SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 28, 1996
BetzDearborn Inc.
(Exact Name of Registrant as Specified in Charter)
Pennsylvania 0-2085 23-1503731
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
4636 Somerton Road, Trevose, PA 19053
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (215) 355-3300
Betz Laboratories, Inc.
(Former Name or Former Address, if Changed Since Last Report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 28, 1996, pursuant to the Grace Dear-
born Worldwide Purchase and Sale Agreement, dated as of
March 11, 1995, by and between W. R. Grace & Co.-Conn.
("Grace"), a Connecticut corporation and wholly-owned
subsidiary of W. R. Grace & Co., and Betz Laboratories,
Inc., a Pennsylvania corporation (the "Company"), the
Company and certain of its subsidiaries acquired (the
"Acquisition") certain assets and liabilities comprising
the Dearborn water treatment business (the "Dearborn
Business") from Grace and certain of Grace's subsidiaries
for a purchase price of $632 million, subject to certain
adjustments, of which (i) $100 million was paid in the
form of a promissory note (maturing on January 2, 1997),
that is secured by a letter of credit issued under the
Credit Agreement (as defined herein), (ii) $1.6 million
was paid in the form of a promissory note (which matured
on July 9, 1996) and (iii) the remainder was paid in
cash. The purchase price was established through arms-
length negotiations between Grace and the Company. The
Company intends to combine the Dearborn Business with its
current operations and use the assets acquired in the
Acquisition, including certain manufacturing facilities,
in the operation of the combined business. Immediately
following the Acquisition, the Company changed its name
from Betz Laboratories, Inc. to BetzDearborn Inc.
Prior to the consummation of the Acquisition,
the Company, Betz Canada Inc., a wholly-owned subsidiary
of the Company ("Betz Canada"), the banks parties thereto
and Morgan Guaranty Trust Company of New York, as Agent,
entered into a credit agreement, dated as of June 20,
1996 (the "Credit Agreement"), which provides for a five-
year unsecured revolving credit facility in an initial
amount of $750 million that reduces to $550 million after
two years. On June 28, 1996, the Company and Betz Canada
borrowed approximately $560 million under the Credit
Agreement in order to finance the Acquisition.
The loans under the Credit Agreement have a
maturity date of July 8, 2001 (subject to partial manda-
tory prepayment, if necessary, upon reduction in the
maximum amount of the banks' commitments on June 28, 1998
to $550 million). In the event that the banks' commit-
ments exceed $550 million, such commitments are subject
to mandatory reduction (but not below $550 million) by
amounts equal to 75% of the net cash proceeds realized by
the Company or its subsidiaries from certain incurrences
of long-term debt, certain issuances of equity securities
and securitization transactions. Under the terms of the
Credit Agreement, the Company is required to meet certain
financial tests and comply with certain other covenants
of a customary nature.
The foregoing description of certain terms and
provisions of the Credit Agreement is qualified in its
entirety by reference to the text of the Credit Agree-
ment, a copy of which is filed as Exhibit 10.1 hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
The Company has determined that it is impracticable to
provide the financial statements of the Dearborn Business
which are required to be reported in this Current Report
on Form 8-K. The Company will file the required finan-
cial statements under cover of an amendment to this Form
8-K as soon as practicable but in no event later than
September 13, 1996.
(b) Pro Forma Financial Information. The
Company has determined that it is impracticable to pro-
vide the pro forma financial information required to be
reported in this Current Report on Form 8-K. The Company
will file the required pro forma financial information
under cover of an amendment to this Current Report on
Form 8-K as soon as practicable but in no event later
than September 13, 1996.
(c) Exhibits.
2.1 Grace Dearborn Worldwide Purchase and Sale
Agreement, dated as of March 11, 1996, by and
between Grace and the Company (previously filed
as Exhibit 2.1 to the Company's Current Report
on Form 8-K/A filed by the Company on March 29,
1996 and incorporated herein by reference.)
10.1 Credit Agreement, dated as of June 20, 1996, by
and among the Company, Betz Canada Inc., the
banks parties thereto and Morgan Guaranty Trust
Company of New York, as Agent.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned
hereunto duly authorized.
Date: July 12, 1996
BETZDEARBORN INC.
By: /s/ William R. Cook
Name: William R. Cook
Title: Chairman, President and
Chief Executive Officer
EXHIBIT INDEX
EXHIBIT PAGE NO.
2.1 Grace Dearborn Worldwide Purchase and
Sale Agreement, dated as of March 11,
1996, by and between Grace and the Compa-
ny (previously filed as Exhibit 2.1 to
the Company's Current Report on Form 8-
K/A filed by the Company on March 29,
1996 and incorporated herein by refer-
ence.)
10.1 Credit Agreement, dated as of June 20,
1996, by and among the Company, Betz Can-
ada Inc., the banks parties thereto and
Morgan Guaranty Trust Company of New
York, as Agent.
CONFORMED COPY
$750,000,000
CREDIT AGREEMENT
dated as of
June 20, 1996
among
Betz Laboratories, Inc.,
Betz Canada Inc.,
The Banks Parties Hereto,
and
Morgan Guaranty Trust Company of New York,
as Agent
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
1.1. Definitions . . . . . . . . . . . . . . . . . .
1.2. Accounting Terms and Determinations . . . . . .
1.3. Types of Borrowings . . . . . . . . . . . . . .
ARTICLE 2
THE CREDITS
2.1. Commitments to Lend . . . . . . . . . . . . . .
2.2. Notice of Committed Borrowing . . . . . . . . .
2.3. Money Market Borrowings . . . . . . . . . . . .
2.4. Notice to Banks; Funding of Loans . . . . . . .
2.5. Notes . . . . . . . . . . . . . . . . . . . . .
2.6. Maturity of Loans . . . . . . . . . . . . . . .
2.7. Interest Rates . . . . . . . . . . . . . . . . .
2.8. Fees . . . . . . . . . . . . . . . . . . . . . .
2.9. Optional Termination or Reduction of Commitments
2.10. Method of Electing Interest Rates . . . . . . .
2.11. Mandatory Termination and Reduction of Commitments
2.12. Optional Prepayments . . . . . . . . . . . . .
2.13. General Provisions as to Payments . . . . . . .
2.14. Funding Losses . . . . . . . . . . . . . . . .
2.15. Computation of Interest and Fees . . . . . . .
2.16. Regulation D Compensation . . . . . . . . . . .
2.17. Judgment Currency . . . . . . . . . . . . . . .
2.18. Foreign Subsidiary Costs . . . . . . . . . . . .
2.19. Letter of Credit . . . . . . . . . . . . . . . .
ARTICLE 3
CONDITIONS
3.1. Closing . . . . . . . . . . . . . . . . . . . .
3.2. Borrowings and Issuance of Letter of Credit . .
3.3. First Borrowing by Each Eligible Subsidiary . .
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1. Corporate Existence and Power . . . . . . . . .
4.2. Corporate and Governmental Authorization; No
Contravention . . . . . . . . . . . . . . . .
4.3. Binding Effect . . . . . . . . . . . . . . . . .
4.4. Financial Information . . . . . . . . . . . . .
4.5. Litigation . . . . . . . . . . . . . . . . . . .
4.6. Compliance with ERISA . . . . . . . . . . . . .
4.7. Environmental Matters . . . . . . . . . . . . .
4.8. Taxes . . . . . . . . . . . . . . . . . . . . .
4.9. Subsidiaries . . . . . . . . . . . . . . . . . .
4.10. Regulatory Restrictions on Borrowing . . . . .
4.11. Full Disclosure . . . . . . . . . . . . . . . .
4.12. Representations and Warranties Relating to
Dearborn . . . . . . . . . . . . . . . . . . .
ARTICLE 5
COVENANTS
5.1.A. Company Information . . . . . . . . . . . . . .
5.1.B. Other Borrower Information . . . . . . . . . . .
5.2. Payment of Obligations . . . . . . . . . . . . .
5.3. Maintenance of Property; Insurance . . . . . . .
5.4. Conduct of Business and Maintenance of Existence
5.5. Compliance with Laws . . . . . . . . . . . . . .
5.6. Inspection of Property, Books and Records . . .
5.7. Mergers and Sales of Assets . . . . . . . . . .
5.8. Use of Proceeds . . . . . . . . . . . . . . . .
5.9. Negative Pledge . . . . . . . . . . . . . . . .
5.10. Debt to Total Capital . . . . . . . . . . . . .
5.11. Debt of Subsidiaries . . . . . . . . . . . . .
5.12. Interest Coverage Ratio . . . . . . . . . . . .
5.13. Minimum Consolidated Net Worth . . . . . . . .
5.14. Sale-Leaseback Transactions . . . . . . . . . .
5.15. Transactions with Affiliates . . . . . . . . .
ARTICLE 6
DEFAULTS
6.1. Events of Default . . . . . . . . . . . . . . .
6.2. Notice of Default . . . . . . . . . . . . . . .
6.3. Cash Cover . . . . . . . . . . . . . . . . . . .
ARTICLE 7
THE AGENT
7.1. Appointment and Authorization . . . . . . . . .
7.2. Agent and Affiliates . . . . . . . . . . . . . .
7.3. Action by Agent . . . . . . . . . . . . . . . .
7.4. Consultation with Experts . . . . . . . . . . .
7.5. Liability of Agent . . . . . . . . . . . . . . .
7.6. Indemnification . . . . . . . . . . . . . . . .
7.7. Credit Decision . . . . . . . . . . . . . . . .
7.8. Successor Agent . . . . . . . . . . . . . . . .
7.9. Agent's Fee . . . . . . . . . . . . . . . . . .
ARTICLE 8
CHANGE IN CIRCUMSTANCES
8.1. Basis for Determining Interest Rate Inadequate or
Unfair . . . . . . . . . . . . . . . . . . .
8.2. Illegality . . . . . . . . . . . . . . . . . . .
8.3. Increased Cost and Reduced Return . . . . . . .
8.4. Taxes . . . . . . . . . . . . . . . . . . . . .
8.5. Base Rate Loans Substituted for Affected Fixed
Rate Loans . . . . . . . . . . . . . . . . . .
8.6. Substitution of Bank . . . . . . . . . . . . . .
8.7. Allocations . . . . . . . . . . . . . . . . . .
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
OF ELIGIBLE SUBSIDIARIES
Page
9.1. Corporate Existence and Power . . . . . . . . .
9.2. Corporate and Governmental Authorization;
Contravention . . . . . . . . . . . . . . . .
9.3. Binding Effect . . . . . . . . . . . . . . . . .
9.4. Taxes . . . . . . . . . . . . . . . . . . . . .
ARTICLE 10
GUARANTY
10.1. The Guaranty . . . . . . . . . . . . . . . . .
10.2. Guaranty Unconditional . . . . . . . . . . . .
10.3. Discharge Only Upon Payment In Full;
Reinstatement In Certain Circumstances . . . .
10.4. Waiver by the Company . . . . . . . . . . . . .
10.5. Subrogation . . . . . . . . . . . . . . . . . .
10.6. Stay of Acceleration . . . . . . . . . . . . .
10.7. Continuing Guaranty . . . . . . . . . . . . . .
ARTICLE 11
MISCELLANEOUS
11.1. Notices . . . . . . . . . . . . . . . . . . . .
11.2. No Waivers . . . . . . . . . . . . . . . . . .
11.3. Expenses; Indemnification . . . . . . . . . . .
11.4. Sharing of Set-Offs . . . . . . . . . . . . . .
11.5. Amendments and Waivers . . . . . . . . . . . .
11.6. Successors and Assigns . . . . . . . . . . . .
11.7. Collateral . . . . . . . . . . . . . . . . . .
11.8. Governing Law; Submission to Jurisdiction . . .
11.9. Counterparts; Integration; Effectiveness . . .
11.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . .
11.11. Confidentiality . . . . . . . . . . . . . . . .
PRICING SCHEDULE
EXHIBIT A - Letter of Credit
EXHIBIT B - Note
EXHIBIT C - Money Market Quote Request
EXHIBIT D - Invitation for Money Market Quotes
EXHIBIT E - Money Market Quote
EXHIBIT F-1 - Opinion of Counsel for the Company
and United States Counsel for Betz Canada
EXHIBIT F-2 - Opinion of Canadian Counsel
for Betz Canada
EXHIBIT G - Opinion of Special Counsel
for the Agent
EXHIBIT H - Form of Election to Participate
EXHIBIT I - Form of Election to Terminate
EXHIBIT J - Matters to be covered in the Opinions
of Counsel for the Eligible Subsidiary
and the Company
EXHIBIT K - Assignment and Assumption Agreement
CREDIT AGREEMENT dated as of June 20, 1996 among
BETZ LABORATORIES, INC., BETZ CANADA INC., the BANKS parties
hereto and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. The following terms,
as used herein, have the following meanings:
"Absolute Rate Auction" means a solicitation of
Money Market Quotes setting forth Money Market Absolute
Rates pursuant to Section 2.3.
"Acquisition Agreement" means the Grace Dearborn
Worldwide Purchase and Sale Agreement, dated as of March 11,
1996, between the Company and W.R. Grace & Co.-Conn, and any
and all amendments thereto.
"Adjusted CD Rate" has the meaning set forth in
Section 2.7(b).
"Administrative Questionnaire" means, with respect
to each Bank, an administrative questionnaire in the form
prepared by the Agent and submitted to the Agent (with a
copy to the Company) duly completed by such Bank.
"Affiliate" means (i) any Person that directly, or
indirectly through one or more intermediaries, controls the
Company (a "Controlling Person") or (ii) any Person (other
than the Company or a Subsidiary) which is controlled by or
is under common control with a Controlling Person. As used
herein, the term "control" means possession, directly or
indirectly, of the power to vote 10% or more of any class of
voting securities of a Person or to direct or cause the
direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise.
"Agent" means Morgan Guaranty Trust Company of New
York in its capacity as agent for the Banks hereunder, and
its successors in such capacity.
"Applicable Lending Office" means, with respect to
any Bank, (i) in the case of its Domestic Loans, its Domes-
tic Lending Office, (ii) in the case of its Euro-Dollar
Loans, its Euro-Dollar Lending Office and (iii) in the case
of its Money Market Loans, its Money Market Lending Office.
"Assessment Rate" has the meaning set forth in
Section 2.7(b).
"Assignee" has the meaning set forth in Section
11.6(c).
"Bank" means each bank listed on the signature
pages hereof, each Assignee which becomes a Bank pursuant to
Section 11.6(c), and their respective successors.
"Bankruptcy Remote Subsidiary" means any Subsid-
iary of the Company created in connection with a Permitted
Securitization Transaction which has no material creditors
other than the purchaser or lender related to such Permitted
Securitization Transaction and the Company or any Subsidiary
of the Company that is the originator and seller or contrib-
utor of accounts receivable to such Subsidiary in connection
with a Permitted Securitization Transaction.
"Base Rate" means, for any day, a rate per annum
equal to the higher of (i) the Prime Rate for such day and
(ii) the sum of 1/2 of 1% plus the Federal Funds Rate for
such day.
"Base Rate Loan" means (i) a Committed Loan which
bears interest at the Base Rate pursuant to the applicable
Notice of Committed Borrowing or Notice of Interest Rate
Election or the provisions of Article 8 or (ii) an overdue
amount which was a Base Rate Loan immediately before it
became overdue.
"Beneficiary" has the meaning set forth in the
Letter of Credit.
"Benefit Arrangement" means at any time an employ-
ee benefit plan within the meaning of Section 3(3) of ERISA
which is not a Plan or a Multiemployer Plan and which is
maintained or otherwise contributed to by any member of the
ERISA Group.
"Betz Canada" means Betz Canada Inc., a corpora-
tion incorporated under the federal laws of Canada, and its
successors.
"Borrower" means the Company or any Eligible
Subsidiary, as the context may require, and their respective
successors, and "Borrowers" means all of the foregoing.
"Borrowing" has the meaning set forth in Section
1.3.
"CD Base Rate" has the meaning set forth in Sec-
tion 2.7(b).
"CD Loan" means (i) a Committed Loan which bears
interest at a CD Rate pursuant to the applicable Notice of
Committed Borrowing or Notice of Interest Rate Election or
(ii) an overdue amount which was a CD Loan immediately
before it became overdue.
"CD Margin" means a rate per annum determined in
accordance with the Pricing Schedule.
"CD Rate" means a rate of interest determined
pursuant to Section 2.7(b) on the basis of an Adjusted CD
Rate.
"CD Reference Banks" means Bank of America Illi-
nois, Commerzbank AG and Morgan Guaranty Trust Company of
New York.
"Closing Date" means the date on or after the
Effective Date on which the Agent shall have received the
documents specified in or pursuant to Section 3.1.
"Commitment" means (i) with respect to each Bank
listed on the signature pages hereof, the amount set forth
opposite its name on the signature pages hereof and (ii)
with respect to each Assignee which becomes a Bank pursuant
to Section 8.6 or 11.6(c), the amount of the Commitment
thereby assumed by it, in each case as such amount may be
reduced from time to time pursuant to Sections 2.9, 2.11 and
11.6(c) or increased from time to time pursuant to Section
11.6(c).
"Commitment Reduction Date" has the meaning set
forth in Section 2.11.
"Committed Loan" means a loan made by a Bank
pursuant to Section 2.1; provided that, if any such loan or
loans (or portions thereof) are combined or subdivided
pursuant to a Notice of Interest Rate Election, the term
"Committed Loan" shall refer to the combined principal
amount resulting from such combination or to each of the
separate principal amounts resulting from such subdivision,
as the case may be.
"Company" means Betz Laboratories, Inc., a Penn-
sylvania corporation, and its successors.
"Company's 1995 Form 10-K" means the Company's
annual report on Form 10-K for 1995, as filed with the
Securities and Exchange Commission pursuant to the Securi-
ties Exchange Act of 1934.
"Consolidated Assets" means at any date the assets
of the Company and its Consolidated Subsidiaries, determined
on a consolidated basis as of such date.
"Consolidated Debt" means at any date the Debt of
the Company and its Consolidated Subsidiaries, determined on
a consolidated basis as of such date.
"Consolidated EBIT" means, for any fiscal period,
Consolidated Net Income for such period, excluding the
effect of foreign currency translation gains and losses
arising out of operations in hyperinflationary economies,
plus, to the extent deducted in determining Consolidated Net
Income for such period, the aggregate amount of
(i) Consolidated Interest Expense and (ii) income tax ex-
pense.
"Consolidated EBITDA" means, for any fiscal peri-
od, Consolidated EBIT for such period plus, to the extent
deducted in determining Consolidated Net Income for such
period, the aggregate amount of depreciation and amortiza-
tion expense.
"Consolidated Interest Expense" means, for any
period, the interest expense of the Company and its Consoli-
dated Subsidiaries determined on a consolidated basis for
such period (excluding amortization of deferred financing
costs).
"Consolidated Net Income" means, for any fiscal
period, the net income of the Company and its Consolidated
Subsidiaries, determined on a consolidated basis for such
period, exclusive of the effect of any extraordinary or
other non-recurring gain or loss (such as non-recurring
restructuring and/or integration costs arising as a result
of the acquisition of the Dearborn Business).
"Consolidated Net Worth" means at any date the
consolidated shareholders' equity of the Company and its
Consolidated Subsidiaries determined as of such date (other
than any amount attributable to stock which is required to
be redeemed or is redeemable at the option of the holder, if
certain events or conditions occur or exist or otherwise),
excluding the effect thereon of foreign currency translation
gains and losses arising after June 30, 1996 out of opera-
tions in hyperinflationary economies.
"Consolidated Subsidiary" means at any date any
Subsidiary or other entity the accounts of which would be
consolidated with those of the Company in its consolidated
financial statements if such statements were prepared as of
such date.
"Date of Issuance" has the meaning set forth in
subsection 2.19(a).
"Dearborn Business" has the meaning set forth in
the Acquisition Agreement.
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade ac-
counts payable, construction retentions and similar items
arising in the ordinary course of business, (iv) all obliga-
tions of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles,
(v) all non-contingent obligations (and, for purposes of
Section 5.9 and the definitions of Material Debt and Materi-
al Financial Obligations, all contingent obligations) of
such Person to reimburse any bank or other Person in respect
of amounts paid under a letter of credit or similar instru-
ment, (vi) all Debt secured by a Lien on any asset of such
Person up to the greater of fair market value or book value
of such asset, whether or not such Debt is otherwise an
obligation of such Person and (vii) all Debt of others
Guaranteed by such Person.
"Default" means any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
"Derivatives Obligations" of any Person means all
obligations of such Person in respect of any rate swap
transaction, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity
or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor trans-
action, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any
other similar transaction (including any option with respect
to any of the foregoing transactions) or any combination of
the foregoing transactions.
"Domestic Business Day" means any day except a
Saturday, Sunday or other day on which commercial banks in
New York City are authorized by law to close.
"Domestic Lending Office" means, as to each Bank,
its office located at its address set forth in its Adminis-
trative Questionnaire (or identified in its Administrative
Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic
Lending Office by notice to the Company and the Agent;
provided that any Bank may so designate separate Domestic
Lending Offices for its Base Rate Loans, on the one hand,
and its CD Loans, on the other hand, in which case all
references herein to the Domestic Lending Office of such
Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans
or both.
"Domestic Reserve Percentage" has the meaning set
forth in Section 2.7(b).
"Effective Date" means the date this Agreement
becomes effective in accordance with Section 11.9.
"Eighty Percent-Owned Consolidated Subsidiary"
means any Consolidated Subsidiary of which at least 80% of
the shares of capital stock or other ownership interests are
at the time directly or indirectly owned by the Company.
"Election to Participate" means an Election to
Participate substantially in the form of Exhibit H hereto.
"Election to Terminate" means an Election to
Terminate substantially in the form of Exhibit I hereto.
"Eligible Subsidiary" means (i) Betz Canada and
(ii) any Eighty Percent-Owned Consolidated Subsidiary of the
Company as to which an Election to Participate shall have
been delivered to the Agent and as to which an Election to
Terminate shall not have been delivered to the Agent. Each
such Election to Participate and Election to Terminate shall
be duly executed on behalf of such Consolidated Subsidiary
and the Company in such number of copies as the Agent may
request. The delivery of an Election to Terminate shall not
affect any obligation of an Eligible Subsidiary theretofore
incurred. The Agent shall promptly give notice to the Banks
of the receipt of any Election to Participate or Election to
Terminate.
"Environmental Laws" means any and all federal,
state, local and foreign statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees,
plans, injunctions, permits, concessions, grants, franchis-
es, licenses, agreements and other governmental restrictions
relating to the environment, the effect of the environment
on human health or to emissions, discharges or releases of
pollutants, contaminants, Hazardous Substances or wastes
into the environment including, without limitation, ambient
air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of
pollutants, contaminants, Hazardous Substances or wastes or
the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, or any successor statute.
"ERISA Group" means the Company, any Subsidiary
and all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under
common control which, together with the Company or any
Subsidiary, are treated as a single employer under Section
414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic
Business Day on which commercial banks are open for interna-
tional business (including dealings in dollar deposits) in
London.
"Euro-Dollar Lending Office" means, as to each
Bank, its office, branch or affiliate located at its address
set forth in its Administrative Questionnaire (or identified
in its Administrative Questionnaire as its Euro-Dollar
Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar
Lending Office by notice to the Company and the Agent.
"Euro-Dollar Loan" means (i) a Committed Loan
which bears interest at a Euro-Dollar Rate pursuant to the
applicable Notice of Committed Borrowing or Notice of Inter-
est Rate Election or (ii) an overdue amount which was a
Euro-Dollar Loan immediately before it became overdue.
"Euro-Dollar Margin" means a rate per annum deter-
mined in accordance with the Pricing Schedule.
"Euro-Dollar Rate" means a rate of interest deter-
mined pursuant to Section 2.7(c) on the basis of a London
Interbank Offered Rate.
"Euro-Dollar Reference Banks" means the principal
London offices of Bank of America NT&SA, Commerzbank AG and
Morgan Guaranty Trust Company of New York.
"Euro-Dollar Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement for a member bank of the
Federal Reserve System in New York City with deposits ex-
ceeding five billion dollars in respect of "Eurocurrency
liabilities" (or in respect of any other category of liabil-
ities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which
includes loans by a non-United States office of any Bank to
United States residents).
"Events of Default" has the meaning set forth in
Section 6.1.
"Expiration Time" has the meaning set forth in the
Letter of Credit.
"Facility Fee Rate" has the meaning set forth in
the Pricing Schedule.
"Federal Funds Rate" means, for any day, the rate
per annum (rounded upward, if necessary, to the nearest
1/100th of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New
York on the Domestic Business Day next succeeding such day,
provided that (i) if such day is not a Domestic Business
Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business
Day, and (ii) if no such rate is so published on such next
succeeding Domestic Business Day, the Federal Funds Rate for
such day shall be the average rate quoted to Morgan Guaranty
Trust Company of New York on such day on such transactions
as determined by the Agent.
"Fixed Rate Loans" means CD Loans or Euro-Dollar
Loans or Money Market Loans (excluding Money Market LIBOR
Loans bearing interest at the Base Rate pursuant to Section
8.1) or any combination of the foregoing.
"Funded Debt" means Debt having a maturity that is
more than one year from the date of its original incurrence
or Debt having a maturity which is extendable at the option
of the Company or any of its Subsidiaries to a date more
than one year from the date of its original incurrence.
"Group of Loans" means at any time a group of
Loans consisting of (i) all Committed Loans to a single
Borrower which are Base Rate Loans at such time, (ii) all
Euro-Dollar Loans to a single Borrower having the same
Interest Period at such time or (iii) all CD Loans to a
single Borrower having the same Interest Period at such
time, provided that, if a Committed Loan of any particular
Bank is converted to or made as a Base Rate Loan pursuant to
Article 8, such Loan shall be included in the same Group or
Groups of Loans from time to time as it would have been in
if it had not been so converted or made.
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or indi-
rectly guaranteeing any Debt of any other Person and, with-
out limiting the generality of the foregoing, any obliga-
tion, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt (whether arising
by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or servic-
es, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the pur-
pose of assuring in any other manner the holder of such Debt
of the payment thereof or to protect such holder against
loss in respect thereof (in whole or in part), provided that
the term Guarantee shall not include endorsements for col-
lection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Hazardous Substances" means any toxic, radioac-
tive, caustic or otherwise hazardous substance, including
petroleum, its derivatives, by-products and other hydrocar-
bons, or any substance having any constituent elements
displaying any of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section
11.3(b).
"Information Memorandum" means the confidential
descriptive memorandum dated April, 1996 furnished to the
Banks in connection with the transactions contemplated
hereby.
"Initial Funding Date" means the date of the
earlier of (i) the first Borrowing or (ii) the issuance of
the Letter of Credit.
"Interest Coverage Ratio" means at the end of any
fiscal quarter of the Company the ratio of (i) Consolidated
EBIT for the four consecutive fiscal quarters of the Company
and its Consolidated Subsidiaries ending on such date to
(ii) Consolidated Interest Expense for such period; provided
that for the periods ending December 31, 1996 and March 31,
1997, such ratio shall be calculated from July 1, 1996
through the fiscal quarter then ended.
"Interest Period" means: (1) with respect to each
Euro-Dollar Loan, the period commencing on the date of such
borrowing specified in the applicable Notice of Borrowing or
on the date specified in the applicable Notice of Interest
Rate Election and ending one, two, three or six months (or,
with the prior consent of each Bank, nine or twelve months)
thereafter, as the Borrower may elect in the applicable
notice; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall,
subject to clause (c) below, be extended to the next suc-
ceeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall,
subject to clause (c) below, end on the last Euro-Dollar
Business Day of a calendar month; and
(c) if any Interest Period includes a date on
which a scheduled payment of principal of the Loans is
required to be made under Section 2.11 but does not end on
such date, then (i) the principal amount (if any) of each
Euro-Dollar Loan required to be repaid on such date shall
have an Interest Period ending on such date and (ii) the
remainder (if any) of each such Euro-Dollar Loan shall have
an Interest Period determined as set forth above.
(2) with respect to each CD Loan, the period
commencing on the date of such borrowing specified in the
applicable Notice of Borrowing or on the date specified in
the applicable Notice of Interest Rate Election and ending
30, 60, 90 or 180 days (or, with the prior consent of each
Bank, 270 or 360 days) thereafter, as the Borrower may elect
in the applicable notice; provided that:
(a) any Interest Period (other than an Interest
Period determined pursuant to clause (b) below) which would
otherwise end on a day which is not a Euro-Dollar Business
Day shall be extended to the next succeeding Euro-Dollar
Business Day; and
(b) if any Interest Period includes a date on
which a scheduled payment of principal of the Loans is
required to be made under Section 2.11 but does not end on
such date, then (i) the principal amount (if any) of each
CD Loan required to be repaid on such date shall have an
Interest Period ending on such date and (ii) the remainder
(if any) of each such CD Loan shall have an Interest Period
determined as set forth above.
(3) with respect to each Money Market LIBOR Loan,
the period commencing on the date of borrowing specified in
the applicable Notice of Borrowing and ending such whole
number of months thereafter as the Borrower may elect in
accordance with Section 2.3; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall,
subject to clause (c) below, be extended to the next suc-
ceeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall,
subject to clause (c) below, end on the last Euro-Dollar
Business Day of a calendar month; and
(c) if any Interest Period includes a date on
which a scheduled payment of principal of the Loans is
required to be made under Section 2.11 but does not end on
such date, then (i) the principal amount (if any) of each
Money Market LIBOR Loan required to be repaid on such date
shall have an Interest Period ending on such date and (ii)
the remainder (if any) of each such Money Market LIBOR Loan
shall have an Interest Period determined as set forth
above.
(4) with respect to each Money Market Absolute
Rate Loan, the period commencing on the date of borrowing
specified in the applicable Notice of Borrowing and ending
such number of days thereafter (but not less than 7 days) as
the Borrower may elect in accordance with Section 2.3;
provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall,
subject to clause (b) below, be extended to the next suc-
ceeding Euro-Dollar Business Day; and
(b) if any Interest Period includes a date on
which a scheduled payment of principal of the Loans is
required to be made under Section 2.11 but does not end on
such date, then (i) the principal amount (if any) of each
Money Market Absolute Rate Loan required to be repaid on
such date shall have an Interest Period ending on such date
and (ii) the remainder (if any) of each such Money Market
Absolute Rate Loan shall have an Interest Period determined
as set forth above.
"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended, or any successor statute.
"Letter of Credit" means the letter of credit to
be issued hereunder by the Banks severally and not jointly,
which shall be in the form of Exhibit A and dated the Date
of Issuance.
"Letter of Credit Liabilities" means, for any Bank
and at any time, the sum of (x) the amounts then owing to
such Bank by the Company to reimburse it in respect of
amounts drawn under the Letter of Credit and (y) such Bank's
ratable share of the aggregate amount then available for
drawing under the Letter of Credit.
"LIBOR Auction" means a solicitation of Money
Market Quotes setting forth Money Market Margins based on
the London Interbank Offered Rate pursuant to Section 2.3.
"Lien" means, with respect to any asset, any
mortgage, lien, pledge, charge or security interest, or any
other type of preferential arrangement that has the practi-
cal effect of creating a security interest, in respect of
such asset. For the purposes of this Agreement, the Company
or any Subsidiary shall be deemed to own subject to a Lien
any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement
relating to such asset.
"Loan" means a Domestic Loan, a Euro-Dollar Loan
or a Money Market Loan and "Loans" means Domestic Loans,
Euro-Dollar Loans or Money Market Loans or any combination
of the foregoing.
"London Interbank Offered Rate" has the meaning
set forth in Section 2.7(c).
"Material Debt" means Debt (other than (i) the
Notes, (ii) Debt of a Subsidiary to the Company or (iii)
Debt of the Company or a Subsidiary to a Subsidiary) of the
Company and/or one or more of its Subsidiaries, arising in
one or more related or unrelated transactions, in an aggre-
gate principal or face amount exceeding $25,000,000.
"Material Financial Obligations" means a principal
or face amount of Debt and/or payment or collateralization
obligations in respect of Derivatives Obligations of the
Company and/or one or more of its Subsidiaries, arising in
one or more related or unrelated transactions, exceeding in
the aggregate $25,000,000.
"Material Plan" means at any time a Plan or Plans
having aggregate Unfunded Liabilities in excess of
$25,000,000.
"Material Subsidiary" means (i) any Subsidiary
which is a "significant subsidiary" within the meaning of
Regulation S-X of the Securities and Exchange Commission as
in effect on the date hereof and (ii) any Eligible Subsid-
iary.
"Money Market Absolute Rate" has the meaning set
forth in Section 2.3(d).
"Money Market Absolute Rate Loan" means a loan to
be made by a Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each
Bank, its Domestic Lending Office or such other office,
branch or affiliate of such Bank as it may hereafter desig-
nate as its Money Market Lending Office by notice to the
Company and the Agent; provided that any Bank may from time
to time by notice to the Company and the Agent designate
separate Money Market Lending Offices for its Money Market
LIBOR Loans, on the one hand, and its Money Market Absolute
Rate Loans, on the other hand, in which case all references
herein to the Money Market Lending Office of such Bank shall
be deemed to refer to either or both of such offices, as the
context may require.
"Money Market LIBOR Loan" means a loan to be made
by a Bank pursuant to a LIBOR Auction (including such a loan
bearing interest at the Base Rate pursuant to Section 8.1).
"Money Market Loan" means a Money Market LIBOR
Loan or a Money Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in
Section 2.3(d)(ii)(C).
"Money Market Quote" means an offer by a Bank to
make a Money Market Loan in accordance with Section 2.3.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means at any time an employee
pension benefit plan within the meaning of Section
4001(a)(3) of ERISA to which any member of the ERISA Group
is then making or accruing an obligation to make contribu-
tions or has within the preceding five plan years made
contributions, including for these purposes any Person which
ceased to be a member of the ERISA Group during such five-
year period.
"Net Cash Proceeds" means, with respect to any
Reduction Event, an amount equal to the cash proceeds re-
ceived by the Company or any of its Subsidiaries from or in
respect of such Reduction Event (not exceeding the aggregate
principal or invested amount in the case of a Permitted
Securitization Transaction) less any expenses reasonably
incurred by such Person in respect of such Reduction Event
and net of any proceeds which are intended to be used, and
which are in fact used, to refinance or refund Debt other
than the Loans.
"Note Payoff Borrowing" means any Borrowing if and
to the extent the proceeds thereof are applied immediately
and directly to payment of the "Note" referred to in the
Letter of Credit.
"Notes" means promissory notes of a Borrower,
substantially in the form of Exhibit B hereto, evidencing
the obligation of such Borrower to repay the Loans made to
it, and "Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" means a Notice of Committed
Borrowing (as defined in Section 2.2) or a Notice of Money
Market Borrowing (as defined in Section 2.3(f)).
"Notice of Interest Rate Election" has the meaning
set forth in Section 2.10.
"Parent" means, with respect to any Bank, any
Person controlling such Bank.
"Participant" has the meaning set forth in Section
11.6(b).
"PBGC" means the Pension Benefit Guaranty Corpora-
tion or any entity succeeding to any or all of its functions
under ERISA.
"Permitted Receivables Disposition" means any
transfer (by way of sale, pledge or otherwise) by the Compa-
ny or any Subsidiary to any other Person (including a Bank-
ruptcy Remote Subsidiary) of accounts receivable and other
rights to payment (whether constituting accounts, chattel
paper, instruments, general intangibles or otherwise and
including the right to payment of interest or finance charg-
es) and related contract and other rights and property
(including all general intangibles, collections and other
proceeds relating thereto, all security therefor (and the
property subject thereto), all guarantees and other agree-
ments or arrangements of whatsoever character from time to
time supporting such right to payment, and all other right,
title and interest in goods relating to a sale which gave
rise to such right of payment) in connection with a Permit-
ted Securitization Transaction.
"Permitted Securitization Transaction" means any
receivables purchase or financing transaction pursuant to
which the Company or a Subsidiary (including a Bankruptcy
Remote Subsidiary) sells or grants a security interest in
accounts receivable of the Company or its Subsidiaries (and
related rights and property as described in the definition
of Permitted Receivables Disposition) or an undivided inter-
est therein, provided that (i) the aggregate principal or
invested amount outstanding at any one time under all such
facilities shall not exceed $100,000,000 and (ii) the re-
course of the purchaser or lender with respect to such
transaction for losses resulting from an obligor's failure
to pay a receivable due to credit problems is limited to
such accounts receivable or an interest therein, and the
collections thereof.
"Person" means an individual, a corporation, a
limited liability company, a partnership, an association, a
trust or any other entity or organization, including a
government or political subdivision or an agency or instru-
mentality thereof.
"Plan" means at any time an employee pension
benefit plan (other than a Multiemployer Plan) which is
covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Internal Revenue
Code and either (i) is maintained, or contributed to, by any
member of the ERISA Group for employees of any member of the
ERISA Group or (ii) has at any time within the preceding
five years been maintained, or contributed to, by any Person
which was at such time a member of the ERISA Group for
employees of any Person which was at such time a member of
the ERISA Group.
"Pricing Schedule" means the Schedule attached
hereto identified as such.
"Prime Rate" means the rate of interest publicly
announced by Morgan Guaranty Trust Company of New York in
New York City from time to time as its Prime Rate.
"Quarterly Dates" means each March 31, June 30,
September 30 and December 31.
"Reduction Event" means (1) the incurrence by the
Company or any Subsidiary of any Funded Debt, other than
(i) the Loans, (ii) Funded Debt in an amount not exceeding
$5,000,000 the proceeds of which are used to finance the
acquisition of the Dearborn Business, (iii) Funded Debt
secured by a Lien permitted by clause (c) of Section 5.9,
(iv) Funded Debt owing to the Company or a Subsidiary and
(v) other Funded Debt in an aggregate principal amount at
any time outstanding not exceeding $10,000,000, (2) the
issuance of any equity securities by the Company or any of
its Subsidiaries (other than equity securities issued to the
Company or any of its Subsidiaries or to any employees of
the Company or any of its Subsidiaries) or (3) the occur-
rence of a Permitted Securitization Transaction. The de-
scription of any transaction as falling within the above
definition does not affect any limitation on such transac-
tion imposed by Article 5 of this Agreement.
"Reference Banks" means the CD Reference Banks or
the Euro-Dollar Reference Banks, as the context may require,
and "Reference Bank" means any one of such Reference Banks.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from
time to time.
"Reimbursable Amount" has the meaning set forth in
subsection 2.19(c).
"Reimbursement Due Date" has the meaning set forth
in subsection 2.19(c).
"Related Documents" means the Letter of Credit and
the Acquisition Agreement.
"Required Banks" means at any time Banks having at
least 51% of the aggregate amount of the Commitments or, if
the Commitments shall have been terminated, holding at least
51% of the sum of the aggregate unpaid principal amount of
the Loans and Letter of Credit Liabilities.
"Revolving Credit Period" means the period from
and including the Effective Date to but not including the
Termination Date.
"S&P" means Standard & Poor's Ratings Services.
"Sale-Leaseback Transaction" means any arrangement
with any Person providing for the leasing by the Company or
any Subsidiary of any property that, or of any property
similar to and used for substantially the same purposes as
any other property that, has been or is to be sold, as-
signed, transferred or otherwise disposed of by the Company
or any of its Subsidiaries to such Person with the intention
of entering into such a lease.
"Subsidiary" means, as to any Person, any corpora-
tion or other entity of which securities or other ownership
interests having ordinary voting power to elect a majority
of the board of directors or other persons performing simi-
lar functions are at the time directly or indirectly owned
by such Person; unless otherwise specified, "Subsidiary"
means a Subsidiary of the Company.
"Surrender Date" has the meaning set forth in
Section 3.2(e).
"Termination Date" means the earlier of (i) the
date that is 10 days after the fifth anniversary of the
first Borrowing hereunder or (ii) October 1, 2001, or, if
such day is not a Euro-Dollar Business Day, the next suc-
ceeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case
the Termination Date shall be the next preceding Euro-Dollar
Business Day.
"Total Capital" means, at any date, the sum of (x)
Consolidated Debt plus (y) consolidated shareholders' equity
of the Company and its Consolidated Subsidiaries (including
for this purpose any amount attributable to stock which is
required to be redeemed or is redeemable at the option of
the holder, if certain events or conditions occur or exist
or otherwise), excluding the effect thereon of foreign
currency translation gains and losses arising after June 30,
1996 out of operations in hyperinflationary economies, in
each case determined at such date.
"Unfunded Liabilities" means, with respect to any
Plan at any time, the amount (if any) by which (i) the value
of all benefit liabilities under such Plan, determined on a
plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA (or other
applicable standard), exceeds (ii) the fair market value of
all Plan assets allocable to such liabilities under Title IV
of ERISA (excluding any accrued but unpaid contributions),
all determined as of the then most recent valuation date for
such Plan, but only to the extent that such excess repre-
sents a potential liability of a member of the ERISA Group
to the PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of Ameri-
ca, including the States and the District of Columbia, but
excluding its territories and possessions.
"Wholly-Owned Consolidated Subsidiary" means any
Consolidated Subsidiary all of the shares of capital stock
or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly
owned by the Company.
SECTION 1.2. Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements re-
quired to be delivered hereunder shall be prepared in accor-
dance with generally accepted accounting principles as in
effect from time to time, applied on a basis consistent in
all material respects (except for changes to which the
Company's independent public accountants do not take excep-
tion) with the most recent audited consolidated financial
statements of the Company and its Consolidated Subsidiaries
delivered to the Banks; provided that, if the Company noti-
fies the Agent that the Company wishes to amend any covenant
in Article 5 to eliminate the effect of any change in gener-
ally accepted accounting principles on the operation of such
covenant (or if the Agent notifies the Company that the
Required Banks wish to amend Article 5 for such purpose),
then the Company's compliance with such covenant shall be
determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change
in generally accepted accounting principles became effec-
tive, until either such notice is withdrawn or such covenant
is amended in a manner satisfactory to the Company and the
Required Banks. The parties understand that certain incon-
sistencies between the accounting practices utilized by the
Dearborn Business and those reflected in the Company's most
recent audited consolidated financial statements exist and
will continue until such time as the accounting practices
utilized by the Dearborn Business have been fully integrated
with the Company's accounting practices and systems.
SECTION 1.3. Types of Borrowings. The term
"Borrowing" denotes the aggregation of Loans of one or more
Banks to be made to a single Borrower pursuant to Article 2
on the same date, all of which Loans are of the same type
(subject to Article 8) and, except in the case of Base Rate
Loans, have the same initial Interest Period. Borrowings
are classified for purposes of this Agreement either by
reference to the pricing of Loans comprising such Borrowing
(e.g., a "Fixed Rate Borrowing" is a Euro-Dollar Borrowing,
a CD Borrowing or a Money Market Borrowing (excluding any
such Borrowing consisting of Money Market LIBOR Loans bear-
ing interest at the Base Rate pursuant to Section 8.1), and
a "Euro-Dollar Borrowing" is a Borrowing comprised of
Euro-Dollar Loans) or by reference to the provisions of
Article 2 under which participation therein is determined
(i.e., a "Committed Borrowing" is a Borrowing under Section
2.1 in which all Banks participate in proportion to their
Commitments, while a "Money Market Borrowing" is a Borrowing
under Section 2.3 in which the Bank participants are deter-
mined on the basis of their bids in accordance therewith).
ARTICLE 2
THE CREDITS
SECTION 2.1. Commitments to Lend. (a) During
the Revolving Credit Period, each Bank severally agrees, on
the terms and conditions set forth in this Agreement, to
make loans to any Borrower pursuant to this Section from
time to time in amounts such that the aggregate principal
amount of Committed Loans by such Bank to all Borrowers at
any one time outstanding plus its Letter of Credit Liabili-
ties shall not exceed the amount of its Commitment. Each
Borrowing under this Section shall be in an aggregate prin-
cipal amount of $10,000,000 or any larger multiple of
$1,000,000 (except that any such Borrowing may be in the
aggregate amount available in accordance with Section 3.2)
and shall be made from the several Banks ratably in propor-
tion to their respective Commitments. Within the foregoing
limits, a Borrower may borrow under this Section, repay, or
to the extent permitted by Section 2.12, prepay Loans and
reborrow at any time during the Revolving Credit Period
under this Section.
SECTION 2.2. Notice of Committed Borrowing. (a)
The Borrower shall give the Agent notice (a "Notice of
Committed Borrowing") not later than 10:30 A.M. (New York
City time) on (x) the date of each Base Rate Borrowing, (y)
the second Domestic Business Day (or, if the desired Inter-
est Period is 270 or 360 days, the fourth Domestic Business
Day) before each CD Borrowing and (z) the third Euro-Dollar
Business Day (or, if the desired Interest Period is 9 or 12
months, the fifth Euro-Dollar Business Day) before each
Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Domestic Borrowing
or a Euro-Dollar Business Day in the case of a Euro-Dollar
Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) whether the Loans comprising such Borrowing
are to bear interest initially at the Base Rate, a CD Rate
or a Euro-Dollar Rate; and
(iv) in the case of a Fixed Rate Borrowing, the
duration of the initial Interest Period applicable thereto,
subject to the provisions of the definition of Interest
Period.
(b) If the Borrower specifies a nine or twelve-
month Interest Period with respect to any Euro-Dollar Bor-
rowing or a 270- or 360-day Interest Period with respect to
any CD Borrowing (in each case, an "Extended Interest Peri-
od") in any Notice of Borrowing or Notice of Interest Rate
Election and the Agent shall not have received from any Bank
written objection to such Extended Interest Period by 9:30
A.M. (New York City time) on the second Euro-Dollar Business
Day or the second Domestic Business Day, as the case may be,
after receipt by the Agent of such Notice, then each Bank
shall be deemed to have consented to such Extended Interest
Period. If any Bank timely objects as set forth above to
any request for an Extended Interest Period, then the Agent
shall promptly notify the Borrower and the Borrower shall
deliver a new Notice of Borrowing or Notice of Interest Rate
Election (which may be included as an alternative election
in the original notice) specifying a different election
within the applicable time periods specified in the defini-
tion of Interest Period. If the Borrower fails to so timely
deliver such a new notice, then the related Loans shall be
made as (or continued as or converted into) Base Rate Loans.
SECTION 2.3. Money Market Borrowings. (a) The
Money Market Option. In addition to Committed Borrowings
pursuant to Section 2.1, any Borrower may, as set forth in
this Section, request the Banks during the Revolving Credit
Period to make offers to make Money Market Loans to such
Borrower. The Banks may, but shall have no obligation to,
make such offers and such Borrower may, but shall have no
obligation to, accept any such offers in the manner set
forth in this Section.
(b) Money Market Quote Request. When a Borrower
wishes to request offers to make Money Market Loans under
this Section, it shall transmit to the Agent by telex or
facsimile transmission a Money Market Quote Request substan-
tially in the form of Exhibit C hereto so as to be received
not later than 10:30 A.M. (New York City time) on (x) the
fifth Euro-Dollar Business Day prior to the date of Borrow-
ing proposed therein, in the case of a LIBOR Auction or (y)
the Domestic Business Day next preceding the date of Borrow-
ing proposed therein, in the case of an Absolute Rate Auc-
tion (or, in either case, such other time or date as the
Company and the Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effec-
tive) specifying:
(i) the proposed date of Borrowing, which shall
be a Euro-Dollar Business Day in the case of a LIBOR Auc-
tion or a Domestic Business Day in the case of an Absolute
Rate Auction,
(ii) the aggregate amount of such Borrowing, which
shall be $10,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of
Interest Period, and
(iv) whether the Money Market Quotes requested are to
set forth a Money Market Margin or a Money Market Absolute
Rate.
The Borrower may request offers to make Money Market Loans
for more than one Interest Period in a single Money Market
Quote Request. No Money Market Quote Request shall be given
within five Euro-Dollar Business Days (or such other number
of days as the Company and the Agent may agree) of any other
Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly
upon receipt of a Money Market Quote Request, the Agent
shall send to the Banks by telex or facsimile transmission
an Invitation for Money Market Quotes substantially in the
form of Exhibit D hereto, which shall constitute an invita-
tion by the Borrower to each Bank to submit Money Market
Quotes offering to make the Money Market Loans to which such
Money Market Quote Request relates in accordance with this
Section.
(d) Submission and Contents of Money Market
Quotes. (i) Each Bank may submit a Money Market Quote
containing an offer or offers to make Money Market Loans in
response to any Invitation for Money Market Quotes. Each
Money Market Quote must comply with the requirements of this
subsection (d) and must be submitted to the Agent by telex
or facsimile transmission at its offices specified in or
pursuant to Section 11.1 not later than (x) 2:00 P.M. (New
York City time) on the fourth Euro-Dollar Business Day prior
to the proposed date of Borrowing, in the case of a LIBOR
Auction or (y) 9:30 A.M. (New York City time) on the pro-
posed date of Borrowing, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Company and the Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effec-
tive); provided that Money Market Quotes submitted by the
Agent (or any affiliate of the Agent) in the capacity of a
Bank may be submitted, and may only be submitted, if the
Agent or such affiliate notifies the Borrower of the terms
of the offer or offers contained therein not later than (x)
one hour prior to the deadline for the other Banks, in the
case of a LIBOR Auction or (y) 15 minutes prior to the
deadline for the other Banks, in the case of an Absolute
Rate Auction. Subject to Articles 3 and 6, any Money Market
Quote so made shall be irrevocable except with the written
consent of the Agent given on the instructions of the Bor-
rower.
(ii) Each Money Market Quote shall be in substan-
tially the form of Exhibit E hereto and shall in any case
specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan
for which each such offer is being made, which principal
amount (w) may be greater than or less than the Commitment
of the quoting Bank, (x) must be $5,000,000 or a larger
multiple of $1,000,000, (y) may not exceed the principal
amount of Money Market Loans for which offers were request-
ed and (z) may be subject to an aggregate limitation as to
the principal amount of Money Market Loans for which offers
being made by such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin
above or below the applicable London Interbank Offered Rate
(the "Money Market Margin") offered for each such Money
Market Loan, expressed as a percentage (specified to the
nearest 1/10,000th of 1%) to be added to or subtracted from
such base rate,
(D) in the case of an Absolute Rate Auction, the
rate of interest per annum (specified to the nearest
1/10,000th of 1%) (the "Money Market Absolute Rate") of-
fered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate
offers by the quoting Bank with respect to each Interest
Period specified in the related Invitation for Money Market
Quotes.
(iii) Any Money Market Quote shall be disregarded
if it:
(A) is not substantially in conformity with
Exhibit E hereto or does not specify all of the information
required by subsection (d)(ii) above;
(B) contains qualifying, conditional or similar
language;
(C) proposes terms other than or in addition to
those set forth in the applicable Invitation for Money
Market Quotes; or
(D) arrives after the time set forth in subsec-
tion (d)(i) above.
(e) Notice to Borrower. The Agent shall promptly
notify the Borrower of the terms (x) of any Money Market
Quote submitted by a Bank that is in accordance with subsec-
tion (d) and (y) of any Money Market Quote that amends,
modifies or is otherwise inconsistent with a previous Money
Market Quote submitted by such Bank with respect to the same
Money Market Quote Request. Any such subsequent Money
Market Quote shall be disregarded by the Agent unless such
subsequent Money Market Quote is submitted solely to correct
a manifest error in such former Money Market Quote. The
Agent's notice to the Borrower shall specify (A) the aggre-
gate principal amount of Money Market Loans for which offers
have been received for each Interest Period specified in the
related Money Market Quote Request, (B) the respective
principal amounts and Money Market Margins or Money Market
Absolute Rates, as the case may be, so offered and (C) if
applicable, limitations on the aggregate principal amount of
Money Market Loans for which offers in any single Money
Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later
than 10:30 A.M. (New York City time) on (x) the third
Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) the pro-
posed date of Borrowing, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Company and the Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effec-
tive), the Borrower shall notify the Agent of its acceptance
or non-acceptance of the offers so notified to it pursuant
to subsection (e). In the case of acceptance, such notice
(a "Notice of Money Market Borrowing") shall specify the
aggregate principal amount of offers for each Interest
Period that are accepted. The Borrower may accept any Money
Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money
Market Borrowing may not exceed the applicable amount set
forth in the related Money Market Quote Request;
(ii) the principal amount of each Money Market Borrow-
ing must be $10,000,000 or a larger multiple of $1,000,000;
(iii) acceptance of offers may only be made on the
basis of ascending Money Market Margins or Money Market
Absolute Rates, as the case may be; and
(iv) the Borrower may not accept any offer that is
described in subsection (d)(iii) or that otherwise fails to
comply with the requirements of this Agreement.
(g) Allocation by Agent. If offers are made by
two or more Banks with the same Money Market Margins or
Money Market Absolute Rates, as the case may be, for a
greater aggregate principal amount than the amount in re-
spect of which such offers are accepted for the related
Interest Period, the principal amount of Money Market Loans
in respect of which such offers are accepted shall be allo-
cated by the Agent among such Banks as nearly as possible
(in multiples of $1,000,000, as the Agent may deem appropri-
ate) in proportion to the aggregate principal amounts of
such offers. Determinations by the Agent of the amounts of
Money Market Loans shall be conclusive in the absence of
manifest error.
SECTION 2.4. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of
such Bank's share (if any) of such Borrowing and such Notice
of Borrowing shall not thereafter be revocable by the Bor-
rower.
(b) Not later than 2:00 P.M. (New York City time)
on the date of each Borrowing, each Bank participating
therein shall make available its share of such Borrowing, in
Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section
11.1. Unless the Agent determines that any applicable
condition specified in Article 3 has not been satisfied, the
Agent will make the funds so received from the Banks avail-
able to the Borrower at the Agent's aforesaid address.
(c) Unless the Agent shall have received notice
from a Bank prior to the date of any Borrowing that such
Bank will not make available to the Agent such Bank's share
of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such
Borrowing in accordance with subsection (b) of this Section
and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding
amount. If and to the extent that such Bank shall not have
so made such share available to the Agent, such Bank and the
Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest
thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, a
rate per annum equal to the higher of the Federal Funds Rate
and the interest rate applicable thereto pursuant to Section
2.7 and (ii) in the case of such Bank, the Federal Funds
Rate. If such Bank shall repay to the Agent such corre-
sponding amount, such amount so repaid shall constitute such
Bank's Loan included in such Borrowing for purposes of this
Agreement.
SECTION 2.5. Notes. (a) The Loans of each Bank
to each Borrower shall be evidenced by a single Note of
such Borrower payable to the order of such Bank for the
account of its Applicable Lending Office in an amount equal
to the aggregate unpaid principal amount of such Bank's
Loans to such Borrower.
(b) Each Bank may, by notice to a Borrower and
the Agent, request that its Loans of a particular type to
such Borrower be evidenced by a separate Note of such Bor-
rower in an amount equal to the aggregate unpaid principal
amount of such Loans. Each such Note shall be in substan-
tially the form of Exhibit B hereto with appropriate modifi-
cations to reflect the fact that it evidences solely Loans
of the relevant type. Each reference in this Agreement to a
"Note" or the "Notes" of such Bank shall be deemed to refer
to and include any or all of such Notes, as the context may
require.
(c) Upon receipt of each Bank's Note pursuant to
Section 3.1(a) or Section 3.3(a), the Agent shall forward
such Note to such Bank. Each Bank shall record the date,
amount, type and maturity of each Loan made by it and the
date and amount of each payment of principal made with
respect thereto and may, if such Bank so elects in connec-
tion with any transfer or enforcement of its Note of any
Borrower, endorse on the schedule forming a part thereof
appropriate notations to evidence the foregoing information
with respect to each such Loan to such Borrower then out-
standing; provided that the failure of any Bank to make any
such recordation or endorsement shall not affect the obliga-
tions of any Borrower hereunder or under the Notes. Each
Bank is hereby irrevocably authorized by each Borrower so to
endorse its Notes and to attach to and make a part of any
Note a continuation of any such schedule as and when re-
quired.
SECTION 2.6. Maturity of Loans. (a) Each Com-
mitted Loan shall mature, and the principal amount thereof
shall be due and payable, together with accrued interest
thereon, on the Termination Date.
(b) Each Money Market Loan included in any Money
Market Borrowing shall mature, and the principal amount
thereof shall be due and payable, together with accrued
interest thereon, on the last day of the Interest Period
applicable to such Borrowing.
SECTION 2.7. Interest Rates. (a) Each Base Rate
Loan shall bear interest on the outstanding principal amount
thereof, for each day from the date such Loan is made until
it becomes due, at a rate per annum equal to the Base Rate
for such day. Such interest shall be payable quarterly in
arrears on each Quarterly Date and, with respect to the
principal amount of any Base Rate Loan converted to a CD
Loan or a Euro-Dollar Loan, on the date such Base Rate Loan
is so converted. Any overdue principal of or interest on
any Base Rate Loan shall bear interest, payable on demand,
for each day until paid at a rate per annum equal to the sum
of 2% plus the rate otherwise applicable to Base Rate Loans
for such day.
(b) Each CD Loan shall bear interest on the
outstanding principal amount thereof, for each day during
each Interest Period applicable thereto, at a rate per annum
equal to the sum of the CD Margin for such day plus the
Adjusted CD Rate applicable to such Interest Period; provid-
ed that if any CD Loan shall, as a result of clause (2)(b)
of the definition of Interest Period, have an Interest
Period of less than 30 days, such CD Loan shall bear inter-
est during such Interest Period at the rate applicable to
Base Rate Loans during such period. Such interest shall be
payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than 90 days, at
intervals of 90 days after the first day thereof. Any
overdue principal of or interest on any CD Loan shall bear
interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the higher of (i)
the sum of the CD Margin plus the Adjusted CD Rate applica-
ble to such Loan at the date such payment was due and (ii)
the rate applicable to Base Rate Loans for such day.
The "Adjusted CD Rate" applicable to any Interest
Period means a rate per annum determined pursuant to the
following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest
Period is the rate of interest determined by the Agent to be
the average (rounded upward, if necessary, to the next
higher 1/100 of 1%) of the prevailing rates per annum bid at
10:00 A.M. (New York City time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two
or more New York certificate of deposit dealers of recog-
nized standing for the purchase at face value from each CD
Reference Bank of its certificates of deposit in an amount
comparable to the principal amount of the CD Loan of such CD
Reference Bank to which such Interest Period applies and
having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including without limita-
tion any basic, supplemental or emergency reserves) for a
member bank of the Federal Reserve System in New York City
with deposits exceeding five billion dollars in respect of
new non-personal time deposits in dollars in New York City
having a maturity comparable to the related Interest Period
and in an amount of $100,000 or more. The Adjusted CD Rate
shall be adjusted automatically on and as of the effective
date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual
assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund classified as adequately
capitalized and within supervisory subgroup "A" (or a compa-
rable successor assessment risk classification) within the
meaning of 12 C.F.R. SECTION 327.4(a) (or any successor provision)
to the Federal Deposit Insurance Corporation (or any succes-
sor) 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 automatical-
ly on and as of the effective date of any change in the
Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on
the outstanding principal amount thereof, for each day
during each Interest Period applicable thereto, at a rate
per annum equal to the sum of the Euro-Dollar Margin for
such day plus the London Interbank Offered Rate applicable
to such Interest Period. Such interest shall be payable for
each Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of
three months after the first day thereof.
The "London Interbank Offered Rate" applicable to
any Interest Period means the rate appearing on Page 3750 of
the Telerate Service (or on any successor or substitute page
of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those
currently provided on such page of the Telerate Service, as
determined by the Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately
11:00 a.m. (London time) two Euro-Dollar Business Days prior
to the commencement of such Interest Period, as the rate for
dollar deposits with a maturity comparable to such Interest
Period. In the event that such rate is not so available at
such time for any reason, then the "London Interbank Offered
Rate" with respect to such Euro-Dollar Borrowing for such
Interest Period shall be the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective
rates per annum at which deposits in dollars are offered to
each of the Euro-Dollar Reference Banks in the London inter-
bank market at approximately 11:00 A.M. (London time) two
Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Euro-Dollar
Reference Bank to which such Interest Period is to apply and
for a period of time comparable to such Interest Period.
(d) Any overdue principal of or interest on any
Euro-Dollar Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the higher
of (i) the sum of 2% plus the Euro-Dollar Margin for such
day plus the London Interbank Offered Rate applicable to
such Loan at the date such payment was due and (ii) the sum
of 2% plus the Euro-Dollar Margin for such day plus the
average (rounded upward, if necessary, to the next higher
1/16 of 1%) of the respective rates per annum at which one
day (or, if such amount due remains unpaid more than three
Euro-Dollar Business Days, then for such other period of
time not longer than three months as the Agent may select)
deposits in dollars in an amount approximately equal to such
overdue payment due to each of the Euro-Dollar Reference
Banks are offered to such Euro-Dollar Reference Bank in the
London interbank market for the applicable period determined
as provided above (or, if the circumstances described in
clause (a) or (b) of Section 8.1 shall exist, at a rate per
annum equal to the sum of 2% plus the rate applicable to
Base Rate Loans for such day).
(e) Subject to Section 8.1, each Money Market
LIBOR Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto,
at a rate per annum equal to the sum of the London Interbank
Offered Rate for such Interest Period (determined in accor-
dance with Section 2.7(c) as if the related Money Market
LIBOR Borrowing were a Committed Euro-Dollar Borrowing) plus
(or minus) the Money Market Margin quoted by the Bank making
such Loan in accordance with Section 2.3. Each Money Market
Absolute Rate Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the Money Market
Absolute Rate quoted by the Bank making such Loan in accor-
dance with Section 2.3. Such interest shall be payable for
each Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of
three months after the first day thereof. Any overdue
principal of or interest on any Money Market Loan shall bear
interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the Base Rate for
such day.
(f) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give
prompt notice to the Borrower and the participating Banks of
each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of manifest
error.
(g) Each Reference Bank agrees to use its best
efforts to furnish quotations to the Agent as contemplated
by this Section. If any Reference Bank does not furnish a
timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations
furnished by the remaining Reference Bank or Banks or, if
none of such quotations is available on a timely basis, the
provisions of Section 8.1 shall apply.
SECTION 2.8. Fees. (a) The Borrowers shall pay
to the Agent for the account of the Banks ratably a facility
fee at the Facility Fee Rate (determined daily in accordance
with the Pricing Schedule). Such facility fee shall accrue
(i) from and including the Effective Date to but excluding
the date of termination of the Commitments in their entire-
ty, on the daily aggregate amount of the Commitments (wheth-
er used or unused) and (ii) from and including such date of
termination to but excluding the date the Loans and the
Letter of Credit Liabilities shall be repaid in their en-
tirety, on the daily aggregate outstanding principal amount
of the Loans and the daily aggregate amount of the Letter of
Credit Liabilities. Such fee shall be payable quarterly in
arrears on each Quarterly Date and on the date of termina-
tion of the Commitments in their entirety (and, if later,
the date the Loans and the aggregate amount of Letter of
Credit Liabilities shall be repaid in their entirety). The
portion of the facility fee that shall be the obligation of
each Borrower other than the Company for any period shall be
based on the average daily aggregate outstanding principal
amount of Loans to such Borrower during such period in
relation to the average daily aggregate amount of the Com-
mitments during such period, all as determined by the Agent,
which determination shall be conclusive absent manifest
error. The Company shall be solely responsible for payment
of the balance of the facility fee.
(b) The Company shall pay to the Agent for the
account of the Banks ratably a letter of credit fee of
0.375% per annum of the stated amount of the Letter of
Credit, calculated on the basis of a year of 360 days. Such
fee shall accrue from and including the Date of Issuance (i)
if there is no drawing under the Letter of Credit, to and
including the date of the Expiration Time or, if applicable,
to but excluding the Surrender Date, or (ii) if there is a
drawing under the Letter of Credit, to but excluding the
date on which the Banks honor (or are required to honor) a
draw under the Letter of Credit (whichever of such dates
shall be applicable, the "Last L/C Fee Date") and shall be
payable in arrears on each Quarterly Date and on the Last
L/C Fee Date.
SECTION 2.9. Optional Termination or Reduction of
Commitments. During the Revolving Credit Period, the Compa-
ny may, upon at least three Domestic Business Days' notice
to the Agent, (i) terminate the Commitments at any time, if
no Loans or Letter of Credit Liabilities are outstanding at
such time or (ii) ratably reduce from time to time by an
aggregate amount of $25,000,000 or a larger multiple of
$1,000,000, the aggregate amount of the Commitments in
excess of the sum of the aggregate outstanding principal
amount of the Loans and the aggregate amount of Letter of
Credit Liabilities.
SECTION 2.10. Method of Electing Interest Rates.
(a) The Loans included in each Committed Borrowing shall
bear interest initially at the type of rate specified by the
Borrower in the applicable Notice of Committed Borrowing.
Thereafter, the Borrower may from time to time elect to
change or continue the type of interest rate borne by each
Group of Loans (subject in each case to the provisions of
Article 8), as follows:
(i) if such Loans are Base Rate Loans, the Borrow-
er may elect to convert such Loans to CD Loans as of any
Domestic Business Day or to Euro-Dollar Loans as of any
Euro-Dollar Business Day;
(ii) if such Loans are CD Loans, the Borrower may
elect to convert such Loans to Base Rate Loans or
Euro-Dollar Loans or elect to continue such Loans as CD
Loans for an additional Interest Period, subject to Section
2.14 in the case of any such conversion or continuation
effective on any day other than the last day of the then
current Interest Period applicable to such Loans; and
(iii) if such Loans are Euro-Dollar Loans, the
Borrower may elect to convert such Loans to Base Rate Loans
or CD Loans or elect to continue such Loans as Euro-Dollar
Loans for an additional Interest Period, subject to Section
2.14 in the case of any such conversion or continuation
effective on any day other than the last day of the then
current Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a
"Notice of Interest Rate Election") to the Agent not later
than 10:30 A.M. (New York City time) on (i) in the case of a
conversion to or continuation as a Euro-Dollar Loan, the
third (or, if the desired Interest Period is 9 or 12 months,
the fifth) Euro-Dollar Business Day before the conversion or
continuation selected in such notice is to be effective or
(ii) in the case of a conversion to or continuation as a CD
Rate Loan, on the second (or, if the desired Interest Period
is 270 or 360 days, the fourth) Domestic Business Day before
such conversion or continuation is to be effective. A Notice
of Interest Rate Election may, if it so specifies, apply to
only a portion of the aggregate principal amount of the
relevant Group of Loans; provided that (i) such portion is
allocated ratably among the Loans comprising such Group and
(ii) the portion to which such Notice applies, and the
remaining portion to which it does not apply, are each
$10,000,000 or any larger multiple of $1,000,000. If no
such notice is timely received prior to the end of an Inter-
est Period, the Borrower shall be deemed to have elected
that all Loans having such Interest Period be converted to
Base Rate Loans.
(b) Each Notice of Interest Rate Election shall
specify:
(i) the Group of Loans (or portion thereof) to
which such notice applies;
(ii) the date on which the conversion or continua-
tion selected in such notice is to be effective, which
shall comply with the applicable clause of subsection (a)
above;
(iii) if the Loans comprising such Group are to be
converted, the new type of Loans and, if the Loans being
converted are to be Fixed Rate Loans, the duration of the
next succeeding Interest Period applicable thereto; and
(iv) if such Loans are to be continued as CD Loans
or Euro-Dollar Loans for an additional Interest Period, the
duration of such additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate
Election shall comply with the provisions of the definition
of Interest Period.
(c) Upon receipt of a Notice of Interest Rate
Election from the Borrower pursuant to subsection (a) above,
the Agent shall promptly notify each Bank of the contents
thereof and such notice shall not thereafter be revocable by
the Borrower.
(d) An election by the Borrower to change or
continue the rate of interest applicable to any Group of
Loans pursuant to this Section shall not constitute a "Bor-
rowing" subject to the provisions of Section 3.2.
SECTION 2.11. Mandatory Termination and Reduction
of Commitments. (a) The Commitments shall terminate on the
Termination Date and any Loans then outstanding (together
with accrued interest thereon) shall be due and payable on
such date.
(b) To the extent not theretofore reduced to the
same or a lesser amount pursuant to Section 2.9 or 2.11(c),
the Commitments shall be ratably reduced on the second
anniversary of the Initial Funding Date (the "Commitment
Reduction Date") to an aggregate amount of $550,000,000.
(c) In addition, if the Company or any of its
Subsidiaries shall at any time, or from time to time, after
the date hereof receive any Net Cash Proceeds of any Reduc-
tion Event while the aggregate amount of the Commitments
exceeds $550,000,000, the Commitments shall be reduced by an
amount (the "Reduction Obligation") equal to the lesser of
(i) 75% of such Net Cash Proceeds and (ii) the amount re-
quired to reduce the aggregate amount of the Commitments to
$550,000,000. Such Reduction Obligation shall be effective
forthwith upon receipt by the Company or any of its Subsid-
iaries, as the case may be, of such Net Cash Proceeds;
provided that if the Reduction Obligation in respect of any
Reduction Event is less than $1,000,000, such reduction
shall be effective upon receipt of Net Cash Proceeds such
that, together with all other such amounts not previously
applied, such Reduction Obligation is equal to at least
$1,000,000; and provided further that if any reduction in
the Commitments pursuant to this subsection (c) would other-
wise require prepayment of Fixed Rate Loans or portions
thereof prior to the last day of the then current Interest
Period, such reduction shall, unless both (x) the Company
would be unable on such date to satisfy the conditions set
out in Section 3.2 and (y) the Agent otherwise notifies the
Company upon the instructions of the Required Banks, be
deferred to such last day of the related Interest Period.
The Company shall give the Agent at least three Euro-Dollar
Business Days' notice of each reduction in the Commitments
pursuant to this subsection.
(d) On the date of any reduction of Commitments,
the Borrowers other than Betz Canada shall be jointly and
severally obligated to repay such principal amount (together
with accrued interest thereon) of each Bank's outstanding
Loans, if any, as may be necessary so that after such repay-
ment (i) the sum of the aggregate outstanding principal
amount of such Bank's Committed Loans plus its Letter of
Credit Liabilities, does not exceed the amount of such
Bank's Commitment as then reduced, and (ii) the aggregate
unpaid principal amount of all outstanding Loans plus the
amount of all Letter of Credit Liabilities does not exceed
the aggregate amount of the Commitments as then reduced.
The particular Borrowings to be repaid shall be as designat-
ed by the Borrowers in the related Notice or Notices of
Borrowing (or, failing such designation by the Borrowers, as
the Agent may designate); provided that neither the Agent
nor the Borrowers shall be permitted to designate Borrowings
made by Betz Canada for this purpose.
SECTION 2.12. Optional Prepayments. (a) Subject
in the case of any Fixed Rate Borrowing to Section 2.14, any
Borrower may, upon at least one Domestic Business Day's
notice to the Agent, prepay any Group of Domestic Loans (or
any Money Market Borrowing bearing interest at the Base Rate
pursuant to Section 8.1) or upon at least three Euro-Dollar
Business Days' notice to the Agent, prepay any Group of
Euro-Dollar Loans, in each case in whole at any time, or
from time to time in part in amounts aggregating $10,000,000
or any larger multiple of $1,000,000, by paying the princi-
pal amount to be prepaid together with accrued interest
thereon to the date of prepayment. Each such optional
prepayment shall be applied to prepay ratably the Loans of
the several Banks included in such Group.
(b) Except as provided in subsection (a) above no
Borrower may prepay all or any portion of the principal
amount of any Money Market Loan prior to the maturity there-
of.
(c) Upon receipt of a notice of prepayment pursu-
ant to this Section, the Agent shall promptly notify each
Bank of the contents thereof and of such Bank's ratable
share (if any) of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.13. General Provisions as to Payments.
(a) The Borrowers shall make each payment of principal of,
and interest on, the Loans and of Letter of Credit Liabili-
ties and interest thereon and of fees hereunder not later
than 2:00 P.M. (New York City time) on the date when due, in
Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section
11.1. The Agent will promptly distribute to each Bank its
ratable share of each such payment received by the Agent for
the account of the Banks. Whenever any payment of principal
of, or interest on, the Domestic Loans or of Letter of
Credit Liabilities or interest thereon or of fees shall be
due on a day which is not a Domestic Business Day, the date
for payment thereof shall be extended to the next succeeding
Domestic Business Day. Whenever any payment of principal
of, or interest on, the Euro-Dollar Loans shall be due on a
day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case the date
for payment thereof shall be the next preceding Euro-Dollar
Business Day. Whenever any payment of principal of, or
interest on, the Money Market Loans shall be due on a day
which is not a Euro-Dollar Business Day, the date for pay-
ment thereof shall be extended to the next succeeding
Euro-Dollar Business Day. If the date for any payment of
principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice
from a Borrower prior to the date on which any payment is
due from such Borrower to the Banks hereunder that such
Borrower will not make such payment in full, the Agent may
assume that such Borrower has made such payment in full to
the Agent on such date and the Agent may, in reliance upon
such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such
Bank. If and to the extent that such Borrower shall not
have so made such payment, each Bank shall repay to the
Agent forthwith on demand such amount distributed to such
Bank together with interest thereon, for each day from the
date such amount is distributed to such Bank until the date
such Bank repays such amount to the Agent, at the Federal
Funds Rate.
SECTION 2.14. Funding Losses. If a Borrower
makes any payment of principal with respect to any Fixed
Rate Loan or any Fixed Rate Loan is converted (pursuant to
Article 2, 6 or 8 or otherwise, other than due to Section
8.2(b)) on any day other than the last day of an Interest
Period applicable thereto, or the last day of an applicable
period fixed pursuant to Section 2.7(d), or if a Borrower
fails to borrow, prepay, convert or continue any Fixed Rate
Loans after notice has been given to any Bank in accordance
with Section 2.4(a), 2.12(c) or 2.10(c), such Borrower shall
reimburse each Bank within 15 days after demand for any
resulting loss or expense reasonably incurred by it (or by
an existing or prospective Participant in the related Loan),
including (without limitation) any loss incurred in obtain-
ing, liquidating or employing deposits from third parties in
the principal amount so prepaid or in the principal amount
which the Borrower failed to borrow, prepay, convert or
continue, but excluding loss of margin for the period after
any such payment or conversion or failure to borrow, prepay,
convert or continue, provided that such Bank shall have
delivered to such Borrower a certificate as to the amount of
such loss or expense and showing the calculation thereof,
which certificate shall be conclusive in the absence of
manifest error.
SECTION 2.15. Computation of Interest and Fees.
Interest based on the Prime Rate hereunder shall be computed
on the basis of a year of 365 days (or 366 days in a leap
year) and paid for the actual number of days elapsed (in-
cluding the first day but excluding the last day). All
other interest and fees shall be computed on the basis of a
year of 360 days and paid for the actual number of days
elapsed (including the first day but excluding the last
day).
SECTION 2.16. Regulation D Compensation. Each
Bank may, so long as such Bank shall be required to maintain
reserves in respect of "Eurocurrency liabilities" under
Regulation D of the Board of Governors of the Federal Re-
serve System (or in respect of any other category of liabil-
ities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets that in-
cludes loans by a non-United States office of such Bank to
United States residents), require any Borrower to pay,
contemporaneously with each payment of interest on the
Euro-Dollar Loans, additional interest on the related
Euro-Dollar Loan of such Bank at a rate per annum determined
by such Bank up to but not exceeding the excess of (i) (A)
the applicable London Interbank Offered Rate divided by (B)
one minus the Euro-Dollar Reserve Percentage over (ii) the
applicable London Interbank Offered Rate. Any Bank wishing
to require payment of such additional interest (x) shall so
notify such Borrower and the Agent, in which case such
additional interest on the Euro-Dollar Loans of such Bank
shall be payable to such Bank at the place indicated in such
notice with respect to each Interest Period commencing at
least three Euro-Dollar Business Days after the giving of
such notice and (y) shall notify such Borrower at least five
Euro-Dollar Business Days prior to each date on which inter-
est is payable on the Euro-Dollar Loans of the amount then
due it under this Section.
SECTION 2.17. Judgment Currency. If for the
purpose of obtaining judgment in any court it is necessary
to convert a sum due from any Borrower hereunder or under
any of the Notes in United States dollars ("dollars") into
another currency, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with
normal banking procedures the Agent could purchase dollars
with such other currency at the Agent's New York office at
11:00 A.M. (New York City time) on the Domestic Business Day
preceding that on which final judgment is given. The obli-
gations of each Borrower in respect of any sum due to any
Bank or the Agent hereunder or under any Note shall, not-
withstanding any judgment in a currency other than dollars,
be discharged only to the extent that on the Domestic Busi-
ness Day following receipt by such Bank or the Agent (as the
case may be) of any sum adjudged to be so due in such other
currency such Bank or the Agent (as the case may be) may in
accordance with normal banking procedures purchase dollars
with such other currency; if the amount of dollars so pur-
chased is less than the sum originally due to such Bank or
the Agent, as the case may be, in dollars, each Borrower
agrees, to the fullest extent that it may effectively do so,
as a separate obligation and notwithstanding any such judg-
ment, to indemnify such Bank or the Agent, as the case may
be, against such loss, and if the amount of dollars so
purchased exceeds (a) the sum originally due to any Bank or
the Agent, as the case may be, and (b) any amounts shared
with other Banks as a result of allocations of such excess
as a disproportionate payment to such Bank under Section
11.4, such Bank or the Agent, as the case may be, agrees to
remit such excess to the appropriate Borrower.
SECTION 2.18. Foreign Subsidiary Costs. (a) If
the cost to any Bank of making or maintaining any Loan to an
Eligible Subsidiary is increased, or the amount of any sum
received or receivable by any Bank (or its Applicable Lend-
ing Office) is reduced by an amount deemed by such Bank to
be material, by reason of the fact that such Eligible Sub-
sidiary is incorporated in, or conducts business in, a
jurisdiction outside the United States of America, such
Eligible Subsidiary shall indemnify such Bank for such
increased cost or reduction within 15 days after demand by
such Bank (with a copy to the Agent). A certificate of such
Bank claiming compensation under this subsection (a) and
setting forth the additional amount or amounts to be paid to
it hereunder shall be conclusive in the absence of manifest
error.
(b) Each Bank will promptly notify the Company,
the applicable Eligible Subsidiary and the Agent of any
event of which it has knowledge that will entitle such Bank
to additional compensation pursuant to subsection (a) and
will designate a different Applicable Lending Office if, in
the judgment of such Bank, such designation will avoid the
need for, or reduce the amount of, such compensation and
will not be otherwise disadvantageous to such Bank.
SECTION 2.19. Letter of Credit.
(a) Issuance of the Letter of Credit. The Banks
severally agree, on the terms and conditions herein set
forth, to issue to the Beneficiary the Letter of Credit on a
date (the "Date of Issuance"), not later than September 30,
1996 and designated by the Company by not less than three
Domestic Business Days' notice to the Agent. The Agent
shall promptly notify each Bank of the Date of Issuance so
designated by the Company.
(b) Drawings under the Letter of Credit. Upon
receipt from the Beneficiary of a demand for payment under
the Letter of Credit, the Agent shall determine in accor-
dance with the terms and conditions of the Letter of Credit
whether such demand for payment should be honored. If the
Agent determines that a demand for payment by the Beneficia-
ry should be honored in accordance with the terms and condi-
tions set forth in the Letter of Credit, the Agent shall
promptly notify the Company and each Bank of the aggregate
amount to be paid as a result of such demand and shall
promptly notify each Bank of its share of such amount. Each
Bank shall make available to the Agent for the account of
the Beneficiary its share of the amount so demanded in
accordance with the terms of the Letter of Credit.
(c) Reimbursement Obligation. If any Bank pays
any portion of any draft presented under the Letter of
Credit, the Company agrees to pay to such Bank on the date
of such payment (the "Reimbursement Due Date") an amount
equal to the amount paid by such Bank under the Letter of
Credit (a "Reimbursable Amount"). If any Reimbursable
Amount is not paid on or before the relevant Reimbursement
Due Date, the overdue amount shall bear interest until paid
as provided in subsection 2.19(d).
(d) Overdue Amounts. Any amount payable under
this Section 2.19 which is not paid when due shall bear
interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the Base Rate for
such day.
(e) Obligations Absolute. The obligations of the
Company under this Section 2.19 shall be absolute, uncondi-
tional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under all
circumstances whatsoever, including without limitation the
following circumstances:
(i) any lack of validity or enforceability of
any Related Document or any term or provision therein;
(ii) any amendment or waiver of or any consent to
departure from all or any of the provisions of any Related
Document;
(iii) the existence of any claim, set-off, defense
or other rights that the Company may have at any time
against the Beneficiary (or any Persons for whom the Bene-
ficiary may be acting), the Banks or any other Person,
whether in connection with this Agreement, the Related
Documents or any unrelated transactions;
(iv) any statement or any other document present-
ed under the Letter of Credit proving to be forged, fraudu-
lent or invalid in any respect or any statement therein
being untrue or inaccurate in any respect whatsoever;
(v) payment by any Bank under the Letter of
Credit against presentation to the Agent of a draft or
certificate that does not comply with the terms of the
Letter of Credit, subject to Section 11.3(c); or
(vi) any other act or omission to act or delay of
any kind by any Bank, the Agent or any other Person or any
other event or circumstance whatsoever that might, but for
the provisions of this Section, constitute a legal or
equitable discharge of the Company's obligations hereunder.
Nothing in this Agreement and no failure by the Company to
perform any of its obligations hereunder shall affect the
several obligations of the Banks under the Letter of Credit.
ARTICLE 3
CONDITIONS
SECTION 3.1. Closing. The closing hereunder
shall occur upon receipt by the Agent of the following
documents, each dated the Closing Date unless otherwise
indicated:
(a) a duly executed copy of this Agreement and
duly executed Notes of each of the Company and Betz Canada
for the account of each Bank dated on or before the Closing
Date complying with the provisions of Section 2.5;
(b) an opinion of Morgan, Lewis & Bockius LLP,
counsel for the Company and United States counsel for Betz
Canada, substantially in the form of Exhibit F-1 hereto and
covering such additional matters relating to the transac-
tions contemplated hereby as the Required Banks may reason-
ably request;
(c) an opinion of Bennett Jones Verchere, Canadi-
an counsel for Betz Canada, substantially in the form of
Exhibit F-2 hereto and covering such additional matters
relating to the transactions contemplated hereby as the
Required Banks may reasonably request;
(d) an opinion of Davis Polk & Wardwell, special
counsel for the Agent, substantially in the form of Exhibit
G hereto and covering such additional matters relating to
the transactions contemplated hereby as the Required Banks
may reasonably request; and
(e) all documents the Agent may reasonably re-
quest relating to the existence of the Company and Betz
Canada, the corporate authority for and the validity of
this Agreement and the Notes, and any other matters rele-
vant hereto, all in form and substance satisfactory to the
Agent.
The Agent shall promptly notify the Company and the Banks of
the Closing Date, and such notice shall be conclusive and
binding on all parties hereto.
SECTION 3.2. Borrowings and Issuance of Letter of
Credit. The obligation of any Bank to make a Loan on the
occasion of any Borrowing and the obligations of the several
Banks to issue the Letter of Credit are subject to the
satisfaction of the following conditions:
(a) the fact that the Closing Date shall have
occurred on or prior to July 1, 1996;
(b) receipt by the Agent of a Notice of Borrowing
as required by Section 2.2 or 2.3 or receipt by the Agent
of the notice required by subsection 2.19(a), as the case
may be;
(c) the fact that, on the Initial Funding Date,
(i) the Company shall have acquired the Dearborn Business
on terms in all material respects as set forth in the
Acquisition Agreement, (ii) all material licenses, permits
and governmental and third party filings, consents and
approvals required for such acquisition shall have been
obtained and remain in full force and effect and (iii) the
Agent shall have received a certificate of the Company from
the President or any Vice President of the Company to the
effect of (i) and (ii);
(d) the fact that the Agent shall have received
payment of (i) its fees in accordance with the commitment
letter agreement dated April 9, 1996 between Morgan Guaran-
ty Trust Company of New York and the Company and (ii) for
the benefit of the Banks, the Banks' participation fees
pursuant to such commitment letter agreement by the earlier
of the Initial Funding Date or July 1, 1996;
(e) the fact that, immediately after such Borrow-
ing or issuance of the Letter of Credit, the sum of the
aggregate outstanding principal amount of the Loans and the
aggregate amount of Letter of Credit Liabilities will not
exceed the aggregate amount of the Commitments; provided
that if the Letter of Credit is tendered to the Agent for
cancellation not later than 2:00 P.M. (New York City time)
on the date of a proposed Borrowing, then the Letter of
Credit shall be deemed to be not outstanding on such date
(the "Surrender Date");
(f) except in the case of a Note Payoff Borrow-
ing, the fact that, immediately before and after such
Borrowing or issuance of the Letter of Credit, no Default
shall have occurred and be continuing;
(g) except in the case of a Note Payoff Borrow-
ing, the fact that the representations and warranties of
the Borrower (and, if the Borrower is an Eligible Subsid-
iary, of the Company) contained in this Agreement (except,
in the case of any Borrowing after the Initial Funding
Date, the representations and warranties set forth in
Section 4.12) shall be true in all material respects on and
as of the date of such Borrowing or issuance of the Letter
of Credit;
(h) the fact that immediately after such Borrow-
ing, the aggregate principal amount of Loans outstanding to
Betz Canada will not exceed $550,000,000; and
(i) the fact that, if the Borrowing is by Betz
Canada, such Borrowing is a Committed Borrowing and the
date of such Borrowing is more than five years prior to the
Termination Date.
Each Borrowing and issuance of the Letter of Credit hereun-
der shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing or issuance of
the Letter of Credit as to the facts specified in clauses
(e) - (i) of this Section.
SECTION 3.3. First Borrowing by Each Eligible
Subsidiary. The obligation of each Bank to make a Loan on
the occasion of the first Borrowing by each Eligible Subsid-
iary is subject to the satisfaction of the following further
conditions (except to the extent previously satisfied pursu-
ant to Section 3.1, in the case of Betz Canada):
(a) receipt by the Agent for the account of each
Bank of a duly executed Note of such Eligible Subsidiary,
dated on or before the date of such Borrowing complying
with the provisions of Section 2.5;
(b) receipt by the Agent of an opinion or opin-
ions of counsel for such Eligible Subsidiary and/or for the
Company acceptable to the Agent and addressed to the Agent
and the Banks, substantially to the effect of Exhibit J
hereto and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may
reasonably request; and
(c) receipt by the Agent of all documents which
it may reasonably request relating to the existence of such
Eligible Subsidiary, the corporate authority for and the
validity of the Election to Participate of such Eligible
Subsidiary, this Agreement and the Notes of such Eligible
Subsidiary, and any other matters relevant thereto, all in
form and substance satisfactory to the Agent.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants (such repre-
sentations and warranties, in so far as they relate to the
Dearborn Business and any Subsidiary acquired under the
Acquisition Agreement and in so far as they are made or
deemed made on or prior to the date of delivery of the
Company's first annual financial statements pursuant to
Section 5.1.A(a), being made to the knowledge of the Company
based upon the representations and warranties contained in
the Acquisition Agreement and the Company's own due dili-
gence) that:
SECTION 4.1. Corporate Existence and Power. The
Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the jurisdiction of
its incorporation, and has all corporate powers and all
material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conduct-
ed.
SECTION 4.2. Corporate and Governmental Authori-
zation; No Contravention. The execution, delivery and
performance by the Company of this Agreement and the Notes
are within the corporate powers of the Company, have been
duly authorized by all necessary corporate action, require
no action by or in respect of, or filing with, any govern-
mental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law
or regulation or of the articles of incorporation or by-laws
of the Company or of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Company
or any of its Subsidiaries or result in the creation or
imposition of any Lien on any asset of the Company or any of
its Subsidiaries.
SECTION 4.3. Binding Effect. This Agreement has
been duly executed and delivered by the Company and consti-
tutes a valid and binding agreement of the Company and each
of its Notes, when executed and delivered in accordance with
this Agreement, will constitute a valid and binding obliga-
tion of the Company, in each case enforceable in accordance
with its terms.
SECTION 4.4. Financial Information. (a) The
consolidated balance sheet of the Company and its Consoli-
dated Subsidiaries as of December 31, 1995 and the related
consolidated statements of operations, cash flows and common
shareholders' equity for the fiscal year then ended, report-
ed on by Ernst & Young LLP and set forth in the Company's
1995 Form 10-K, a copy of which has been delivered to each
of the Banks, fairly present, in conformity with generally
accepted accounting principles, the consolidated financial
position of the Company and its Consolidated Subsidiaries as
of such date and their consolidated results of operations
and cash flows for such fiscal year.
(b) Since December 31, 1995 there has been no
material adverse change in the business, financial position
or results of operations of the Company and its Consolidated
Subsidiaries, considered as a whole.
SECTION 4.5. Litigation. There is no action,
suit or proceeding pending against or, to the knowledge of
the Company, threatened against or affecting the Company or
any of its Subsidiaries before any court or arbitrator or
any governmental body, agency or official in which there is
a reasonable possibility of an adverse decision which would
materially adversely affect the business, consolidated
financial position or consolidated results of operations of
the Company and its Consolidated Subsidiaries, considered as
a whole, or which in any manner draws into question the
validity or enforceability of this Agreement or the Notes.
SECTION 4.6. Compliance with ERISA. Each member
of the ERISA Group has fulfilled its obligations under the
minimum funding standards of ERISA and the Internal Revenue
Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions
of ERISA and the Internal Revenue Code with respect to each
Plan. No member of the ERISA Group has (i) sought a waiver
of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to
make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement,
or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security under ERISA
or the Internal Revenue Code or (iii) incurred any liability
under Title IV of ERISA other than a liability to the PBGC
for premiums under Section 4007 of ERISA.
SECTION 4.7. Environmental Matters. In the
ordinary course of its business, the Company conducts an
ongoing review of the effect of Environmental Laws on the
business, operations and properties of the Company and its
Subsidiaries, in the course of which it identifies and
evaluates associated liabilities and costs (including,
without limitation, any capital or operating expenditures
required for clean-up or closure of properties presently or
previously owned, any capital or operating expenditures
required to achieve or maintain compliance with environmen-
tal protection standards imposed by law or as a condition of
any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent
shutdown of any facility or reduction in the level of or
change in the nature of operations conducted thereat, any
costs or liabilities in connection with off-site disposal of
wastes or Hazardous Substances, and any actual or potential
liabilities to third parties, including employees, and any
related costs and expenses). On the basis of this review,
the Company has reasonably concluded that such associated
liabilities and costs, including the costs of compliance
with Environmental Laws, are unlikely to have an effect on
the business, financial condition, results of operations or
prospects of the Company and its Consolidated Subsidiaries,
considered as a whole, that would be materially adverse in
relation to the Banks.
SECTION 4.8. Taxes. The Company and its Subsid-
iaries have filed all United States Federal income tax
returns and all other material tax returns which are re-
quired to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment
received by the Company or any Subsidiary. The charges,
accruals and reserves on the books of the Company and its
Subsidiaries in respect of taxes or other governmental
charges are, in the opinion of the Company, adequate.
SECTION 4.9. Subsidiaries. Each of the Company's
corporate Material Subsidiaries is a corporation validly
existing and in good standing under the laws of its juris-
diction of incorporation, and has all corporate powers and
all material governmental licenses, authorizations, consents
and approvals required to carry on its business as now
conducted.
SECTION 4.10. Regulatory Restrictions on Borrow-
ing. The Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, a
"holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended, or otherwise sub-
ject to any regulatory scheme which restricts its ability to
incur debt.
SECTION 4.11. Full Disclosure. Neither the
descriptions of the Company and the Dearborn Business in the
Information Memorandum, as of the date of the Information
Memorandum, nor any statement or certification furnished by
the Company to the Agent or any Bank pursuant to this Agree-
ment, as of the date of such statement or certification,
contained any untrue statement of a material fact or omitted
to state a material fact necessary in order to make any
statements contained therein, in the light of the circum-
stances under which they were made, not misleading.
SECTION 4.12. Representations and Warranties
Relating to Dearborn. (a) The Company has furnished to the
Agent and the Banks the special-purpose, combined and con-
solidated statement of net assets of the Dearborn Business
as of December 31, 1995 and the special-purpose, combined
and consolidated statement of pretax income of the Dearborn
Business for the year then ended, in each case audited by
Price Waterhouse LLP and as furnished to the Company pursu-
ant to the provisions of the Acquisition Agreement; such
statements present fairly, in all material respects, the net
assets of the Dearborn Business as of December 31, 1995 and
the pretax results of operations of the Dearborn Business
for the year then ended in accordance with the basis of
presentation described therein and in the accompanying
reports thereon of Price Waterhouse LLP.
(b) Since the date of distribution of the Infor-
mation Memorandum, there has been no material adverse change
in the business, financial position or results of operations
of the Dearborn Business taken as a whole.
(c) The projections set forth in the Information
Memorandum were, in the opinion of management of the Compa-
ny, based on reasonable assumptions and as of the date of
distribution of the Information Memorandum represented
management's best estimate of future performance of the
Dearborn Business.
(d) Since the date of distribution of the Infor-
mation Memorandum, no event or condition has come to the
attention of management of the Company which would have
caused the assumptions used in preparing the projections in
the Information Memorandum to be materially misleading.
ARTICLE 5
COVENANTS
The Company and, where stated, each other Borrower
agree that, so long as any Bank has any Commitment hereunder
or any amount payable under any Note or any Letter of Credit
Liability remains unpaid:
SECTION 5.1.A. Company Information. The Company
will deliver to each of the Banks:
(a) as soon as available and in any event within
90 days after the end of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Consoli-
dated Subsidiaries as of the end of such fiscal year and
the related consolidated statements of operations, cash
flows and common shareholders' equity for such fiscal year,
setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on in a manner
acceptable to the Securities and Exchange Commission by
Ernst & Young LLP or other independent public accountants
of nationally recognized standing;
(b) as soon as available and in any event within
45 days after the end of each of the first three quarters
of each fiscal year of the Company, a consolidated balance
sheet of the Company and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated
statements of operations for such quarter and for the
portion of the Company's fiscal year ended at the end of
such quarter and the related consolidated statement of cash
flows for the portion of the Company's fiscal year ended at
the end of such quarter, setting forth in the case of such
statements of operations and cash flows, in comparative
form, the figures for the corresponding periods of the
Company's previous fiscal year, all certified (subject to
normal year-end adjustments) as to fairness of presenta-
tion, generally accepted accounting principles (except as
to the absence of footnotes) and consistency by the chief
financial officer or the chief accounting officer of the
Company;
(c) simultaneously with the delivery of each set
of financial statements referred to in clauses (a) and (b)
above, a certificate of the chief financial officer or the
chief accounting officer of the Company (i) setting forth
in reasonable detail the calculations required to establish
whether the Company was in compliance with the requirements
of Sections 5.7(b) and 5.9(g), (h) and (l) and 5.10 to
5.14, inclusive, on the date of such financial statements,
(ii) if the One-Time Pricing Option (as defined in the
Pricing Schedule) has not been exercised, setting forth the
calculations required to establish the Applicable Pricing
Ratio (as defined in the Pricing Schedule) and (iii) stat-
ing whether any Default exists on the date of such certifi-
cate and, if any Default then exists, setting forth the
details thereof and the action which the Company is taking
or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set
of financial statements referred to in clause (a) above, a
statement of the firm of independent public accountants
which reported on such statements (i) as to whether any-
thing has come to their attention to cause them to believe
that any Default existed on the date of such statements (it
being understood that such accountants shall not thereby be
required to perform any procedures not otherwise required
under generally accepted auditing standards) and (ii)
confirming the calculations set forth in the officer's
certificate delivered simultaneously therewith pursuant to
clause (c) above;
(e) within five days after the chief financial
officer, the treasurer or chief accounting officer of the
Company obtains knowledge of any Default, if such Default
is then continuing, a certificate of the chief financial
officer, the treasurer or the chief accounting officer of
the Company setting forth the details thereof and the
action which the Company is taking or proposes to take with
respect thereto;
(f) promptly upon the mailing thereof to the
shareholders of the Company generally, copies of all finan-
cial statements, reports and proxy statements so mailed;
(g) promptly upon the filing thereof, copies of
all registration statements (other than the exhibits there-
to and any registration statements on Form S-8 or its
equivalent) and reports (other than the exhibits thereto)
on Forms 10-K, 10-Q and 8-K (or their equivalents) which
the Company shall have filed with the Securities and Ex-
change Commission;
(h) if and when any member of the ERISA Group
(i) gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA)
with respect to any Plan which might constitute grounds for
a termination of such Plan under Title IV of ERISA, or
knows that the plan administrator of any Plan has given or
is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or re-
quired 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 reorgani-
zation, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV
of ERISA of an intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect
of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum
funding standard under Section 412 of the Internal Revenue
Code, a copy of such application; (v) gives notice of
intent to terminate any Plan under Section 4041(c) of
ERISA, a copy of such notice and other information filed
with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution
to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement or makes any amendment to any Plan or
Benefit Arrangement which has resulted or could result in
the imposition of a Lien or the posting of a bond or other
security, a certificate of the chief financial officer or
the chief accounting officer of the Company setting forth
details as to such occurrence and action, if any, which the
Company or applicable member of the ERISA Group is required
or proposes to take; and
(i) from time to time such additional information
regarding the financial position or business of the Company
and its Subsidiaries as the Agent, at the request of any
Bank, may reasonably request.
SECTION 5.1.B. Other Borrower Information. Each
Borrower other than the Company will deliver to each of the
Banks:
(a) as soon as available and in any event within
120 days after the end of each fiscal year of such Borrow-
er, a consolidated balance sheet of such Borrower and its
Consolidated Subsidiaries as of the end of such fiscal year
and the related consolidated statements of operations, cash
flows and common shareholders' equity for such fiscal year,
setting forth in each case in comparative form the figures
for the previous fiscal year, all certified as to fairness
of presentation and consistency by the chief financial
officer or the chief accounting officer of such Borrower;
and
(b) from time to time such additional information
regarding the financial position or business of such Bor-
rower as the Agent, at the request of any Bank, may reason-
ably request.
SECTION 5.2. Payment of Obligations. Each Bor-
rower will pay and discharge, and will cause each of its
Subsidiaries to pay and discharge, at or before maturity,
all their respective material obligations and liabilities
(including, without limitation, material tax liabilities and
claims of materialmen, warehousemen and the like which if
unpaid might by law give rise to a Lien), except where the
same may be contested in good faith by appropriate proceed-
ings, and will maintain, and will cause each of its Subsid-
iaries to maintain, in accordance with generally accepted
accounting principles, appropriate reserves for the accrual
of any of the same.
SECTION 5.3. Maintenance of Property; Insurance.
(a) Each Borrower will keep, and will cause each of its
Subsidiaries to keep, all property useful and necessary in
its business in good working order and condition, ordinary
wear and tear excepted.
(b) Each Borrower will, and will cause each of
its Subsidiaries to, maintain (either in the name of the
Company or in such Borrower's or Subsidiary's own name) with
financially sound and responsible insurance companies,
insurance on all its respective properties in at least such
amounts, against at least such risks and with such risk
retention as are usually maintained, insured against or
retained, as the case may be, in the same general area by
companies of established repute engaged in the same or a
similar business; and will furnish to the Banks, upon re-
quest from the Agent, information presented in reasonable
detail as to the insurance so carried.
SECTION 5.4. Conduct of Business and Maintenance
of Existence. Each Borrower and its Subsidiaries taken as a
whole will continue to engage in business of the same gener-
al type as now conducted by such Borrower and its Subsidiar-
ies, and each Borrower will preserve, renew and keep in full
force and effect, and will cause each of its Subsidiaries to
preserve, renew and keep in full force and effect, its
respective corporate existence and its respective rights,
privileges and franchises necessary or desirable in the
normal conduct of business; provided that nothing in this
Section 5.4 shall prohibit (i) the consolidation or merger
of a Subsidiary with or into another Person or (ii) the
termination of the corporate existence of any Subsidiary if,
in the case of clauses (i) and (ii), the Company in good
faith determines that such consolidation, merger or termina-
tion is in the best interest of the Company and is not
materially disadvantageous to the Banks.
SECTION 5.5. Compliance with Laws. Each Borrower
will comply, and cause each of its Subsidiaries to comply,
in all material respects with all applicable laws, ordinanc-
es, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental
Laws and ERISA and the rules and regulations thereunder)
except where the necessity of compliance therewith is con-
tested in good faith by appropriate proceedings.
SECTION 5.6. Inspection of Property, Books and
Records. Each Borrower will keep, and will cause each of
its Subsidiaries to keep, proper books of record and account
in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and
activities; and will permit, and will cause each of its
Subsidiaries to permit, representatives of any Bank at such
Bank's expense to visit and inspect any of its respective
properties, to examine and make abstracts from any of its
respective books and records and to discuss its respective
affairs, finances and accounts with its respective officers,
employees and independent public accountants, all at such
reasonable times as may be desired.
SECTION 5.7. Mergers and Sales of Assets. (a)
The Company will not consolidate or merge with or into any
other Person; provided that the Company may merge with
another Person if (x) the Company is the corporation surviv-
ing such merger and (y) after giving effect to such merger,
no Default shall have occurred and be continuing.
(b) The Company will not sell, lease or otherwise
transfer, directly, or indirectly, assets (exclusive of
assets transferred in the ordinary course of business and
any Permitted Receivables Disposition) if after giving
effect to such transfer the aggregate book value of assets
so transferred subsequent to the date of this Agreement
would exceed 25% of Consolidated Assets as of the day pre-
ceding the date of such transfer.
SECTION 5.8. Use of Proceeds. The proceeds of
the Loans made under this Agreement will be used by the
Borrowers for general corporate purposes, including the
acquisition by the Borrowers of the Dearborn Business. None
of such proceeds will be used, directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of
buying or carrying any "margin stock" within the meaning of
Regulation U.
SECTION 5.9. Negative Pledge. Neither any Bor-
rower nor any Subsidiary of any Borrower will create, assume
or suffer to exist any Lien on any asset now owned or here-
after acquired by it, except:
(a) Liens existing on the date of this Agreement
securing Debt outstanding on the date of this Agreement in
an aggregate principal or face amount not exceeding
$15,000,000;
(b) any Lien existing on any asset of any Person
at the time such Person becomes a Subsidiary of a Borrower
and not created in contemplation of such event;
(c) any Lien on any asset securing Debt incurred
or assumed for the purpose of financing all or any part of
the cost of acquiring or constructing such asset, provided
that such Lien attaches to such asset concurrently with or
within 90 days after the acquisition or completion of
construction thereof;
(d) any Lien on any asset of any Person existing
at the time such Person is merged or consolidated with or
into a Borrower or a Subsidiary of a Borrower and not
created in contemplation of such event;
(e) any Lien existing on any asset prior to the
acquisition thereof by a Borrower or a Subsidiary of a
Borrower and not created in contemplation of such acquisi-
tion;
(f) any Lien arising out of the refinancing,
extension, renewal or refunding of any Debt secured by any
Lien permitted by any of the foregoing clauses of this
Section, provided that the proceeds or such Debt are used
solely for the foregoing purpose and to pay financing costs
and such Debt is not secured by any additional assets;
(g) Liens arising in the ordinary course of its
business which (i) do not secure Debt or Derivatives Obli-
gations, (ii) do not secure any obligation in an amount
exceeding $25,000,000 and (iii) do not in the aggregate
materially detract from the value of its assets or materi-
ally impair the use thereof in the operation of its busi-
ness;
(h) Liens on cash and cash equivalents securing
Derivatives Obligations, provided that the aggregate amount
of cash and cash equivalents subject to such Liens may at
no time exceed $25,000,000;
(i) Liens for current taxes, assessments and
other governmental charges not yet due and payable or being
contested in good faith and as to which adequate reserves
in accordance with generally accepted accounting principles
have been established;
(j) mechanics, materialmen's, carrier's,
warehousemen's or similar liens for sums not yet due and
owing or being contested in good faith and as to which
adequate reserves in accordance with generally accepted
accounting principles have been established;
(k) Liens created in connection with Permitted
Securitization Transactions; provided that, except for the
assets transferred pursuant to Permitted Receivables Dispo-
sitions made in connection with such Permitted Securitiza-
tion Transactions, no such Lien may extend to any assets of
the Company or any Subsidiary of the Company that is not a
Bankruptcy Remote Subsidiary; and
(l) Liens not otherwise permitted by the forego-
ing clauses of this Section securing Debt in an aggregate
principal or face amount at any date not to exceed 10% of
Consolidated Net Worth.
SECTION 5.10. Debt to Total Capital. The ratio
of Consolidated Debt to Total Capital shall not exceed
during any period set forth below the applicable ratio set
forth below for such period.
Period Ratio
Closing Date to December 30, 1996 72%
December 31, 1996 - December 30, 1997 70%
December 31, 1997 - December 30, 1998 65%
December 31, 1998 - December 30, 1999 57%
December 31, 1999 and thereafter 50%
SECTION 5.11. Debt of Subsidiaries. Total Debt
of all Subsidiaries (excluding Debt (i) of a Subsidiary to
the Company, (ii) of a Subsidiary to a wholly owned Subsid-
iary or (iii) of an Eligible Subsidiary under this Agree-
ment) will at no time exceed $75,000,000. For purposes of
this Section any preferred stock of a Consolidated Subsid-
iary held by a Person other than the Company or a Wholly-
Owned Consolidated Subsidiary shall be included, at the
higher of its voluntary or involuntary liquidation value, in
"Consolidated Debt" and in the "Debt" of such Consolidated
Subsidiary.
SECTION 5.12. Interest Coverage Ratio. As of the
last day of each fiscal quarter of the Company ending during
each period set forth below, the Interest Coverage Ratio at
such last day will not be less than the ratio set forth
below opposite such period:
Period Ratio
Quarter ending December 31, 1996 through quarter 3.00
ending June 30, 1997 to
1.00
Quarter ending September 30, 1997 through quar- 3.25
ter ending December 31, 1997 to
1.00
Quarter ending March 31, 1998 through quarter 3.50
ending September 30, 1998 to
1.00
Quarter ending December 31, 1998 and all quar- 4.00
ters thereafter to
1.00
SECTION 5.13. Minimum Consolidated Net Worth.
Consolidated Net Worth will at no time be less than an
amount equal to the sum of (i) $270,000,000 plus (ii) an
amount equal to 25% of Consolidated Net Income for each
fiscal quarter of the Company ending after June 30, 1996 and
on or prior to the date of determination, in each case, for
which Consolidated Net Income is positive (but with no
deduction on account of negative Consolidated Net Income for
any fiscal quarter of the Company) plus (iii) 50% of the
aggregate net proceeds, including the fair market value of
property other than cash (as determined in good faith by the
Board of Directors of the Company), received by the Company
from the issuance and sale after the date hereof of any
capital stock of the Company (other than the proceeds of any
issuance and sale of any capital stock (x) to a Subsidiary
of the Company or (y) which is required to be redeemed, or
is redeemable at the option of the holder, at any time) or
in connection with the conversion or exchange of any Debt of
the Company into capital stock of the Company after December
31, 1995 (such sum being the "Minimum Permissible Consoli-
dated Net Worth"); provided that the Minimum Permissible
Consolidated Net Worth shall be reduced by an amount not to
exceed $15,000,000 for the after-tax effect of restructuring
charges actually taken by the Company in relation to its
acquisition of the Dearborn Business.
SECTION 5.14. Sale-Leaseback Transactions.
Neither any Borrower nor any of their respective Subsidiar-
ies will engage in any Sale-Leaseback Transaction unless
such Borrower or such Subsidiary would be entitled, pursuant
to the provisions of Section 5.9, to incur Debt with a
principal amount equal to or exceeding the Value of such
Sale-Leaseback Transaction secured by a Lien on the property
to be leased (after giving similar effect to all other
Sale-Leaseback Transactions in effect at such time). For
purposes of this Section, "Value" means, with respect to a
Sale-Leaseback Transaction, at any time, the amount equal to
the greater of (i) the net proceeds of the sale or transfer
of the property leased pursuant to such Sale-Leaseback
Transaction and (ii) the fair value in the opinion of the
Board of Directors of the Company of such property at the
time of entering into such Sale-Leaseback Transaction, in
either case divided first by the number of full years of the
term of the lease and then multiplied by the number of full
years of such term remaining at the time of determination,
without regard to any renewal or extension options contained
in the lease.
SECTION 5.15. Transactions with Affiliates. No
Borrower will, nor will it permit any of its Subsidiaries
to, directly or indirectly, pay any funds to or for the
account of, make any investment (whether by acquisition of
stock or indebtedness, by loan, advance, transfer of proper-
ty, guarantee or other agreement to pay, purchase or ser-
vice, directly or indirectly, any Debt, or otherwise) in,
lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect,
any transaction with, any Affiliate except on an arms-length
basis on terms at least as favorable to such Borrower or
such Subsidiary as could have been obtained from a third
party who was not an Affiliate; provided that the foregoing
provisions of this Section shall not prohibit any such
Person from declaring or paying any lawful dividend or other
payment ratably in respect of all of its capital stock, from
paying reasonable compensation to its directors and officers
or from entering into other transactions that the Company
determines are in its best interests and having a cost to
such Person not in excess of $5,000,000.
ARTICLE 6
DEFAULTS
SECTION 6.1. Events of Default. If one or more
of the following events ("Events of Default") shall have
occurred and be continuing:
(a) (i) any drawing under the Letter of Credit
shall fail to be reimbursed when required hereunder or any
principal of any Loan shall fail to be paid when due or
(ii) any interest, any fees or any other amount payable
hereunder shall fail to be paid within five days after the
due date thereof;
(b) any Borrower shall fail to observe or perform
any covenant contained in Article 5, other than those
contained in Sections 5.1.A through 5.6 and 5.9;
(c) any Borrower shall fail to observe or perform
any covenant contained in Section 5.9 for 30 days after
such Borrower shall have obtained knowledge thereof;
(d) any Borrower shall fail to observe or perform
any covenant or agreement contained in this Agreement
(other than those covered by clause (a), (b) or (c) above)
for 30 days after notice thereof has been given to the
Company by the Agent at the request of any Bank;
(e) any representation, warranty, certification
or statement made by any Borrower in this Agreement or in
any certificate, financial statement or other document
delivered pursuant to this Agreement shall prove to have
been incorrect in any material respect when made (or deemed
made);
(f) any Borrower or any Subsidiary shall fail to
make any payment in respect of any Material Financial
Obligations when due or within any applicable grace period;
(g) any event or condition shall occur which
results in the acceleration of the maturity of any Material
Debt or enables (with the giving of notice of acceleration,
if required) the holder of such Debt or any Person acting
on such holder's behalf to accelerate the maturity thereof;
(h) any Borrower or any Material Subsidiary shall
commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize
any of the foregoing;
(i) an involuntary case or other proceeding shall
be commenced against any Borrower or any Material Subsid-
iary seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquida-
tor, custodian or other similar official of it or any
substantial part of its property, and such involuntary case
or other proceeding shall remain undismissed and unstayed
for a period of 60 days; or an order for relief shall be
entered against any Borrower or any Material Subsidiary
under the federal bankruptcy laws as now or hereafter in
effect;
(j) any member of the ERISA Group shall fail to
pay when due an amount or amounts aggregating in excess of
$5,000,000 which it shall have become liable to pay under
Title IV of ERISA; or notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of
ERISA) in respect of, or to cause a trustee to be appointed
to administer any Material Plan; or a condition shall exist
by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be termi-
nated; or there shall occur a complete or partial withdraw-
al from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which causes one or more members of the
ERISA Group to incur a current payment obligation in excess
of $5,000,000 in the aggregate that is not paid when due;
(k) judgments or orders for the payment of money
in excess of $5,000,000 in the aggregate shall be rendered
against any Borrower or any Material Subsidiary and such
judgments or orders shall continue unsatisfied and unstayed
for a period of 30 days;
(l) any person or group of persons (within the
meaning of Section 13 or 14 of the Securities Exchange Act
of 1934, as amended) shall have acquired beneficial owner-
ship (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 35%
or more of the outstanding shares of common stock of the
Company; or, during any period of 12 consecutive calendar
months, individuals who were directors of the Company on
the first day of such period shall cease to constitute a
majority of the board of directors of the Company; or
(m) any of the obligations of the Company under
Article 10 of this Agreement shall for any reason not be
enforceable against the Company in accordance with their
terms, or the Company shall so assert in writing;
then, and in every such event, the Agent shall (i) if re-
quested by the Required Banks, by notice to the Borrowers
terminate the Commitments and they shall thereupon termi-
nate, and (ii) if requested by the Required Banks, by notice
to the Borrowers declare the Loans and the Letter of Credit
Liabilities (together with accrued interest thereon) to be,
and the Loans and Letter of Credit Liabilities shall there-
upon become, immediately due and payable without present-
ment, demand, protest or other notice of any kind, all of
which are hereby waived by each Borrower; provided that in
the case of any of the Events of Default specified in clause
6.1(h) or 6.1(i) with respect to any Borrower, without any
notice to any Borrower or any other act by the Agent or the
Banks, the Commitments shall thereupon terminate and the
Loans and the Letter of Credit Liabilities (together with
accrued interest thereon) shall become immediately due and
payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by each Borrow-
er.
SECTION 6.2. Notice of Default. The Agent shall
give notice to the Borrowers under Section 6.1(d) promptly
upon being requested to do so by any Bank and shall thereup-
on notify all the Banks thereof.
SECTION 6.3. Cash Cover. The Company agrees, in
addition to the provisions of Section 6.1 hereof, that upon
the occurrence and during the continuance of any Event of
Default, it shall, if requested by the Agent upon the in-
struction of the Required Banks, pay to the Agent an amount
in immediately available funds (which funds shall be held as
collateral pursuant to arrangements satisfactory to the
Agent) equal to the aggregate amount available for drawing
under the Letter of Credit, provided that, upon the occur-
rence of any Event of Default specified in Section 6.1(h) or
6.1(i) with respect to any Borrower, the Company shall pay
such amount forthwith without any notice or demand or any
other act by the Agent or the Banks.
ARTICLE 7
THE AGENT
SECTION 7.1. Appointment and Authorization. Each
Bank irrevocably appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such
powers under this Agreement, the Letter of Credit and the
Notes as are delegated to the Agent by the terms hereof or
thereof, together with all such powers as are reasonably
incidental thereto.
SECTION 7.2. Agent and Affiliates. Morgan Guar-
anty Trust Company of New York shall have the same rights
and powers under this Agreement as any other Bank and may
exercise or refrain from exercising the same as though it
were not the Agent, and Morgan Guaranty Trust Company of New
York and its affiliates may accept deposits from, lend money
to, and generally engage in any kind of business with any
Borrower or any Subsidiary or Affiliate of any Borrower as
if it were not the Agent.
SECTION 7.3. Action by Agent. The obligations of
the Agent hereunder are only those expressly set forth
herein. Without limiting the generality of the foregoing,
the Agent shall not be required to take any action with
respect to any Default, except as expressly provided in
Article 6.
SECTION 7.4. Consultation with Experts. The
Agent may consult with legal counsel (who may be counsel for
any Borrower), independent public accountants and other
experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or
experts.
SECTION 7.5. Liability of Agent. Neither the
Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be liable for
any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks
(or, when expressly required hereby, all the Banks) or (ii)
in the absence of its own gross negligence or willful mis-
conduct. Neither the Agent nor any of its affiliates nor
any of their respective directors, officers, agents or
employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any statement, warran-
ty or representation made in connection with this Agreement
or any borrowing hereunder; (ii) the performance or obser-
vance of any of the covenants or agreements of any Borrower;
(iii) the satisfaction of any condition specified in Article
3, except receipt of items required to be delivered to the
Agent; or (iv) the validity, effectiveness or genuineness of
this Agreement, the Letter of Credit, the Notes or any other
instrument or writing furnished in connection herewith. The
Agent shall not incur any liability by acting in reliance
upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile trans-
mission or similar writing) believed by it to be genuine or
to be signed by the proper party or parties.
SECTION 7.6. Indemnification. Each Bank shall,
ratably in accordance with its Commitment, indemnify the
Agent, its affiliates and their respective directors, offi-
cers, agents and employees (to the extent not reimbursed by
the Borrowers) against any cost, expense (including reason-
able counsel fees and disbursements), claim, demand, action,
loss or liability (except such as result from such
indemnitees' gross negligence or willful misconduct) that
such indemnitees may suffer or incur in connection with this
Agreement or any action taken or omitted by such indemnitees
hereunder.
SECTION 7.7. Credit Decision. Each Bank acknowl-
edges that it has, independently and without reliance upon
the Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement.
Each Bank also acknowledges that it will, independently and
without reliance upon the Agent or any other Bank, and based
on such documents and information as it shall deem appropri-
ate at the time, continue to make its own credit decisions
in taking or not taking any action under this Agreement.
SECTION 7.8. Successor Agent. The Agent may
resign at any time by giving notice thereof to the Banks and
the Company. Upon any such resignation, the Required Banks
shall have the right to appoint a successor Agent, subject
to the approval of the Company. If no successor Agent shall
have been so appointed by the Required Banks, and shall have
accepted such appointment, within 30 days after the retiring
Agent gives notice of resignation, then the retiring Agent
may, on behalf of the Banks, appoint a successor Agent,
which shall be a commercial bank organized or licensed under
the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at
least $50,000,000. Upon the acceptance of its appointment
as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all
the rights and duties of the retiring Agent, and the retir-
ing Agent shall be discharged from its duties and obliga-
tions hereunder. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article shall
inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent.
SECTION 7.9. Agent's Fee. The Company shall pay,
or shall cause Betz Canada to pay, to the Agent for its own
account fees in the amounts and at the times previously
agreed upon between the Company and the Agent.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.1. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of
any Interest Period for any CD Loan, Euro-Dollar Loan or
Money Market LIBOR Loan:
(a) the Agent is advised by the Reference Banks
that deposits in dollars (in the applicable amounts) are
not being offered to the Reference Banks in the relevant
market for such Interest Period, or
(b) in the case of CD Loans or Euro-Dollar Loans,
Banks having 50% or more of the aggregate principal amount
of the affected Loans advise the Agent that the Adjusted CD
Rate or the London Interbank Offered Rate, as the case may
be, as determined by the Agent will not adequately and
fairly reflect the cost to such Banks of funding their CD
Loans or Euro-Dollar Loans, as the case may be, for such
Interest Period,
the Agent shall forthwith give notice thereof to the Borrow-
er and the Banks, whereupon until the Agent notifies the
Borrower that the circumstances giving rise to such suspen-
sion no longer exist, (i) the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be, or
to continue or convert outstanding Loans as or into CD Loans
or Euro-Dollar Loans, as the case may be, shall be suspended
and (ii) each outstanding CD Loan or Euro-Dollar Loan, as
the case may be, shall be converted into a Base Rate Loan on
the last day of the then current Interest Period applicable
thereto. Unless the Borrower notifies the Agent at least
two Domestic Business Days before the date of any Fixed Rate
Borrowing for which a Notice of Borrowing has previously
been given that it elects not to borrow on such date, (i) if
such Fixed Rate Borrowing is a Committed Borrowing, such
Borrowing shall instead be made as a Base Rate Borrowing and
(ii) if such Fixed Rate Borrowing is a Money Market LIBOR
Borrowing, the Money Market LIBOR Loans comprising such
Borrowing shall bear interest for each day from and includ-
ing the first day to but excluding the last day of the
Interest Period applicable thereto at the Base Rate for such
day.
SECTION 8.2. Illegality. If, on or after the
date of this Agreement, the adoption of any applicable law,
rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, cen-
tral bank or comparable agency charged with the interpreta-
tion or administration thereof, or compliance by any Bank
(or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) of any
such authority, central bank or comparable agency shall make
it unlawful or impossible for any Bank (or its Euro-Dollar
Lending Office) to make, maintain or fund its Euro-Dollar
Loans to any Borrower and such Bank shall so notify the
Agent, the Agent shall forthwith give notice thereof to the
other Banks and the Borrower, whereupon until such Bank
notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the obliga-
tion of such Bank to make Euro-Dollar Loans to such Borrow-
er, or to convert outstanding Loans into Euro-Dollar Loans,
shall be suspended. Before giving any notice to the Agent
pursuant to this Section, such Bank shall designate a dif-
ferent Euro-Dollar Lending Office if such designation will
avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such
Bank. If such notice is given, each Euro-Dollar Loan of
such Bank then outstanding shall be converted to a Base Rate
Loan either (a) on the last day of the then current Interest
Period applicable to such Euro-Dollar Loan if such Bank may
lawfully continue to maintain and fund such Loan to such day
or (b) immediately if such Bank shall determine that it may
not lawfully continue to maintain and fund such Loan to such
day.
SECTION 8.3. Increased Cost and Reduced Return.
(a) If on or after (x) the date hereof, in the case of any
Committed Loan or the Letter of Credit or any obligation to
make Committed Loans or issue the Letter of Credit or (y)
the date of the related Money Market Quote, in the case of
any Money Market Loan, the adoption of any applicable law,
rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, cen-
tral bank or comparable agency charged with the interpreta-
tion or administration thereof, or compliance by any Bank
(or its Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any
such authority, central bank or comparable agency shall
impose, modify or deem applicable any reserve (including,
without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but ex-
cluding (i) with respect to any CD Loan any such requirement
included in an applicable Domestic Reserve Percentage and
(ii) with respect to any Euro-Dollar Loan any such require-
ment with respect to which such Bank is entitled to compen-
sation during the relevant Interest Period under Section
2.16), special deposit, insurance assessment (excluding,
with respect to any CD Loan, any such requirement reflected
in an applicable Assessment Rate) or similar requirement
against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Applicable Lending
Office) or shall impose on any Bank (or its Applicable
Lending Office) or on the United States market for certifi-
cates of deposit or the London interbank market any other
condition affecting its Fixed Rate Loans, its Notes or its
obligation to make Fixed Rate Loans or its obligations
hereunder in respect of the Letter of Credit and the result
of any of the foregoing is to increase the cost to such Bank
(or its Applicable Lending Office) of making or maintaining
any Fixed Rate Loan or of issuing the Letter of Credit, or
to reduce the amount of any sum received or receivable by
such Bank (or its Applicable Lending Office) under this
Agreement or under its Notes with respect thereto, by an
amount deemed by such Bank to be material, then, within 15
days after demand by such Bank (with a copy to the Agent),
each Borrower shall pay to such Bank such additional amount
or amounts as will compensate such Bank for the portion of
such increased cost or reduction allocable to such Borrower.
(b) If any Bank shall have determined that, after
the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any
such law, rule or regulation, or any change in the interpre-
tation or administration thereof by any governmental author-
ity, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing
the rate of return on capital of such Bank (or its Parent)
as a consequence of such Bank's obligations hereunder to a
level below that which such Bank (or its Parent) could have
achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Bank to be
material, then from time to time, within 15 days after
demand by such Bank (with a copy to the Agent), each Borrow-
er shall pay to such Bank the portion allocable to such
Borrower of such additional amount or amounts as will com-
pensate such Bank (or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrowers
and the Agent of any event of which it has knowledge, occur-
ring after the date hereof, which will entitle such Bank to
compensation pursuant to this Section and will designate a
different Lending Office if such designation will avoid the
need for, or reduce the amount of, such compensation and
will not, in the judgment of such Bank, be otherwise disad-
vantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the addi-
tional amount or amounts (and the calculation thereof) to be
paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may
use any reasonable averaging and attribution methods.
SECTION 8.4. Taxes. (a) For the purposes of this
Section 8.4, the following terms have the following mean-
ings:
"Taxes" means any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings
with respect to any payment by any Borrower pursuant to this
Agreement or under any Note, and all liabilities with re-
spect thereto, excluding (i) in the case of each Bank and
the Agent, taxes imposed on its income, and franchise or
similar taxes imposed on it, by a jurisdiction under the
laws of which such Bank or the Agent (as the case may be) is
organized or in which its principal executive office is
located or by any other jurisdiction imposing such taxes by
reason of any connection between such jurisdiction and such
Bank or the Agent (as the case may be) other than a connec-
tion arising solely from this Agreement or, in the case of
each Bank, in which its Applicable Lending Office is located
and (ii) in the case of each Bank, any United States with-
holding tax imposed on such payments but only to the extent
that payments to such Bank hereunder are subject to United
States withholding tax at the time such Bank first becomes a
party to this Agreement.
"Other Taxes" means any present or future stamp or
documentary taxes and any other excise or property taxes, or
similar charges or levies, which arise from any payment made
pursuant to this Agreement or under any Note or from the
execution or delivery of, or otherwise with respect to, this
Agreement, any Note or the Letter of Credit.
(b) Any and all payments by any Borrower to or
for the account of any Bank or the Agent hereunder or under
any Note shall be made without deduction for any Taxes or
Other Taxes; provided that, if any Borrower shall be re-
quired by law to deduct any Taxes or Other Taxes from any
such payments, (i) the sum payable shall be increased as
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section) such Bank or the Agent (as the case may
be) receives an amount equal to the sum it would have re-
ceived had no such deductions been made, (ii) such Borrower
shall make such deductions, (iii) such Borrower shall pay
the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and
(iv) such Borrower shall furnish to the Agent, at its ad-
dress referred to in Section 11.1, the original or a certi-
fied copy of a receipt evidencing payment thereof.
(c) Each Borrower agrees to indemnify each Bank
and the Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable
under this Section) paid by such Bank or the Agent (as the
case may be) and any liability (including penalties, inter-
est and expenses) arising therefrom or with respect thereto
to the extent allocable to such Borrower. Each Bank will
promptly notify the Borrowers and the Agent of any event of
which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to
this Section. A certificate of any Bank claiming compensa-
tion under this Section and setting forth the additional
amount or amounts to be paid to it and the calculation
thereof hereunder shall be conclusive in the absence of
manifest error. Such amount(s) shall be paid within 15 days
after such Bank or the Agent (as the case may be) makes
demand therefor.
(d) Each Bank organized under the laws of a
jurisdiction outside the United States, on or prior to the
date of its execution and delivery of this Agreement in the
case of each Bank listed on the signature pages hereof and
on or prior to the date on which it becomes a Bank in the
case of each other Bank, and from time to time thereafter if
requested in writing by the Borrowers (but only so long as
such Bank remains lawfully able to do so), shall provide the
Borrowers and the Agent with Internal Revenue Service form
1001 or 4224, as appropriate, or any successor form pre-
scribed by the Internal Revenue Service, certifying that
such Bank is entitled to benefits under an income tax treaty
to which the United States is a party which exempts the Bank
from United States withholding tax or reduces the rate of
withholding tax on payments of interest for the account of
such Bank or certifying that the income receivable pursuant
to this Agreement is effectively connected with the conduct
of a trade or business in the United States.
(e) For any period with respect to which a Bank
has failed to provide the Borrowers or the Agent with the
appropriate form pursuant to Section 8.4(d) (unless such
failure is due to a change in treaty, law or regulation
occurring subsequent to the date on which such form origi-
nally was required to be provided), such Bank shall not be
entitled to indemnification under Section 8.4(b) or (c) with
respect to Taxes imposed by the United States; provided that
if a Bank, which is otherwise exempt from or subject to a
reduced rate of withholding tax, becomes subject to Taxes
because of its failure to deliver a form required hereunder,
the Borrowers shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such
Taxes.
(f) If any Borrower is required to pay additional
amounts to or for the account of any Bank pursuant to this
Section, then such Bank will change the jurisdiction of its
Applicable Lending Office if, in the judgment of such Bank,
such change (i) will eliminate or reduce any such additional
payment which may thereafter accrue and (ii) is not other-
wise disadvantageous to such Bank.
SECTION 8.5. Base Rate Loans Substituted for
Affected Fixed Rate Loans. If (i) the obligation of any
Bank to make, or convert outstanding Loans to, Euro-Dollar
Loans to any Borrower has been suspended pursuant to Section
8.2 or (ii) any Bank has demanded compensation under Section
8.3 or 8.4 with respect to its CD Loans or Euro-Dollar Loans
and the Borrower shall, by at least five Euro-Dollar Busi-
ness Days' prior notice to such Bank through the Agent, have
elected that the provisions of this Section shall apply to
such Bank, then, unless and until such Bank notifies the
Borrower that the circumstances giving rise to such suspen-
sion or demand for compensation no longer exist:
(a) all Loans to such Borrower which would other-
wise be made by such Bank as (or continued as or converted
into) CD Loans or Euro-Dollar Loans, as the case may be,
shall instead be Base Rate Loans (on which interest and
principal shall be payable contemporaneously with the
related Fixed Rate Loans of the other Banks); and
(b) after each of its CD Loans or Euro-Dollar
Loans, as the case may be, to such Borrower has been repaid
(or converted to a Base Rate Loan), all payments of princi-
pal which would otherwise be applied to repay such Fixed
Rate Loans shall be applied to repay its Base Rate Loans
instead.
If such Bank notifies the Borrower that the circumstances
giving rise to such notice no longer apply, the principal
amount of each such Base Rate Loan shall be converted into a
CD Loan or Euro-Dollar Loan, as the case may be, on the
first day of the next succeeding Interest Period applicable
to the related CD Loans or Euro-Dollar Loans of the other
Banks.
SECTION 8.6. Substitution of Bank. If (i) the
obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.2 or (ii) any Bank has
demanded compensation under Section 8.3 or 8.4, the Company
shall have the right, with the assistance of the Agent, to
seek a mutually satisfactory substitute bank or banks (which
may be one or more of the Banks) to purchase the Notes,
assume such Bank's obligations under the Letter of Credit
and assume the Commitment of such Bank, all in accordance
with Section 11.6(c).
SECTION 8.7. Allocations. The respective por-
tions allocable to particular Borrowers of any amount pay-
able pursuant to Section 8.3 or 8.4 shall be as determined
by the Company and notified by it to the Bank demanding such
payment. The Company shall itself be unconditionally obli-
gated for payment of any such amount if and to the extent
(i) it fails to allocate to particular Borrowers the full
amount payable within 15 days of demand for payment thereof
or (ii) any particular Borrower disputes the amount so
allocated to it.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
OF ELIGIBLE SUBSIDIARIES
On the Closing Date, Betz Canada represents and
warrants that, and by the execution and delivery by each
other Eligible Subsidiary of its Election to Participate,
such Eligible Subsidiary shall be deemed to have represented
and warranted as of the date thereof that:
SECTION 9.1. Corporate Existence and Power. It
is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorpo-
ration and is an Eighty Percent-Owned Consolidated Subsid-
iary of the Company.
SECTION 9.2. Corporate and Governmental Authori-
zation; Contravention. The execution and delivery by it of
this Agreement or its Election to Participate and its Notes,
and the performance by it of this Agreement and its Notes,
are within its corporate powers, have been duly authorized
by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency
or official and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of
its certificate or incorporation or by-laws or of any agree-
ment, judgment, injunction, order, decree or other instru-
ment binding upon the Company or such Eligible Subsidiary or
result in the creation or imposition of any Lien on any
asset of the Company or any of its Subsidiaries.
SECTION 9.3. Binding Effect. This Agreement or
its Election to Participate has been duly executed by such
Eligible Subsidiary and this Agreement constitutes a valid
and binding agreement of such Eligible Subsidiary and each
of its Notes, when executed and delivered in accordance with
this Agreement, will constitute a valid and binding obliga-
tion of such Eligible Subsidiary, in each case enforceable
in accordance with its terms.
SECTION 9.4. Taxes. Except as disclosed in the
opinion of counsel delivered pursuant to Section 3.1(c) of
this Agreement or in its Election to Participate, there is
no income, stamp or other tax of any country, or any taxing
authority thereof or therein, imposed by or in the nature of
withholding or otherwise, which is imposed on any payment to
be made by such Eligible Subsidiary pursuant hereto or on
its Notes, or imposed on or by virtue of the execution,
delivery or enforcement of this Agreement, its Election to
Participate or of its Notes.
ARTICLE 10
GUARANTY
SECTION 10.1. The Guaranty. The Company hereby
unconditionally guarantees the full and punctual payment
(whether at stated maturity, upon acceleration or otherwise)
of the principal of and interest on each Note issued by any
Eligible Subsidiary pursuant to this Agreement, and the full
and punctual payment of all other amounts payable by any
Eligible Subsidiary under this Agreement. Upon failure by
any Eligible Subsidiary to pay punctually any such amount,
the Company shall forthwith on demand pay the amount not so
paid at the place and in the manner specified in this Agree-
ment.
SECTION 10.2. Guaranty Unconditional. The obli-
gations of the Company hereunder shall be unconditional and
absolute and, without limiting the generality of the forego-
ing, shall not be released, discharged or otherwise affected
by:
(i) any extension, renewal, settlement, compro-
mise, waiver or release in respect of any obligation of any
Eligible Subsidiary under this Agreement or any Note, by
operation of law or otherwise;
(ii) any modification or amendment of or supple-
ment to this Agreement or any Note;
(iii) any release, impairment, non-perfection or
invalidity of any direct or indirect security for any
obligation of any Eligible Subsidiary under this Agreement
or any Note;
(iv) any change in the existence, structure or
ownership of any Eligible Subsidiary, or any insolvency,
bankruptcy, reorganization or other similar proceeding
affecting any Eligible Subsidiary or its assets or any
resulting release or discharge of any obligation of any
Eligible Subsidiary contained in this Agreement or any
Note;
(v) the existence of any claim, set-off or other
rights which the Company may have at any time against any
Eligible Subsidiary, the Agent, any Bank or any other
Person, whether in connection herewith or any unrelated
transactions, provided that nothing herein shall prevent
the assertion of any such claim by separate suit or compul-
sory counterclaim;
(vi) any invalidity or unenforceability relating
to or against any Eligible Subsidiary for any reason of
this Agreement or any Note, or any provision of applicable
law or regulation purporting to prohibit the payment by any
Eligible Subsidiary of the principal of or interest on any
Note or any other amount payable by it under this Agree-
ment; or
(vii) any other act or omission to act or delay of
any kind by any Eligible Subsidiary, the Agent, any Bank or
any other Person or any other circumstance whatsoever which
might, but for the provisions of this paragraph, constitute
a legal or equitable discharge of or defense to the
Company's obligations hereunder.
SECTION 10.3. Discharge Only Upon Payment In
Full; Reinstatement In Certain Circumstances. The Company's
obligations hereunder shall remain in full force and effect
until the Commitments shall have terminated and the princi-
pal of and interest on the Notes and all other amounts
payable by the Company and each Eligible Subsidiary under
this Agreement shall have been paid in full. If at any time
any payment of principal of or interest on any Note or any
other amount payable by any Eligible Subsidiary under this
Agreement is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization
of any Eligible Subsidiary or otherwise, the Company's
obligations hereunder with respect to such payment shall be
reinstated at such time as though such payment had been due
but not made at such time.
SECTION 10.4. Waiver by the Company. The Company
irrevocably waives acceptance hereof, presentment, demand,
protest and any notice not provided for herein, as well as
any requirement that at any time any action be taken by any
Person against any Eligible Subsidiary or any other Person.
SECTION 10.5. Subrogation. The Company irrevoca-
bly waives any and all rights to which it may be entitled,
by operation of law or otherwise, upon making any payment
hereunder to be subrogated to the rights of the payee
against an Eligible Subsidiary with respect to such payment
or against any direct or indirect security therefor, or
otherwise to be reimbursed, indemnified or exonerated by or
for the account of an Eligible Subsidiary in respect there-
of.
SECTION 10.6. Stay of Acceleration. In the event
that acceleration of the time for payment of any amount
payable by any Eligible Subsidiary under this Agreement or
its Notes is stayed upon insolvency, bankruptcy or reorgani-
zation of such Eligible Subsidiary, all such amounts other-
wise subject to acceleration under the terms of this Agree-
ment shall nonetheless be payable by the Company hereunder
forthwith on demand by the Agent made at the request of the
Required Banks.
SECTION 10.7. Continuing Guaranty. This guaranty
is a continuing one and all liabilities to which it applies
or may apply shall be conclusively presumed to have been
created in reliance hereon.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1. Notices. All notices, requests and
other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission
or similar writing) and shall be given to such party: (a)
in the case of the Company or the Agent, at its address,
facsimile number or telex number set forth on the signature
pages hereof, (b) in the case of any Bank, at its address,
facsimile number or telex number set forth in its Adminis-
trative Questionnaire or (c) in the case of any party, such
other address, facsimile number or telex number as such
party may hereafter specify for the purpose by notice to the
Agent and the Company. Each such notice, request or other
communication shall be effective (i) if given by telex, when
such telex is transmitted to the telex number specified in
this Section and the appropriate answerback is received,
(ii) if given by facsimile transmission, when transmitted to
the facsimile number specified in this Section and confirma-
tion of receipt is received, (iii) if given by mail, 72
hours after such communication is deposited in the mail with
first class postage prepaid, addressed as aforesaid or (iv)
if given by any other means, when delivered at the address
specified in this Section; provided that notices to the
Agent under Article 2 or Article 8 shall not be effective
until received. Any notice required to be given to or by
any Eligible Subsidiary shall be duly given if given to or
by the Company, which is hereby appointed the agent of each
Eligible Subsidiary for such purpose.
SECTION 11.2. No Waivers. No failure or delay by
the Agent or any Bank in exercising any right, power or
privilege hereunder or under any Note shall operate as a
waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.
SECTION 11.3. Expenses; Indemnification.
(a) The Company shall pay (i) all reasonable out-of-pocket
expenses of the Agent, including reasonable fees and dis-
bursements of special counsel for the Agent, in connection
with the preparation and administration of this Agreement,
any waiver or consent hereunder or any amendment hereof or
any Default or alleged Default hereunder and (ii) if an
Event of Default occurs, all reasonable out-of-pocket ex-
penses reasonably incurred by the Agent and each Bank,
including (without duplication) the reasonable fees and
disbursements of outside counsel and allocated cost of
inside counsel, in connection with such Event of Default and
"work-out", collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
(b) The Company agrees to indemnify the Agent and
each Bank, their respective affiliates and the respective
directors, officers, agents and employees of the foregoing
(each an "Indemnitee") and hold each Indemnitee harmless
from and against any and all liabilities, losses, damages,
costs and expenses of any kind, including, without limita-
tion, the reasonable fees and disbursements of counsel,
which may be incurred by such Indemnitee in connection with
any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party
thereto) brought or threatened relating to or arising out of
this Agreement or any actual or proposed use of proceeds of
Loans or of the Letter of Credit hereunder; provided that no
Indemnitee shall have the right to be indemnified hereunder
for such Indemnitee's own gross negligence or willful mis-
conduct as determined by a court of competent jurisdiction.
(c) None of the Banks nor the Agent nor any of
their officers or directors or employees or agents shall be
liable or responsible, by reason of or in connection with
the execution and delivery or transfer of or payment or
failure to pay under the Letter of Credit, including without
limitation any of the circumstances enumerated in subsection
2.19(e), as well as (i) any error, omission, interruption or
delay in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, (ii) any error in
interpretation of technical terms, (iii) any loss or delay
in the transmission of any document required in order to
make a drawing under the Letter of Credit, (iv) any conse-
quences arising from causes beyond the control of the Agent
and the Banks, including without limitation any government
acts, or any other circumstances whatsoever in making or
failing to make payment under the Letter of Credit; provided
that the Company shall not be required to indemnify the
Agent or any Bank for any claims, damages, losses, liabili-
ties, costs or expenses, and the Company shall have a claim
for direct (but not consequential) damage suffered by it, to
the extent found by a court of competent jurisdiction to
have been caused by (x) the willful misconduct or gross
negligence of the Agent in determining whether a request
presented under the Letter of Credit strictly complied with
the terms of such Letter of Credit or (y) such Bank's fail-
ure to pay under the Letter of Credit after having received
from the Agent a notification to pay pursuant to Section
2.19(b). Nothing in this subsection (c) is intended to
limit the obligations of the Company under any other provi-
sion of this Agreement.
SECTION 11.4. Sharing of Set-Offs. Each Bank
agrees that if it shall, by exercising any right of set-off
or counterclaim or otherwise, receive payment of a propor-
tion of the aggregate amount of principal and interest then
due and payable with respect to any Note held by it and any
Letter of Credit Liabilities then due and payable which is
greater than the proportion received by any other Bank in
respect of the aggregate amount of principal and interest
then due and payable with respect to any Note and Letter of
Credit Liabilities held by such other Bank, the Bank receiv-
ing such proportionately greater payment shall purchase such
participations in the Notes and Letter of Credit Liabilities
held by the other Banks, and such other adjustments shall be
made, as may be required so that all such payments of prin-
cipal and interest with respect to the Notes and Letter of
Credit Liabilities held by the Banks shall be shared by the
Banks pro rata; provided that nothing in this Section shall
impair the right of any Bank to exercise any right of
set-off or counterclaim it may have and to apply the amount
subject to such exercise to the payment of indebtedness of a
Borrower other than its indebtedness hereunder. Each Bor-
rower agrees, to the fullest extent it may effectively do so
under applicable law, that any holder of a participation in
a Note or Letter of Credit Liabilities, whether or not
acquired pursuant to the foregoing arrangements, may exer-
cise rights of set-off or counterclaim and other rights with
respect to such participation as fully as if such holder of
a participation were a direct creditor of such Borrower in
the amount of such participation.
SECTION 11.5. Amendments and Waivers . Any
provision of this Agreement or the Notes may be amended or
waived if, but only if, such amendment or waiver is in
writing and is signed by the Company and the Required Banks
(and, if the rights or duties of the Agent are affected
thereby, by the Agent); provided that no such amendment or
waiver shall, unless signed by all the Banks, (i) increase
or decrease the Commitment of any Bank (except for a ratable
decrease in the Commitments of all Banks) or subject any
Bank to any additional obligation, (ii) reduce the principal
of or rate of interest on any Loan or the amount to be
reimbursed in respect of any Letter of Credit or any inter-
est thereon or any fees hereunder, (iii) postpone the date
fixed for any payment of principal of or interest on any
Loan or the amount to be reimbursed in respect of any Letter
of Credit or any interest thereon or any fees hereunder or
for any scheduled reduction or termination of any Commitment
or the expiry date of the Letter of Credit, (iv) change the
aggregate amount by which or to which the Commitments are
required to be reduced on or prior to the Commitment Reduc-
tion Date, (v) release or reduce the Guarantee by the Compa-
ny in Article 10 hereof or (vi) change the percentage of the
Commitments or of the aggregate unpaid principal amount of
the Notes and Letter of Credit Liabilities, or the number of
Banks, which shall be required for the Banks or any of them
to take any action under this Section or any other provision
of this Agreement; provided further that no such amendment,
waiver or modification shall, unless signed by each Eligible
Subsidiary, (w) subject such Eligible Subsidiary to any
additional obligation, (x) increase the principal of or rate
of interest on any outstanding Loan of such Eligible Subsid-
iary, (y) accelerate the stated maturity of any outstanding
Loan of such Eligible Subsidiary or (z) change this proviso.
SECTION 11.6. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns, except that no Borrower may assign
or otherwise transfer any of its rights under this Agreement
without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more
banks or other institutions (each a "Participant") partici-
pating interests in its Commitment or any or all of its
Loans and Letter of Credit Liabilities. In the event of any
such grant by a Bank of a participating interest to a Par-
ticipant, whether or not upon notice to the Borrowers and
the Agent, such Bank shall remain responsible for the per-
formance of its obligations hereunder, and the Borrowers and
the Agent shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obliga-
tions under this Agreement. Any agreement pursuant to which
any Bank may grant such a participating interest shall
provide that such Bank shall retain the sole right and
responsibility to enforce the obligations of the Borrowers
hereunder including, without limitation, the right to ap-
prove any amendment, modification or waiver of any provision
of this Agreement; provided that such participation agree-
ment may provide that such Bank will not agree to any modi-
fication, amendment or waiver of this Agreement described in
clause (i), (ii), (iii), or (iv) of Section 11.5 without the
consent of the Participant. The Borrowers agree that each
Participant shall, to the extent provided in its participa-
tion agreement, be entitled to the benefits of Section 2.16
or Article 8 with respect to its participating interest. An
assignment or other transfer which is not permitted by
subsection (c) or (d) below shall be given effect for pur-
poses of this Agreement only to the extent of a participat-
ing interest granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or
more banks or other institutions (each an "Assignee") all,
or a proportionate part (equivalent to an initial Commitment
of not less than $10,000,000) of all, of its rights and
obligations under this Agreement, the Letter of Credit and
the Notes, and such Assignee shall assume such rights and
obligations, pursuant to an Assignment and Assumption Agree-
ment in substantially the form of Exhibit K hereto executed
by such Assignee and such transferor Bank, with (and subject
to) the subscribed consent of the Company, Betz Canada and
the Agent, which shall not be unreasonably withheld; provid-
ed that (i) if an Assignee is a wholly-owned subsidiary of
such transferor Bank or of such transferor Bank's Parent or
was a Bank immediately prior to such assignment, no such
consent shall be required; (ii) such assignment may, but
need not, include rights of the transferor Bank in respect
of outstanding Money Market Loans; and (iii) until the
Letter of Credit is no longer outstanding, such Assignee
shall have long term debt ratings of at least A- from S&P
and at least A3 from Moody's. Upon execution and delivery
of such instrument and payment by such Assignee to such
transferor Bank of an amount equal to the purchase price
agreed between such transferor Bank and such Assignee, such
Assignee shall be a Bank party to this Agreement and shall
have all the rights and obligations of a Bank with a Commit-
ment as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent
or action by any party shall be required. Upon the consum-
mation of any assignment pursuant to this subsection (c),
the transferor Bank, the Agent and the Borrowers shall make
appropriate arrangements so that, if required, new Notes are
issued to the Assignee. In connection with any such assign-
ment, the transferor Bank shall pay to the Agent an adminis-
trative fee for processing such assignment in the amount of
$2,500. If the Assignee is not incorporated under the laws
of the United States of America or a state thereof, it shall
deliver to the Company and the Agent certification as to
exemption from deduction or withholding of any United States
federal income taxes in accordance with Section 8.4.
(d) Any Bank may at any time assign all or any
portion of its rights under this Agreement and its Notes to
a Federal Reserve Bank. No such assignment shall release
the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee
of any Bank's rights shall be entitled to receive any great-
er payment under Section 8.3 or 8.4 than such Bank would
have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Company's
prior written consent after disclosure of such Assignee's,
Participant's or other transferee's intention to seek such
greater payments or by reason of the provisions of Section
8.2, 8.3 or 8.4 requiring such Bank to designate a different
Applicable Lending Office under certain circumstances or at
a time when the circumstances giving rise to such greater
payment did not exist.
SECTION 11.7. Collateral. Each of the Banks
represents to the Agent and each of the other Banks that it
in good faith is not relying upon any "margin stock" (as
defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 11.8. Governing Law; Submission to Juris-
diction. This Agreement and each Note shall be governed by
and construed in accordance with the laws of the State of
New York. Each Borrower hereby submits to the nonexclusive
jurisdiction of the United States District Court for the
Southern District of New York and of any New York State
court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement or
the transactions contemplated hereby. Each Borrower irrevo-
cably 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.
SECTION 11.9. Counterparts; Integration; Effec-
tiveness. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement and any obliga-
tions of the Company to pay the fees described in the com-
mitment letter agreement referred to in Section 3.2(d)
constitute the entire agreement and understanding among the
parties hereto and supersede any and all prior agreements
and understandings, oral or written, relating to the subject
matter hereof. This Agreement shall become effective upon
receipt by the Agent of counterparts hereof signed by each
of the Company, the Banks and the Agent (or, in the case of
any party as to which an executed counterpart shall not have
been received, receipt by the Agent in form satisfactory to
it of telegraphic, telex, facsimile or other written confir-
mation from such party of execution of a counterpart hereof
by such party).
SECTION 11.10. WAIVER OF JURY TRIAL. EACH OF THE
BORROWERS, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSAC-
TIONS CONTEMPLATED HEREBY.
SECTION 11.11. Confidentiality. The Agent and
each Bank agree to keep any information delivered or made
available by the Borrowers pursuant to this Agreement confi-
dential from anyone other than persons employed or retained
by such Bank who are engaged in evaluating, approving,
structuring or administering the credit facility contemplat-
ed hereby; provided that nothing herein shall prevent any
Bank from disclosing such information (a) to any other Bank
or to the Agent, (b) to any other Person if reasonably
incidental to the administration of the credit facility
contemplated hereby, (c) upon the order of any court or
administrative agency, (d) upon the request or demand of any
regulatory agency or authority, (e) which had been publicly
disclosed other than as a result of a disclosure by the
Agent or such Bank prohibited by this Agreement, (f) in
connection with any litigation to which the Agent, any Bank
or its subsidiaries or Parent may be a party, (g) to the
extent necessary in connection with the exercise of any
remedy hereunder, (h) to such Bank's or Agent's legal coun-
sel and independent auditors and (i) subject to provisions
substantially similar to those contained in this Section, to
any actual or proposed Participant or Assignee.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the day and year first above
written.
BETZ LABORATORIES, INC.
By /s/ George L. James, III
--------------------------------
Title: Vice President-Finance
Chief Financial Officer
and Treasurer
Address: 4636 Somerton Road
Trevose, PA 19053-6783
Facsimile: (215) 953-5544
BETZ CANADA INC.
By /s/ Robert D. Duchesne
---------------------------------
Title: Treasurer
Address: 3026 Solandt Road
Kanata, Ontario,
Canada K2K 2A5
Facsimile: (613) 592-4103
$ 50,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Laura E. Reim
----------------------------------
Title: Vice President
$ 40,000,000 BANK OF AMERICA ILLINOIS
By /s/ Wendy Loring
----------------------------------
Title: Vice President
$ 40,000,000 THE CHASE MANHATTAN BANK, N.A.
By /s/ Robert T. Sacks
----------------------------------
Title: Vice President
$ 40,000,000 COMMERZBANK AG, New York Branch
By /s/ A. Campbell
----------------------------------
Title: Assistant Cashier
By /s/ J. Schmieding
----------------------------------
Title: Vice President
$ 40,000,000 CORESTATES BANK, N.A.
By /s/ Robert Cordell
----------------------------------
Title: Vice President
$ 40,000,000 PNC BANK, NATIONAL ASSOCIATION
By /s/ Daniel K. Fitzpatrick
----------------------------------
Title: Vice President
$ 40,000,000 ROYAL BANK OF CANADA
By /s/ John M. Crawford
----------------------------------
Title: Senior Manager
$ 28,000,000 ABN AMRO BANK N.V., New York Branch
By /s/ George M. Dugan
----------------------------------
Title: Vice President
By /s/ David W. Stack
----------------------------------
Title: Assistant Vice President
$ 28,000,000 BANK OF MONTREAL
By /s/ Susan Blackburn
----------------------------------
Title: Director
$ 28,000,000 THE BANK OF NEW YORK
By /s/ Walter Parelli
----------------------------------
Title: Assistant Vice President
$ 28,000,000 BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By /s/ Mark R. Marron
----------------------------------
Title: Vice President
$ 28,000,000 THE DAI-ICHI KANGYO BANK, LTD.
By /s/ Thomas M. Fennessey
----------------------------------
Title: Assistant Vice President
$ 28,000,000 DEUTSCHE BANK AG, New York Branch and/or
Cayman Islands Branch
By /s/ John Augsburger
----------------------------------
Title: Vice President
By /s/ James Fox
----------------------------------
Title: Assistant Vice President
$ 28,000,000 THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Daniel J. Lenckos
----------------------------------
Title: Vice President
$ 28,000,000 FIRST UNION NATIONAL BANK
By /s/ Patrick A. Mc Govern
----------------------------------
Title: Senior Vice President
$ 28,000,000 THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY
By /s/ Robert W. Ramage, JR
----------------------------------
Title: Senior Vice President
$ 28,000,000 KREDIETBANK N.V., Grand Cayman Branch
By /s/ Raymond F. Murray
----------------------------------
Title: Vice President
By /s/ Robert Snauffer
----------------------------------
Title: Vice President
$ 28,000,000 MELLON BANK, N.A.
By /s/ George B. Davis
----------------------------------
Title: Vice President
$ 28,000,000 SOCIETE GENERALE
By /s/ Robert Peterson
----------------------------------
Title: Vice President
$ 28,000,000 THE SUMITOMO BANK, LIMITED,
New York Branch
By /s/ Y. Kawamura
----------------------------------
Title: Joint General Manager
$ 28,000,000 WACHOVIA BANK OF GEORGIA, N.A.
By /s/ Adam T. Ogburn
----------------------------------
Title: Vice President
$ 20,000,000 THE FUJI BANK, LIMITED,
New York Branch
By /s/ Gina Kearns
----------------------------------
Title: Vice President and Manager
$ 20,000,000 ISTITUTO BANCARIO SAN PAOLO
DI TORINO SPA
By /s/ Gerard McKenna
----------------------------------
Title: Vice President
By /s/ Robert Worster
----------------------------------
Title: Vice President
$ 15,000,000 ALLIED IRISH BANKS PLC
By /s/ David Widger
----------------------------------
Title: Manager of Corporate Banking
$ 13,000,000 THE FIRST NATIONAL BANK OF MARYLAND
By /s/ Theodore K. Oswald
----------------------------------
Title: Vice President
Total Commitments
$750,000,000
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Laura E. Reim
----------------------------------
Title: Vice President
Address: 60 Wall Street
New York, NY 10260
Telex: 177615 MGT UT
Facsimile: (212) 648-5336
PRICING SCHEDULE
Each of "Euro-Dollar Margin", "CD Margin" and
"Facility Fee Rate" means, for any date, the rate set forth
below in the row opposite such term and in the column corre-
sponding to the "Pricing Level" that applies at such date:
Level I Level II Level III Level IV Level V
CD Margin 0.295% 0.325% 0.415% 0.500% 0.600%
Euro-Dollar 0.170% 0.200% 0.290% 0.375% 0.475%
Margin
Facility Fee 0.080% 0.100% 0.135% 0.175% 0.250%
Rate
For purposes of this Schedule, the following terms
have the following meanings, subject to the last paragraph
of this Schedule:
"Applicable Pricing Ratio" means, for any day, the
ratio of Consolidated Debt to Consolidated EBITDA as at the
last day of the fiscal quarter of the Company most recently
ended prior to such date for which the Company has delivered
financial statements pursuant to Section 5.1.A(a) or
5.1.A(b), as the case may be; provided that if at any time
after June 30, 1997 the Company shall fail to timely deliver
the financial statements required to be delivered by it
pursuant to Section 5.1.A(a) or 5.1.A(b), as the case may
be, the Applicable Pricing Ratio for each date from and
including the date on which such statements are required to
be delivered (the "statement due date") shall be the higher
pricing of the Applicable Pricing Ratio in effect prior to
the delivery of each financial statements and the Applicable
Pricing Ratio in effect upon delivery of such financial
statements; provided, further that if the Company shall have
failed to deliver such statements by the day that is 30 days
after the statement due date, then the Applicable Price
Ratio for each date from the statement due date until the
date on which such statements are delivered shall be deemed
to be greater than 3.0:1.
"Level I Pricing" applies at any date after June
30, 1997 if, at such date, (x) the Company's Applicable
Pricing Ratio is less than or equal to 1.5:1 or (y) if the
Company has exercised its One-Time Pricing Option, the
Company's long-term debt is rated A- or higher by S&P or A3
or higher by Moody's.
"Level II Pricing" applies at any date after June
30, 1997 if, at such date, (i) (x) the Company's Applicable
Pricing Ratio is less than or equal to 2.0:1 or (y) if the
Company has exercised its One-Time Pricing Option, the
Company's long-term debt is rated BBB+ or higher by S&P or
Baa1 or higher by Moody's and (ii) Level I Pricing does not
apply.
"Level III Pricing" applies at any date after June
30, 1997 if, at such date, (i) (x) the Company's Applicable
Pricing Ratio is less than or equal to 2.5:1 or (y) if the
Company has exercised its One-Time Pricing Option, the
Company's long-term debt is rated BBB or higher by S&P or
Baa2 or higher by Moody's and (ii) neither Level I Pricing
nor Level II Pricing applies.
"Level IV Pricing" applies at any date after June
30, 1997 if, at such date, (i) (x) the Company's Applicable
Pricing Ratio is less than or equal to 3.0:1 or (y) if the
Company has exercised its One-Time Pricing Option,the
Company's long-term debt is rated BBB- or higher by S&P or
Baa3 or higher by Moody's and (ii) none of Level I Pricing,
Level II Pricing and Level III Pricing applies.
"Level V Pricing" applies at any date after June
30, 1997 if, at such date, no other Pricing Level applies.
"One-Time Pricing Option" means the one-time,
irrevocable option of the Company during the life of this
facility to switch to a ratings-based pricing grid. Such
option shall be considered to be exercised, and thereafter
irrevocably in effect, on the day of receipt by the Agent of
the Company's notification of its exercise of such option.
"Pricing Level" refers to the determination of
which of Level I, Level II, Level III, Level IV or Level V
applies at any date; provided that prior to the date the
Agent receives, or should have received pursuant to Section
5.1.A(b), the Pricing Ratio calculation for the period
ending June 30, 1997, Level IV Pricing shall apply.
Upon the One-Time Pricing Option being exercised,
the following shall apply:
(a) The credit ratings to be utilized for purpos-
es of this Schedule are those assigned to the senior
unsecured long-term debt securities of the Company
without third-party credit enhancement, whether or not
any such debt securities are actually outstanding, and
any rating assigned to any other debt security of the
Company shall be disregarded. The rating in effect at
any date is that in effect at the close of business on
such date.
(b) If the Company is split-rated and the ratings
differential is one notch, the higher of the two rat-
ings will apply (e.g., A-/Baa1 results in Level I
Status and BBB+/Baa2 results in Level II Status). If
the Company is split-rated and the ratings differential
is more than one notch, the average of the two ratings
(or the higher of two intermediate ratings) shall be
used (e.g., A-/Baa3 results in Level II Status and
BBB+/Baa3 results in Level III Status). If, however,
at any date, the Company's long-term debt is not rated
by both S&P and Moody's, then Level V shall apply;
provided that if either Moody's or S&P shall (i) cease
to issue ratings or (ii) refuse to issue a rating to
the Company at a reasonable cost, then the Company,
together with the Agent, shall substitute another
mutually satisfactory nationally recognized credit
rating agency for either Moody's or S&P, as the case
may be, and this Pricing Schedule shall apply in re-
spect of the equivalent ratings of such rating agency.
EXHIBIT A - Letter of Credit
IRREVOCABLE STANDBY LETTER OF CREDIT
June 28, 1996
[Letter of Credit No.] MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
[Letter of Credit No.] BANK OF AMERICA ILLINOIS
[Letter of Credit No.] THE CHASE MANHATTAN BANK, N.A.
[Letter of Credit No.] COMMERZBANK AG, New York Branch
[Letter of Credit No.] CORESTATES BANK, N.A.
[Letter of Credit No.] PNC BANK, NATIONAL ASSOCIATION
[Letter of Credit No.] ROYAL BANK OF CANADA
[Letter of Credit No.] ABN AMRO BANK N.V.,
New York Branch
[Letter of Credit No.] BANK OF MONTREAL
[Letter of Credit No.] THE BANK OF NEW YORK
[Letter of Credit No.] BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
[Letter of Credit No.] THE DAI-ICHI KANGO BANK, LTD.
[Letter of Credit No.] DEUTSCHE BANK AG, New York Branch
and/or Cayman Islands Branch
[Letter of Credit No.] THE FIRST NATIONAL BANK OF CHICAGO
[Letter of Credit No.] FIRST UNION NATIONAL BANK
[Letter of Credit No.] THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY
[Letter of Credit No.] KREDIETBANK N.V.,
Grand Cayman Branch
[Letter of Credit No.] MELLON BANK, N.A.
[Letter of Credit No.] SOCIETE GENERALE
[Letter of Credit No.] THE SUMITOMO BANK, LIMITED,
New York Branch
[Letter of Credit No.] WACHOVIA BANK OF GEORGIA, N.A.
[Letter of Credit No.] THE FUJI BANK, LIMITED,
New York Branch
[Letter of Credit No.] ISTITUTO BANCARIO SAN PAOLO
DI TORINO SPA
[Letter of Credit No.] ALLIED IRISH BANKS PLC
[Letter of Credit No.] THE FIRST NATIONAL BANK
OF MARYLAND
Beneficiary: L B Realty, Inc.
One Town Center Road
Boca Raton, FL 33486-1010
Attention: Treasurer
Ladies and Gentlemen:
1. By order of our customer, Betz Laboratories,
Inc. ("Betz"), we, the banks listed in paragraph 2 below
(each a "Bank" and collectively the "Banks"), hereby estab-
lish (severally in our respective Commitment Percentages
specified in paragraph 2 below) this Irrevocable Standby
Letter of Credit ("this Letter of Credit") in favor of L B
Realty, Inc., a Delaware corporation, and its permitted
transferees ("you" or the "Beneficiary") in the aggregate
amount of US $103,405,363.28 (One hundred three million,
four hundred five thousand, three hundred sixty-three United
States Dollars and twenty-eight cents) (the "Letter of
Credit Amount") in order to assure payment of the promissory
note of Betz dated June 28, 1996 (the "Note") delivered
pursuant to Section 3.6(d) of the Grace Dearborn Worldwide
Purchase and Sale Agreement, dated as of March 11, 1996, and
any and all amendments thereto (the "Agreement"), between
Betz and W.R. Grace & Co.-Conn.
2. Each Bank shall be severally responsible for
its following commitment percentage ("Commitment Percent-
age") of the drawing hereunder:
Bank Commitment Percentage
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK 6.666666673%
BANK OF AMERICA ILLINOIS 5.333333333%
THE CHASE MANHATTAN BANK, N.A. 5.333333333%
COMMERZBANK AG, New York Branch 5.333333333%
CORESTATES BANK, N.A. 5.333333333%
PNC BANK, NATIONAL ASSOCIATION 5.333333333%
ROYAL BANK OF CANADA 5.333333333%
ABN AMRO BANK N.V., New York Branch 3.733333333%
BANK OF MONTREAL 3.733333333%
THE BANK OF NEW YORK 3.733333333%
BANK OF TOKYO-MITSUBISHI TRUST COMPANY 3.733333333%
THE DAI-ICHI KANGO BANK, LTD. 3.733333333%
DEUTSCHE BANK AG, New York Branch
and/or Cayman Islands Branch 3.733333333%
THE FIRST NATIONAL BANK OF CHICAGO 3.733333333%
FIRST UNION NATIONAL BANK 3.733333333%
THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY 3.733333333%
KREDIETBANK N.V., 3.733333333%
Grand Cayman Branch
MELLON BANK, N.A. 3.733333333%
SOCIETE GENERALE 3.733333333%
THE SUMITOMO BANK, LIMITED,
New York Branch 3.733333333%
WACHOVIA BANK OF GEORGIA, N.A. 3.733333333%
THE FUJI BANK, LIMITED,
New York Branch 2.666666667%
ISTITUTO BANCARIO SAN PAOLO
DI TORINO SPA 2.666666667%
ALLIED IRISH BANKS PLC 2.000000000%
THE FIRST NATIONAL BANK
OF MARYLAND 1.733333333%
Total 100%
The obligations of the Banks under this Letter of Credit are
several and no Bank shall be liable for the failure of any
other Bank to perform its obligations hereunder. Morgan
Guaranty Trust Company of New York, as Agent for the Banks
(the "Agent"), shall have no liability for the failure of
any Bank to perform its obligations hereunder.
3. Funds are available to you under this Letter
of Credit in a single drawing against your draft, in an
amount not exceeding the Letter of Credit Amount, presented
at the office of the Agent specified in paragraph 7 below or
at its offices at 15 Broad Street, Teller's Department-
Ground Floor, New York, NY 10015, Attention: International
Trade Services. The draft must be in the form of Annex 1
hereto, with blanks appropriately completed, and must be
accompanied by the original of this Letter of Credit and any
amendment(s) hereto and a certificate of one who purports to
be the President, a Vice President, the Treasurer or an
Assistant Treasurer of the Beneficiary in the form of Annex
2 hereto, with blanks appropriately completed.
4. This Letter of Credit shall be transferable by
the Beneficiary only to a transferee of the Note, upon
delivery to the Agent of a transfer notice in the form of
Annex 3 hereto, with blanks appropriately completed, by
certified mail, return receipt requested, or hand delivery
at the office of the Agent referred to in paragraph 7 below.
5. This Letter of Credit shall expire at the
close of business at the office of the Agent at which the
draft may be presented on January 17, 1997 (the "Expiration
Time"), it being understood that such expiration shall not
affect the obligations of the Agent and each Bank hereunder
in respect of any drawing duly made prior to the Expiration
Time.
6. If the Agent receives from you the items
described in paragraph 3 above on or before the Expiration
Time, each Bank will unconditionally honor the same in the
amount of its Commitment Percentage (as specified in para-
graph 2 above) by remitting such amount, in immediately
available funds, to the Agent at its office at 60 Wall
Street, New York, New York 10260, for your account, no
later than the date one business day after receipt by the
Agent of such items, and the Agent shall make the total
amount so received by it available to you in such manner as
you may specify. The term "business day" means any day
except a Saturday, Sunday or other day on which commercial
banks in New York City are required or authorized by law to
close.
7. All communications regarding this Letter of
Credit shall be addressed to Morgan Guaranty Trust Company
of New York, c/o J.P. Morgan Services, Inc., Attention:
International Trade Services Department, 500 Stanton
Christiana Road, Newark, DE 19713-2107 (facsimile number
(302) 634-1838 or (302) 634-1839) and shall reference this
Letter of Credit. All such communications shall be effec-
tive when received by the Agent at the above address. The
Agent agrees to notify Betz (by facsimile transmission) when
it receives the items required pursuant to paragraph 3
above. Such notice shall be addressed to: Betz Laborato-
ries, Inc., 4636 Somerton Road, Trevose, PA 19053, Atten-
tion: Treasurer (facsimile number (215) 953-5544).
8. This Letter of Credit sets forth in full the
terms of our several undertakings, and such undertakings
shall not in any way be modified by reference to any docu-
ment, instrument, or agreement referred to herein. This
Letter of Credit may be amended if, but only if, such amend-
ment is in writing and is signed by the Beneficiary, the
Agent and each Bank, with the written consent of Betz. This
Letter of Credit may be signed in any number of counter-
parts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the
same instrument.
9. This Letter of Credit is subject to the Uni-
form Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No.
500 (the "Uniform Customs"), as the same exists on the date
of issuance of this Letter of Credit. This Letter of Credit
shall be deemed to be a contract made under the laws of the
State of New York and shall, as to matters not governed by
the Uniform Customs, be governed by and construed in accor-
dance with the laws of the State of New York.
Very truly yours,
[AUTHORIZED BANK SIGNATURES]
ANNEX 1 TO
LETTER OF CREDIT
[FORM OF DRAFT]
U.S. $ [aggregate amount] __________, 19
To the Banks listed below:
Pay to the order of [Beneficiary] the aggregate
amount of U.S. $____ ([insert amount in words] United States
Dollars). Such aggregate amount consists of a principal
component of U.S. $_____ ([insert amount in words] United
States Dollars) and an interest component of U.S. $_____
([insert amount in words] United States Dollars).
The portion of said aggregate amount being drawn
on each Bank is the amount of this draft multiplied by such
Bank's Commitment Percentage set forth in paragraph 2 of the
Letter of Credit referred to below.
Drawn under the following Irrevocable Standby
Letter of Credit:
[Letter of Credit No.] MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
[Letter of Credit No.] BANK OF AMERICA ILLINOIS
[Letter of Credit No.] THE CHASE MANHATTAN BANK, N.A.
[Letter of Credit No.] COMMERZBANK AG, New York Branch
[Letter of Credit No.] CORESTATES BANK, N.A.
[Letter of Credit No.] PNC BANK, NATIONAL ASSOCIATION
[Letter of Credit No.] ROYAL BANK OF CANADA
[Letter of Credit No.] ABN AMRO BANK N.V.,
New York Branch
[Letter of Credit No.] BANK OF MONTREAL
[Letter of Credit No.] THE BANK OF NEW YORK
[Letter of Credit No.] BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
[Letter of Credit No.] THE DAI-ICHI KANGO BANK, LTD.
[Letter of Credit No.] DEUTSCHE BANK AG, New York Branch
and/or Cayman Islands Branch
[Letter of Credit No.] THE FIRST NATIONAL BANK OF CHICAGO
[Letter of Credit No.] FIRST UNION NATIONAL BANK
[Letter of Credit No.] THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY
[Letter of Credit No.] KREDIETBANK N.V.,
Grand Cayman Branch
[Letter of Credit No.] MELLON BANK, N.A.
[Letter of Credit No.] SOCIETE GENERALE
[Letter of Credit No.] THE SUMITOMO BANK, LIMITED,
New York Branch
[Letter of Credit No.] WACHOVIA BANK OF GEORGIA, N.A.
[Letter of Credit No.] THE FUJI BANK, LIMITED,
New York Branch
[Letter of Credit No.] ISTITUTO BANCARIO SAN PAOLO
DI TORINO SPA
[Letter of Credit No.] ALLIED IRISH BANKS PLC
[Letter of Credit No.] THE FIRST NATIONAL BANK
OF MARYLAND
[BENEFICIARY]
By:___________________
[Name and Title]
ANNEX 2 TO
LETTER OF CREDIT
OFFICER'S CERTIFICATE
In [his/her] capacity as [President] [Vice Presi-
dent] [Treasurer] [Assistant Treasurer] of [the Beneficia-
ry], the undersigned hereby certifies as follows:
Betz Laboratories, Inc. (the "Buyer") is in default of
its payment obligations under its promissory note dated
June 28, 1996 (the "Note") delivered pursuant to Sec-
tion 3.6(d) of the Grace Dearborn Worldwide Purchase
and Sale Agreement, dated as of March 11, 1996, and any
and all amendments thereto (the "Agreement"), between
Betz Laboratories, Inc. and W.R. Grace & Co.-Conn., and
has failed to cure such default within the period of
time (if any) permitted by the Note and the Agreement
after notice (if any notice is required) having been
given in accordance with the Note and the Agreement.
The undersigned beneficiary is entitled under the terms
of the Note and the Agreement to draw under the Letter
of Credit that this Certificate accompanies (being the
Letter of Credit referred to in the Note and the Agree-
ment) in the aggregate amount of the draft that this
Certificate accompanies.
IN WITNESS WHEREOF the undersigned has hereunto set
[his/her] name this ___ day of [Month], [Year].
___________________
Title:
ANNEX 3 TO
LETTER OF CREDIT
TRANSFER NOTICE
[Date]
TO: [Names of Banks]
[c/o Agent, name & address]
The undersigned ___________________ is the Benefi-
ciary of your Letter of Credit dated June 28, 1996 (the
"Letter of Credit") in the amount of US$103,405,363.28.
All terms defined in the Letter of Credit have the same
meanings as used herein.
The undersigned has transferred to _____________
(the "Transferee") the undersigned's rights with respect to
the Note and the Transferee has become the Beneficiary under
the Letter of Credit. The Transferee is a permitted trans-
feree of the Note.
[Name of Beneficiary]
By ____________________
Name:
Title:
EXHIBIT B - Note
NOTE
New York, New York
___________ __, 199_
For value received, [Name of Borrower], a [juris-
diction of incorporation] (the "Borrower"), promises to pay
to the order of ______________________ (the "Bank"), for the
account of its Applicable Lending Office, the unpaid princi-
pal amount of each Loan made by the Bank to the Borrower
pursuant to the Credit Agreement referred to below on the
maturity date provided for in the Credit Agreement. The
Borrower promises to pay interest on the unpaid principal
amount of each such Loan on the dates and at the rate or
rates provided for in the Credit Agreement. All such pay-
ments of principal and interest shall be made in lawful
money of the United States in Federal or other immediately
available funds at the office of Morgan Guaranty Trust
Company of New York, 60 Wall Street, New York, New York
10260-0060.
All Loans made by the Bank to the Borrower, the
respective types and maturities thereof and all repayments
of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the
foregoing information with respect to each such Loan then
outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule
attached to and made a part hereof; provided that the fail-
ure of the Bank to make any such recordation or endorsement
shall not affect the obligations of the Borrower hereunder
or under the Credit Agreement.
This note is one of the Notes referred to in the
Credit Agreement dated as of June 20, 1996 among Betz Labo-
ratories, Inc., Betz Canada Inc., the Banks parties thereto
and Morgan Guaranty Trust Company of New York, as Agent (as
the same may be amended from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used
herein with the same meanings. Reference is made to the
Credit Agreement for provisions for the prepayment hereof
and the acceleration of the maturity hereof.
[ The payment in full of the principal and interest
on this note has, pursuant to the provisions of the Credit
Agreement, been unconditionally guaranteed by Betz Laborato-
ries, Inc.]*
[NAME OF BORROWER]
* To be deleted in the case of Notes executed and delivered
by the Company.
By____________________
Name:
Title:
LOANS AND PAYMENTS OF PRINCIPAL
__________________________________________________________________________
Amount Type Amount of
of of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
EXHIBIT C - Money Market Quote Request
Form of Money Market Quote Request
[Date]
To: Morgan Guaranty Trust Company of New York (the
"Agent")
From: [Name of Borrower]
Re: Credit Agreement (the "Credit Agreement") dated
as of June 20, 1996 among Betz Laboratories,
Inc., Betz Canada Inc., the Banks parties
thereto and the Agent
We hereby give notice pursuant to Section 2.3 of the
Credit Agreement that we request Money Market Quotes for the
following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount* Interest Period**
$
Such Money Market Quotes should offer a Money Market
[Margin] [Absolute Rate]. [The applicable base rate is the
London Interbank Offered Rate.]
Terms used herein have the meanings assigned to them
in the Credit Agreement.
[NAME OF BORROWER]
By________________________
Name:
Title:
* Amount must be $10,000,000 or a larger multiple of
$1,000,000.
** Not less than one month (LIBOR Auction) or not less than
seven days (Absolute Rate Auction), subject to the provi-
sions of the definition of Interest Period.
EXHIBIT D - Invitation for Money Market Quotes
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes to [Name of Bor-
rower] (the "Borrower")
Pursuant to Section 2.3 of the Credit Agreement
dated as of June 20, 1996 among Betz Laboratories, Inc.,
Betz Canada Inc., the Banks parties thereto and the under-
signed, as Agent, we are pleased on behalf of the Borrower
to invite you to submit Money Market Quotes to the Borrower
for the following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market
[Margin] [Absolute Rate]. [The applicable base rate is the
London Interbank Offered Rate.]
Please respond to this invitation by no later than
[2:00 P.M.] [9:30 A.M.] (New York City time) on [date].
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By______________________
Authorized Officer
EXHIBIT E - Money Market Quote
Form of Money Market Quote
To: Morgan Guaranty Trust Company of New York, as Agent
Re: Money Market Quote to [Name of Borrower] (the "Bor-
rower")
In response to your invitation on behalf of the
Borrower dated _____________, 19__, we hereby make the
following Money Market Quote on the following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the
following principal amounts, for the following In-
terest Periods and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
$
$
[Provided, that the aggregate principal amount of Money
Market Loans for which the above offers may be accepted
shall not exceed $____________.]**
__________
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not
exceed principal amount requested. Specify aggregate limi-
tation if the sum of the individual offers exceeds the
amount the Bank is willing to lend. Bids must be made for
$5,000,000 or a larger multiple of $1,000,000.
(notes continued on following page)
We understand and agree that the offer(s) set
forth above, subject to the satisfaction of the applica-
ble conditions set forth in the Credit Agreement dated as
of June 20, 1996 among Betz Laboratories, Inc., Betz
Canada Inc., the Banks parties thereto and yourselves, as
Agent, irrevocably obligates us to make the Money Market
Loan(s) for which any offer(s) are accepted, in whole or
in part.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
__________
*** Not less than one month or not less than seven days, as
specified in the related Invitation. No more than five bids
are permitted for each Interest Period.
**** Margin over or under the London Interbank Offered Rate
determined for the applicable Interest Period. Specify
percentage (to the nearest 1/10,000 of 1%) and specify
whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest
1/10,000th of 1%).
EXHIBIT F-1 - Opinion of Counsel for the Company
and United States Counsel for Betz
Canada
________________, 199_
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have acted as counsel for Betz Laboratories, Inc.
(the "Company") and as United States counsel for Betz Canada
Inc. ("Betz Canada") in connection with the Credit Agreement
(the "Credit Agreement") dated as of June 20, 1996 among the
Company, Betz Canada, the Banks parties thereto and Morgan
Guaranty Trust Company of New York, as Agent. Terms defined
in the Credit Agreement are used herein as therein defined.
This opinion is being rendered to you at the request of our
clients pursuant to Section 3.1(b) of the Credit Agreement.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and
other instruments and have conducted such other investiga-
tions of fact and law as we have deemed necessary or advis-
able for purposes of this opinion.
Upon the basis of the foregoing and subject to the
qualifications set forth below, we are of the opinion that:
1. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of
Pennsylvania and has all corporate power required to carry
on its business as described in the Company's 1995 Form
10-K.
2. The execution, delivery and performance by the
Company of the Credit Agreement and its Notes are within the
corporate power of the Company, have been duly authorized by
all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of
the articles of incorporation or bylaws of the Company or of
any agreement, judgment, injunction, order, decree or other
instrument known to us to be binding upon the Company or any
of its Subsidiaries or result in the creation or imposition
of any Lien on any asset of the Company or any of its Sub-
sidiaries pursuant to any of the foregoing.
3. The execution, delivery and performance by Betz
Canada of the Credit Agreement and its Notes require no
action by or in respect of, or filing with, any governmental
body, agency or official and do not contravene, or consti-
tute a default under, any provision of applicable law or
regulation or of any agreement, judgment, injunction, order,
decree or other instrument known to us to be binding upon
Betz Canada or any of its Subsidiaries or result in the
creation or imposition of any Lien on any asset of Betz
Canada or any of its Subsidiaries pursuant to any of the
foregoing.
4. The Credit Agreement has been duly executed and
delivered by, and constitutes a valid and binding agreement
of, the Company and Betz Canada and each of the Notes of the
Company and Betz Canada, respectively, has been duly execut-
ed and delivered by, and constitutes a valid and binding
obligation of, the Company or Betz Canada, as the case may
be, in each case enforceable in accordance with its terms
except as the same may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights generally and by
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
We have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as origi-
nals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. We
have also assumed that the Credit Agreement constitutes the
legal, valid and binding agreement of the Agent and the
Banks.
Whenever our opinion herein with respect to the
existence or absence of facts is indicated to be based on
our knowledge, it is intended to signify that no information
has come to the attention of the lawyers actually involved
in our representation of the Company in connection with the
Credit Agreement and the lawyer having overall responsibili-
ty for our representation of the Company that would give us
actual present knowledge of the existence or absence of
facts. We have not, however, undertaken any independent
investigation to determine the existence or absence of such
facts.
In giving the opinion in paragraph 4 as to Betz
Canada we have relied with your permission on the opinions
of Bennett Jones Verchere, Canadian counsel for Betz Canada,
contained in its opinion letter of even date herewith deliv-
ered to you in connection with the Credit Agreement.
This opinion is limited to the laws of the Common-
wealth of Pennsylvania, the State of New York and the feder-
al laws of the United States of America.
This opinion is being delivered to you solely for
your benefit in connection with the Credit Agreement and may
not be relied upon by any other person or for any other
purpose without our prior written consent.
Very truly yours,
EXHIBIT F-2 - Opinion of Canadian Counsel for Betz Canada
___________, 1996
The Banks and the Agent
referred to below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
Re: Betz Canada Inc.
We have acted as Canadian counsel to Betz Canada
Inc. ("Betz Canada") in connection with a Credit Agreement
(the "Credit Agreement") dated as of June 20, 1996 among
Betz Laboratories, Inc. (the "Company"), Betz Canada, the
Banks parties thereto and Morgan Guaranty Trust Company of
New York, as Agent. Terms defined in the Credit Agreement
are used herein as therein defined.
For the purposes of the opinions expressed below, we
have examined originals or copies of the following docu-
ments:
1. a copy, certified by an officer of Betz Canada, of
the Letters Patent and Articles of Continuance of
Betz Canada (the "Articles");
2. a copy, certified by an officer of Betz Canada, of
the by-laws of Betz Canada (the "By-laws");
3. a copy, certified by an officer of Betz Canada, of a
resolution of the board of directors of Betz Canada,
authorizing, among other things, the execution and
delivery of the Credit Agreement;
4. a certificate of compliance (the "Certificate of
Compliance") for Betz Canada issued by Industry
Canada in respect of Betz Canada dated June 11,
1996;
5. a certificate of incumbency of Betz Canada of even
date herewith;
6. the Credit Agreement; and
7. the form of promissory note (the "Note") to be de-
livered by Betz Canada to the Bank(s) in connection
with Loans made to Betz Canada.
We have also considered such statutes and regula-
tions of the Province of Ontario and of Canada applicable in
Ontario ("Ontario Law") as we have considered necessary as a
basis for the opinions hereinafter expressed.
As to certain matters of fact material to our opin-
ions, we have also examined and relied exclusively and
without independent verification on a certificate of the
Secretary and Vice President of Betz Canada and a certifi-
cate of the President of Betz Canada (collectively, the
"Officer's Certificates"), copies of which are attached to
this opinion.
Assumptions
For the purposes of the opinions hereinafter ex-
pressed, we have made the following assumptions:
1. that all signatures are genuine, all documents sub-
mitted to us as originals are authentic, and all
documents submitted to us as copies conform to au-
thentic original documents;
2. that all facts set forth in official public records
and certificates and other documents supplied by
public officials or otherwise conveyed to us by
public officials are complete, true and accurate;
3. that the Certificate of Compliance is conclusive
evidence that Betz Canada is incorporated and a
subsisting corporation under the laws of Canada and
has not been dissolved thereunder and that a similar
certificate bearing a current date could be ob-
tained.
Applicable Law
We are solicitors qualified to practice law only in
the Province of Ontario. Accordingly, we do not express any
opinion with respect to the laws of any other jurisdiction
other than Ontario Law as of the date of this opinion let-
ter.
Opinions
Based and relying upon the foregoing, and subject to
the qualifications listed below, we are of the opinion that:
1. Betz Canada is a corporation validly existing under
the laws of Canada and has not been dissolved;
2. Betz Canada has the corporate power and authority to
execute, deliver and perform its obligations under
the Credit Agreement and the Notes (the "Docu-
ments");
3. the execution, delivery and performance of the Docu-
ments has been authorized by all necessary corporate
action of Betz Canada;
4. Betz Canada has duly executed and delivered each of
the Documents;
5. the execution, delivery and performance by Betz
Canada of the Documents does not constitute or re-
sult in a violation or a breach of, or a default
under:
(a) its Articles or By-laws;
(b) any Ontario Law to which Betz Canada is sub-
ject; or
(c) any agreement, judgment, injunction, order,
decree or other instrument known to us to be
binding upon Betz Canada;
6. Under the Income Tax Act (Canada), the Regulations
thereunder and the publicly-announced administrative
practices of Revenue Canada as of the date hereof,
Canadian nonresident withholding tax will not apply
on interest paid to a Bank by Betz Canada on a Loan
made to it pursuant to the Credit Agreement if,
under the terms of the Loan, Betz Canada may not,
under any circumstances, be obliged to pay more than
25% of the principal amount of the obligation within
five years of the date of its issue except (i) in
the event of a failure or default under the terms of
the Credit Agreement relating thereto (which events
have commercial reality, are beyond the control of
such Bank, impair such Bank's position and are not
contrived) or (ii) the terms of the obligation or
any agreement relating thereto become unlawful or
are changed by virtue of legislation or by a court,
statutory board or commission. Canadian nonresident
withholding tax of 25% as reduced by applicable tax
treaty (to 10% in the case of a U.S. resident Bank)
will apply on interest paid by Betz Canada on a Loan
if the prescribed repayment provisions are not met.
If the prescribed repayment provisions are satis-
fied, there would be no Canadian non-resident with-
holding tax imposed on any other payments that Betz
Canada might be required to make to the Banks pursu-
ant to the Credit Agreement.
7. There is no registration tax, stamp duty or any
similar tax or duty imposed by Ontario Law by virtue
of the execution and delivery of the Documents by
the parties thereto or the performance of their
obligations thereunder.
The choice of New York law as the governing law of
the Credit Agreement and the Notes will be upheld as a valid
choice of law by the courts of the Province of Ontario
provided that such choice of law is bona fide (in the sense
that it was not made with a view to avoiding the consequenc-
es of the law of any other jurisdiction) and provided that
such choice of law is not contrary to public policy, as that
term is understood under the laws of the Province of Ontar-
io. We have no reason to believe that the choice of law in
the Credit Agreement and the Notes would
not be upheld.
Qualifications
Our opinions expressed above are subject to the
following qualification:
1. The validity, binding effect and enforceability of
each of the Documents or any judgment arising out of
or in connection with any Document may be limited by
applicable bankruptcy, insolvency, winding-up, reor-
ganization, arrangement, moratorium or other similar
laws affecting creditors' rights generally and by
general principles of equity.
Yours truly,
BENNETT JONES VERCHERE
EXHIBIT G - Opinion of Special Counsel for the Agent
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
________________, 199_
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the
Credit Agreement (the "Credit Agreement") dated as of June
20, 1996 among Betz Laboratories, Inc., a Pennsylvania
corporation, Betz Canada Inc., a Canadian corporation, the
Banks parties thereto and Morgan Guaranty Trust Company of
New York, as Agent, and have acted as special counsel for
the Agent for the purpose of rendering this opinion pursuant
to Section 3.1(d) of the Credit Agreement. Terms defined in
the Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and
other instruments and have conducted such other investiga-
tions of fact and law as we have deemed necessary or advis-
able for purposes of this opinion.
Upon the basis of the foregoing, we are of the
opinion that the Credit Agreement constitutes a valid and
binding agreement of each of the Company and Betz Canada,
and each of their respective Notes constitutes a valid and
binding obligation of its maker, in each case enforceable in
accordance with its terms except as the same may be limited
by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of
equity.
We are members of the Bar of the State of New York
and the foregoing opinion is limited to the laws of the
State of New York and the federal laws of the United States
of America. In giving the foregoing opinion, (i) we express
no opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any
Bank is located which limits the rate of interest that such
Bank may charge or collect and (ii) as to all matters gov-
erned by the laws of the Commonwealth of Pennsylvania or
Canada, we have relied, without independent investigation,
on the respective opinions of Morgan, Lewis & Bockius LLP,
counsel for the Company, and Bennett Jones Verchere, counsel
for Betz Canada, copies of which have been delivered to you.
This opinion is rendered solely to you in connec-
tion with the above matter. This opinion may not be relied
upon by you for any other purpose or relied upon by any
other person without our prior written consent.
Very truly yours,
EXHIBIT H - Form of Election to Participate
FORM OF ELECTION TO PARTICIPATE
[Date]
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent for
the Banks parties to the Credit
Agreement dated as of June 20, 1996
among Betz Laboratories, Inc,
Betz Canada Inc.,
such Banks and such Agent (the
"Credit Agreement")
Dear Sirs:
Reference is made to the Credit Agreement de-
scribed above. Terms not defined herein which are defined
in the Credit Agreement shall have for the purposes hereof
the meaning provided therein.
The undersigned, [name of Eligible Subsidiary], a
[jurisdiction of incorporation] corporation, hereby elects
to be an Eligible Subsidiary for purposes of the Credit
Agreement, effective from the date hereof until an Election
to Terminate shall have been delivered on behalf of the
undersigned in accordance with the Credit Agreement. The
undersigned confirms that the representations and warranties
set forth in Article 9 of the Credit Agreement are true and
correct as to the undersigned as of the date hereof, and the
undersigned hereby agrees to perform all the obligations of
an Eligible Subsidiary under, and to be bound in all re-
spects by the terms of, the Credit Agreement, including
without limitation Sections 11.1 and 11.8 thereof, as if the
undersigned were a signatory party thereto.
[Tax disclosure pursuant to Section 9.4]
This instrument shall be construed in accordance
with and governed by the laws of the State of New York.
Very truly yours,
[NAME OF ELIGIBLE SUBSIDIARY]
By____________________________
Title:
The undersigned hereby confirms that [name of
Eligible Subsidiary] is an Eligible Subsidiary for purposes
of the Credit Agreement described above.
BETZ LABORATORIES, INC.
By____________________________
Title:
Receipt of the above Election to Participate is
hereby acknowledged on and as of the date set forth above.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By____________________________
Title:
EXHIBIT I - Form of Election to Terminate
FORM OF ELECTION TO TERMINATE
[Date]
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent for
the Banks parties to the Credit
Agreement dated as of June 20, 1996
among Betz Laboratories, Inc.,
Betz Canada Inc.,
such Banks and such Agent (the
"Credit Agreement")
Dear Sirs:
Reference is made to the Credit Agreement de-
scribed above. Terms not defined herein which are defined
in the Credit Agreement shall have for the purposes hereof
the meaning provided therein.
The undersigned, [name of Eligible Subsidiary], a
[jurisdiction of incorporation] corporation, hereby elects
to terminate its status as an Eligible Subsidiary for pur-
poses of the Credit Agreement, effective as of the date
hereof. The undersigned hereby represents and warrants that
all principal and interest on all Notes of the undersigned
and all other amounts payable by the undersigned pursuant to
the Credit Agreement have been paid in full on or prior to
the date hereof. Notwithstanding the foregoing, this Elec-
tion to Terminate shall not affect any obligation of the
undersigned under the Credit Agreement or under any Note
heretofore incurred.
This instrument shall be construed in accordance
with and governed by the laws of the State of New York.
Very truly yours,
[NAME OF ELIGIBLE SUBSIDIARY]
By_______________________
Title:
The undersigned hereby confirms that the status of
[name of Eligible Subsidiary] as an Eligible Subsidiary for
purposes of the Credit Agreement described above is termi-
nated as of the date hereof.
BETZ LABORATORIES, INC.
By_________________________
Title:
Receipt of the above Election to Terminate is
hereby acknowledged on and as of the date set forth above.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By__________________________
Title:
EXHIBIT J - Matters to be covered in the Opin-
ions of Counsel for the Eligible
Subsidiary and the Company
1. The Borrower is a corporation validly existing
and in good standing under the laws of [jurisdiction of
organization].
2. The execution and delivery by the Borrower of
its Election to Participate and its Notes and the perfor-
mance by the Borrower of the Credit Agreement and its Notes
are within the Borrower's powers, have been duly authorized
by all necessary action, require no action by or in respect
of, or filing with, any governmental body, agency or offi-
cial and do not contravene, or constitute a default under,
any provision of applicable law or regulation or of the
[charter and similar documents] or bylaws of the Borrower or
of any agreement, judgment, injunction, order, decree or
other instrument known to such counsel to be binding upon
the Borrower or the Company or any of its Subsidiaries or
result in the creation or imposition of any Lien on any
asset of the Company or any of its Subsidiaries pursuant to
any of the foregoing.
3. The Borrower's Election to Participate has
been duly executed and delivered and the Credit Agreement
constitutes a valid and binding agreement of the Borrower
and each of its Notes has been duly executed and delivered
and constitutes a valid and binding obligation of the Bor-
rower, in each case enforceable in accordance with its terms
except as the same may be limited by bankruptcy, insolvency
and other similar laws affecting creditors' rights generally
and by general principles of equity.
4. Except as disclosed in the Borrower's Election
to Participate, there is no income, stamp or other tax of
[jurisdiction of organization and, if different, principal
place of business], or any taxing authority thereof or
therein, imposed by or in the nature of withholding or
otherwise, which is imposed on any payment to be made by the
Borrower pursuant to the Credit Agreement or its Notes, or
imposed on or by virtue of the execution, delivery or en-
forcement of its Election to Participate, the Credit Agree-
ment or its Notes.
EXHIBIT K - Form of Assignment and Assumption Agreement
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among <NAME
OF ASSIGNOR> (the "Assignor"), <NAME OF ASSIGNEE> (the
"Assignee"), BETZ LABORATORIES, INC. (the "Company"), BETZ
CANADA INC. ("Betz Canada") and MORGAN GUARANTY TRUST COMPA-
NY OF NEW YORK, as Agent (the "Agent").
WHEREAS, this Assignment and Assumption Agreement
(the "Agreement") relates to the Credit Agreement dated as
of June 20, 1996 among the Company, Betz Canada Inc., the
Assignor and the other Banks parties thereto, as Banks, and
the Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement,
the Assignor has a Commitment to make Loans [and be an
issuer of the Letter of Credit] in an aggregate principal
amount at any time outstanding not to exceed $__________;
WHEREAS, Committed Loans made by the Assignor
under the Credit Agreement in the aggregate principal amount
of $__________ are outstanding at the date hereof;
[WHEREAS, the Letter of Credit with a total amount
available for drawing thereunder upon Assignor of
$__________ is outstanding at the date hereof;] and
WHEREAS, the Assignor proposes to assign to the
Assignee all of the rights of the Assignor under the Credit
Agreement in respect of a portion of its Commitment thereun-
der in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its
outstanding Committed Loans [and Letter of Credit Liabili-
ties], and the Assignee proposes to accept assignment of
such rights and assume the corresponding obligations from
the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing
and the mutual agreements contained herein, the parties
hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not
otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.
SECTION 2. Assignment. (a) The Assignor hereby
assigns and sells to the Assignee all of the rights of the
Assignor under the Credit Agreement to the extent of the
Assigned Amount, and the Assignee hereby accepts such as-
signment from the Assignor and assumes all of the obliga-
tions of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, including the purchase from
the Assignor of the corresponding portion of the principal
amount of the Committed Loans made by, and Letter of Credit
Liabilities of, the Assignor outstanding at the date hereof.
Upon the execution and delivery hereof by the Assignor, the
Assignee, [the Company, Betz Canada and the Agent]* and the
payment of the amounts specified in Section 3 required to be
paid on the date hereof (i) the Assignee shall, as of the
date hereof, succeed to the rights and be obligated to
perform the obligations of a Bank under the Credit Agreement
with a Commitment in an amount equal to the Assigned Amount,
and (ii) the Commitment of the Assignor shall, as of the
date hereof, be reduced by a like amount and the Assignor
released from its obligations under the Credit Agreement to
the extent such obligations have been assumed by the Assign-
ee. The assignment provided for herein shall be without
recourse to the Assignor.
* Not necessary if the Assignee is a Bank.
[ (b) The parties understand that the assignment
and assumption pursuant to this instrument does not affect
the rights of the beneficiary under the Letter of Credit or
the obligations of the Assignor to such beneficiary. None-
theless, the Assignee hereby assumes and agrees to perform
such obligations to the extent of a Bank with a Commitment
Percentage (as defined in the Letter of Credit) equal to the
percentage equivalent of a fraction (x) the numerator of
which is the Assigned Amount and (y) the denominator of
which is the aggregate amount of the Commitments at the date
hereof. The Assignee hereby indemnifies the Assignor for
any failure on the part of the Assignee to perform the
obligations so assumed.]*
SECTION 3. Payments. As consideration for the
assignment and sale contemplated in Section 2 hereof, the
Assignee shall pay to the Assignor on the date hereof in
Federal funds the amount heretofore agreed between them.* It
is understood that facility [and letter of credit] fees
accrued to the date hereof are for the account of the As-
signor and such fees accruing from and including the date
hereof with respect to the Assigned Amount are for the
account of the Assignee. Each of the Assignor and the
Assignee hereby agrees that if it receives any amount under
the Credit Agreement which is for the account of the other
party hereto, it shall receive the same for the account of
such other party to the extent of such other party's inter-
est therein and shall promptly pay the same to such other
party.
[SECTION 4. Consent of the Company, Betz Canada
and the Agent. This Agreement is conditioned upon the
consent of the Company, Betz Canada and the Agent pursuant
to Section 11.6(c) of the Credit Agreement. The execution
of this Agreement by the Company, Betz Canada and the Agent
is evidence of this consent. Pursuant to Section 11.6(c),
each of the Company and Betz Canada agrees to execute and
deliver a Note and to cause each of the other Eligible
Subsidiaries to execute and deliver a Note payable to the
order of the Assignee to evidence the assignment and assump-
tion provided for herein.]**
SECTION 5. Non-Reliance on Assignor. The Assign-
or makes no representation or warranty in connection with,
and shall have no responsibility with respect to, the sol-
vency, financial condition, or statements of any Borrower,
or the validity and enforceability of the obligations of any
Borrower in respect of the Credit Agreement or any Note.
The Assignee acknowledges that it has, independently and
without reliance on the Assignor, and based on such docu-
* Not necessary if the Letter of Credit is no longer out-
standing.
* Amount should combine principal together with accrued
interest and breakage compensation, if any, to be paid by
the Assignee, net of any portion of any upfront fee to be
paid by the Assignor to the Assignee. It may be preferable
in an appropriate case to specify these amounts generically
or by formula rather than as a fixed sum.
** Not necessary if the Assignee is a Bank.
ments and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agree-
ment and will continue to be responsible for making its own
independent appraisal of the business, affairs and financial
condition of the Borrowers.
SECTION 6. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of
the State of New York.
SECTION 7. Counterparts. This Agreement may be
signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their duly autho-
rized officers as of the date first above written.
<NAME OF ASSIGNOR>
By_________________________
Name:
Title:
<NAME OF ASSIGNEE>
By__________________________
Name:
Title:
[BETZ LABORATORIES, INC.
By__________________________
Name:
Title:
BETZ CANADA INC.
By__________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By__________________________
Name:
Title: ]
