per annum
(rounded upwards, if necessary, to the nearest 1/20 of 1%)
of the Reference Lenders, in each such case determined by
the Reference Lender to be the average of the bid rates
quoted to it at its principal office at approximately 10:00
a.m. New York City time (or as soon thereafter as
practicable) on the first day of the Interest Period for
such Loan by New York certificate of deposit dealers of
recognized standing selected by such Reference Lender for
the purchase at face value of certificates of deposit of
such Reference Lender with a term, and in an amount,
comparable to such Interest Period and the principal amount
of the CD Loan which shall be made by such Reference Lender
and outstanding during such Interest Period; provided that,
if such quotations from such dealers are not available to
such Reference Lender, such Lender shall notify the
Administrative Agent of a reasonably equivalent rate
determined by it on the basis of another source or sources
selected by it.
"CD LOANS" shall mean Loans, the interest on which
is determined on the basis of rates referred to in the
definition of "CD Base Rate" in Section 1.01.
"CERCLA" shall mean the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, and regulations
promulgated thereunder.
"CHASE" shall mean The Chase Manhattan Bank
(National Association) and its successors.
"CLOSING DATE" shall mean the date of the initial
Loans hereunder.
"CODE" shall mean the Internal Revenue Code of
1986, as amended, or any successor statute.
"COMMITMENT" shall mean, as to any Lender, the
obligation of such Lender to make Loans in an aggregate
principal amount at any one time outstanding up to but not
exceeding the amount set forth opposite such Lender's name
on the signature pages hereof under the caption "Commitment"
(as the same may be reduced from time to time pursuant to
Section 2.02 hereof).
"CONTROLLED GROUP" shall mean all members of a
controlled group of corporations and all trades or
businesses (whether or not incorporated) under common
control which, together with the Company, are treated as a
single employer under Section 414 of the Code.
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<PAGE> 10
"DEFAULT" shall mean an Event of Default or an
event which with notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DISCLOSURE DOCUMENTS" shall mean the Company's
annual report on Form 10-K for 1993 and quarterly reports on
Form 10-Q for the quarterly periods ended August 31, 1993,
November 30, 1993 and February 28, 1994, in each case as
filed with the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934, and the audited
consolidated financial statements of Rust-Oleum Corporation
as of and for the fiscal year ended October 31, 1993
included in the schedules forming part of the Acquisition
Documents.
"DOLLARS" and "$" shall mean lawful money of the
United States of America.
"DOMESTIC RESERVE PERCENTAGE" shall mean, for any
day, that percentage (expressed as a decimal) which is in
effect on such day, as prescribed by the Board of Governors
of the Federal Reserve System (or any successor), for
determining the maximum reserve requirement (including
without limitation any basic, supplemental or emergency
reserves) for a member bank of the Federal Reserve System in
New York City with deposits exceeding five billion dollars
in respect of new non-personal time deposits in dollars in
New York City having a maturity comparable to the Interest
Period for which the Adjusted CD Rate is being determined
and in an amount of $100,000 or more. The Adjusted CD Rate
shall be adjusted automatically on and as of the effective
date of any change in the Domestic Reserve Percentage.
"EBIT" shall mean, for any period, determined on a
consolidated basis for the Company and its Subsidiaries, net
operating income of the Company and its Subsidiaries
(calculated before provision for income taxes, interest
expense, extraordinary items and income attributable to
equity in affiliates) for such period.
"ENVIRONMENTAL LAWS" shall mean any and all
applicable federal, state, local and foreign statutes, laws,
judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, codes, injunctions, permits,
concessions, grants, franchises, licenses, agreements and
other governmental restrictions relating to the environment
or the effect of the environment on human health or to
emissions, discharges or release of pollutants,
contaminants, Hazardous Substances or wastes into the
environment, including, without limitation, ambient air,
surface water, ground water, or land, or otherwise relating
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<PAGE> 11
to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of
pollutants, contaminants, Hazardous Substances or wastes or
the clean-up or other remediation thereof.
"ENVIRONMENTAL LIABILITIES" shall mean all
liabilities in connection with or relating to the business,
assets, presently or previously owned or leased property,
activities (including, without limitation, off-site
disposal) or operations of the Company and each Subsidiary,
whether vested or unvested, contingent or fixed, actual or
potential, known or unknown, which arise under or relate to
matters covered by Environmental Laws.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"EURODOLLAR BASE RATE" shall mean, with respect to
any Eurodollar Loans, the arithmetic mean, as calculated by
the Administrative Agent, of the respective rates per annum
(rounded upwards, if necessary, to the nearest 1/16 of 1%)
quoted by the Reference Lenders at approximately 11:00 a.m.
London time by the principal London branch of each of the
Reference Lenders on the day two Business Days prior to the
first day of the Interest Period for such Loans for the
offering to leading banks in the London interbank market of
Dollar deposits in immediately available funds, for a
period, and in an amount, comparable to such Interest Period
and the principal amount of the Eurodollar Loan which shall
be made by such Reference Lender and outstanding during such
Interest Period. If any Reference Lender is not
participating in any Eurodollar Loans during the Interest
Period therefor (pursuant to Section 6.04 hereof or for any
other reason), the Eurodollar Base Rate for such Loans for
such Interest Period shall be determined by reference to the
amount of the Loan which such Reference Lender would have
made had it been participating in such Loans. If any
Reference Lender does not furnish a timely quotation, the
Administrative Agent shall determine the relevant interest
rate on the basis of the quotation or quotations furnished
by the remaining Reference Lender or Lenders or, if none of
such quotations is available on a timely basis, the
provisions of Section 6.02 shall apply.
"EURODOLLAR LOANS" shall mean Loans the interest
on which is determined on the basis of rates referred to in
the definition of "Eurodollar Base Rate" in this Section
1.01.
"EURODOLLAR RATE" shall mean, for any Eurodollar
Loans, a rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by the Administrative
Agent to be equal to (i) the Eurodollar Base Rate for such
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<PAGE> 12
Loans for the Interest Period for such Loans divided by
(ii) 1 minus the Eurodollar Reserve Requirement for such
Loans for such Interest Period.
"EURODOLLAR RESERVE REQUIREMENT" shall mean, for
any Eurodollar Loans for any Interest Period therefor, the
average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required
to be maintained during such Interest Period under
Regulation D by member banks of the Federal Reserve System
in New York City with deposits exceeding one billion Dollars
against "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks by
reason of any Regulatory Change against (i) any category of
liabilities which includes deposits by reference to which
the Eurodollar Rate is to be determined as provided in the
definition of "Eurodollar Base Rate" in this Section 1.01 or
(ii) any category of extensions of credit or other assets
which include Eurodollar Loans.
"EVENT OF DEFAULT" shall have the meaning assigned
to such term in Section 10.01 hereof.
"FEDERAL FUNDS RATE" shall mean, for any day, the
rate per annum (rounded upwards, if necessary, to the
nearest 1/100th of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such
day, provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the
average rate charged to Chase on such day on such
transactions as determined by the Administrative Agent.
"FIXED RATE LOANS" shall mean CD Loans or
Eurodollar Loans or both, as the context may require.
"GAAP" shall mean generally accepted accounting
principles as in effect from time to time in the United
States consistently applied.
"GUARANTY" by any Person shall mean any
obligation, contingent or otherwise, of such Person directly
or indirectly guaranteeing any Indebtedness of any other
Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or
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<PAGE> 13
otherwise, of such Person (i) to purchase or pay (or advance
or supply funds for the purchase or payment of) such
Indebtedness (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise, other
than agreements to purchase goods at an arm's length price
in the ordinary course of business) or (ii) entered into for
the purpose of assuring in any other manner the holder of
such Indebtedness of the payment thereof or to protect such
holder against loss in respect thereof (in whole or in
part), PROVIDED that the term Guaranty shall not include
endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has
a corresponding meaning.
"HAZARDOUS SUBSTANCES" shall mean any toxic,
radioactive, caustic or otherwise hazardous substance,
including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having constituent elements
displaying any of the foregoing characteristics, regulated
under Environmental Laws.
"INDEBTEDNESS" shall mean, as to any Person
(determined without duplication): (i) indebtedness of such
Person for borrowed money (whether by loan or the issuance
and sale of debt securities) or for the deferred purchase or
acquisition price of property or services, other than
accounts payable (other than for borrowed money) incurred in
the ordinary course of business; (ii) obligations of such
Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial
institutions for the account of such Person (whether or not
such obligations are contingent); (iii) Capital Lease
Obligations of such Person; (iv) obligations of such Person
to redeem or otherwise retire shares of capital stock of
such Person; (v) indebtedness of others of the type
described in clause (i), (ii), (iii) or (iv) above secured
by a Lien on the property of such Person, whether or not the
respective obligation so secured has been assumed by such
Person; and (vi) indebtedness of others of the type
described in clause (i), (ii), (iii) or (iv) above
Guaranteed by such Person.
"INTEREST EXPENSE" shall mean, for any period, the
sum (determined without duplication) of the aggregate amount
of interest accruing during such period on Indebtedness of
the Company and its Subsidiaries (on a consolidated basis),
including the interest portion of payments under Capital
Lease Obligations and any capitalized interest, and
excluding amortization of debt discount and expense.
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<PAGE> 14
"INTEREST PERIOD" shall mean,
(1) with respect to any Eurodollar Loans, the
period commencing on the date such Loans are made or
converted from other types of Loans or the last day of the
next preceding Interest Period with respect to such Loans
and ending on the numerically corresponding day in the
first, second (subject to the availability of deposits of
the corresponding maturity to each of the Lenders in the
London interbank market), third or sixth calendar month
thereafter, as the Company may select as provided in Section
5.05 hereof, except that each such Interest Period which
commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end
on the last Business Day of the appropriate subsequent
calendar month; and
(2) with respect to any CD Loans, the period
commencing on the date such CD Loans are made or converted
from other Types of Loans or the last day of the next
preceding Interest Period with respect to such Loans and
ending on the day 30, 60, 90 or 180 days thereafter, as the
Company may select as provided in Section 5.05 hereof.
Notwithstanding the foregoing: (i) each Interest
Period which would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day
(or, in the case of an Interest Period for Eurodollar Loans,
if such next succeeding Business Day falls in the next
succeeding calendar month, on the next preceding Business
Day); and (ii) no Interest Period for any Fixed Rate Loans
shall have a duration of less than one month (in the case of
Eurodollar Loans) or 30 days (in the case of CD Loans) and,
if the Interest Period for any Fixed Rate Loan would
otherwise be a shorter period, such Loans shall not be
available hereunder.
"INVESTMENTS" shall have the meaning assigned to
such term in Section 9.12 hereof.
"LIEN" shall mean, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset. For the
purposes of this Agreement, the Company and each of its
Subsidiaries shall be deemed to own subject to a Lien any
asset which it has acquired or holds subject to the interest
of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to
such asset.
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<PAGE> 15
"LIQUID INVESTMENTS" shall mean (i) certificates
of deposit maturing within 90 days of the acquisition
thereof denominated in Dollars and issued by (X) a Lender or
(Y) a bank or trust company having combined capital and
surplus of at least $500,000,000 and which has (or which is
a Subsidiary of a bank holding company which has) publicly
traded debt securities rated A- or higher by Standard &
Poor's Corporation or A-3 or higher by Moody's Investors
Service, Inc.; (ii) obligations issued or guaranteed by the
United States of America, with maturities not more than one
year after the date of issue; and (iii) commercial paper
with maturities of not more than 90 days and a published
rating of not less than A-1 from Standard & Poor's
Corporation or P-1 from Moody's Investors Service, Inc.
"LOANS" shall mean the loans provided for by
Section 2.01 hereof.
"MAJORITY LENDERS" shall mean, at any time while
no Loans are outstanding, Lenders having at least 66-2/3% of
the aggregate amount of the Commitments and, at any time
while any Loans are outstanding, Lenders holding at least
66-2/3% of the outstanding aggregate principal amount of the
Loans.
"MATERIAL ADVERSE EFFECT" means (i) a material
adverse effect on the condition (financial or otherwise),
results of operations, properties, assets, liabilities
(including, without limitation, tax and ERISA liabilities
and Environmental Liabilities), business, operations,
capitalization, shareholders' equity, franchises or
prospects of the Company and its Subsidiaries, taken as a
whole; or (ii) a material adverse effect on the ability of
the Company to perform its obligations under the Credit
Agreement or the Notes.
"MULTIEMPLOYER PLAN" shall mean at any time an
employee pension benefit plan within the meaning of Section
4001(a)(3) of ERISA to which the Company or any member of
the Controlled Group is then making or accruing an
obligation to make contributions or has within the preceding
five plan years made contributions, including for these
purposes any Person which ceased to be a member of the
Controlled Group during such five year period.
"NOTES" shall have the meaning assigned to such
term in Section 2.06 hereof.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
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<PAGE> 16
"PERSON" shall mean an individual, a corporation
a company, a voluntary association, a partnership, a trust,
an unincorporated organization or a government or any
agency, instrumentality or political subdivision thereof.
"PLAN" shall mean an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title
IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code and either (i) is maintained
or contributed to, by the Company or any member of the
Controlled Group for employees of the Company or any member
of the Controlled Group or (ii) has at any time within the
preceding five years been maintained, or contributed to, by
the Company or any Person which was at such time a member of
the Controlled Group for employees of any Person which was
at such time a member of the Controlled Group.
"POST-DEFAULT RATE" shall mean, in respect of any
principal of any Loan or any other amount payable by the
Company under this Agreement, a rate per annum equal to the
sum of 2% plus the higher of (i) the Base Rate as in effect
from time to time PLUS the Applicable Margin for Base Rate
Loans and (ii) in the case of any Loan, the rate of interest
(if any) otherwise applicable to such Loan.
"PRICING SCHEDULE" shall mean the Pricing Schedule
attached hereto.
"PRIME RATE" shall mean the rate of interest from
time to time announced by Chase at the Principal Office as
its prime commercial lending rate. Each change in the
interest rate provided for herein resulting from a change in
the Prime Rate shall take effect at the time of such change
in the Prime Rate.
"PRINCIPAL OFFICE" shall mean the principal office
of Chase, presently located at 1 Chase Manhattan Plaza, New
York, New York 10081.
"QUARTERLY DATES" shall mean the last Business Day
of each March, June, September and December.
"REFERENCE LENDERS" shall mean each of National
City Bank, The First National Bank of Chicago and Chase.
"REGULATION D" shall mean Regulation D of the
Board of Governors of the Federal Reserve System as the same
may be amended or supplemented from time to time.
"REGULATORY CHANGE" shall mean, with respect to
any Lender, any change on or after the date of this
Agreement in United States federal, state or foreign laws or
regulations (including Regulation D) or the adoption or
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<PAGE> 17
making on or after such date of any interpretations,
directives or requests applying to a class of lenders
including such Lender of or under any United States federal
or state, or any foreign, laws or regulations (whether or
not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or
administration thereof.
"RELEASE" shall mean any discharge, emission or
release, including a "Release" as defined in CERCLA at 42
U.S.C. Section 9601(22). The term "Released" shall have a
corresponding meaning.
"REVOLVING CREDIT PERIOD" shall mean the period
from and including the date hereof to but not including June
28, 1997, or such later date to which the Revolving Credit
Period shall have been extended pursuant to Section 2.01(b).
"SENIOR OFFICER" shall mean the chief executive
officer, president, chief financial officer or vice
president-finance and treasurer of the Company.
"SIGNIFICANT SUBSIDIARY" shall mean at any
time any Subsidiary of the Company, except Subsidiaries
of the Company which, if aggregated and considered as a
single Subsidiary at the time of occurrence with respect to
such Subsidiaries of any event or condition of the kind
described in clause (e), (f) or (g) of Section 10.01, would
not meet the definition of a "significant subsidiary"
contained as of the date hereof in Regulation S-X of the
Securities and Exchange Commission.
"SUBSIDIARY" shall mean, with respect to any
Person, any corporation of which at least a majority of the
outstanding shares of stock having by the terms thereof
ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether or
not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time directly
or indirectly owned or controlled by such Person or one or
more of the Subsidiaries of such Person or by such Person
and one or more of the Subsidiaries of such Person.
"TYPE" shall have the meaning assigned to such
term in Section 1.03 hereof.
"UNFUNDED LIABILITIES" shall mean, with respect to
any Plan, at any time, the amount (if any) by which (i) the
value of all benefits liabilities under such Plan,
determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of
ERISA, exceeds (ii) the fair market value of all Plan assets
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<PAGE> 18
allocable to such benefits under Title IV of ERISA
(excluding any accrued but unpaid contributions), all
determined as of the then most recent valuation date for
such Plan, but only to the extent that such excess
represents a potential liability of the Company or any
member of the Controlled Group to the PBGC or any other
Person under Title IV of ERISA.
1.02 ACCOUNTING TERMS AND DETERMINATIONS. Unless
otherwise specified herein, all accounting terms used herein
shall be interpreted, all determinations with respect to
accounting matters hereunder shall be made, and all
financial statements and certificates and reports as to
financial matters required to be delivered hereunder shall
be prepared, in accordance with GAAP; PROVIDED that if any
change in GAAP in itself materially affects the calculation
of any financial covenant in Section 9, the Company may by
notice to the Administrative Agent, or the Administrative
Agent (at the request of the Majority Lenders) may by notice
to the Company, require that such covenant thereafter be
calculated in accordance with GAAP as in effect, and applied
by the Company, immediately before such change in GAAP
occurs. If such notice is given, the compliance
certificates delivered pursuant to Section 9.01 after such
change occurs shall be accompanied by reconciliations of the
difference between the calculation set forth therein and a
calculation made in accordance with GAAP as in effect from
time to time after such change occurs. To enable the ready
determination of compliance with the covenants set forth in
Section 9 hereof, the Company will not change from May 31 in
each year the date on which its fiscal year ends, nor from
August 31, November 30 and February 28 the dates on which
the first three fiscal quarters in each fiscal year end.
1.03 TYPES OF LOANS. Loans hereunder are
distinguished by "Type". The "Type" of a Loan refers to the
determination whether such Loan is a Eurodollar Loan, a CD
Loan or a Base Rate Loan.
Section 2. COMMITMENTS.
2.01 LOANS. (a) Each Lender severally agrees,
on the terms and subject to the conditions of this
Agreement, to make Loans from time to time during the
Revolving Credit Period to the Company in an aggregate
principal amount at any one time outstanding which shall not
exceed its Commitment, as reduced from time to time pursuant
to Section 2.02 hereof.
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(b) The Revolving Credit Period may be extended,
in the manner set forth in this subsection (b), on each of
June 28, 1995 and, if (and only if) it has been extended on
June 28, 1995, June 28, 1996 (an "Extension Date") for a
period of one year after the date on which the Revolving
Credit Period would otherwise have expired. If the Company
wishes to request an extension of the Revolving Credit
Period on an Extension Date, it shall give written notice to
that effect to the Administrative Agent not less than 45 nor
more than 90 days prior to such Extension Date, whereupon
the Administrative Agent shall notify each of the Lenders of
such notice. Each Lender will use its best efforts to
respond to such request, whether affirmatively or
negatively, within 30 days. If all Lenders respond
affirmatively, then, subject to receipt by the
Administrative Agent prior to such Extension Date of
counterparts of an Extension Agreement in substantially the
form of Exhibit D hereto duly completed and signed by all of
the parties hereto, the Revolving Credit Period shall be
extended, effective on such Extension Date, for a period of
one year to the date stated in such Extension Agreement.
2.02 REDUCTIONS OF COMMITMENTS.
(a) MANDATORY. The Commitments shall terminate
on the last day of the Revolving Credit Period; PROVIDED,
that if the Closing Date shall not have occurred by December
31, 1994, the Commitments shall terminate on such date.
(b) OPTIONAL. The Company shall have the right
to terminate or reduce the Commitments at any time or from
time to time, provided that: (i) the Company shall give
notice of each such termination or reduction to the
Administrative Agent as provided in Section 5.05 hereof and
(ii) each partial reduction shall be in an aggregate amount
equal to $10,000,000 or any greater multiple of $5,000,000.
(c) NO REINSTATEMENT. Commitments once
terminated or reduced may not be reinstated.
2.03 FEES.
(a) COMMITMENT FEES. The Company shall pay to
the Administrative Agent for the account of each Lender
commitment fees on the daily average unused amount of such
Lender's Commitment, for the period from the Closing Date to
and including the earlier of the date the Commitments are
terminated or the last day of the Revolving Credit Period,
at a commitment fee rate per annum determined in accordance
with the Pricing Schedule. Accrued commitment fees shall be
payable on the Quarterly Dates and on the earlier of the
date the Commitments are terminated or the last day of the
Revolving Credit Period.
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<PAGE> 20
(b) OTHER FEES. The Company shall pay to the
Administrative Agent on the Closing Date other fees in the
amounts heretofore mutually agreed. The Company shall pay
to the Administrative Agent on the Closing Date and on each
anniversary thereof, so long as any of the Commitments are
in effect and until payment in full of all Loans hereunder,
all interest thereon and all other amounts payable
hereunder, an annual administrative agency fee in the amount
heretofore mutually agreed.
2.04 LENDING OFFICES. The Loans of each Type
made by each Lender shall be made and maintained at such
Lender's Applicable Lending Office for Loans of such Type.
2.05 SEVERAL OBLIGATIONS. The failure of any
Lender to make any Loan to be made by it on the date
specified therefor shall not relieve any other Lender of its
obligation to make its Loan on such date, but neither the
Administrative Agent nor any Lender shall be responsible for
the failure of any other Lender to make a Loan to be made by
such other Lender.
2.06 NOTES. The Loans made by each Lender shall
be evidenced by a single Note of the Company (each a "Note")
in substantially the form of Exhibit A hereto, dated the
Closing Date, payable to the order of such Lender in a
principal amount equal to such Lender's Commitment as
originally in effect and otherwise duly completed. Each
Lender may, by notice to the Company and the Administrative
Agent, request that its Loans of a particular Type be
evidenced by a separate Note in an amount equal to the
aggregate unpaid principal amount of such Loans. Each such
Note shall be in substantially the form of Exhibit A hereto
with appropriate modifications to reflect the fact that it
evidences solely Loans of the relevant Type. Each reference
in this Agreement to the "Note" of such Lender shall be
deemed to refer to and include any or all of such Notes, as
the context may require. Each Lender is hereby authorized
by the Company to endorse on the schedule (or a continuation
thereof) attached to each Note of such Lender, to the extent
applicable, the date, amount and Type of and the Interest
Period (if any) for each Loan made by such Lender to the
Company hereunder, and the date and amount of each payment
or prepayment of principal of such Loan received by such
Lender, provided that any failure by such Lender to make any
such endorsement or any error in such endorsement shall not
affect the obligations of the Company under such Note or
hereunder in respect of such Loan.
2.07 USE OF PROCEEDS. The proceeds of the Loans
shall be used by the Company to refinance certain existing
indebtedness, to finance the consummation of the Acquisition
and for working capital and other general corporate
15
<PAGE> 21
purposes. None of such proceeds shall be used, directly or
indirectly, for the purpose, whether immediate, incidental
or ultimate, of buying or carrying any margin stock (within
the meaning of Regulation U or X of the Board of Governors
of the Federal Reserve System).
Section 3. BORROWINGS, CONVERSIONS AND
PREPAYMENTS.
3.01 BORROWINGS. The Company shall give the
Administrative Agent notice of each borrowing to be made
hereunder as provided in Section 5.05 hereof. Not later
than 11:00 a.m. (or, in the case of Base Rate Loans,
1:00 p.m.) New York time on the date specified for each such
borrowing hereunder, each Lender shall make available the
amount of the Loan to be made by it on such date to the
Administrative Agent, at the Principal Office, in
immediately available funds, for the account of the Company.
The amount so received by the Administrative Agent shall,
subject to the terms and conditions of this Agreement, be
made available to the Company by depositing the same, in
immediately available funds, in an account designated by the
Company maintained with the Administrative Agent at the
Principal Office.
3.02 PREPAYMENTS AND CONVERSIONS. The Company
shall have the right to prepay Loans or to convert Loans of
one Type into Loans of another Type, at any time or from
time to time, provided that: (i) the Company shall give the
Administrative Agent notice of each such prepayment or
conversion as provided in Section 5.05 hereof, and (ii)
except to the extent required pursuant to Section 6.04
hereof, Fixed Rate Loans may be prepaid or converted only on
the last day of an Interest Period for such Loans.
Section 4. PAYMENTS OF PRINCIPAL AND INTEREST.
4.01 REPAYMENT OF LOANS. The Loans shall mature
on the last day of the Revolving Credit Period.
4.02 INTEREST. The Company will pay to the
Administrative Agent for the account of each Lender interest
on the unpaid principal amount of each Loan made by such
Lender for the period commencing on the date of such Loan to
but excluding the date such Loan shall be paid in full, at
the following rates per annum:
(a) if such Loan is a Base Rate Loan, the Base
Rate PLUS the Applicable Margin;
(b) if such Loan is a Eurodollar Loan, the
Eurodollar Rate PLUS the Applicable Margin; and
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<PAGE> 22
(c) if such Loan is a CD Loan, the Adjusted CD
Rate PLUS the Applicable Margin.
Notwithstanding any of the foregoing, the Company will pay
to the Administrative Agent for the account of each Lender
interest at the applicable Post-Default Rate on the
principal of any Loan made by such Lender and on any other
amount payable by the Company hereunder to or for the
account of such Lender (but, if such amount is interest,
only to the extent legally enforceable), which shall not be
paid in full when due (whether at stated maturity, by
acceleration or otherwise) for the period commencing on the
due date thereof until the same is paid in full.
Accrued interest on each Loan shall be payable (i)
if such Loan is a Base Rate Loan, on each Quarterly Date,
(ii) if such Loan is a Fixed Rate Loan, on the last day of
the Interest Period for such Loan (and, if such Interest
Period exceeds 90 days' (in the case of a CD Loan) or three
months' (in the case of a Eurodollar Loan) duration,
quarterly, commencing on the first quarterly anniversary of
the first day of such Interest Period), and (iii) in any
event, upon the payment, prepayment or conversion thereof,
but only on the principal so paid or prepaid or converted;
PROVIDED that interest payable at the Post-Default Rate
shall be payable from time to time on demand of the
Administrative Agent or the Majority Lenders. Promptly
after the determination of any interest rate provided for
herein or any change therein, the Administrative Agent shall
notify the Lenders and the Company thereof.
Notwithstanding the foregoing provisions of this
Section 4.02, if at any time the rate of interest set forth
above on any Loan of or other obligation payable to any
Lender (the "STATED RATE") exceeds the maximum non-usurious
interest rate permissible for such Lender to charge
commercial borrowers under applicable law (the "MAXIMUM
RATE" for such Lender), the rate of interest charged on such
Loan of or other obligation payable to such Lender hereunder
shall be limited to the Maximum Rate for such Lender.
If the Stated Rate for any Loan of a Lender that
has theretofore been subject to the preceding paragraph at
any time is less than the Maximum Rate for such Lender, the
principal amount of such Loan shall bear interest at the
Maximum Rate for such Lender until the total amount of
interest paid to such Lender or accrued on its Loans
hereunder equals the amount of interest which would have
been paid to such Lender or accrued on such Lender's Loans
hereunder if the Stated Rate had at all times been in
effect.
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<PAGE> 23
If, upon payment in full of all amounts payable
hereunder, the total amount of interest paid to any Lender
or accrued on such Lender's Loans under the terms of this
Agreement is less than the total amount of interest which
would have been paid to such Lender or accrued on such
Lender's Loans if the Stated Rate had, at all times, been in
effect, then the Company shall, to the extent permitted by
applicable law, pay to the Administrative Agent for the
account of such Lender an amount equal to the difference
between (a) the lesser of (i) the amount of interest which
would have accrued on such Lender's Loans if the Maximum
Rate for such Lender had at all times been in effect or (ii)
the amount of interest which would have accrued on such
Lender's Loans if the Stated Rate had at all times been in
effect and (b) the amount of interest actually paid to such
Lender or accrued on its Loans under this Agreement.
If any Lender ever receives, collects or applies
as interest any sum in excess of the Maximum Rate for such
Lender, such excess amount shall be applied to the reduction
of the principal balance of its Loans or to other amounts
(other than interest) payable hereunder, and if no such
principal is then outstanding, such excess or part thereof
remaining shall be paid to the Company.
Section 5. PAYMENTS; PRO RATA TREATMENT;
COMPUTATIONS; ETC.
5.01 PAYMENTS. Except to the extent otherwise
provided herein, all payments of principal, interest and
other amounts to be made by the Company hereunder and under
the Notes shall be made in Dollars, in immediately available
funds, to the Administrative Agent at the Principal Office,
not later than 11:00 a.m. New York time on the date on which
such payment shall become due (each such payment made after
such time on such due date to be deemed to have been made on
the next succeeding Business Day). The Administrative
Agent, or any Lender for whose account any such payment is
made, may (but shall not be obligated to) debit the amount
of any such payment which is not made by such time to any
ordinary deposit account of the Company with the
Administrative Agent or such Lender, as the case may be.
The Company shall, at the time of making each payment
hereunder or under any Note, specify to the Administrative
Agent the Loans or other amounts payable by the Company
hereunder to which such payment is to be applied (and in the
event that it fails to so specify, or if an Event of Default
has occurred and is continuing, the Administrative Agent may
apply such payment as it may elect in its sole discretion to
amounts then due, but subject to the other terms and
conditions of this Agreement, including, without limitation,
Section 5.02 hereof). Each payment received by the
Administrative Agent hereunder or under any Note for the
18
<PAGE> 24
account of a Lender shall be paid promptly to such Lender,
in immediately available funds, for the account of such
Lender's Applicable Lending Office. If the due date of any
payment hereunder or under any Note would otherwise fall on
a day which is not a Business Day such date shall be
extended to the next succeeding Business Day and interest
shall be payable for any principal so extended for the
period of such extension.
5.02 PRO RATA TREATMENT. Except to the extent
otherwise provided herein: (a) each borrowing from the
Lenders under Section 2.01 hereof shall be made from the
Lenders, each payment of commitment fees under Section 2.03
hereof shall be made for the account of the Lenders, and
each termination or reduction of the Commitments under
Section 2.02 hereof shall be applied to the Commitments of
the Lenders, pro rata according to the Lenders' respective
percentages of the Commitments; (b) each payment by the
Company of principal of or interest on Loans of a particular
Type (other than payments in respect of Loans of individual
Lenders provided for by Section 6 hereof) shall be made to
the Administrative Agent for the account of the Lenders pro
rata in accordance with the respective unpaid principal
amounts of such Loans held by the Lenders; and (c) each
conversion of Loans of a particular Type (other than
conversions of Loans of individual Lenders pursuant to
Section 6.04 hereof) shall be made pro rata among the
Lenders in accordance with the respective principal amounts
of such Loans held by the Lenders.
5.03 COMPUTATIONS. Interest on Fixed Rate Loans
and fees shall be computed on the basis of a year of 360
days and actual days elapsed, and interest on Base Rate
Loans shall be computed on the basis of a year of 365 or 366
days and actual days elapsed (in each case, including the
first day but excluding the last day), occurring in the
period for which payable.
5.04 MINIMUM AND MAXIMUM AMOUNTS; TYPES. Each
borrowing, conversion and prepayment of principal of Loans
shall be in an aggregate principal amount equal to (a) in
the case of Eurodollar Loans, $5,000,000 or any larger
multiple of $1,000,000, (b) in the case of CD Loans,
$10,000,000 or any larger multiple of $1,000,000, and (c) in
the case of Base Rate Loans, at least $5,000,000, except
that any borrowing may be in the aggregate amount of the
unused portion of the Commitments (borrowings, conversions
or prepayments of Loans of different Types or, in the case
of Fixed Rate Loans, having different Interest Periods, at
the same time hereunder to be deemed separate borrowings,
conversions and prepayments for purposes of the foregoing,
one for each Type or Interest Period). Notwithstanding
anything to the contrary contained in this Agreement there
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<PAGE> 25
shall not be, at any one time, more than six Interest
Periods in effect with respect to Fixed Rate Loans.
5.05 CERTAIN NOTICES. Notices to the
Administrative Agent of terminations or reductions of
Commitments, of borrowings, conversions and prepayments of
Loans and of the duration of Interest Periods shall be
irrevocable and shall be effective only if received by the
Administrative Agent not later than 12:00 noon (or, in the
case of borrowings or prepayments of Base Rate Loans, 10:30
a.m.) New York time on the number of Business Days prior to
the date of the relevant termination, reduction, borrowing,
conversion and/or prepayment specified below:.
<TABLE>
<CAPTION>
Number of
Business
Notice Days Prior
------ ----------
<S> <C>
Termination or
reduction of Commitments 3
Borrowing or
prepayment of Base Rate
Loans 0
Borrowing or
prepayment of, conversion of or into,
or duration of Interest Period
for, Fixed Rate Loans 3
</TABLE>
Each notice of termination or reduction shall specify the
amount of the Commitments to be terminated or reduced. Each
notice of borrowing, conversion or prepayment shall specify
the amount, and Type of the Loans to be borrowed, converted
or prepaid (subject to Sections 3.02 and 5.04 hereof), the
date of borrowing, conversion or prepayment (which shall be
a Business Day) and, in the case of Fixed Rate Loans, the
duration of the Interest Period therefor (subject to the
definition of Interest Period). Each such notice of
duration of an Interest Period shall specify the Loans to
which such Interest Period is to relate. The Administrative
Agent shall promptly notify the affected Lenders of the
contents of each such notice. In the event that the Company
fails to select the duration of any Interest Period for any
Fixed Rate Loans within the time period and otherwise as
provided in this Section 5.05, such Loans (if outstanding as
Fixed Rate Loans) will be automatically converted into Base
Rate Loans on the last day of the then current Interest
Period for such Loans or (if outstanding as Base Rate Loans)
will remain as, or (if not then outstanding) will be made
as, Base Rate Loans.
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<PAGE> 26
5.06 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE
AGENT. Unless the Administrative Agent shall have been
notified by a Lender or the Company (the "Payor") prior to
the date on (or, in the case of Base Rate Loans, prior to
the time by) which such Lender is to make payment to the
Administrative Agent of the proceeds of a Loan to be made by
it hereunder or the Company is to make a payment to the
Administrative Agent for the account of one or more of the
Lenders, as the case may be (such payment being herein
called the "REQUIRED PAYMENT"), which notice shall be
effective upon receipt, that the Payor does not intend to
make the Required Payment to the Administrative Agent, the
Administrative Agent may assume that the Required Payment
has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available
to the intended recipient on such date (or at such time)
and, if the Payor has not in fact made the Required Payment
to the Administrative Agent, the recipient of such payment
shall, on demand, pay to the Administrative Agent the amount
made available to it together with interest thereon in
respect of the period commencing on the date such amount was
so made available by the Administrative Agent until the date
the Administrative Agent receives such amount at a rate per
annum equal to the Federal Funds Rate for such period.
5.07 SHARING OF PAYMENTS, ETC. The Company agrees
that, in addition to (and without limitation of) any right
of set-off, bankers' lien or counterclaim a Lender may
otherwise have, each Lender shall be entitled, at its
option, to offset balances held by it for the account of the
Company at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any of
such Lender's Loans to the Company hereunder which is not
paid when due (regardless of whether such balances are then
due to the Company), in which case it shall promptly notify
the Company and the Administrative Agent thereof, provided
that such Lender's failure to give such notice shall not
affect the validity thereof. If a Lender shall obtain
payment of any principal of or interest on any Loan made by
it under this Agreement, through the exercise of any right
of set-off, banker's lien, counterclaim or similar right, or
otherwise, it shall promptly purchase from the other Lenders
participations in the Loans made, by the other Lenders in
such amounts, and make such other adjustments from time to
time as shall be equitable to the end that all the Lenders
shall share the benefit of such payment (net of any expenses
which may be incurred by such Lender in obtaining or
preserving such benefit) pro rata in accordance with the
unpaid principal and interest on the Loans or other
obligations then due to each of them. To such end all the
Lenders shall make appropriate adjustments among themselves
(by the resale of participations sold or otherwise) if such
payment is rescinded or must otherwise be restored. The
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<PAGE> 27
Company agrees, to the fullest extent it may effectively do
so under applicable law, that any Person purchasing a
participation in the Loans made, by another Person, whether
or not acquired pursuant to the foregoing arrangements, may
exercise all rights of set-off, bankers' lien, counterclaim
or similar rights with respect to such participation as
fully as if such Lender were a direct holder of Loans or
other obligations in the amount of such participation.
Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any
Lender to exercise, and retain the benefits of exercising,
any such right with respect to any other indebtedness or
obligation of the Company.
5.08 TAXES. (a) Any and all payments by the
Company hereunder shall be made, in accordance with Section
5.01, free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the
Administrative Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the
laws of which such Lender or the Administrative Agent (as
the case may be) is organized or any political subdivision
thereof and, in the case of each Lender, taxes imposed on
its income, and franchise taxes imposed on it, by the
jurisdiction of such Lender's Applicable Lending Office or
any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "TAXES").
If the Company shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder to any
Lender or the Administrative Agent, (i) except as provided
in subsection (g) below, the sum payable shall be increased
as may be necessary so that after making all required
deductions (including deductions applicable to additional
sums payable under this Section 5.08), such Lender or the
Administrative Agent (as the case may be) receives an amount
equal to the sum it would have received had no such
deductions been made, (ii) the Company shall make such
deductions and (iii) the Company shall pay the full amount
deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) In addition, the Company agrees to pay any
present 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 Basic Document or other document
referred to herein or therein (hereinafter referred to as
"OTHER TAXES").
22
<PAGE> 28
(c) The Company will indemnify each Lender and
the Administrative Agent for the full amount of Taxes or
Other Taxes (including related penalties, interest and
expenses) imposed by any jurisdiction on amounts payable
under this Section 5.08 paid by such Lender or the
Administrative Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date
such Lender or the Administrative Agent (as the case may be)
makes written demand therefor. It is understood that Taxes
do not include any withholdings or other obligations imposed
on a Lender with respect to payments by such Lender to a
participant in such Lender's Loans.
(d) Within 30 days after the date of any payment
of Taxes, the Company or a Lender, in the case of any Taxes
paid by such Lender, will furnish to the Administrative
Agent, at its address referred to in Section 12.02, the
original or a certified copy of a receipt evidencing payment
thereof.
(e) At the reasonable request of the Company, a
Lender or the Administrative Agent shall apply at the
Company's expense for a refund in respect of Taxes or Other
Taxes previously paid by the Company pursuant to this
Section 5.08 if in the opinion of such Lender or
Administrative Agent there is a reasonable basis for such
refund. Notwithstanding the foregoing, none of the Lenders
or the Administrative Agent shall be obligated to pursue
such refund if, in its sole good faith judgment, such action
would be disadvantageous to it. If any Lender subsequently
receives from a taxing authority a refund of any Tax
previously paid by the Company and for which the Company has
indemnified the Lender pursuant to this Section 5.08, such
Lender shall within 30 days after receipt of such refund,
and to the extent permitted by applicable law, pay to the
Company the net amount of any such recovery after deducting
taxes and expenses attributable thereto.
(f) Not later than the Closing Date or, in the
case of any bank or financial institution that becomes a
Lender after the Closing Date pursuant to Section 12.06, the
date of the instrument of assignment pursuant to which such
bank or financial institution became a Lender, and annually
thereafter or at such other times as the Administrative
Agent or the Company may request, each Lender organized
under the laws of a jurisdiction outside the United States
shall provide the Administrative Agent and the Company with
duly completed copies of Form 1001 or Form 4224 or any
successor form prescribed by the Internal Revenue Service of
the United States certifying that such Lender is exempt from
23
<PAGE> 29
United States withholding taxes with respect to all payments
to be made to such Lender hereunder or other documents
satisfactory to the Company and the Administrative Agent
indicating that all payments to be made to such Lender
hereunder are not subject to such taxes (an "EXEMPTION
CERTIFICATE"). In the case of payments to or for any Lender
organized under the laws of a jurisdiction outside the
United States, unless the Administrative Agent and the
Company have received an Exemption Certificate from such
Lender, the Company, or the Administrative Agent if the
Company has not withheld, may withhold taxes from such
payments at the applicable statutory rate; PROVIDED that if
the Company has withheld it shall so notify the
Administrative Agent. If the Company is required to pay
additional amounts to any Lender pursuant to this Section
5.08, such Lender shall use reasonable efforts to designate
a different Applicable Lending Office if such designation
will thereafter avoid the need for any additional payments
under this Section 5.08 and will not, in the sole judgment
of such Lender, be otherwise disadvantageous to such Lender.
A Lender which ceases to be exempt from United States
withholding taxes shall notify the Administrative Agent and
the Company promptly thereof.
(g) If a Lender organized under the laws of a
jurisdiction outside the United States fails to comply with
the provisions of subsection (f) above, then the Company
shall not have any obligation to increase the sum payable to
such Lender pursuant to Section 5.08(a) or to indemnify such
Lender pursuant to Section 5.08(c) for Taxes (including
related penalties, interest and expenses) imposed by the
United States or any political subdivision thereof.
Section 6. YIELD PROTECTION AND ILLEGALITY.
6.01 ADDITIONAL COSTS.
(a) The Company shall pay to the Administrative
Agent for the account of each Lender from time to time such
amounts as such Lender may determine to be necessary to
compensate it for any costs incurred by such Lender which
such Lender determines are attributable to its making or
maintaining of any Fixed Rate Loans hereunder or its
obligation to make any of such Loans hereunder, or any
reduction in any amount receivable by such Lender hereunder
in respect of any of such Loans or such obligation (such
increases in costs and reductions in amounts receivable
being herein called "ADDITIONAL COSTS"), in each case
resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts
payable to such Lender under this Agreement or its
Notes in respect of any of such Loans (other than
24
<PAGE> 30
changes which affect taxes measured by or imposed on
the overall net income of such Lender or of its
Applicable Lending Office for any of such Loans by the
jurisdiction in which such Lender has its principal
office or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special
deposit, insurance assessment or similar requirements
relating to any extensions of credit or other assets
of, or any deposits with or other liabilities of, such
Lender (including any of such Loans or any deposits
referred to in the definitions of "CD Base Rate" or
"Eurodollar Base Rate" in Section 1.01 hereof but
excluding, with respect to any such Fixed Rate Loan,
any such requirements included in the applicable
Domestic Reserve Requirement or Eurodollar Reserve
Requirement); or
(iii) imposes any other condition affecting this
Agreement (or any of such extensions of credit or
liabilities).
Each Lender will notify the Company through the
Administrative Agent of any event occurring after the date
of this Agreement which will entitle such Lender to
compensation pursuant to this Section 6.01(a) as promptly as
practicable after it obtains knowledge thereof and
determines to request such compensation, and (if so
requested by the Company through the Administrative Agent)
will designate a different Applicable Lending Office for the
relevant Type of Fixed Rate Loans of such Lender if such
designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the sole opinion of
such Lender, be disadvantageous to such Lender (provided
that such Lender shall have no obligation to so designate an
Applicable Lending Office located in the United States of
America). Each Lender will furnish the Company with a
statement setting forth the basis and amount of each request
by such Lender for compensation under this Section 6.01(a).
If any Lender requests compensation from the Company under
this Section 6.01(a), the Company may, by notice to such
Lender through the Administrative Agent, suspend the
obligation of such Lender to make additional Fixed Rate
Loans of the relevant Type to the Company until the
Regulatory Change giving rise to such request ceases to be
in effect (in which case the provisions of Section 6.04
hereof shall be applicable).
(b) Without limiting the effect of the foregoing
provisions of this Section 6.01, if, by reason of any
Regulatory Change, any Lender either (i) incurs Additional
Costs based on or measured by the excess above a specified
level of the amount of a category of deposits or other
25
<PAGE> 31
liabilities of such Lender which includes deposits by
reference to which the interest rate on any Type of Fixed
Rate Loans is determined as provided in this Agreement or a
category of extensions of credit or other assets of such
Lender which includes any Type of Fixed Rate Loans or (ii)
becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then,
if such Lender so elects by notice to the Company (with a
copy to the Administrative Agent), the obligation of such
Lender to make Fixed Rate Loans of the relevant Type
hereunder shall be suspended until the date such Regulatory
Change ceases to be in effect (in which case the provisions
of Section 6.04 hereof shall be applicable).
(c) Determinations and allocations by any Lender
for purposes of this Section 6.01 of the effect of any
Regulatory Change on its costs of maintaining its
obligations to make Loans or of making or maintaining Loans
or on amounts receivable by it in respect of Loans, and of
the additional amounts required to compensate such Lender in
respect of any Additional Costs, shall be presumed correct
absent manifest error.
(d) Notwithstanding the foregoing, the Company
shall not be required to compensate any Lender for any
Additional Costs incurred more than one year prior to the
date that such Lender notifies the Company thereof, unless
such Additional Costs were caused by the retroactive
application of a Regulatory Change to a date more than one
year prior to the date of such notice.
6.02 LIMITATION ON TYPES OF LOANS. Anything
herein to the contrary notwithstanding, if, with respect to
any Fixed Rate Loans:
(a) the Administrative Agent determines (which
determination shall be conclusive) that quotations of
interest rates for the relevant deposits referred to in
the definition of "CD Base Rate" or "Eurodollar Base
Rate", as the case may be, in Section 1.01 hereof are
not being provided by the Reference Lenders in the
relevant amounts or for the relevant maturities for
purposes of determining the rate of interest for such
Loans for Interest Periods therefor as provided in this
Agreement; or
(b) the Majority Lenders determine (which
determination shall be conclusive) and notify the
Administrative Agent that the relevant rates of
interest referred to in the definition of "CD Base
Rate" or "Eurodollar Base Rate", as the case may be, in
Section 1.01 hereof upon the basis of which the rates
of interest for such Loans are to be determined do not
26
<PAGE> 32
accurately reflect the cost to such Lenders of making
or maintaining such Loans for Interest Periods
therefor;
then the Administrative Agent shall promptly notify the
Company and each Lender thereof, and so long as such
condition remains in effect, the Lenders shall be under no
obligation to make Fixed Rate Loans of the relevant Type or
to convert Base Rate Loans into Fixed Rate Loans of the
relevant Type and the Company shall, on the last day(s) of
the then current Interest Period(s) for the outstanding
Fixed Rate Loans of the relevant Type, either prepay such
Loans or convert such Loans into Base Rate Loans in
accordance with Section 3.02 hereof.
6.03 ILLEGALITY. Notwithstanding any other
provision of this Agreement to the contrary, in the event
that it becomes unlawful for any Lender or its Applicable
Lending Office to (a) honor its obligation to make Fixed
Rate Loans of any Type hereunder, or (b) maintain Fixed Rate
Loans of any Type hereunder, then such Lender shall promptly
notify the Company thereof through the Administrative Agent
and such Lender's obligation to make Fixed Rate Loans of
such Type hereunder shall be suspended until such time as
such Lender may again make and maintain Fixed Rate Loans of
such Type (in which case the provisions of Section 6.04
hereof shall be applicable).
6.04 SUBSTITUTE BASE RATE LOANS. If the
obligation of any Lender to make Fixed Rate Loans of any
Type shall be suspended pursuant to Section 6.01, 6.02 or
6.03 hereof, all Loans which would otherwise be made by such
Lender as Fixed Rate Loans of such Type shall be made
instead as Base Rate Loans (and, if an event referred to in
Section 6.01(b) or 6.03 hereof has occurred and such Lender
so requests by notice to the Company with a copy to the
Administrative Agent, each Fixed Rate Loan of such Type of
such Lender then outstanding shall be automatically
converted into a Base Rate Loan on the date specified by
such Lender in such notice) and, to the extent that Fixed
Rate Loans of such Type are so made as (or converted into)
Base Rate Loans, all payments of principal which would
otherwise be applied to such Fixed Rate Loans of such Type
shall be applied instead to such Base Rate Loans.
6.05 COMPENSATION. The Company shall pay to the
Administrative Agent for the account of each Lender, upon
the request of such Lender through the Administrative Agent,
such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any
loss, cost or expense incurred by it as a result of:
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(a) any payment, prepayment or conversion of a
Fixed Rate Loan made by such Lender on a date other
than the last day of an Interest Period for such Loan;
or
(b) any failure by the Company to borrow a Fixed
Rate Loan to be made by such Lender on the date for
such borrowing specified in the relevant notice of
borrowing under Section 5.05 hereof.
Notwithstanding the foregoing, the Company shall
not be required to compensate any Lender for any such loss,
cost or expense incurred more than one year prior to the
date that such Lender notifies the Company thereof.
6.06 CAPITAL ADEQUACY. If any Lender shall
determine that the adoption or implementation of any
applicable law, rule, regulation or treaty regarding capital
adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance
by any Lender (or its Applicable Lending Office) with any
request or directive issued after the date hereof regarding
capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on
capital of such Lender or any Person controlling such Lender
(a "PARENT") as a consequence of its obligations hereunder
to a level below that which such Lender (or its Parent)
could have achieved but for such adoption, change or
compliance (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such
Lender to be material, then from time to time, within 15
days after demand by such Lender (with a copy to the
Administrative Agent), the Company shall pay to such Lender
such additional amount or amounts as will compensate such
Lender for such reduction. A statement of any Lender
claiming compensation under this Section and setting forth
the additional amount or amounts to be paid to it hereunder
shall be presumed correct absent manifest error. In
determining such amount, such Lender may use any reasonable
averaging and attribution methods.
6.07 SUBSTITUTION OF LENDER. If (i) the Company
is required to withhold with respect to any Lender pursuant
to Section 5.08, (ii) any Lender has demanded compensation
under Section 6.01(a) or Section 6.06 or (iii) the
obligation of any Lender to make Fixed Rate Loans has been
suspended pursuant to Section 6.01(b)(ii) or Section 6.03,
and so long as no Default shall have occurred and be
continuing, the Company shall have the right to request one
or more substitute banks, financial institutions or funds
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(which may be one or more of the Lenders) reasonably
satisfactory to the Administrative Agent to purchase such
Lender's Note and assume such Lender's Commitment hereunder
by paying to such Lender an amount equal to all of the
obligations of the Company to such Lender hereunder
including, without limitation, principal and accrued
interest and fees. Any costs or expenses incurred by the
Administrative Agent in connection with assisting the
Company pursuant hereto shall be paid upon demand by the
Company. The Administrative Agent shall respond promptly to
any request by the Company for its consent to a substitute
for a Lender.
Section 7. CONDITIONS PRECEDENT.
7.01 INITIAL LOANS. The obligation of each
Lender to make the initial Loans to be made by it hereunder
is subject to the following conditions precedent, each of
which shall have been fulfilled to the satisfaction of the
Administrative Agent:
(a) CORPORATE ACTION. The Administrative Agent
shall have received certified copies of the articles of
incorporation and Code of Regulations of the Company
and of all corporate action taken by the Company
authorizing the execution, delivery and performance of
this Agreement and the Notes (including, without
limitation, a certificate of the Company setting forth
the resolutions authorizing the transactions
contemplated thereby).
(b) INCUMBENCY. The Company shall have delivered
to the Administrative Agent a certificate in respect of
the name and signature of each of the officers (i) who
is authorized to sign on its behalf this Agreement and
the Notes and (ii) who will, until replaced by another
officer or officers duly authorized for that purpose,
act as its representative for the purposes of signing
documents and giving notices and other communications
in connection with this Agreement and the Notes. The
Administrative Agent and each Lender may conclusively
rely on such certificates until it receives notice in
writing from the Company to the contrary.
(c) NOTES. The Administrative Agent shall have
received a Note for each Lender, duly completed and
executed.
(d) ACQUISITION. All of the conditions to the
consummation of the Acquisition (other than the initial
borrowing hereunder) shall have been duly satisfied in
accordance with the Acquisition Documents (subject to
waivers and other modifications thereof which, in the
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aggregate, are not material), and the Administrative
Agent shall have received (or arrangements satisfactory
to the Administrative Agent shall have been made for it
to receive) a copy of each Acquisition Document
(including, without limitation, each certificate,
opinion of counsel or other material writing delivered
in connection with the consummation of the Acquisition)
and a certificate of the Company to the effect set
forth in the first clause of this Section 7.01(d).
(e) FEES AND EXPENSES. The Company shall have
paid to the Administrative Agent for its account fees
in the amount previously agreed upon between the
Company and the Administrative Agent.
(f) OPINION OF COUNSEL TO THE COMPANY. The
Administrative Agent shall have received an opinion of
Calfee, Halter & Griswold, counsel to the Company, and
the General Counsel of the Company, substantially in
the form of Exhibit B-1 and B-2 hereto, respectively.
(g) OPINION OF SPECIAL COUNSEL TO THE
ADMINISTRATIVE AGENT. The Administrative Agent shall
have received an opinion of Davis Polk & Wardwell,
special counsel to the Administrative Agent,
substantially in the form of Exhibit C hereto.
(h) COUNTERPARTS. The Administrative Agent shall
have received counterparts of this Agreement executed
and delivered by or on behalf of each of the parties
hereto (or, in the case of any Lender as to which the
Administrative Agent shall not have received such a
counterpart, the Administrative Agent shall have
received evidence satisfactory to it of the execution
and delivery by such Lender of a counterpart hereof).
(i) EXISTING CREDIT AGREEMENT. The
Administrative Agent shall have received evidence that,
after giving effect to the application of the proceeds
of the initial Loans to be made hereunder, all amounts
outstanding under the $55,000,000 Credit Agreement
dated October 20, 1993 between the Company and National
City Bank shall have been paid in full and all
commitments thereunder shall have been terminated.
(j) OTHER DOCUMENTS. The Administrative Agent
shall have received such other documents relating to
the transactions contemplated hereby as the
Administrative Agent may reasonably request.
7.02 INITIAL AND SUBSEQUENT LOANS. The
obligation of each Lender to make any Loan to be made by it
hereunder is subject to the conditions precedent that, as of
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the date of such Loan, and before and after giving effect
thereto:
(a) no Default shall have occurred and be
continuing; and
(b) the representations and warranties made by
the Company in this Agreement shall be true on and as
of the date of the making of such Loan, with the same
force and effect as if made on and as of such date.
Each notice of borrowing by the Company hereunder shall
constitute a certification by the Company to the effect set
forth in the preceding sentence (both as of the date of such
notice and as of the date of such borrowing).
Section 8. REPRESENTATIONS AND WARRANTIES. The
Company represents and warrants to the Lenders and the
Administrative Agent as follows (including, in the case of
any representation or warranty made as of the Closing Date,
both before and immediately after giving effect to the
Acquisition):
8.01 CORPORATE EXISTENCE. Each of the Company
and its Subsidiaries: (a) is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation; (b) has all requisite
corporate power, and has all governmental licenses,
authorizations, consents and approvals necessary to own its
assets and carry on its business as now being or as proposed
to be conducted, except in the case of such licenses,
authorizations, consents and approvals, where the failure to
obtain them would not have a Material Adverse Effect; and
(c) is qualified to do business in all jurisdictions in
which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify
would have a Material Adverse Effect.
8.02 INFORMATION. (a) All information
heretofore furnished by the Company to the Administrative
Agent or any Lender for purposes of or in connection with
this Agreement or any transaction contemplated hereby did
not as of the date thereof and will not as of the Closing
Date contain any untrue statement of a material fact or
assumption or omit to state a material fact or assumption
necessary in order to make the statements contained therein
not misleading; PROVIDED that (i) the Company makes no
representation as to any materials prepared by or on behalf
of Rust-Oleum Corporation in connection with the offer for
sale of Rust-Oleum Corporation and (ii) although the
management of the Company believes that the projections
presented in the pro forma consolidated balance sheet of the
Company and its Subsidiaries as of May 31, 1995 are
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reasonable, they were not prepared in accordance with GAAP
and the Company makes no representation as to their
attainability.
(b) Without limiting the generality of
paragraph (a):
(i) The audited consolidated balance sheet of the
Company and its Subsidiaries as of May 31, 1993 and the
audited consolidated statements of income,
shareholders' equity and cash flows for the fiscal year
ended May 31, 1993 (collectively, the "FINANCIAL
STATEMENTS") have been prepared in accordance with
generally accepted accounting principles consistently
applied. The Financial Statements fairly present the
financial position of the Company and its Subsidiaries
as of May 31, 1993 and the results of their operations
and their cash flows for the fiscal year ended May 31,
1993 in conformity with generally accepted accounting
principles.
(ii) The unaudited consolidated balance sheet of
the Company and its Subsidiaries as of February 28,
1994 and the unaudited consolidated statements of
income, shareholders' equity and cash flows for the
nine months then ended have been prepared in accordance
with generally accepted accounting principles
consistently applied, and fairly present the financial
position of the Company and its Subsidiaries as of
February 28, 1994 and the results of their operations
and their cash flows for the nine months then ended in
conformity with generally accepted accounting
principles (subject to normal year-end adjustments).
(iii) The Company and its Subsidiaries did not on
the date of the balance sheet referred to in clause
(ii) above, and will not on the Closing Date, have any
material contingent liabilities, material liabilities
for taxes, unusual and material forward or long-term
commitments or material unrealized or anticipated
losses from any unfavorable commitments, except as
referred to or reflected or provided for in said
balance sheet.
(c) The Company has disclosed to the Lenders in
writing any and all facts (other than general economic and
industry conditions) which have or may have a Material
Adverse Effect.
(d) Since February 28, 1994 no event has occurred
and no condition has come into existence which has had, or
is reasonably likely to have, a Material Adverse Effect.
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8.03 LITIGATION. Except as disclosed in the
Disclosure Documents, there are no legal or arbitral
proceedings or any proceedings by or before any governmental
or regulatory authority or agency, now pending or, to the
knowledge of the Company, threatened against or affecting
the Company or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect or
which in any manner draw into question the validity of the
Credit Agreement or the Notes. The disclosure of litigation
to the Lenders pursuant to this Section does not necessarily
mean that such litigation is of the type described in this
Section or that the Company believes that such litigation
has any merit whatsoever.
8.04 NO BREACH. None of the execution and
delivery of the Basic Documents, the consummation of the
Acquisition or the transactions therein contemplated or
compliance with the terms and provisions thereof will
conflict with or result in a breach of, or require any
consent under, the articles of incorporation or Codes of
Regulation or comparable instruments of the Company or any
of its Subsidiaries, or any applicable law or regulation, or
any order, writ, injunction or decree of any court or
governmental authority or agency, or any Basic Document or
other material agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which it is
bound or to which it is subject, or constitute a default
under any such material agreement or instrument, or result
in the creation or imposition of any Lien upon any of the
revenues or assets of the Company or any of its Subsidiaries
pursuant to the terms of any such agreement or instrument.
8.05 CORPORATE ACTION. Each of the Company and
RPM of Illinois, Inc. has all necessary corporate power and
authority to consummate the Acquisition and to execute,
deliver and perform its obligations under the Basic
Documents to which it is a party; the consummation of the
Acquisition and the execution, delivery and performance by
the Company and RPM of Illinois, Inc. of the Basic Documents
to which they are parties have been duly authorized by all
necessary corporate action; and this Agreement has been duly
and validly executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the
Company and, on the Closing Date, each of the other Basic
Documents to which the Company or RPM of Illinois, Inc. is
to be a party will constitute its legal, valid and binding
obligation, in each case enforceable in accordance with its
terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization or moratorium or
other similar laws relating to the enforcement of creditors'
rights generally and by general equitable principles.
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8.06 APPROVALS. Each of the Company and its
Subsidiaries has obtained all authorizations, approvals and
consents of, and has made all filings and registrations
with, any governmental or regulatory authority or agency and
any third party necessary for the consummation of the
Acquisition and the execution, delivery or performance by it
of any Basic Document to which it is a party, or for the
validity or enforceability thereof.
8.07 REGULATIONS U AND X. Neither the Company
nor any of its Subsidiaries 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 (within the meaning of Regulation U or X of the
Board of Governors of the Federal Reserve System) and no
part of the proceeds of any Loan hereunder will be used to
purchase or carry any such margin stock.
8.08 ERISA. The Company and each member of the
Controlled Group have fulfilled their obligations under the
minimum funding standards of ERISA and the Code with respect
to each Plan and are in compliance in all material respects
with the presently applicable provisions of ERISA and the
Code with respect to each Plan. No such Person has (i)
sought a waiver of the minimum funding standard under
Section 412 of the Code in respect of any Plan, (ii) failed
to make any contribution or payment to any Plan or
Multiemployer Plan, or made any amendment to any Plan, which
has resulted or could result in the imposition of a Lien or
the posting of a bond or other security under ERISA or the
Code or (iii) incurred any liability under Title IV of ERISA
(other than a liability to the PBGC for premiums under
Section 4007 of ERISA).
8.09 TAXES. Each of the Company and its
Subsidiaries has filed all United States Federal income tax
returns and all other material tax returns which are
required to be filed by it and has paid all taxes due
pursuant to such returns or pursuant to any assessment
received by it, except to the extent the same may be
contested as permitted by Section 9.02 hereof. There are no
material tax disputes or contests pending as of the Closing
Date. The charges, accruals and reserves on the books of
the Company and its Subsidiaries in respect of taxes and
other governmental charges are, in the opinion of the
Company, adequate.
8.10 SUBSIDIARIES. Schedule I hereto is a
complete and correct list, as of the date of this Agreement,
of all Subsidiaries of the Company and of all Investments
held by the Company or any of its Subsidiaries in any
material joint venture or other similar Person. The Company
owns, free and clear of Liens, all outstanding shares of its
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Subsidiaries and all such shares are validly issued, fully
paid and non-assessable and the Company (or the respective
Subsidiary of the Company) also owns, free and clear of
Liens, all such Investments.
8.11 INVESTMENT COMPANY ACT. Neither the Company
nor any of its Subsidiaries is an investment company within
the meaning of the Investment Company Act of 1940, as
amended, or, directly or indirectly, controlled by or acting
on behalf of any Person which is an investment company,
within the meaning of said Act.
8.12 PUBLIC UTILITY HOLDING COMPANY ACT. Neither
the Company nor any of its Subsidiaries is a "holding
company", or an "affiliate" of a "holding company" or a
"subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935,
as amended.
8.13 OWNERSHIP AND USE OF PROPERTIES. Each of
the Company and its Subsidiaries will have on the Closing
Date and at all times thereafter, legal title or ownership
of, or the right to use pursuant to enforceable and valid
agreements or arrangements, all tangible property, both real
and personal, and all franchises, licenses, copyrights,
patents and know-how which is material to the operation of
its business as proposed to be conducted.
8.14 ENVIRONMENTAL MATTERS. Except as disclosed
in the Disclosure Documents, neither the Company nor any of
its Subsidiaries has (i) failed to obtain any permits,
certificates, licenses, approvals, registrations and other
authorizations which are required under any applicable
Environmental Law where failure to have any such permit,
certificate, license, approval, registration or
authorization would have a Material Adverse Effect; (ii)
failed to comply with the terms and conditions of all such
permits, certificates, licenses, approvals, registrations
and authorizations, and are also in compliance with all
other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and
timetables contained in any applicable Environmental Law or
in any notice or demand letter from any regulatory authority
issued, entered, promulgated or approved thereunder where
failure to comply would have a Material Adverse Effect; or
(iii) failed to conduct its business so as to comply in all
respects with applicable Environmental Laws where failure to
so comply would have a Material Adverse Effect. The
disclosure of any failure or alleged failure to the Lenders
pursuant to this Section does not necessarily mean that such
failure is of the type described in this Section or that any
such allegation has any merit whatsoever.
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Section 9. COVENANTS. The Company agrees that,
so long as any of the Commitments are in effect and until
payment in full of all Loans hereunder, all interest thereon
and all other amounts payable hereunder, unless the Majority
Lenders shall agree otherwise as contemplated by Section
12.05 hereof:
9.01 INFORMATION. The Company shall deliver to
each of the Lenders:
(a) as soon as available and in any event within
90 days after the end of each fiscal year of the
Company, consolidated statements of income,
shareholders' equity and cash flows of the Company and
its Subsidiaries for such year and the related
consolidated balance sheet as at the end of such year,
setting forth in each case in comparative form the
corresponding figures for the preceding fiscal year,
and accompanied by an opinion thereon of Ciulla
Stephens & Co. or other independent certified public
accountants of recognized national standing, which
opinion shall state that said consolidated financial
statements fairly present in all material respects the
consolidated financial condition and results of
operations of the Company and its Subsidiaries as at
the end of, and for, such fiscal year, and a standard
letter from such accountants stating that, in
performing the auditing procedures necessary for their
above-described opinion (but without any special or
additional procedures for that purpose), nothing came
to their attention that caused them to believe, except
as specifically stated, that the Company was not in
compliance with any of the terms, covenants, provisions
or conditions of this Agreement;
(b) as soon as available and in any event within
45 days after the end of each fiscal quarter of the
Company other than the last fiscal quarter in each
fiscal year, consolidated statements of income,
shareholders' equity and cash flows of the Company and
its Subsidiaries for such fiscal quarter and for the
portion of the fiscal year ended at the end of such
fiscal quarter, and the related consolidated balance
sheet as at the end of such fiscal quarter,
accompanied, in each case, by a certificate of a Senior
Officer, which certificate shall state that said
consolidated financial statements fairly present in all
material respects the consolidated financial condition
and results of operations of the Company in accordance
with GAAP (except for footnotes of the type required by
the Securities and Exchange Commission to be included
in quarterly reports on Form 10-Q), consistently
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applied, as at the end of, and for, such period
(subject to normal year-end audit adjustments);
(c) promptly upon the mailing thereof to the
shareholders of the Company generally, copies of all
financial statements, reports and proxy statements so
mailed;
(d) promptly upon the filing thereof, copies of
all registration statements (other than any
registration statements on Form S-8 or its equivalent)
and any reports which the Company shall have filed with
the Securities and Exchange Commission;
(e) if and when the Company or any member of the
Controlled Group (i) gives or is required to give
notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any
Plan which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that the
plan administrator of any Plan has given or is required
to give notice of any such reportable event, a copy of
the notice of such reportable event given or required
to be given to the PBGC, (ii) receives notice of
complete or partial withdrawal liability under Title IV
of ERISA or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, a
copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate
or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum
funding standard under Section 412 of the Code, a copy
of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a
copy of such notice and other information filed with
the PBGC; (vi) gives notice of withdrawal from any Plan
pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or makes
any amendment to any Plan which has resulted or could
result in the imposition of a Lien or the posting of a
bond or other security, a certificate of a Senior
Officer setting forth details as to such occurrence and
action, if any, which the Company or member of the
Controlled Group is required or proposes to take;
(f) promptly after management of the Company
knows that any Default has occurred and is continuing,
a notice of such Default, describing the same in
reasonable detail; and
(g) from time to time such other information
regarding the financial condition, operations,
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prospects or business of the Company as the
Administrative Agent or any Lender through the
Administrative Agent may reasonably request.
The Company will furnish to each Lender, at the time it
furnishes each set of financial statements pursuant to
paragraph (a) or (b) above, a certificate of a Senior
Officer (i) to the effect that, to the best of his knowledge
after due inquiry, no Default has occurred and is continuing
(or, if any Default has occurred and is continuing,
describing the same in reasonable detail) and (ii) setting
forth in reasonable detail the computations necessary to
determine whether it was in compliance with Sections 9.08 to
9.12, inclusive, and 9.16 hereof as of the end of the
respective fiscal quarter or fiscal year.
9.02 TAXES AND CLAIMS. The Company will pay and
discharge, and will cause each of its Subsidiaries to pay
and discharge, all material taxes, assessments and
governmental charges or levies imposed upon it or upon its
income or profits, or upon any property belonging to it,
prior to the date on which penalties attach thereto, and all
lawful claims which, if unpaid, might become a Lien upon the
property of the Company or such Subsidiary, PROVIDED that
neither the Company nor such Subsidiary shall be required to
pay any such tax, assessment, charge, levy or claim the
payment of which is being contested in good faith and by
proper proceedings if it maintains adequate reserves with
respect thereto and if such contest, proceedings and
reserves have been described in a certificate of a Senior
Officer delivered to the Lenders.
9.03 INSURANCE. The Company will maintain, and
will cause each of its Subsidiaries to maintain, insurance
with responsible companies in such amounts and against such
risks as is usually carried by companies of established
repute engaged in the same or similar businesses, owning
similar properties, and located in the same general areas as
the Company and its Subsidiaries.
9.04 MAINTENANCE OF EXISTENCE; CONDUCT OF
BUSINESS. The Company will preserve and maintain, and will
cause each of its Subsidiaries to preserve and maintain, its
corporate existence and all of its rights, privileges and
franchises necessary or desirable in the normal conduct of
its business, and will conduct its business in a regular
manner; PROVIDED that nothing herein shall prevent (i) the
merger and dissolution of any Subsidiary of the Company into
the Company so long as the Company is the surviving
corporation, (ii) the merger of any Subsidiary of the
Company into any other Subsidiary of the Company, or (iii)
the sale of any Subsidiary of the Company other than the
following Subsidiaries and their successors: Day-Glo Color
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Corp., an Ohio corporation, Kop-Coat, Inc., an Ohio
corporation, Mameco International, Inc., an Ohio
corporation, Carboline Company, a Delaware corporation,
William Zinsser and Co., Incorporated, a New Jersey
corporation, and Rust-Oleum Corporation, an Illinois
corporation.
9.05 MAINTENANCE OF AND ACCESS TO PROPERTIES.
The Company will keep, and will cause each of its
Subsidiaries to keep, all of its properties necessary in its
business in good working order and condition (having regard
to the condition of such properties at the time such
properties were acquired by the Company or such Subsidiary),
ordinary wear and tear excepted, and proper books of record
and account in which full, true and correct entries in
conformity with GAAP shall be made of all dealings and
transactions in relation to its business activities, and
will permit representatives of the Lenders to inspect such
properties and, upon reasonable notice and at reasonable
times, to examine and make extracts and copies from the
books and records of the Company and any such Subsidiary.
9.06 COMPLIANCE WITH APPLICABLE LAWS. The
Company will comply, and will cause each of its Subsidiaries
to comply, with the requirements of all applicable laws,
rules, regulations and orders of any governmental body or
regulatory authority (including, without limitation, all
Environmental Laws), a breach of which would have a Material
Adverse Effect, except where contested in good faith and by
proper proceedings.
9.07 LITIGATION. The Company will promptly give
to the Administrative Agent (which shall promptly notify
each Lender) notice in writing of all litigation and of all
proceedings of which it is aware before any courts,
arbitrators or governmental or regulatory agencies affecting
the Company or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.
9.08 LEVERAGE RATIO. The Company will not permit
Indebtedness of the Company and its Subsidiaries, determined
on a consolidated basis, on any date to exceed 60% of the
sum of such Indebtedness and consolidated shareholders'
equity of the Company and its Subsidiaries on such date.
9.09 INTEREST COVERAGE RATIO. The Company will
not permit the ratio, calculated as at the end of each
fiscal quarter ending after the Closing Date for the four
fiscal quarters then ended, of EBIT for such period to
Interest Expense for such period to be less than 3:1.
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9.10 MERGERS, ASSET DISPOSITIONS, ETC. The
Company will not (i) consolidate or merge with or into any
other Person or (ii) sell, lease or otherwise transfer,
directly or indirectly, in one transaction or a series of
related transactions, all or substantially all of its
business or assets; PROVIDED that the Company may merge with
another Person if (A) the Company is the corporation
surviving such merger and (B) immediately after giving
effect to such merger, no Default shall have occurred and be
continuing.
9.11 LIENS. The Company will not, and will not
permit any of its Subsidiaries to, create or suffer to exist
any Lien upon any property or assets, now owned or hereafter
acquired, securing any Indebtedness or other obligation,
except:
(i) Liens existing on the Closing Date and
securing Indebtedness in an aggregate principal amount
not exceeding $4,000,000;
(ii) Liens existing on other assets at the date
of acquisition thereof or which attach to such assets
concurrently with or within 90 days after the
acquisition thereof, securing Indebtedness incurred to
finance the acquisition thereof in an aggregate
principal amount at any time outstanding not exceeding
$10,000,000;
(iii) any Lien existing on any asset of any
corporation at the time such corporation becomes a
Subsidiary of the Company or is merged or consolidated
with or into the Company or one of its Subsidiaries and
not created in contemplation of such event;
(iv) any Lien arising out of the refinancing,
extension, renewal or refunding of any Indebtedness
secured by any Lien permitted by any of the foregoing
clauses of this Section 9.11, PROVIDED that such
Indebtedness is not increased and is not secured by any
additional assets;
(v) other Liens arising in the ordinary course of
the business of the Company or such Subsidiary which
are not incurred in connection with the borrowing of
money or the obtaining of advances or credit, do not
secure any obligation in an amount exceeding
$10,000,000 and do not materially detract from the
value of its property or assets or materially impair
the use thereof in the operation of its business; and
(vi) Liens not otherwise permitted by the foregoing
clauses of this Section 9.11 securing
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Indebtedness in an aggregate principal or face amount
at any date not to exceed $10,000,000.
9.12 INVESTMENTS. The Company will not, and will
not permit any of its Subsidiaries to, make or permit to
remain outstanding any advances, loans or other extensions
of credit or capital contributions (other than prepaid
expenses in the ordinary course of business) to (by means of
transfers of property or assets or otherwise), or purchase
or own any stocks, bonds, notes, debentures or other
securities of, any Person (all such transactions being
herein called "INVESTMENTS"), except: (i) operating deposit
accounts; (ii) Liquid Investments; (iii) subject to Section
9.13 hereof, Investments in accounts and notes receivable
acquired in the ordinary course of business as presently
conducted; (iv) Investments existing on the Closing Date in
Subsidiaries, and Investments after the Closing Date by
First Colonial Insurance Company, a wholly-owned Subsidiary
of the Company, in the ordinary course of its business; (v)
Investments not otherwise permitted by the foregoing clauses
of this Section 9.12 in Subsidiaries of the Company and in
Persons which become Subsidiaries of the Company as the
result of such Investments; (vi) Investments not otherwise
permitted by the foregoing clauses of this Section 9.12 in
joint ventures in an aggregate amount not to exceed
$25,000,000; and (vii) Investments not otherwise permitted
by the foregoing clauses of this Section 9.12 in an
aggregate amount not to exceed $5,000,000.
9.13 TRANSACTIONS WITH AFFILIATES. Except as
expressly permitted by this Agreement the Company will not,
and will not permit any of its Subsidiaries to, directly or
indirectly: (i) make any Investment in an Affiliate of the
Company (other than a Subsidiary of the Company);
(ii) transfer, sell, lease, assign or otherwise dispose of
any assets to an Affiliate of the Company (other than a
Subsidiary of the Company); (iii) merge into or consolidate
with or purchase or acquire assets from an Affiliate of the
Company (other than a Subsidiary of the Company); or
(iv) enter into any other transaction directly or indirectly
with or for the benefit of an Affiliate of the Company
(including, without limitation, Guaranties and assumptions
of obligations of an Affiliate of the Company); PROVIDED
that (a) any Affiliate of the Company who is an individual
may serve as a director, officer or employee of the Company
and receive reasonable compensation or indemnification in
connection with his or her services in such capacity; and
(b) any transaction entered into by the Company or a
Subsidiary of the Company with an Affiliate of the Company
which is not a Subsidiary of the Company providing for the
leasing of property, the rendering or receipt of services or
the purchase or sale of inventory and other assets in the
ordinary course of business must be for a monetary or
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business consideration which would be substantially as
advantageous to the Company or such Subsidiary as the
monetary or business consideration which would obtain in a
comparable arm's length transaction with a Person not an
Affiliate of the Company.
9.14 LINES OF BUSINESS. The Company and its
Subsidiaries, taken as a whole, shall not engage to any
substantial extent in any line or lines of business activity
other than present or related product lines.
9.15 ENVIRONMENTAL MATTERS. The Company will
promptly give to the Lenders notice in writing of any
complaint, order, citation, notice or other written
communication from any Person with respect to, or if the
Company becomes aware after due inquiry of, (i) the
existence or alleged existence of a violation of any
applicable Environmental Law or Environmental Liability at,
upon, under or within any property now or previously owned,
leased, operated or used by the Company or any of its
Subsidiaries or any part thereof, or due to the operations
or activities of the Company, any Subsidiary on or in
connection with such property or any part thereof (including
receipt by the Company or any Subsidiary of any notice of
the happening of any event involving the Release of a
reportable quantity under any applicable Environmental Law
or cleanup of any Hazardous Substance), (ii) any Release on
such property or any part thereof in a quantity that is
reportable under any applicable Environmental Law, (iii) the
commencement of any cleanup pursuant to or in accordance
with any applicable Environmental Law of any Hazardous
Substances on or about such property or any part thereof and
(iv) any pending or threatened proceeding for the
termination, suspension or non-renewal of any permit
required under any applicable Environmental Law, in each
case which individually or in the aggregate could reasonably
be expected to have a Material Adverse Effect.
9.16. LEASE PAYMENTS. Neither the Company nor
any of its Subsidiaries will incur or assume (whether
pursuant to a Guaranty or otherwise) any liability for
rental payments under a lease with a lease term (as defined
in Financial Accounting Standards No. 13 of the Financial
Accounting Standards Board, as in effect on the date hereof)
if (i) such lease is of an asset previously owned by the
Company or any of its Subsidiaries and (ii) after giving
effect thereto, the aggregate amount of minimum lease
payments that the Company and its Subsidiaries have so
incurred or assumed (excluding payments in respect of a
lease (whether now or hereafter existing) of Rust-Oleum
Corporation's corporate headquarters located in Vernon
Hills, Illinois) will exceed, on a consolidated basis,
$5,000,000 for any calendar year under all such leases.
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Section 10. DEFAULTS.
10.01 EVENTS OF DEFAULT. If one or more of the
following events (herein called "EVENTS OF DEFAULT") shall
occur and be continuing:
(a) default in the payment of (i) any principal
of any Loan when due or of (ii) any interest on any
Loan or other amount payable hereunder within five
Business Days after the due date thereof; or
(b) the Company or any of its Subsidiaries shall
default in the payment when due of any principal of or
interest on Indebtedness having an aggregate
outstanding principal amount of at least $20,000,000
(other than the Loans); or any event or condition shall
occur which results in the acceleration of the maturity
of any such Indebtedness or enables (or, with the
giving of notice or lapse of time or both, would
enable) the holder of any such Indebtedness or any
Person acting on such holder's behalf to accelerate the
maturity thereof; or
(c) any representation or warranty made or deemed
made by the Company or any Subsidiary in any Basic
Document or in any certificate furnished to any Lender
or the Administrative Agent pursuant to the provisions
of any Basic Document, shall prove to have been false
or misleading in any material respect as of the time
made or furnished; or
(d) (i) the Company shall default in the
performance of any of its obligations under Section
2.07 or Sections 9.08 through 9.13 and 9.16 hereof; or
(ii) the Company or any Subsidiary shall default in the
performance of any of its other obligations in any
Basic Document, and such default described in this
subclause (ii) shall continue unremedied for a period
of 30 days after notice thereof to the Company by the
Administrative Agent or any Lender (through the
Administrative Agent); or
(e) the Company or any of its Significant
Subsidiaries shall admit in writing its inability to,
or be generally unable to, pay its debts as such debts
become due; or
(f) the Company or any of its Significant
Subsidiaries shall (i) apply for or consent to the
appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or
of all or a substantial part of its property, (ii) make
a general assignment for the benefit of its creditors,
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(iii) commence a voluntary case under the Bankruptcy Code, (iv) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against it in an involuntary
case under the Bankruptcy Code, or (vi) take any corporate or partnership
action for the purpose of effecting any of the foregoing; or
(g) a proceeding or case shall be commenced, without the application
or consent of the Company or any of its Significant Subsidiaries in any
court of competent jurisdiction, seeking (i) its liquidation,
reorganization, dissolution or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of such Person or of all or any
substantial part of its assets, or (iii) similar relief in respect of such
Person under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, and such proceeding or
case shall continue undismissed, or an order, judgment or decree approving
or ordering any of the foregoing shall be entered and continue unstayed and
in effect, for a period of 90 days; or an order for relief against such
Person shall be entered in an involuntary case under the Bankruptcy Code;
or
(h) a final judgment or judgments for the payment of money shall be
rendered by a court or courts against the Company or any of its
Subsidiaries in excess of $25,000,000 in the aggregate (excluding any
amount of such judgment as to which an Acceptable Insurer has acknowledged
liability), and the same shall not be discharged (or provision shall not be
made for such discharge), or a stay of execution thereof shall not be
procured, within 10 days from the date of entry thereof, or the Company or
such Subsidiary shall not, within said period of 10 days, or such longer
period during which execution of the same shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during such appeal;
or
(i) the Company or any member of the Controlled Group shall fail to
pay when due an amount or amounts aggregating in excess of $20,000,000 for
which it shall have become liable under Title IV of ERISA; or notice of
intent to terminate a Plan or Plans having aggregate Unfunded Liabilities
in excess of $20,000,000 shall be filed under Title IV of ERISA by the
Company or any member of the Controlled Group, any plan administrator
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or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer, any Plan or
Plans having aggregate Unfunded Liabilities in excess
of $20,000,000; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree
adjudicating that any Plan or Plans having aggregate
Unfunded Liabilities in excess of $20,000,000 must be
terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or
more Multiemployer Plans which could cause the Company
or one or more members of the Controlled Group to incur
a current payment obligation in excess of $20,000,000;
or
(j) (i) as a result of one or more transactions
after the date of this Agreement, any "person" or
"group" of persons shall have "beneficial ownership"
(within the meaning of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended, and the
applicable rules and regulations thereunder) of 20% or
more of the outstanding common stock of the Company; or
(ii) without limiting the generality of the foregoing,
during any period of 12 consecutive months, commencing
after the date of this Agreement, individuals who at
the beginning of such 12-month period were directors of
the Company shall cease for any reason to constitute a
majority of the board of directors of the Company;
THEREUPON: the Administrative Agent may (and, if directed
by the Majority Lenders, shall) by notice to the Company
(a) declare the Commitments terminated (whereupon the
Commitments shall be terminated) and/or (b) declare the
principal amount then outstanding of and the accrued
interest on the Loans and commitment fees and all other
amounts payable hereunder and under the Notes to be
forthwith due and payable, whereupon such amounts shall be
and become immediately due and payable, without other
notice, presentment, demand, protest or other formalities of
any kind (all of which are hereby expressly waived by the
Company); PROVIDED that in the case of the occurrence of an
Event of Default with respect to the Company referred to in
clause (f) or (g) of this Section 10.01, the Commitments
shall be automatically terminated and the principal amount
then outstanding of and the accrued interest on the Loans
and commitment fees and all other amounts payable hereunder
and under the Notes shall be and become automatically and
immediately due and payable, without notice (including,
without limitation, notice of intent to accelerate),
presentment, demand, protest or other formalities of any
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kind, all of which are hereby expressly waived by the
Company. Each Lender hereby agrees that, unless so
requested by the Administrative Agent with the consent of
the Majority Lenders, it shall not take or cause to be taken
any action to declare the Commitments terminated or to
declare payable or collect the amounts referred to above
that is independent from any action taken or to be taken by
the Administrative Agent, unless such action is taken in
connection with an Event of Default described in clause (a),
(e), (f) or (g) of this Section 10.01.
Section 11. THE ADMINISTRATIVE AGENT.
11.01 APPOINTMENT, POWERS AND IMMUNITIES. Each
Lender hereby irrevocably appoints and authorizes the
Administrative Agent to act as its agent hereunder and under
the Notes with such powers as are specifically delegated to
the Administrative Agent by the terms hereof and thereof,
together with such other powers as are reasonably incidental
thereto. The Administrative Agent (which term as used in
this Section 11 shall include reference to its affiliates
and its and its affiliates' officers, directors, employees
and agents): (a) shall have no duties or responsibilities
except those expressly set forth in this Agreement and the
Notes, and shall not by reason of this Agreement or any Note
be a trustee for any Lender; (b) shall not be responsible to
the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or the Notes, or in
any certificate or other document referred to or provided
for in, or received by any of them under, this Agreement or
any the Notes, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement
or any Note or any other document referred to or provided
for herein or therein or for any failure by the Company or
any of its Subsidiaries or any other Person to perform any
of its obligations hereunder or thereunder; (c) shall not be
required to initiate or conduct any litigation or collection
proceedings hereunder or under any Note except to the extent
requested by the Majority Lenders, and (d) shall not be
responsible for any action taken or omitted to be taken by
it hereunder or under any Note or any other document or
instrument referred to or provided for herein or therein or
in connection herewith or therewith, except for its own
gross negligence or willful misconduct. The Administrative
Agent may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such
agents or attorneys-in-fact selected by it with reasonable
care.
11.02 RELIANCE BY ADMINISTRATIVE AGENT. The
Administrative Agent shall be entitled to rely upon any
certification, notice or other communication (including any
thereof by telephone, telex, telegram or cable) believed by
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it to be genuine and correct and to have been signed or sent
by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent
accountants and other experts selected by the Administrative
Agent. As to any matters not expressly provided for by this
Agreement or the Notes, the Administrative Agent shall in
all cases be fully protected in acting, or in refraining
from acting, hereunder and thereunder in accordance with
instructions signed by the Majority Lenders and such
instructions of the Majority Lenders and any action taken or
failure to act pursuant thereto shall be binding on all of
the Lenders.
11.03 DEFAULTS. The Administrative Agent shall
not be deemed to have knowledge of the occurrence of a
Default (other than the non-payment of principal of or
interest on Loans or commitment fees) unless the
Administrative Agent has received notice from a Lender or
the Company specifying such Default and stating that such
notice is a "Notice of Default". In the event that the
Administrative Agent receives such a notice of the
occurrence of a Default, the Administrative Agent shall give
prompt notice thereof to the Lenders (and shall give each
Lender prompt notice of each such non-payment). The
Administrative Agent shall (subject to Section 11.07 hereof)
take such action with respect to such Default as shall be
directed by the Majority Lenders, provided that, unless and
until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such
action, with respect to such Default as it shall deem
advisable in the best interests of the Lenders.
11.04 RIGHTS AS A LENDER. With respect to its
Commitment and the Loans made by it, Chase in its capacity
as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and may exercise the same as
though it were not acting as the Administrative Agent, and
the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent may (without
having to account therefor to any Lender) accept deposits
from, lend money to and generally engage in any kind of
banking, trust or other business with the Company (and any
of its Affiliates) as if it were not acting as the
Administrative Agent and the Administrative Agent may accept
fees and other consideration from the Company (in addition
to the agency fees and arrangement fees heretofore agreed to
between the Company, the Administrative Agent) for services
in connection with this Agreement or otherwise without
having to account for the same to the Lenders.
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11.05 INDEMNIFICATION. The Lenders agree to
indemnify the Administrative Agent (to the extent not
reimbursed under Section 12.03 or 12.04 hereof, but without
limiting the obligations of the Company under said Sections
12.03 and 12.04), ratably in accordance with their
respective Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or
asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any other
Basic Document or any other documents contemplated by or
referred to herein or therein or the transactions
contemplated hereby or thereby (including, without
limitation, the costs and expenses which the Company is
obligated to pay under Sections 12.03 and 12.04 hereof but
excluding, unless a Default has occurred and is continuing,
normal administrative costs and expenses incident to the
performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any
such other documents, PROVIDED that no Lender shall be
liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the party
to be indemnified.
11.06 NON-RELIANCE ON ADMINISTRATIVE AGENT AND
OTHER LENDERS. Each Lender agrees that it has,
independently and without reliance on the Administrative
Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own
credit analysis of the Company and decision to enter into
this Agreement and 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 deem
appropriate at the time, continue to make its own analysis
and decisions in taking or not taking action under this
Agreement or its Note or Notes. The Administrative Agent
shall not be required to keep itself informed as to the
performance or observance by the Company or any other Person
of this Agreement or any of the other Basic Documents or any
other document referred to or provided for herein or therein
or to inspect the properties or books of the Company or any
other Person. Except for notices, reports and other
documents and information expressly required to be furnished
to the Lenders by the Administrative Agent hereunder or
under the Notes, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit
or other information concerning the affairs, financial
condition or business of the Company or any other Person (or
any of their affiliates) which may come into the possession
of the Administrative Agent.
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11.07 FAILURE TO ACT. Except for action
expressly required of the Administrative Agent hereunder and
under any Note, the Administrative Agent shall in all cases
be fully justified in failing or refusing to act hereunder
and thereunder unless it shall receive further assurances to
its satisfaction by the Lenders of their indemnification
obligations under Section 11.05 hereof against any and all
liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.
11.08 RESIGNATION OR REMOVAL OF ADMINISTRATIVE
AGENT. Subject to the appointment and acceptance of a
successor Administrative Agent as provided below, the
Administrative Agent may resign at any time by giving notice
thereof to the Lenders and the Company and the
Administrative Agent may be removed at any time with or
without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the
right to appoint a successor Administrative Agent reasonably
acceptable to the Company. If no successor Administrative
Agent shall have been so appointed by the Majority Lenders
and shall have accepted such appointment within 30 days
after the retiring Administrative Agent's giving of notice
of resignation or the Majority Lenders' removal of the
retiring Administrative Agent (the "NOTICE DATE"), then the
retiring Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent reasonably
acceptable to the Company. Any successor Administrative
Agent shall be (i) a Lender or (ii) if no Lender has
accepted such appointment within 40 days after the Notice
Date, a bank which has an office in New York, New York with
a combined capital and surplus of at least $250,000,000.
Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon 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 any retiring
Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Section 11
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 the Administrative Agent.
11.09 CO-AGENTS. Neither National City Bank nor
The First National Bank of Chicago shall have any
responsibility, obligation or liability under this Agreement
in its capacity as a Co-Agent.
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Section 12. MISCELLANEOUS.
12.01 WAIVER. No failure on the part of the
Administrative Agent or any Lender to exercise and no delay
in exercising, and no course of dealing with respect to, any
right, power or privilege under this Agreement or the Notes
shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege thereunder
preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The
remedies provided in this Agreement and the Notes are
cumulative and not exclusive of any remedies provided by
law.
12.02 NOTICES. All notices and other
communications provided for herein (including, without
limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by telex,
telegraph, telecopy, cable or other writing and telexed,
telecopied, telegraphed, cabled, mailed or delivered to the
intended recipient at the "Address for Notices" specified
below its name on the signature pages hereof; or, as to any
party, at such other address as shall be designated by such
party in a notice to the Company and the Administrative
Agent given in accordance with this Section 12.02. Except
as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when
transmitted by telex or telecopier, delivered to the
telegraph or cable office or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
12.03 EXPENSES, ETC. If an Event of Default
occurs, the Company agrees to pay or reimburse each of the
Lenders and the Administrative Agent for paying all costs
and expenses of each of the Lenders and the Administrative
Agent (including counsels' fees) incurred as a result of
such Event of Default and collection, enforcement,
bankruptcy, insolvency and other proceedings resulting
therefrom.
12.04 INDEMNIFICATION. The Company shall
indemnify the Administrative Agent, the Lenders and each
affiliate thereof and their respective directors, officers,
employees, attorneys and agents from, and hold each of them
harmless against, any and all losses, liabilities, claims or
damages to which any of them may become subject, insofar as
such losses, liabilities, claims or damages arise out of or
result from (i) any actual or proposed use by the Company of
the proceeds of any extension of credit by any Lender
hereunder or breach by the Company of this Agreement or any
other Basic Document, (ii) any Environmental Liabilities or
(iii) any investigation, litigation or other proceeding
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(including any threatened investigation or proceeding)
relating to the foregoing, whether or not the indemnified
Person is a party thereto, and the Company shall reimburse
the Administrative Agent and each Lender, and each affiliate
thereof and their respective directors, officers, employees
and agents, upon demand for any expenses (including legal
fees and fees of engineers, environmental consultants and
similar technical personnel) incurred in connection with any
such investigation or proceeding; but excluding any such
losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of the
Person to be indemnified.
12.05 AMENDMENTS, ETC. No amendment or waiver of
any provision of this Agreement or the Notes, nor any
consent to any departure by the Company therefrom, shall in
any event be effective unless the same shall be agreed or
consented to by the Majority Lenders and the Company, and
each such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which
given; PROVIDED, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, do any of
the following: (i) increase any Commitment of any of the
Lenders or subject the Lenders to any additional
obligations; (ii) reduce the principal of, or interest on,
any Loan, or any fees hereunder; (iii) postpone any date
fixed for any payment of principal of, or interest on, any
Loan, or any fee hereunder pursuant to Sections 2.03, 4.01
or 4.02 hereof; (iv) change the percentage of any of the
Commitments or of the aggregate unpaid principal amount of
any of the Loans, or the number of Lenders, which shall be
required for the Lenders or any of them to take any action
under this Agreement; or (v) change any provision contained
in Sections 2.07, 6, 12.03 or 12.04 hereof or this Section
12.05 or Section 12.08 hereof. Notwithstanding anything in
this Section 12.05 to the contrary, no amendment, waiver or
consent shall be made with respect to Section 11 without the
consent of the Administrative Agent.
12.06 SUCCESSORS AND ASSIGNS. This Agreement
shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns
except that the Company may not assign its rights or
obligations hereunder or under the Notes without the prior
written consent of all of the Lenders. Each Lender may
assign any Loan or Loans or all or any part of its
Commitment (i) to any affiliate thereof, (ii) to any other
Lender, or (iii) with the consent of the Company and the
Administrative Agent, which consents shall not be
unreasonably withheld, to any other bank or financial
institution or fund; PROVIDED that (x) any assignment shall
not be less than $10,000,000 or, if less, shall constitute
an assignment of all of such Lender's Commitment and Loans
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and (y) the Company shall be deemed to be reasonable in
withholding consent if the assignee is not exempt from
United States withholding taxes. Upon execution by the
assignor and the assignee of an instrument pursuant to which
the assignee assumes such rights and obligations, payment by
such assignee to such assignor of an amount equal to the
purchase price agreed between such assignor and such
assignee and delivery to the Administrative Agent and the
Company of an executed copy of such instrument together with
payment by such assignee to the Administrative Agent of a
processing fee of $2,500, such assignee shall have, to the
extent of such assignment (unless otherwise provided
therein), the same rights and benefits as it would have if
it were a Lender hereunder and the assignor shall be, to the
extent of such assignment (unless otherwise provided
therein) released from its obligations under this Agreement.
Upon the consummation of such assignment, the Company shall
make appropriate arrangements so that, if required, new
Notes are issued to the assignor and the assignee. If such
assignee is not incorporated under the laws of the United
States of America or a state thereof, it shall, prior to the
effectiveness of the applicable instrument of assumption,
deliver to the Company and the Administrative Agent
certification as to exemption from deduction or withholding
of any United States federal income taxes in accordance with
Section 5.08(f). Each Lender may (without the consent of any
other party to this Agreement) sell participations in all or
any part of any Loan or Loans made by it to another bank or
other entity, in which event the participant shall not have
any rights under this Agreement (except as provided in the
next succeeding sentence hereof), or in the case of a Loan,
such Lender's Note (the participant's rights against such
Lender in respect of such participation to be those set
forth in the agreement executed by such Lender in favor of
the participant relating thereto, which agreement shall not
give the participant the right to consent to any
modification, amendment or waiver other than one described
in clause (i), (ii) or (iii) of Section 12.05 hereof). The
Company agrees that each participant shall be entitled to
the benefits of Sections 5.07 and 6 with respect to its
participation; PROVIDED that no participant shall be
entitled to receive any greater amount pursuant to such
Sections than the transferor Lender would have been entitled
to receive in respect of the amount of the participation
transferred by such transferor Lender to such participant
had no such transfer occurred. Each Lender may furnish any
information concerning the Company and its Subsidiaries in
the possession of such Lender from time to time to assignees
and participants (including prospective assignees and
participants) which have agreed in writing to be bound by
the provisions of Section 12.07 hereof. The Administrative
Agent and the Company may, for all purposes of this
Agreement, treat any Lender as the holder of any Note drawn
52
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to its order (and owner of the Loans evidenced thereby)
until written notice of assignment or other transfer shall
have been received by them from such Lender.
Notwithstanding anything to the contrary, any Lender may at
any time assign all or any portion of its rights under this
Agreement and its Notes to a Federal Reserve Bank. No such
assignment shall release the transferor Lender from its
obligations hereunder.
12.07 CONFIDENTIALITY. Each Lender agrees to
exercise all reasonable efforts to keep confidential any
information delivered or made available by the Company to it
prior to the end of the term of this Agreement which is
clearly indicated to be confidential information; PROVIDED
that nothing herein shall prevent any Lender from disclosing
such information (i) to any other Lender, (ii) to its
officers, directors, employees, affiliates, agents,
attorneys and accountants who have a need to know such
information in accordance with customary banking practices
and who receive such information having been made aware of
the restrictions set forth in this Section, (iii) upon the
order of any court or administrative agency, (iv) upon the
request or demand of any regulatory agency or authority
having jurisdiction over such Lender, (v) which has been
publicly disclosed, (vi) to the extent reasonably required
in connection with any litigation to which the
Administrative Agent, any Lender, the Company or their
respective affiliates may be a party, (vii) to the extent
reasonably required in connection with the exercise of any
remedy hereunder, (viii) to such Lender's legal counsel and
independent auditors, and (ix) to any actual or proposed
participant or assignee of all or part of its rights
hereunder which has agreed in writing to be bound by the
provisions of this Section 12.07.
12.08 SURVIVAL. The obligations of the Company
under Sections 5.08, 6.01, 6.05, 12.03 and 12.04 hereof and
the obligations of the Lenders under Sections 11.05 and
12.07 shall survive the repayment of the Loans and the
termination of the Commitments.
12.09 CAPTIONS. The table of contents and the
captions and section headings appearing herein are included
solely for convenience of reference and are not intended to
affect the interpretation of any provision of this
Agreement.
12.10 COUNTERPARTS; INTEGRATION. This Agreement
may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument,
and any of the parties hereto may execute this Agreement by
signing any such counterpart. This Agreement constitutes
the entire agreement and understanding among the parties
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hereto and supersedes any and all prior agreements and
understandings, oral and written, relating to the subject
matter hereof (except to the extent specific reference is
made to any such agreement in Section 2.03 hereof).
12.11 GOVERNING LAW; SUBMISSION TO JURISDICTION;
WAIVER OF JURY TRIAL. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK. THE COMPANY HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW
YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF
ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE
COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT
IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
EACH OF THE COMPANY, THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
54
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IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered as of the
day and year first above written.
RPM, INC.
By /S/ Frank C. Sullivan
----------------------------
Title: Vice President -
Chief Financial Officer
Address for Notices:
2628 Pearl Road
P.O. Box 777
Medina, Ohio 44258
Attention: Frank C. Sullivan,
Vice President -
Chief Financial Officer
Telephone Number: 216-273-5090 or
216-273-8808
Telecopy Number: 216-225-8743
55
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Commitment: THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
$50,000,000
By /S/ Lawrence Shields
---------------------------
Title: Managing Director
Address for Notices:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Attention: Lawrence Shields
Telecopy Number: (212) 552-7175
Lending Offices for
all Loans:
The Chase Manhattan Bank
(National Association)
4 Metrotech Center
Brooklyn, New York 11245
Attention: New York Agency
Telex Number: 6720516 CMB NYA UW
62910 CMB UW
Telecopy Number: (718) 242-6411
56
<PAGE> 62
Commitment: NATIONAL CITY BANK
$45,000,000
By /S/ Thomas R. Poe
--------------------------
Title: Vice President
Address for Notices:
National City Bank
P.O. Box 5756
Cleveland, Ohio 44101
LOC #2104
Attention: Thomas R. Poe
Telecopy Number: (216) 575-9396
Lending Offices for
all Loans:
National City Bank
P.O. Box 5756
Cleveland, Ohio 44101
LOC #2104
Attention: Connie Djukic
57
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Commitment: THE FIRST NATIONAL BANK OF CHICAGO
$45,000,000
By /S/ Marguerite Canestraro
----------------------------------
Title: Vice President
Address for Notices:
The First National Bank of Chicago
1301 East Ninth Street, Suite 2150
Cleveland, Ohio 44114-1824
Attention: Marguerite Canestraro
Telecopy Number: (216) 574-9278
Lending Office for
all Loans:
The First National Bank of Chicago
One First National Plaza
Suite 0634
Chicago, Illinois 60670
Attention: Ernest Misiora
Telecopy Number: (312) 732-4840
58
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Commitment: CREDIT LYONNAIS CHICAGO BRANCH
$35,000,000
By /S/
------------------------------
Title: Vice President
CREDIT LYONNAIS CAYMAN
ISLAND BRANCH
By /S/
------------------------------
Title: Authorized Signature
Address for Notices:
Credit Lyonnais Chicago Branch
227 W. Monroe Street - Suite 3800
Chicago, Illinois 60606
Attention: Brian Jackson/
Mary Ann Klemm
Telecopy Number: (312) 641-0527
Lending Office for all Loans
other than Eurodollar Loans:
Credit Lyonnais Chicago Branch
227 W. Monroe Street - Suite 3800
Chicago, Illinois 60606
Attention: Rosette Liptak
Telecopy Number: (312) 641-5834
Lending Office for
all Loans:
Credit Lyonnais Cayman
Island Branch
c/o Credit Lyonnais Chicago Branch
227 W. Monroe Street - Suite 3800
Chicago, Illinois 60606
Attention: Rosette Liptak
Telecopy Number: (312) 641-5834
59
<PAGE> 65
Commitment: HARRIS TRUST AND SAVINGS BANK
$25,000,000
By /S/ Lori L. Reilly
---------------------------------
Title: Vice President
Address for Notices:
Harris Trust and Savings Bank
111 West Monroe Street
P.O. Box 755
Chicago, Illinois 60690-0755
Attention: Lori Reilly
Telecopy Number: (312) 461-2591
Lending Office for
all Loans:
Harris Trust and Savings Bank
111 West Monroe Street
P.O. Box 755
Chicago, Illinois 60690-0755
Attention: Arlett Hall
Telecopy Number: (312) 461-2591
60
<PAGE> 66
Commitment: PNC BANK NATIONAL ASSOCIATION
$25,000,000
By /S/ Julianne S. McKinzie
------------------------------
Title: Vice President
Address for Notices:
PNC Bank, National Association
1375 E. 9th Street, #1250
Cleveland, Ohio 44114
Attention: Julianne S. McKinzie
Telecopy Number: (216) 348-8594
Lending Office for
all Loans:
PNC Bank, National Association
1375 E. 9th Street, #1250
Cleveland, Ohio 44114
Attention: Ludmila Timko
Telecopy Number: (216) 348-8594
61
<PAGE> 67
Commitment: SOCIETY NATIONAL BANK
$25,000,000
By /S/
-------------------------------
Title: Jr. Vice President
Address for Notices:
Society National Bank
127 Public Square
Cleveland, Ohio 44113
Attention: Helen France
Telecopy Number: (216) 689-4981
Lending Office for
all Loans:
Society National Bank
127 Public Square
Cleveland, Ohio 44113
Attention: Helen France
Telecopy Number: (216) 689-4981
62
<PAGE> 68
Commitment: THE BOATMEN'S NATIONAL BANK
OF ST. LOUIS
$25,000,000
By /S/ Jay H. Nilson
----------------------------
Title: Vice President
Address for Notices:
The Boatmen's National Bank
of St. Louis
800 Market Street
P.O. Box 236
St. Louis, Missouri 63166-0236
Attention: Jay H. Nilson
Telecopy Number: (314) 466-6499
Lending Office for
all Loans:
The Boatmen's National Bank
of St. Louis
800 Market Street
P.O. Box 236
St. Louis, Missouri 63166-0236
Attention: Wanda Bailey
Telecopy Number: (314) 466-6499
63
<PAGE> 69
Commitment: WACHOVIA BANK OF GEORGIA, N.A.
$ 25,000,000
By /S/ Terry L. Akins
-------------------------------
Title: Senior Vice President
Address for Notices:
Wachovia Bank of Georgia, N.A
191 Peachtree Street, 28th Floor
Atlanta, Georgia 30303
Attention: Katherine Glista
Telecopy Number: (404) 332-6898
Lending Office for
all Loans:
Wachovia Bank of Georgia, N.A.
191 Peachtree Street, 28th Floor
Atlanta, Georgia 30303
Attention: Heidi McLaughlin
Telecopy Number: (404) 332-1118
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TOTAL COMMITMENTS
$ 300,000,000
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
as Administrative Agent
By: /S/ Lawrence Shields
-----------------------------
Title: Managing Director
Address for Notices:
The Chase Manhattan Bank
(National Association)
4 Metrotech Center, 13th Floor
Brooklyn, New York 11245
Attention: New York Agency
Telex Number: 6720516 CMB NYA UW
62910 CMB UW
Telecopy Number: (718) 242-6411
Copy to:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Attention: Lawrence Shields
Telecopy Number: (212) 552-7175
65
