- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
SCHEDULE 14D-1
(AMENDMENT NO. 7)
-------------------
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
-------------------
BORDEN, INC.
(Name of Subject Company)
-------------------
BORDEN ACQUISITION CORP.
WHITEHALL ASSOCIATES, L.P.
KKR PARTNERS II, L.P.
(Bidders)
-------------------
COMMON STOCK, PAR VALUE $.625 PER SHARE
(Title of Class of Securities)
-------------------
099599102
(CUSIP Number of Class of Securities)
-------------------
HENRY R. KRAVIS
KOHLBERG KRAVIS ROBERTS & CO.
9 WEST 57TH STREET, SUITE 4200
NEW YORK, NEW YORK 10019
(212) 750-8300
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
-------------------
COPY TO:
CHARLES I. COGUT, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 455-2000
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<PAGE>
This Amendment No. 6 amends and supplements the Tender Offer Statement on
Schedule 14D-1 filed on November 22, 1994 (as amended from time to time, the
"Schedule 14D-1") relating to the offer by Borden Acquisition Corp., a New
Jersey corporation (the "Purchaser"), a subsidiary of Whitehall Associates, L.P.
(the "Partnership"), an affiliate of Kohlberg Kravis Roberts & Co., L.P.
("KKR"), upon the terms and subject to the conditions set forth in the Offering
Circular/Prospectus dated November 22, 1994 (the "Offering
Circular/Prospectus"), as supplemented by the Offering Circular/Prospectus
Supplement, dated December 7, 1994 (the "Offering Circular/Prospectus
Supplement"), and in the related Letter of Transmittal (collectively, the
"Exchange Offer"), to exchange shares of common stock, par value $.01 per share
(the "Holdings Common Stock"), of RJR Nabisco Holdings Corp., a Delaware
corporation ("Holdings"), owned by the Purchaser or its affiliates for all
outstanding shares (the "Borden Shares") of common stock, par value $.625 per
share (collectively, the "Borden Common Stock"), and the associated Preferred
Stock Purchase Rights (the "Rights"), of Borden, Inc., a New Jersey
corporation ("Borden"), not already owned by the Purchaser or its affiliates.
Unless otherwise indicated, all capitalized terms used but not defined herein
shall have the meanings assigned to them in the Offering Circular/Prospectus
or in the Offering Circular/Prospectus Supplement.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
11(g)(25) Credit Agreement dated as of December 15, 1994 among Borden, Inc., as Borrower,
and the banks named therein, as Banks, Citibank, N.A., as Administrative Agent,
Bankers Trust Company, Chemical Bank, Citibank, N.A. and Credit Suisse, as Lead
Managing Agents, and BT Securities Corporation, Chemical Securities Inc.,
Citicorp Securities, Inc. and Credit Suisse, as Arrangers.
11(g)(26) Second Amended and Restated Credit Agreement dated as of December 15, 1994 among
T.M. Investors Limited Partnership, as Borrower, and the banks named therein, as
Banks, Citibank, N.A., as Administrative Agent, Bankers Trust Company, Chemical
Bank, Citibank, N.A. and Credit Suisse, as Lead Managing Agents, and BT
Securities Corporation, Chemical Securities Inc., Citicorp Securities, Inc. and
Credit Suisse, as Arrangers. (Borden does not control T.M. Investors Limited
Partnership and this exhibit has been furnished to Borden voluntarily at Borden's
request.)
</TABLE>
1
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
BORDEN ACQUISITION CORP.
By: /s/ SCOTT M. STUART
..................................
Name: Scott M. Stuart
Title: Vice President
WHITEHALL ASSOCIATES, L.P.
By: KKR Associates, a limited
partnership, its General Partner
By: /s/ HENRY R. KRAVIS
..................................
Name: Henry R. Kravis
Title: General Partner
KKR PARTNERS II, L.P.
By: KKR Associates, a limited
partnership, its General Partner
By: /s/ HENRY R. KRAVIS
..................................
Name: Henry R. Kravis
Title: General Partner
Date: December 20, 1994
2
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION NO.
- --------- --------------------------------------------------------------------------- ----
<S> <C> <C>
11(g)(25) Credit Agreement dated as of December 15, 1994 among Borden, Inc., as
Borrower, and the banks named therein, as Banks, Citibank, N.A., as
Administrative Agent, Bankers Trust Company, Chemical Bank, Citibank,
N.A. and Credit Suisse, as Lead Managing Agents, and BT Securities
Corporation, Chemical Securities Inc., Citicorp Securities, Inc. and
Credit Suisse, as Arrangers................................................
11(g)(26) Second Amended and Restated Credit Agreement dated as of December 15, 1994
among T.M. Investors Limited Partnership, as Borrower, and the banks
named therein, as Banks, Citibank, N.A., as Administrative Agent, Bankers
Trust Company, Chemical Bank, Citibank, N.A. and Credit Suisse, as Lead
Managing Agents, and BT Securities Corporation, Chemical Securities Inc.,
Citicorp Securities, Inc. and Credit Suisse, as Arrangers. (Borden does
not control T.M. Investors Limited Partnership and this exhibit has been
furnished to Borden voluntarily at Borden's request.)....................
</TABLE>
EXHIBIT 11(g)(25)
[EXECUTION COPY]
CREDIT AGREEMENT
Dated as of December 15, 1994
Among
BORDEN, INC.
as Borrower,
-- --------
and
THE BANKS NAMED HEREIN
as Banks,
-- -----
CITIBANK, N.A.
as Administrative Agent,
-- --------------------
BANKERS TRUST COMPANY
CHEMICAL BANK
CITIBANK, N.A.
CREDIT SUISSE
as Lead Managing Agents
-- ---- -------- ------
and
BT SECURITIES CORPORATION
CHEMICAL SECURITIES INC.
CITICORP SECURITIES, INC.
CREDIT SUISSE
as Arrangers
-- ---------
<PAGE>
T A B L E O F C O N T E N T S
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms . . . . . . . . . . . . . . 1
1.02. Computation of Time Periods . . . . . . . . . . . 25
1.03. Accounting Terms . . . . . . . . . . . . . . . . 25
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. The Advances . . . . . . . . . . . . . . . . . . 25
2.02. Making the Advances . . . . . . . . . . . . . . . 26
2.03. The Competitive Bid Advances . . . . . . . . . . 28
2.04. Repayment . . . . . . . . . . . . . . . . . . . . 31
2.05. Reduction of the Commitments . . . . . . . . . . 32
2.06. Application of Certain Proceeds . . . . . . . . . 32
2.07. Prepayments . . . . . . . . . . . . . . . . . . . 34
2.08. Interest . . . . . . . . . . . . . . . . . . . . 34
2.09. Fees . . . . . . . . . . . . . . . . . . . . . . 35
2.10. Conversion of Advances . . . . . . . . . . . . . 36
2.11. Increased Costs, Etc. . . . . . . . . . . . . . . 36
2.12. Payments and Computations . . . . . . . . . . . . 38
2.13. Taxes . . . . . . . . . . . . . . . . . . . . . . 39
2.14. Sharing of Payments, Etc. . . . . . . . . . . . . 42
2.15. Letters of Credit . . . . . . . . . . . . . . . . 42
2.16. Use of Proceeds . . . . . . . . . . . . . . . . . 46
2.17. Defaulting Lenders . . . . . . . . . . . . . . . 46
2.18. Option to Replace Lenders . . . . . . . . . . . . 49
ARTICLE III
CONDITIONS PRECEDENT
3.01. Conditions Precedent to Effectiveness . . . . . . 49
3.02. Conditions Precedent to Initial Borrowing . . . . 51
3.03. Conditions Precedent to Certain Borrowings and
Issuances . . . . . . . . . . . . . . . . . . . . . 53
3.04. Conditions Precedent to Each Competitive Bid
Borrowing . . . . . . . . . . . . . . . . . . . . . 53
3.05. Determinations Under Sections 3.01 and 3.02 . . . 53
<PAGE>
ii
Section Page
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrower . 54
ARTICLE V
COVENANTS OF THE BORROWER
5.01. Affirmative Covenants . . . . . . . . . . . . . . 58
5.02. Negative Covenants . . . . . . . . . . . . . . . 61
5.03. Reporting Requirements . . . . . . . . . . . . . 67
5.04. Financial Covenants . . . . . . . . . . . . . . . 70
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default . . . . . . . . . . . . . . . . 71
6.02. Actions in Respect of the Letters of Credit Upon
Default . . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE VII
THE AGENTS
7.01. Authorization and Action . . . . . . . . . . . . 75
7.02. Reliance, Etc. . . . . . . . . . . . . . . . . . 75
7.03. Lead Managing Agents and Affiliates . . . . . . . 76
7.04. Lender Credit Decision . . . . . . . . . . . . . 76
7.05. Indemnification . . . . . . . . . . . . . . . . . 76
7.06. Successor Administrative Agent . . . . . . . . . 77
<PAGE>
iii
Section Page
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc. . . . . . . . . . . . . . . . . 78
8.02. Notices, Etc. . . . . . . . . . . . . . . . . . . 78
8.03. No Waiver; Remedies . . . . . . . . . . . . . . . 79
8.04. Costs and Expenses . . . . . . . . . . . . . . . 79
8.05. Right of Set-Off . . . . . . . . . . . . . . . . 81
8.06. Binding Effect . . . . . . . . . . . . . . . . . 81
8.07. Assignments and Participations . . . . . . . . . 82
8.08. Governing Law . . . . . . . . . . . . . . . . . . 85
8.09. Execution in Counterparts . . . . . . . . . . . . 85
8.10. Confidentiality . . . . . . . . . . . . . . . . . 85
8.11. Receivables Financings Documents . . . . . . . . 85
8.12. No Liability of the Issuing Banks. . . . . . . . 85
8.13. Waiver of Existing Credit Agreement . . . . . . . 86
8.14. Waiver of Jury Trial . . . . . . . . . . . . . . 86
SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule 1.01 - Scheduled Debt
Schedule 4.01(b) - Material Subsidiaries
<PAGE>
iv
EXHIBITS
Exhibit A-1 - Form of Term Note
Exhibit A-2 - Form of Working Capital Note
Exhibit A-3 - Form of Competitive Bid Note
Exhibit B-1 - Form of Notice of Borrowing
Exhibit B-2 - Form of Notice of Competitive Bid Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D-1 - Form of Opinion of New York Counsel for the
Borrower
Exhibit D-2 - Form of Opinion of General Counsel to the
Borrower
Exhibit E - Form of Pledge Agreement
Exhibit F - Form of Confidentiality Agreement
<PAGE>
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of December 15, 1994
among Borden, Inc., a New Jersey corporation (the "Borrower"),
--------
the banks (the "Banks") listed on the signature pages hereof,
-----
Citibank, N.A. ("Citibank"), as administrative agent (together
--------
with any successor appointed pursuant to Article VII, the
"Administrative Agent") for the Lenders (as hereinafter defined),
--------------------
BT Securities Corporation ("BT Securities"), Chemical Securities
-------------
Inc. ("Chemical Securities"), Citicorp Securities, Inc. and
-------------------
Credit Suisse ("Credit Suisse"), as arrangers (the "Arrangers"),
------------- ---------
BT Securities and Chemical Securities as co-syndication agents
and Credit Suisse, as Issuing Bank (as defined below) and
documentation agent.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in
---------------------
this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Advance" means a Working Capital Advance, a Term
-------
Advance, a Competitive Bid Advance or a Letter of Credit
Advance.
"Administrative Agent" has the meaning specified in
--------------------
the recital of parties to this Agreement.
"Administrative Agent's Account" means the account
------------------------------
of the Administrative Agent maintained by the Administrative
Agent with Citibank at its office at 1 Court Square, 7th
Floor, Long Island City, New York 11120, Account No. 3685
2248, Attention: John Makrinos.
"Affiliate" means, as to any Person (other than a
---------
Subsidiary), any other Person that, directly or indirectly,
controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For
purposes of this definition, the term "control" (including
the terms "controlling," "controlled by" and "under common
control with") of a Person means the possession, direct or
indirect, of the power to vote 10% or more of the Voting
Stock of such Person or to direct or cause the direction of
the management and policies of such Person, whether through
the ownership of Voting Stock, by contract or otherwise.
"Agents" means, collectively, the Administrative
------
Agent, the Lead Managing Agents and the Arrangers.
"Applicable Lending Office" means, with respect to
-------------------------
each Lender, such Lender's Domestic Lending Office in the
case of a Base Rate Advance and such
<PAGE>
2
Lender's Eurodollar Lending Office in the case of a
Eurodollar Rate Advance and, in the case of a Competitive
Bid Advance, the office of such Lender notified by such
Lender to the Administrative Agent as its Applicable Lending
Office with respect to such Competitive Bid Advance.
"Applicable Margin" means, as of any date, a
-----------------
percentage per annum determined by reference to the Public
Debt Rating in effect on such date as set forth below:
Public Debt Applicable Applicable
Rating Margin for Margin for
S&P/Moody's Base Rate Eurodollar
Advances Rate
Advances
Level 1
-------
BBB- or 0% 1%
Baa3 or
above
Level 2
-------
below BBB- .5% 1.75%
and Baa3
but at
least BB or
Ba2
Level 3
-------
below BB 1% 2.25%
and Ba2
provided, that for the period commencing on the date of the
--------
initial Borrowing and ending on the first anniversary
thereof, the Applicable Margin shall be Level 2 (if it would
otherwise be Level 2 or Level 1) or Level 3.
"Applicable Percentage" means, as of any date, a
---------------------
percentage per annum determined by reference to the Public
Debt Rating in effect on such date as set forth below:
Public Debt Applicable
Rating Percentage
S&P/Moody's
Level 1
-------
BBB- or Baa3 .375%
or above
Level 2
-------
below BBB- .500%
and Baa3 but
at least BB
or Ba2
Level 3
-------
below BB and .500%
Ba2
provided, that for the period commencing on the date of the
--------
initial Borrowing and ending on the first anniversary
thereof, the Applicable Percentage shall be Level 2 (if it
would otherwise be Level 2 or Level 1) or Level 3.
<PAGE>
3
"Appropriate Lender" means, at any time, with
------------------
respect to any of the Letter of Credit, Term or Working
Capital Facilities, a Lender that has a Commitment with
respect to such Facility at such time.
"Arrangers" has the meaning specified in the
---------
recital of parties to this Agreement.
"Asset Proceeds" means the aggregate value received
--------------
in connection with the sale of assets of the Borrower and
its Subsidiaries (other than Excluded Asset Sales) after
deducting therefrom only (a) the costs of sale including
reasonable brokerage commissions, underwriting fees and
discounts, legal fees, finder's fees, severance, legacy and
similar costs and other similar fees and commissions, (b)
the amount of taxes paid or estimated to be payable during
the then current or next fiscal year in connection with or
as a result of such transaction and reasonable reserves
associated therewith, (c) the amount of any Indebtedness
related to such asset that, by the terms of such
transaction, is required to be repaid upon such disposition
and (d) any such other reasonable exit costs related to such
transaction, in each case to the extent, but only to the
extent, that the amounts so deducted are, at the time of
receipt of such cash, properly attributable to such
transaction or to the asset that is the subject thereof.
"Assignment and Acceptance" means an assignment and
-------------------------
acceptance entered into by a Lender and an Eligible
Assignee, and accepted by the Administrative Agent, in
accordance with Section 8.07 and in substantially the form
of Exhibit C hereto.
"Available Amount" of any Letter of Credit means,
----------------
at any time, the maximum amount available to be drawn under
such Letter of Credit at such time (assuming compliance at
such time with all conditions to drawing).
"Bank" has the meaning specified in the recital of
----
parties to this Agreement.
"Base Rate" means a fluctuating interest rate per
---------
annum in effect from time to time, which rate per annum
shall at all times be equal to the highest of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time,
as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1%
or, if there is no nearest 1/4 of 1%, to the next
higher 1/4 of 1%) of (i) 1/2 of 1% per annum, plus
----
(ii) the rate obtained by dividing (A) the latest
three-week moving average of secondary market
morning offering rates in the United States for
three-month certificates of deposit of major United
States money
<PAGE>
4
market banks, such three-week moving average
(adjusted to the basis of a year of 360 days) being
determined weekly on each Monday (or, if such day
is not a Business Day, on the next succeeding
Business Day) for the three-week period ending on
the previous Friday by Citibank on the basis of
such rates reported by certificate of deposit
dealers to and published by the Federal Reserve
Bank of New York or, if such publication shall be
suspended or terminated, on the basis of quotations
for such rates received by Citibank from three
New York certificate of deposit dealers of
recognized standing selected by Citibank, by (B) a
percentage equal to 100% minus the average of the
daily percentages specified during such three-week
period by the Board of Governors of the Federal
Reserve System (or any successor) for determining
the maximum reserve requirement (including, but not
limited to, any emergency, supplemental or other
marginal reserve requirement) for Citibank with
respect to liabilities consisting of or including
(among other liabilities) three-month U.S. dollar
non-personal time deposits in the United States,
plus (iii) the average during such three-week
----
period of the annual assessment rates reasonably
estimated by Citibank for determining the then
current annual assessment payable by Citibank to
the Federal Deposit Insurance Corporation (or any
successor) for insuring U.S. dollar deposits of
Citibank in the United States; and
(c) 1/2 of one percent per annum above the
Federal Funds Rate.
"Base Rate Advance" means an Advance that bears
-----------------
interest as provided in Section 2.08(a)(i).
"Borrower" has the meaning specified in the recital
--------
of parties to this Agreement.
"Borrowing" means a Term Borrowing, a Competitive
---------
Bid Borrowing or a Working Capital Borrowing.
"BT" means Bankers Trust Company.
--
"BT Securities" has the meaning specified in the
-------------
recital of parties to this Agreement.
"Business Day" means a day of the year on which
------------
banks are not required or authorized to close in New York
City and, if the applicable Business Day relates to any
Eurodollar Rate Advances, on which dealings are carried on
in the London interbank eurodollar market.
<PAGE>
5
"Capital Expenditures" means for any period, the
--------------------
aggregate of all expenditures (whether paid in cash or
accrued as liabilities and including in all events all
amounts expended or capitalized under Capitalized Leases but
excluding any amount representing capitalized interest) by
the Borrower and its Subsidiaries during such period that,
in conformity with GAAP, are or are required to be included
as additions during such period to property, plant or
equipment reflected in the Consolidated balance sheet of the
Borrower and its Subsidiaries, provided that Capital
--------
Expenditures shall in any event exclude (a) expenditures
made in connection with the replacement, substitution or
restoration of assets (i) to the extent financed from
insurance proceeds paid on account of the loss of or damage
to the assets being replaced or restored or (ii) with awards
of compensation arising from the taking by eminent domain or
condemnation of the assets being replaced, (b) the purchase
price of equipment that is purchased simultaneously with the
trade-in of existing equipment to the extent that the gross
amount of such purchase price is reduced by the credit
granted by the seller of such equipment for the equipment
being traded in at such time and (c) the purchase of plant,
property and equipment made within 270 days of the sale of a
similar asset.
"Capitalized Leases" has the meaning specified in
------------------
clause (e) of the definition of Debt.
"Cash Asset Proceeds" means the amount of cash
-------------------
proceeds received from time to time in connection with the
sale of assets of the Borrower and its Subsidiaries,
including deferred receipts as collections, sales or other
monetizations of notes or otherwise, after deducting
therefrom the amounts specified in clauses (a) - (d) of the
definition of Asset Proceeds.
"Cash Equivalents" shall mean (i) securities issued
----------------
or unconditionally guaranteed by the United States
Government or any agency or instrumentality thereof, in each
case having maturities of not more than twelve months from
the date of acquisition thereof; (ii) securities issued by
any state of the United States of America or any political
subdivision of any such state or any public instrumentality
thereof having maturities of not more than twelve months
from the date of acquisition thereof and, at the time of
acquisition, having the highest rating generally obtainable
from either S&P or Moody's (or, if at any time neither S&P
nor Moody's shall be rating such obligations, then from
another nationally recognized rating service);
(iii) commercial paper issued by any Lender or any bank
holding company owning any Lender; (iv) commercial paper
maturing no more than twelve months after the date of
creation thereof and, at the time of acquisition, having a
rating of at least A-1 or P-1 from either S&P or Moody's
(or, if at any time neither S&P nor Moody's shall be rating
such obligations, then an equivalent rating from another
nationally recognized rating service); (v) domestic and
eurodollar certificates of deposit or bankers' acceptances
maturing no more than one year after the date of acquisition
thereof issued by any Lender or any other bank having
combined capital and surplus
<PAGE>
6
of not less than $250,000,000 in the case of domestic banks
and $100,000,000 (or the dollar equivalent thereof) in the
foreign banks; (vi) repurchase agreements with a term of not
more than seven days for underlying securities of the type
described in clauses (i), (ii) and (v) above entered into
with any bank meeting the qualifications specified in clause
(v) above or securities dealers of recognized national
standing; and (vii) other customarily utilized high quality
instruments in countries where the Borrower's foreign
Subsidiaries are located.
"Chemical" means Chemical Bank.
--------
"Chemical Securities" has the meaning specified in
-------------------
the recital of parties to this Agreement.
"Citibank" has the meaning specified in the recital
--------
of parties to this Agreement.
"Collateral" means all "Collateral" referred to in
----------
the Pledge Agreement and all other property that is subject
to any Lien in favor of the Administrative Agent, the
Lenders or any Issuing Bank.
"Commitment" means a Term Commitment, a Working
----------
Capital Commitment or a Letter of Credit Commitment.
"Competitive Bid Advance" means an advance by a
-----------------------
Lender to the Borrower as part of a Competitive Bid
Borrowing resulting from the auction bidding procedure
described in Section 2.03 and refers to a Fixed Rate Advance
or a LIBO Rate Advance.
"Competitive Bid Borrowing" means a borrowing
-------------------------
consisting of simultaneous Competitive Bid Advances from
each of the Lenders whose offer to make one or more
Competitive Bid Advances as part of such borrowing has been
accepted under the auction bidding procedure described in
Section 2.03.
"Competitive Bid Note" means the promissory note of
--------------------
the Borrower payable to the order of the Administrative
Agent for the benefit of each Lender making a Competitive
Bid Advance, in substantially the Form of Exhibit A-3
hereto, evidencing the indebtedness of the Borrower to the
Lenders resulting from Competitive Bid Advances made by the
Lenders.
"Competitive Bid Register" has the meaning
------------------------
specified in Section 2.03(a)(vi).
"Confidential Information" means information that
------------------------
the Borrower furnishes to any Agent or any Lender in a
writing designated as confidential, but does not
<PAGE>
7
include any such information that is or becomes generally
available to the public or that is or becomes available to
such Agent or such Lender from a source other than the
Borrower.
"Consolidated" refers to the consolidation of
------------
accounts in accordance with GAAP.
"Conversion", "Convert" and "Converted" each refer
---------- ------- ---------
to a conversion of Advances of one Type into Advances of the
other Type pursuant to Section 2.10 or 2.11.
"Credit Parties" means the Borrower, BDS One, Inc.,
--------------
BDS Two, Inc. and BDS Four, Inc.
"Credit Suisse" has the meaning specified in the
-------------
recital of parties to this Agreement.
"Debt" of any Person means, without duplication,
----
(a) all indebtedness of such Person for borrowed money,
(b) all obligations of such Person for the deferred purchase
price of property or services (other than trade payables and
accrued expenses arising in the ordinary course of
business), (c) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments,
(d) all obligations of such Person created or arising under
any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such
agreement in the event of default are limited to
repossession or sale of such property), (e) all obligations
of such Person as lessee under leases that have been, in
accordance with GAAP, recorded as capital leases
("Capitalized Leases") and (f) all Debt referred to in
------------------
clauses (a) through (e) above secured by any Lien on
property owned by such Person, even though such Person has
not assumed or become liable for the payment of such Debt,
but only to the extent that, in accordance with GAAP, such
Debt would be reflected on the financial statements of such
Person.
"Debt Proceeds" means gross proceeds received by
-------------
the Borrower from the sale or issuance of any borrowed money
Debt (other than hereunder, the TMI Credit Agreement or
Excluded Debt) whether by means of any public offering,
private placement or incurrence of additional bank Debt.
"Default" means any Event of Default or any event
-------
that would constitute an Event of Default but for the
requirement that notice be given or time elapse or both.
"Defaulted Advance" means, with respect to any
-----------------
Lender at any time, the amount of any Advance required to be
made by such Lender to the Borrower pursuant to
<PAGE>
8
Section 2.01 at or prior to such time which has not been so
made as of such time; provided, however, any Advance made by
-------- -------
the Administrative Agent for the account of such Lender
pursuant to Section 2.02(d) shall not be considered a
Defaulted Advance even if, at such time, such Lender shall
not have reimbursed the Administrative Agent therefor as
provided in Section 2.02(d). In the event that a portion of
a Defaulted Advance shall be deemed made pursuant to
Section 2.17(a), the remaining portion of such Defaulted
Advance shall be considered a Defaulted Advance originally
required to be made pursuant to Section 2.01 on the same
date as the Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any
----------------
Lender at any time, any amount required to be paid by such
Lender to the Administrative Agent or any other Lender
hereunder or under any other Loan Document at or prior to
such time which has not been so paid as of such time,
including, without limitation, any amount required to be
paid by such Lender to (a) any Issuing Bank pursuant to
Section 2.15(b) to purchase a portion of a Letter of Credit
Advance made by such Issuing Bank, (b) the Administrative
Agent pursuant to Section 2.02(d) to reimburse the
Administrative Agent for the amount of any Advance made by
the Administrative Agent for the account of such Lender,
(c) any other Lender pursuant to Section 2.14 to purchase
any participation in Advances owing to such other Lender and
(d) the Administrative Agent pursuant to Section 7.05 to
reimburse the Administrative Agent for such Lender's ratable
share of any amount required to be paid by the Lenders to
the Administrative Agent as provided therein. In the event
that a portion of a Defaulted Amount shall be deemed paid
pursuant to Section 2.17(b), the remaining portion of such
Defaulted Amount shall be considered a Defaulted Amount
originally required to be made hereunder or under any other
Loan Document on the same date as the Defaulted Amount so
deemed paid in part.
"Defaulting Lender" means, at any time, any Lender
-----------------
that, at such time, (a) owes a Defaulted Advance or a
Defaulted Amount or (b) shall take or be the subject of any
action or proceeding of a type described in Section 6.01(f).
"Designated Asset Sales" means asset sales, if any,
----------------------
identified to the Lenders prior to the date hereof in a
writing specifically referring to Section 5.02(d) of this
Agreement.
"Domestic Lending Office" means, with respect to
-----------------------
any Lender, the office of such Lender specified as its
"Domestic Lending Office" opposite its name on Schedule I
hereto or in the Assignment and Acceptance pursuant to which
it became a Lender, or such other office of such Lender as
such Lender may from time to time specify to the Borrower
and the Administrative Agent.
"EBITDA" means, for any period, net income (or net
------
loss) plus the sum, without duplication, of (a) Net
----
Interest Expense, (b) income tax expense,
<PAGE>
9
(c) depreciation expense, (d) amortization expense, (e)
extraordinary or unusual losses included in net income (net
of taxes to the extent not already deducted in determining
such losses and net of extraordinary or unusual gains
included in net income) including, without limitation,
cumulative effects of accounting changes, discontinued
operations, restructuring charges and non-cash charges,
(f) amortization of deferred financing fees and debt
discount, (g) other non-cash charges, (h) gains or losses on
asset sales (including sales of accounts receivable), (i)
severance and similar expenses and (j) dividends accrued on
securities other than common stock, in each case determined
in accordance with GAAP for such period.
"Effective Date" has the meaning specified in
--------------
Section 3.01.
"Eligible Assignee" means any of (i) a commercial
-----------------
bank organized under the laws of the United States, or any
State thereof, and having a combined capital and surplus of
at least $250,000,000; (ii) a savings and loan association
or savings bank organized under the laws of the United
States, or any State thereof, and having a combined capital
and surplus of at least $250,000,000; (iii) a commercial
bank organized under the laws of any other country that is a
member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated
with its General Arrangements to Borrow, or a political
subdivision of any such country, and having a combined
capital and surplus of at least $250,000,000, so long as
such bank is acting through a branch or agency located in
the United States or in the country in which it is organized
or another country that is described in this clause (iii);
(iv) the central bank of any country that is a member of the
OECD; and (v) a finance company, insurance company or other
financial institution or fund (whether a corporation,
partnership, trust or other entity) that is engaged in
making, purchasing or otherwise investing in commercial
loans in the ordinary course of its business and having a
combined capital and surplus of at least $100,000,000, in
each case as approved by the Arrangers and the Borrower,
such approval not to be unreasonably withheld or delayed;
provided, however, that an Affiliate or Subsidiary of the
-------- -------
Borrower shall not qualify as an Eligible Assignee under
this definition.
"Environmental Claims" means any and all
--------------------
administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of non-
compliance or violation, investigations or proceedings
relating in any way to any Environmental Law (hereafter
"Claims") or any permit issued under any such law, including
------
without limitation (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to
any applicable Environmental Law and (b) any and all Claims
by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive
relief resulting from Hazardous Materials or arising from
alleged injury or threat or injury to health, safety or the
environment.
<PAGE>
10
"Environmental Law" means any federal, state,
-----------------
provincial or local statute, law, rule, regulation,
ordinance, code, policy or rule of common law now or
hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including
any judicial or administrative order, consent, decree or
judgment, relating to the environment, health, safety or
Hazardous Materials.
"Equity Proceeds" means gross proceeds received by
---------------
the Borrower from (a) the sale or issuance of any equity
security of the Borrower whether by means of any public
offering or private placement, (b) the sale of some or all
of the RN Stock contributed to the Borrower or another
instrument which has the effect of monetizing the value of
such RN Stock or (c) capital contributions to the Borrower
from time to time.
"ERISA" means the Employee Retirement Income
-----
Security Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"ERISA Affiliate" means each person (as defined in
---------------
Section 3(9) of ERISA) which together with the Borrower or
any Subsidiary of the Borrower would be deemed to be a
"single employer" within the meaning of Section 414 (b),
(c), (m) or (o) of the Internal Revenue Code.
"Eurocurrency Liabilities" has the meaning
------------------------
specified in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to
-------------------------
any Lender, the office of such Lender specified as its
"Eurodollar Lending Office" opposite its name on Schedule I
hereto or in the Assignment and Acceptance pursuant to which
it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such
Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period
---------------
for each Eurodollar Rate Advance comprising part of the same
Borrowing, an interest rate per annum equal to the rate per
annum obtained by dividing (a) the average (rounded upward
to the nearest whole multiple of 1/16 of 1% per annum, if
such average is not such a multiple) of the rate per annum
at which deposits in U.S. dollars are offered by the
principal office of each of the Reference Banks in London,
England to prime banks in the London interbank market at
11:00 A.M. (London Time) two Business Days before the first
day of such Interest Period in an amount substantially equal
to such Reference Bank's Eurodollar Rate Advance comprising
part of such Borrowing to be outstanding during such
Interest Period and for a period equal to such Interest
Period by (b) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period.
The Eurodollar Rate for any Interest Period for each
Eurodollar Rate
<PAGE>
11
Advance comprising part of the same Borrowing shall be
determined by the Administrative Agent on the basis of
applicable rates furnished to and received by the
Administrative Agent from the Reference Banks two Business
Days before the first day of such Interest Period.
"Eurodollar Rate Advance" means an Advance that
-----------------------
bears interest as provided in Section 2.08(a)(ii).
"Eurodollar Rate Reserve Percentage" for any
----------------------------------
Interest Period for all Eurodollar Rate Advances comprising
part of the same Borrowing means the reserve percentage if
and to the extent actually applicable two Business Days
before the first day of such Interest Period under
regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor)
for determining the reserve requirement (including, without
limitation, any emergency, supplemental or other marginal
reserve requirement) for each Lender with respect to
liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference
to which the interest rate on Eurodollar Rate Advances is
determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in
-----------------
Section 6.01.
"Excluded Asset Sales" means (i) sales of inventory
--------------------
in the ordinary course of business, (ii) sales of worn out
or obsolete equipment and other property in the ordinary
course of business, (iii) sales of accounts receivable and
"Related Security" (as such term is defined in the
Receivables Financing Documents) under the Receivables
Financing Documents, (iv) sales of plant, property and
equipment to the extent that the proceeds thereof are used
to purchase a similar asset within 270 days of such sale in
an aggregate amount not to exceed $50,000,000 in any twelve-
month period, (v) sales of assets located outside of the
United States in an aggregate amount not to exceed
$25,000,000 in any twelve-month period, (vi) sales of assets
by the Borrower to any of its Subsidiaries the capital stock
of which is required to be pledged to the Lenders pursuant
to the Pledge Agreement and (vii) other inter-company sales
of assets permitted by Section 5.02(c).
"Excluded Debt" means (a) Indebtedness permitted by
-------------
Section 5.02(b)(iii), (b) Indebtedness incurred by
Subsidiaries of the Borrower organized outside of the United
States, (c) Indebtedness in respect of Capitalized Leases,
(d) Indebtedness of the Borrower or any of its Subsidiaries
owed to the Borrower or any of its Subsidiaries;
(e) Indebtedness incurred solely as the deferred purchase
price of property or services or under any conditional sale
or other title retention agreement with respect to acquired
property of the Borrower or any of its Subsidiaries and
(f) Indebtedness, if any, arising under the Receivables
Financing Documents.
<PAGE>
12
"Excluded Equity Sales" means any issuance or other
---------------------
sale of equity to (i) any officers or employees of the
Borrower or its Subsidiaries to the extent that the gross
proceeds thereof do not exceed an aggregate amount of
$10,000,000 from the date hereof or (ii) the Borrower or any
of its Subsidiaries by any of their Subsidiaries.
"Existing Credit Agreement" means the Amended and
-------------------------
Restated Credit Agreement dated as of August 16, 1994 among
the Borrower, the banks named therein, Citibank, as
administrative agent and Citicorp Securities and Credit
Suisse, as arrangers.
"Existing Credit Facilities" means the Existing
--------------------------
Credit Agreement, the Existing TM Credit Agreement and the
Existing Receivables Back-Stop Facility Agreement.
"Existing Indebtedness" means Indebtedness of the
---------------------
Borrower and its Subsidiaries outstanding on the date
hereof.
"Existing Receivables Back-Stop Facility Agreement"
-------------------------------------------------
means, collectively, the Parallel Purchase Commitment dated
as of August 16, 1994 among Borden Receivables Corp.,
Citibank and the other banks party thereto and Citicorp
North America, Inc., as agent, and the Asset Purchase
Agreement dated as of August 16, 1994 among the purchasers
party thereto and Citicorp North America, Inc., as agent.
"Existing TM Credit Agreement" means the Amended
----------------------------
and Restated Credit Agreement dated as of August 16, 1994
among TM, the banks named therein, Citibank, as
administrative agent and Citicorp Securities and Credit
Suisse, as arrangers.
"Facility" means the Term Facility, the Working
--------
Capital Facility or the Letter of Credit Facility Sublimit.
"Federal Funds Rate" means, for any period, a
------------------
fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of
the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers
of recognized standing selected by it.
"Fixed Rate Advances" has the meaning specified in
-------------------
Section 2.03(a)(i).
"GAAP" has the meaning specified in Section 1.03.
----
<PAGE>
13
"Hazardous Materials" means (a) petroleum or
-------------------
petroleum products, radioactive materials, asbestos in any
form that is or could become friable, urea formaldehyde foam
insulation, transformers or other equipment that contained
electric fluid containing levels of polychlorinated
biphenyls and radon gas, (b) any chemicals, materials or
substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar import,
under any applicable Environmental Law and (c) any other
chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental
authority.
"Hedge Agreements" means interest rate swap, cap or
----------------
collar agreements, interest rate future or option contracts,
currency swap agreements, currency future or option
contracts and other similar agreements.
"Incremental RN Stock" means any contribution of RN
--------------------
Stock to the Borrower (other than the investment by
Whitehall Associates, L.P. contemplated by Sections 3.02(d)
and 3.02(e) hereof), the value of which shall be calculated
based on the determination of the average of the average of
the high and low sales prices of RN Stock as reported on the
New York Stock Exchange Composite Tape on each of the ten
consecutive trading days immediately preceding the second
trading day prior to the date of such contribution.
"Indebtedness" of any Person means, without
------------
duplication, (a) all Debt of such Person, (b) all
obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities, (c) all
obligations of such Person in respect of Hedge Agreements
and (d) all Indebtedness of others referred to in
clauses (a) through (c) above guaranteed directly or
indirectly in any manner by such Person, or in effect
guaranteed directly or indirectly by such Person through an
agreement (i) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such
Indebtedness, (ii) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily
for the purpose of enabling the debtor to make payment of
such Indebtedness or to assure the holder of such
Indebtedness against loss, (iii) to supply funds to or in
any other manner invest in the debtor (including any
agreement to pay for property or services irrespective of
whether such property is received or such services are
rendered) or (iv) otherwise to assure a creditor against
loss; provided, however, that amount so guaranteed shall not
-------- -------
include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount
of any such guarantee obligation shall be deemed to be an
amount equal to the stated or determinable amount of the
primary obligation in respect of which such guarantee
obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as
determined by such Person in good faith.
<PAGE>
14
"Indemnified Party" has the meaning specified in
-----------------
Section 8.04(b).
"Information Memorandum" means the information
----------------------
memorandum dated November 16, 1994 used by the Arrangers in
connection with the syndication of the Commitments.
"Interest Period" means, for each Eurodollar Rate
---------------
Advance comprising part of the same Borrowing, the period
commencing on the date of such Eurodollar Rate Advance or
the date of the Conversion of any Base Rate Advance into
such Eurodollar Rate Advance, and ending on the last day of
the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period
commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below.
The duration of each such Interest Period shall be one, two,
three, six or, to the extent available in the reasonable
judgment of the Administrative Agent, nine or twelve months,
as the Borrower may, upon notice received by the
Administrative Agent not later than 11:00 A.M. (New York
City time) on the third Business Day prior to the first day
of such Interest Period, select; provided, however, that:
-------- -------
(a) the Borrower may not select any Interest
Period that ends after any principal repayment
installment date unless, after giving effect to
such selection, the aggregate principal amount of
Base Rate Advances and of Eurodollar Rate Advances
having Interest Periods that end on or prior to
such principal repayment installment date shall be
at least equal to the aggregate principal amount
of Advances due and payable on or prior to such
date;
(b) Interest Periods commencing on the same date
for Eurodollar Rate Advances comprising part of the
same Borrowing shall be of the same duration;
(c) whenever the last day of any Interest Period
would otherwise occur on a day other than a
Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding
Business Day, provided, however, that, if such
-------- -------
extension would cause the last day of such Interest
Period to occur in the next following calendar
month, the last day of such Interest Period shall
occur on the next preceding Business Day;
(d) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for
which there is no numerically corresponding day in
the calendar month that succeeds such initial
calendar month by the number of months equal to the
number of months in such Interest Period, such
Interest Period shall end on the last Business Day
of such succeeding calendar month; and
(e) from the date of the initial Borrowing
hereunder through and including February 28, 1995,
only one month Interest Periods may be selected
unless the Lead Managing Agents shall otherwise
agree.
<PAGE>
15
"Internal Revenue Code" means the Internal Revenue
---------------------
Code of 1986, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"Investment" in any Person means any loan or
----------
advance to such Person, any purchase or other acquisition of
any capital stock, warrants, rights, options, obligations or
other securities of such Person, any capital contribution to
such Person or any other similar investment in such Person.
"Investment Grade Rating" means the Borrower's long
-----------------------
term senior unsecured public debt is rated at least BBB- by
S&P or Baa3 by Moody's.
"Issuing Bank" means Credit Suisse, and any other
------------
Lender that is a commercial bank, acting through a domestic
branch, as issuer of a Letter of Credit.
"KKR" has the meaning specified in Section 5.01(h).
---
"L/C Account" means an account to be established by
-----------
the Borrower with the Administrative Agent pursuant to an
agreement in form and substance reasonably satisfactory to
the Administrative Agent.
"L/C Related Documents" has the meaning specified
---------------------
in Section 2.15(d).
"Lead Managing Agents" means BT, Chemical, Citibank
--------------------
and Credit Suisse.
"Letters of Credit" has the meaning specified in
-----------------
Section 2.15(a).
"Letter of Credit Advance" means an advance made by
------------------------
any Issuing Bank or any Working Capital Lender pursuant to
Section 2.15(c).
"Letter of Credit Agreement" has the meaning
--------------------------
specified in Section 2.15(b).
"Letter of Credit Commitment" means, with respect
---------------------------
to any Lender at any time, the amount set forth opposite
such Lender's name on Schedule I hereto under the caption
"Letter of Credit Commitment" or, if such Lender has entered
into one or more Assignments and Acceptances, set forth for
such Lender in the Register maintained by the Administrative
Agent pursuant to Section 8.07(c) as such Lender's "Letter
of Credit Commitment", as such amount may be reduced at or
prior to such time pursuant to Sections 2.05 and 2.06.
"Letter of Credit Facility Sublimit" means, until
----------------------------------
the date that is six months after the initial Borrowing,
$550,000,000, and thereafter, $300,000,000.
<PAGE>
16
"Lenders" means the Banks listed on the signature
-------
pages hereof and each Eligible Assignee that shall become a
party hereto pursuant to Section 8.07.
"LIBO Rate Advances" has the meaning specified in
------------------
Section 2.03(a)(i).
"Lien" means any lien, security interest or other
----
charge or encumbrance of any kind, or any other type of
preferential arrangement, including, without limitation, the
lien or retained security title of a conditional vendor.
"Loan Documents" means this Agreement, the Notes,
--------------
the Pledge Agreement each Letter of Credit Agreement and
each other agreement pursuant to which a pledge of, or grant
of a security interest in, Collateral is granted to the
Administrative Agent, the Lenders or any Issuing Bank.
"Loan Parties" means the Borrower, TM and Borden
------------
Receivables Corp.
"LYNX Payments" means all payments, and all
-------------
obligations or elections to make any payments under or in
connection with (i) the LYNX Reset Agreement dated May 21,
1992, between the Borrower and Merrill Lynch & Co., (ii) the
Equity Unit Agreement dated May 21, 1992, between the
Borrower and Merrill Lynch & Co. and (iii) the Zero Coupon
Bonds due 2002, issued by the Borrower under the Indenture
dated as of May 21, 1992, including, without limitation, the
payment by the Borrower of amounts in connection with the
termination of certain rights of the holders of certain
securities related thereto and the payment of amounts to
such holders in connection with the redemption and
retirement of such securities.
"Margin Stock" has the meaning specified in
------------
Regulation U.
"Material Adverse Change" means any change in the
-----------------------
business, condition (financial or otherwise), operations,
performance or properties of the Borrower and its
Subsidiaries taken as a whole that would materially
adversely affect the ability of the Borrower to perform its
obligations under this Agreement and the other Loan
Documents (taken as a whole).
"Material Adverse Effect" means a circumstance or
-----------------------
condition affecting the business, condition (financial or
otherwise), operations, performance or properties of the
Borrower and its Subsidiaries taken as a whole which would
materially adversely affect (a) the ability of the Borrower
to perform its obligations under this Agreement, the Notes
and the other Loan Documents (taken as a whole) or (b) the
rights and remedies of the Administrative Agent or any
Lender under this Agreement and the other Loan Documents
(taken as a whole).
"Material Subsidiary" means each Subsidiary of the
-------------------
Borrower now existing or hereafter acquired or formed by the
Borrower (i) which (x) for the most recent
<PAGE>
17
fiscal year of the Borrower, accounted for more than 3% of
the consolidated revenues of the Borrower or (y) as at the
end of such fiscal year, was the owner of more than 4% of
the consolidated assets of the Borrower, in each case as
shown on the consolidated financial statements of the
Borrower for such fiscal year, or (ii) the capital stock of
which is pledged or is required to be pledged to the Lenders
pursuant to the Pledge Agreement.
"Merger Agreement" means the Agreement and Plan of
----------------
Merger among Whitehall Associates, L.P., Borden Acquisition
Corp. and Borden, Inc. dated as of September 23, 1994.
"Moody's" means Moody's Investor Services, Inc. or
-------
any successor by merger or consolidation to its business.
"Net Debt Proceeds" means Debt Proceeds of any
-----------------
transaction after deducting therefrom only reasonable
brokerage commissions, underwriting fees and discounts,
legal fees and similar fees and commissions to the extent,
but only to the extent, that the amounts so deducted are, at
the time of receipt of such cash, properly attributable to
such transaction.
"Net Equity Proceeds" means Equity Proceeds of any
-------------------
transaction after deducting therefrom only reasonable
brokerage commissions, underwriting fees and discounts,
legal fees and similar fees and commissions to the extent,
but only to the extent, that the amounts so deducted are, at
the time of receipt of such cash, properly attributable to
such transaction.
"Net Interest Expense" means, for any fiscal period
--------------------
of the Borrower, the aggregate of (a) interest expense on
all Debt of the Borrower and its Subsidiaries, net of
interest income, in accordance with GAAP (excluding, in any
event, interest expense, if any, on overdue tax assessments,
LYNX Payments and amortization of financing fees and debt
discount), (b) the portion of minority interest as set forth
on the Borrower's Consolidated statement of income equal to
the interest payable under the TM Credit Agreement and
(c) dividends required to be paid on Preferred Stock
permitted by Section 5.02(f)(ii) (but not including any
Preferred Stock issued in respect of monetization of RN
Stock contributed to the Borrower).
"Note" means a Term Note, the Competitive Bid Note
----
or a Working Capital Note.
"Notice of Borrowing" has the meaning specified in
-------------------
Section 2.02(a).
"Notice of Competitive Bid Borrowing" has the
-----------------------------------
meaning specified in Section 2.03(a).
<PAGE>
18
"Notice of Issuance" has the meaning specified in
------------------
Section 2.15(b).
"OECD" means the Organization for Economic
----
Cooperation and Development.
"Other Taxes" has the meaning specified in
-----------
Section 2.13(b).
"PBGC" means the Pension Benefit Guaranty
----
Corporation or any successor thereof.
"Permitted Liens" means (a) Liens for taxes,
---------------
assessments or governmental charges or claims not yet due or
which are being contested in good faith and by appropriate
proceedings for which appropriate reserves have been
established in accordance with GAAP; (b) Liens in respect of
property or assets of the Borrower or any of its
Subsidiaries imposed by law which are incurred in the
ordinary course of business, such as carriers',
warehousemen's and mechanics' Liens and other similar Liens
arising in the ordinary course of business, and which do not
individually or in the aggregate have a Material Adverse
Effect; (c) Liens on assets of the Borrower or any of its
Subsidiaries existing on the date hereof securing
Indebtedness in an aggregate principal amount not to exceed
$5,000,000 or arising pursuant to any of the Loan Documents;
(d) Liens arising from judgments or decrees in circumstances
not constituting an Event of Default under Section 6.01(g);
(e) Liens incurred or deposits made in connection with
workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and return-
of-money bonds and other similar obligations incurred in the
ordinary course of business; (f) leases or subleases granted
to others not interfering in any material respect with the
business of the Borrower and its Subsidiaries taken as a
whole; (g) ground leases in respect of real property on
which facilities owned or leased by the Borrower or any of
its Subsidiaries are located; (h) easements, rights-of-way,
restrictions, minor defects or irregularities in title and
other similar charges or encumbrances not interfering in any
material respect with the business of the Borrower and its
Subsidiaries taken as a whole; (i) any interest or title of
a lessor or secured by a lessor's interest under any lease
permitted by this Agreement; (j) Liens in favor of customs
and revenue authorities arising as a matter of law to secure
payment of customs duties in connection with the importation
of goods; (k) Liens on goods the purchase price of which is
financed by a documentary letter of credit issued for the
account of the Borrower or any of its Subsidiaries where
such Lien secures the obligations of the Borrower or such
Subsidiaries in respect of such letter of credit to the
extent permitted under Section 5.02(b); (l) Liens arising
pursuant to purchase money mortgages securing Indebtedness
financing the purchase price of assets acquired after the
date hereof; provided that any such Liens attach only to the
--------
assets so purchased to the extent permitted under
Section 5.02(b); (m) Liens on assets permitted to be
acquired hereunder; provided that such Liens were existing
--------
at the time
<PAGE>
19
of such acquisition and were not created in anticipation
thereof; and (n) Liens granted in connection with any
foreign contract option, futures contract or similar
agreement designed to protect the Borrower or any of its
Subsidiaries from fluctuations in the price of commodities,
provided that such Liens attach solely to the commodities
--------
which are the subject of such options, contracts or
agreements.
"Person" means an individual, partnership,
------
corporation (including a business trust), joint stock
company, trust, unincorporated association, joint venture or
other entity, or a government or any political subdivision
or agency thereof.
"Plan" means any multiemployer or single-employer
----
plan as defined in Section 4001 of ERISA and which is
covered by Title IV of ERISA, which is maintained or
contributed to (or to which there is an obligation to
contribute), by the Borrower, any of its Subsidiaries or any
ERISA Affiliate.
"Pledge Agreement" has the meaning specified in
----------------
Section 3.01(d)(ix).
"Prepayment Target" means an amount equal to
-----------------
$1,150,000,000 minus (a) the excess of (x) the sum of Debt
Proceeds and Equity Proceeds over (y) the sum of Net Debt
Proceeds and Net Equity Proceeds and (b) the aggregate
amount of optional prepayments of term Debt paid out of
sources other than (i) Asset Proceeds, (ii) Debt Proceeds to
the extent required to be paid pursuant to Section 2.06(a)
or Section 2.06(d) and (iii) Equity Proceeds to the extent
required to be paid pursuant to Section 2.06(a).
"Preferred Stock" means, with respect to any
---------------
corporation, capital stock issued by such corporation that
is entitled to a preference or priority over any other
capital stock issued by such corporation upon any
distribution of such corporation's assets, whether by
dividend or upon liquidation.
"Public Debt Rating" means, as of any date, the
------------------
higher of the ratings that have been most recently announced
by either S&P or Moody's, as the case may be, for any class
of long-term senior unsecured debt issued by the Borrower.
For purposes of the foregoing, (a) if only one of S&P and
Moody's shall have in effect a Public Debt Rating, the
Applicable Margin and the Applicable Percentage shall be
determined by reference to the available rating; (b) if
neither S&P nor Moody's shall have in effect a Public Debt
Rating, the Applicable Margin and the Applicable Percentage
will be set in accordance with Level 3 under the definition
of "Applicable Margin" or "Applicable Percentage", as the
----------------- ---------------------
case may be; (c) if any rating established by S&P or Moody's
shall be changed, such change shall be effective as of the
date on which such change is first announced publicly by the
rating agency making such change; and (d) if S&P or Moody's
shall change the basis on which ratings are established,
each reference to the Public Debt Rating announced by S&P or
Moody's,
<PAGE>
20
as the case may be, shall refer to the then equivalent
rating by S&P or Moody's, as the case may be.
"Ratable Share" of any amount means, with respect
-------------
to any Working Capital Lender at any time, the product of
(a) a fraction the numerator of which is the amount of such
Lender's Working Capital Commitment at such time and the
denominator of which is the Working Capital Facility at such
time and (b) such amount.
"Real Property" of any Person means all of the
-------------
right, title and interest of such Person in and to land,
improvements and fixtures, including leaseholds.
"Receivables Back-Stop Facility Agreement" means,
----------------------------------------
collectively, the Parallel Purchase Commitment dated as of
August 16, 1994 among Borden Receivables Corp., Citibank and
the other banks party thereto and Citicorp North America,
Inc., as agent, dated as of August 16, 1994 and the Amended
and Restated Asset Purchase Agreement dated as of December
15, 1994 among the purchasers party thereto and Citicorp
North America, Inc., as agent.
"Receivables Financing Agreements" means (a) the
--------------------------------
Receivables Purchase Agreement dated as of August 16, 1994
among Borden Receivables Corp., Corporate Asset Funding
Company, Inc., Ciesco, L.P., CXC Incorporated, Citicorp
North America, Inc., as agent, and Borden, Inc., as
collection agent, and (b) the Receivables Back-Stop Facility
Agreement, in each case as such documents are amended as of
the date hereof and may be further amended, supplemented or
otherwise modified from time to time.
"Receivables Financing Documents" means the
-------------------------------
Receivables Financing Agreements and the Receivables
Purchase Agreement dated as of August 16, 1994 between the
Borrower and Borden Receivables Corp., in each case as such
documents are amended as of the date hereof and may be
further amended, supplemented or otherwise modified from
time to time.
"Reference Banks" means BT, Chemical, Citibank and
---------------
Credit Suisse.
"Register" has the meaning specified in
--------
Section 8.07(c).
"Regulation U" means Regulation U of the Board of
------------
Governors of the Federal Reserve System, as in effect from
time to time.
"Related Documents" means the TM Credit Agreement,
-----------------
the "Operative Documents" (as such term is defined in the TM
Credit Agreement) and the Receivables Financing Documents.
<PAGE>
21
"Replacement Lender" has the meaning specified in
------------------
Section 2.18.
"Reportable Event" means an event described in
----------------
Section 4043(b) of ERISA with respect to a Plan as to which
the 30-day notice requirement has not been waived by the
PBGC.
"Required Lenders" means at any time Lenders owed
----------------
or holding at least 51% of the sum of (a) the aggregate
principal amount of Advances outstanding at such time and
(b) the aggregate Available Amount of all Letters of Credit
outstanding at such time and (c) the aggregate Unused
Working Capital Commitments and unused Commitments under the
Term Facility at such time; provided, however, if any Lender
-------- -------
shall be a Defaulting Lender at such time, there shall be
excluded from the determination of Required Lenders at such
time (i) the aggregate principal amount of Advances made by
such Lender and outstanding at such time, (ii) if such
Lender shall be an Issuing Bank, the aggregate Available
Amount of all Letters of Credit issued by such Lender and
outstanding at such time and (iii) the Commitment of such
Lender under all Facilities at such time. For purposes of
this definition, the Available Amount of each Letter of
Credit shall be considered to be owed to the Lenders ratably
in accordance with their respective Working Capital
Commitments.
"RN Stock" means shares of common stock par value
--------
$.01 per share of RJR Nabisco Holdings Corp., a Delaware
corporation.
"S&P" means Standard & Poor's Ratings Group or any
---
successor by merger or consolidation to its business.
"Scheduled Debt" means Debt of the Borrower listed
--------------
on Schedule 1.01 hereto including all of the LYNX Payments.
"Senior Bank Facilities" means this Agreement, the
----------------------
Receivables Financing Agreements and the TM Credit
Agreement.
"Subsidiary" of any Person shall mean and include
----------
(i) any corporation more than 50% of whose stock of any
class or classes having by the terms thereof ordinary voting
power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time
stock of any class or classes of such corporation shall have
or might have voting power by reason of the happening of any
contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership,
association, joint venture or other entity in which such
Person directly or indirectly through Subsidiaries has more
than a 50% equity interest at the time.
"Taxes" has the meaning specified in Section 2.13(a).
-----
<PAGE>
22
"Term Advance" has the meaning specified in
------------
Section 2.01(b).
"Term Borrowing" means a borrowing consisting of
--------------
simultaneous Term Advances of the same Type made by the Term
Lenders.
"Term Commitment" means, with respect to any Term
---------------
Lender at any time, the amount set forth opposite such
Lender's name on Schedule I hereto under the caption "Term
Commitment" or, if such Lender has entered into one or more
Assignments and Acceptances, set forth for such Lender in
the Register maintained by the Administrative Agent pursuant
to Section 8.07(c) as such Lender's "Term Commitment", as
such amount may be reduced at or prior to such time pursuant
to Sections 2.05 and 2.06.
"Term Facility" means, at any time, the aggregate
-------------
amount of the Term Lenders' Term Commitments at such time.
"Term Lender" means any Lender that has a Term
-----------
Commitment.
"Term Note" means a promissory note of the Borrower
---------
payable to the order of any Term Lender, in substantially
the form of Exhibit A-1 hereto, evidencing the indebtedness
of the Borrower to such Lender resulting from the Term
Advance made by such Lender.
"Termination Date" means the earlier of December
----------------
31, 1999 and the date of termination in whole of the Term
Commitments and Working Capital Commitments pursuant to
Section 2.04 or 6.01.
"TM" means T.M. Investors Limited Partnership, a
--
Delaware limited partnership.
"TM Credit Agreement" means the Second Amended and
-------------------
Restated Credit Agreement dated as of December 15, 1994
among TM, the banks named therein, Citibank, as
administrative agent and BT Securities, Chemical Securities,
Citicorp Securities and Credit Suisse, as arrangers, as such
agreement may be amended, supplemented or otherwise modified
from time to time.
"TMI Associates Limited Partnership Agreement"
--------------------------------------------
means the Amended and Restated Agreement of Limited
Partnership of T.M.I. Associates, L.P. dated as of December
23, 1991 among BDS One, Inc., BDS Two, Inc., and BDS Four,
Inc., as general partners, and TM, as limited partner, as
such agreement is amended by Amendment No. 1 dated as of
August 16, 1994 and as further amended by the amendment
dated the date hereof, and as it may be further amended,
supplemented or otherwise modified from time to time.
<PAGE>
23
"Total Debt" means, without duplication, the
----------
aggregate of (a) Debt described in clauses (a) through (e)
of the definition of "Debt" herein, (b) outstanding
----
"Capital" of all "Receivable Interests" (as such terms are
defined in the Receivables Financing Agreements) and (c) the
portion of minority interest as set forth on the Borrower's
Consolidated balance sheet equal to the principal amount
outstanding under the TM Credit Agreement.
"Type" refers to the distinction between Advances
----
bearing interest by reference to the Base Rate and Advances
bearing interest by reference to the Eurodollar Rate.
"Unfunded Current Liability" of any Plan means the
--------------------------
amount, if any, by which the present value of the accrued
benefits under the Plan as of the close of its most recent
plan year, based upon the actuarial assumptions which would
be required to be used by the Plan's actuary in connection
with the determination of the Plan's accrued benefits
pursuant to its termination, exceeds the fair market value
of the assets allocable thereto, determined in accordance
with Section 412 of the Internal Revenue Code.
"Unused Working Capital Commitment" means, with
---------------------------------
respect to any Working Capital Lender at any time, (a) such
Lender's Working Capital Commitments at such time minus (b)
-----
the sum of (i) the aggregate principal amount of all Working
Capital Advances and Letter of Credit Advances made by such
Lender and outstanding at such time, plus, without
----
duplication, (ii) such Lender's Ratable Share of (A) the
aggregate Available Amount of all Letters of Credit
outstanding at such time, (B) the aggregate principal amount
of all Letter of Credit Advances made by an Issuing Banks
pursuant to Section 2.15(c) and outstanding at such time
other than any such Letter of Credit Advance which, at or
prior to such time, has been assigned in part to such
Working Capital Lender pursuant to Section 2.15(c), (C) the
aggregate outstanding "Capital" of all "Receivable
Interests" (as such terms are defined in the Receivables
Financing Agreements) at such time, (D) from and after the
date that is six months after the date of the initial
Borrowing, the aggregate outstanding principal amount of
Debt of any Subsidiaries of the Borrower incorporated
outside of the United States and (E) the aggregate principal
outstanding amount of Competitive Bid Advances.
"Voting Stock" means capital stock issued by a
------------
corporation, or equivalent interests in any other Person,
the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such
Person, even though the right so to vote has been suspended
by the happening of such a contingency (but excluding in any
event convertible or exchangable Preferred Stock prior to
conversion or exchange, as the case may be).
<PAGE>
24
"Working Capital Advance" has the meaning specified
-----------------------
in Section 2.01.
"Working Capital Borrowing" means a borrowing
-------------------------
consisting of simultaneous Working Capital Advances of the
same Type made by the Working Capital Lenders.
"Working Capital Commitment" means, with respect to
--------------------------
any Working Capital Lender at any time, the amount set forth
opposite such Lender's name on Schedule I hereto under the
caption "Working Capital Commitment" or, if such Lender has
entered into one or more Assignment and Acceptances, set
forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 8.07(c) as such
Lender's "Working Capital Commitment", as such amount may be
reduced pursuant to Sections 2.05 and 2.06.
"Working Capital Facility" means, at any time, the
------------------------
aggregate amount of the Working Capital Lenders' Working
Capital Commitments at such time.
"Working Capital Lender" means any Lender that has
----------------------
a Working Capital Commitment.
"Working Capital Note" means a promissory note of
--------------------
the Borrower payable to the order of any Working Capital
Lender, in substantially the form of Exhibit A-2 hereto,
evidencing the indebtedness of the Borrower to such Lender
resulting from the Working Capital Advances made by such
Lender.
SECTION 1.02. Computation of Time Periods. In
---------------------------
this Agreement in the computation of periods of time from a
specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each mean "to
but excluding".
SECTION 1.03. Accounting Terms. All accounting
----------------
terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles
("GAAP").
----
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) Working Capital
------------ ---------------
Advances. Each Working Capital Lender severally agrees, on the
--------
terms and conditions hereinafter set forth, to make advances
("Working Capital Advances") to the Borrower from time to time on
------------------------
any Business Day during the period from the date hereof until the
Termination Date in an amount for each such Advance not to exceed
such Lender's Unused Working Capital Commitment on such Business
Day, provided that, from and after the date that is six months
--------
after the initial
<PAGE>
25
Borrowing, an aggregate amount of the Lenders' Unused Working
Capital Commitment equal to the aggregate outstanding principal
amount of Debt of any Subsidiaries of the Borrower organized
outside of the United States may be borrowed for the purpose of
retiring such Debt. Each Working Capital Borrowing shall be in
an aggregate amount not less than $15,000,000 or an integral
multiple of $1,000,000 in excess thereof and shall consist of
Working Capital Advances of the same Type made on the same day by
the Working Capital Lenders ratably according to their respective
Working Capital Commitments. Within the limits of each Working
Capital Lender's Unused Working Capital Commitment in effect from
time to time, the Borrower may borrow under this Section 2.01(a),
prepay pursuant to Section 2.07 and reborrow under this Section
2.01(a).
(b) The Term Advances. Each Term Lender
-----------------
severally agrees, on the terms and conditions hereinafter set
forth, to make a single advance (a "Term Advance") to the
------------
Borrower on any Business Day during the period from the date
hereof until February 15, 1995 in an amount not to exceed such
Lender's Term Commitment on such Business Day. Amounts borrowed
under this Section 2.01(b) and repaid or prepaid may not be
reborrowed.
SECTION 2.02. Making the Advances. (a) Except as
-------------------
otherwise provided in Section 2.02(b), each Borrowing shall be
made on notice, given not later than 11:00 A.M. (New York City
time) (i) on the third Business Day prior to the date of the
proposed Borrowing in the case of Eurodollar Rate Borrowings and
(ii) on the same Business Day in the case of Base Rate
Borrowings, by the Borrower to the Administrative Agent, which
shall give to each Appropriate Lender prompt notice thereof by
telex, telecopier or cable. Each such notice of a Borrowing (a
"Notice of Borrowing") shall be by telephone, telex, telecopier
-------------------
or cable, confirmed immediately in writing, in substantially the
form of Exhibit B hereto, specifying therein the requested
(i) date of such Borrowing, (ii) Facility under which such
Borrowing is to be made, (iii) Type of Advances comprising such
Borrowing, (iv) aggregate amount of such Borrowing and (v) in the
case of a Borrowing consisting of Eurodollar Rate Advances,
initial Interest Period for each such Advance. In the case of a
proposed Borrowing comprised of Eurodollar Rate Advances, the
Administrative Agent shall promptly notify each Appropriate
Lender of the applicable interest rate under Section 2.08(a)(ii).
Each Appropriate Lender shall, before 12:00 noon (New York City
time) on the date of such Borrowing, make available for the
account of its Applicable Lending Office to the Administrative
Agent at the Administrative Agent's Account, in same day funds,
such Lender's ratable portion of such Borrowing in accordance
with the respective Commitments of such Lender and the other
Appropriate Lenders. After the Administrative Agent's receipt of
such funds and upon fulfillment of the applicable conditions set
forth in Article III, the Administrative Agent will make such
funds available to the Borrower; provided, however, that, in the
-------- -------
case of any Working Capital Borrowing, the Administrative Agent
shall first make a portion of such funds equal to the aggregate
principal amount of any Letter of Credit Advances made by any
Issuing Bank and by any other Working Capital Lender and
outstanding on the date of such Borrowing, plus interest accrued
and unpaid thereon to and as of such date, available to such
Issuing Bank and such other Working Capital Lenders for repayment
of such Letter of Credit Advances.
<PAGE>
26
(b) Anything in subsection (a) above to the
contrary notwithstanding, (i) the Borrower may not select
Eurodollar Rate Advances for the initial Borrowing hereunder or
for any Borrowing if the aggregate amount of such Borrowing is
less than $15,000,000 or if the obligation of the Appropriate
Lenders to make Eurodollar Rate Advances shall then be suspended
pursuant to Section 2.11, (ii) the Working Capital Advances made
on any date as Eurodollar Rate Advances may not be outstanding as
part of more than ten separate Working Capital Borrowings and
(iii) the Term Advance may not be outstanding as part of more
than ten separate Term Borrowings.
(c) Each Notice of Borrowing shall be irrevocable
and binding on the Borrower. In the case of any Borrowing that
the related Notice of Borrowing specifies is to be comprised of
Eurodollar Rate Advances, the Borrower shall indemnify each
Appropriate Lender, after receipt of a written request by such
Lender (which request shall set forth in reasonable detail the
basis for such amount) against any loss, cost or expense actually
incurred by such Lender (excluding loss of anticipated profits)
as a result of any failure to fulfill on or before the date
specified in such Notice of Borrowing for such Borrowing the
applicable conditions set forth in Article III, including,
without limitation, any loss, cost or expense reasonably incurred
by reason of the liquidation or reemployment of deposits or other
funds acquired by such Lender to fund the Advance to be made by
such Lender as part of such Borrowing when such Advance, as a
result of such failure, is not made on such date.
(d) Unless the Administrative Agent shall have
received notice from an Appropriate Lender prior to the time of
any Borrowing under a Facility under which such Lender has a
Commitment that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender
has made such portion available to the Administrative Agent on
the date of such Borrowing in accordance with subsection (a) of
this Section 2.02 and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date
a corresponding amount. If and to the extent that such Lender
shall not have so made such ratable portion available to the
Administrative Agent, such Lender and the Borrower severally
agree to repay or pay to the Administrative Agent forthwith on
demand such corresponding amount and to pay interest thereon, for
each day from the date such amount is made available to the
Borrower until the date such amount is repaid or paid to the
Administrative Agent, at (i) in the case of the Borrower, the
interest rate applicable at such time under Section 2.08 to
Advances comprising such Borrowing and (ii) in the case of such
Lender, the Federal Funds Rate. If such Lender shall pay to the
Administrative Agent such corresponding amount, such amount so
paid shall constitute such Lender's Advance as part of such
Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Advance
to be made by it as part of any Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its
Advance on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any
Borrowing.
<PAGE>
27
SECTION 2.03. The Competitive Bid Advances. (a)
----------------------------
Each Working Capital Lender severally agrees that the Borrower
may make Competitive Bid Borrowings under this Section 2.03 from
time to time on any Business Day during the period from the date
hereof until the date occurring seven days prior to the
Termination Date in the manner set forth below; provided that,
--------
following the making of each Competitive Bid Borrowing, no
prepayment shall be required pursuant to Section 2.07(b)(i).
(i) The Borrower may request a Competitive Bid
Borrowing under this Section 2.03 by delivering to the
Administrative Agent, by telecopier or telex, confirmed
immediately in writing, a notice of a Competitive Bid
Borrowing (a "Notice of Competitive Bid Borrowing"), in
-----------------------------------
substantially the form of Exhibit B-2 hereto, together with
a processing fee of $4,000 for each Notice of Competitive
Bid Borrowing, specifying therein (v) date of such proposed
Competitive Bid Borrowing, (w) aggregate amount of such
proposed Competitive Bid Borrowing, (x) the maturity date
for repayment of each Competitive Bid Advance to be made as
part of such Competitive Bid Borrowing (which maturity date
may not be earlier than the date occurring seven days after
the date of such Competitive Bid Borrowing or later than the
Termination Date), (y) the interest payment date or dates
relating thereto, and (z) any other terms to be applicable
to such Competitive Bid Borrowing, not later than 10:00
A.M. (New York City time) (A) at least one Business Day
prior to the date of the proposed Competitive Bid Borrowing,
if the Borrower shall specify in the Notice of Competitive
Bid Borrowing that the rates of interest to be offered by
the Lenders shall be fixed rates per annum (the Advances
comprising any such Competitive Bid Borrowing being referred
to herein as "Fixed Rate Advances") and (B) at least four
-------------------
Business Days prior to the date of the proposed Competitive
Bid Borrowing, if the Borrower shall instead specify in the
Notice of Competitive Bid Borrowing the basis to be used by
the Lenders in determining the rates of interest to be
offered by them (the Advances comprising such Competitive
Bid Borrowing being referred to herein as "LIBO Rate
---------
Advances"). The Administrative Agent shall in turn promptly
--------
notify each Working Capital Lender of each request for a
Competitive Bid Borrowing received by it from the Borrower
by sending such Lender a copy of the related Notice of
Competitive Bid Borrowing.
(ii) Each Working Capital Lender may, if, in its
sole discretion, it elects to do so, irrevocably offer to
make one or more Competitive Bid Advances to the Borrower as
part of such proposed Competitive Bid Borrowing at a rate or
rates of interest specified by such Lender in its sole
discretion, by notifying the Administrative Agent (which
shall give prompt notice thereof to the Borrower), before
10:00 A.M. (New York City time) on the date of such proposed
Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of Fixed Rate Advances and three
Business Days before the date of such proposed Competitive
Bid Borrowing, in the case of a Competitive Bid Borrowing
consisting of LIBO Rate Advances, of the minimum amount and
maximum amount of each Competitive Bid Advance which such
Lender would be willing to make as part of such proposed
Competitive Bid
<PAGE>
28
Borrowing (which amounts may, subject to the proviso to the
first sentence of this Section 2.03(a), exceed such Lender's
Working Capital Commitment), the rate or rates of interest
therefor and such Lender's Applicable Lending Office with
respect to such Competitive Bid Advance; provided that if
--------
the Administrative Agent in its capacity as a Working
Capital Lender shall, in its sole discretion, elect to make
any such offer, it shall notify the Borrower of such offer
before 9:00 A.M. (New York City time) on the date on which
notice of such election is to be given to the Administrative
Agent by the other Working Capital Lenders. If any Working
Capital Lender shall elect not to make such an offer, such
Lender shall so notify the Administrative Agent, before
10:00 A.M. (New York City time) on the date on which notice
of such election is to be given to the Administrative Agent
by the other Working Capital Lenders, and such Lender shall
not be obligated to, and shall not, make any Competitive Bid
Advance as part of such Competitive Bid Borrowing; provided
--------
that the failure by any Working Capital Lender to give such
notice shall not cause such Lender to be obligated to make
any Competitive Bid Advance as part of such proposed
Competitive Bid Borrowing.
(iii) The Borrower shall, in turn, before 11:00
A.M. (New York City time) on the date of such proposed
Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of Fixed Rate Advances and before
1:00 P.M. (New York City time) three Business Days before
the date of such proposed Competitive Bid Borrowing, in the
case of a Competitive Bid Borrowing consisting of LIBO Rate
Advances, either:
(x) cancel such Competitive Bid Borrowing by
giving the Administrative Agent notice to that
effect, or
(y) accept one or more of the offers made by any
Working Capital Lender or Lenders pursuant to
paragraph (ii) above, by giving notice to the
Administrative Agent of the amount of each
Competitive Bid Advance (which amount shall be
equal to or greater than the minimum amount, and
equal to or less than the maximum amount, notified
to the Borrower by the Administrative Agent on
behalf of such Lender for such Competitive Bid
Advance pursuant to paragraph (ii) above) to be
made by each Lender as part of such Competitive Bid
Borrowing, and reject any remaining offers made by
Lenders pursuant to paragraph (ii) above by giving
the Administrative Agent notice to that effect.
(iv) If the Borrower notifies the Administrative
Agent that such Competitive Bid Borrowing is cancelled
pursuant to paragraph (iii)(x) above, the Administrative
Agent shall give prompt notice thereof to the Working
Capital Lenders and such Competitive Bid Borrowing shall not
be made.
<PAGE>
29
(v) If the Borrower accepts one or more of the
offers made by any Working Capital Lender or Lenders
pursuant to paragraph (iii)(y) above, the Administrative
Agent shall in turn promptly notify (A) each Working Capital
Lender that has made an offer as described in paragraph (ii)
above, of the date and aggregate amount of such Competitive
Bid Borrowing and whether or not any offer or offers made by
such Lender pursuant to paragraph (ii) above have been
accepted by the Borrower, (B) each Working Capital Lender
that is to make a Competitive Bid Advance as part of such
Competitive Bid Borrowing, of the amount of each Competitive
Bid Advance to be made by such Lender as part of such
Competitive Bid Borrowing, and (C) each Working Capital
Lender that is to make a Competitive Bid Advance as part of
such Competitive Bid Borrowing, upon receipt, that the
Administrative Agent has received forms of documents
appearing to fulfill the applicable conditions set forth in
Article III. Each Working Capital Lender that is to make a
Competitive Bid Advance as part of such Competitive Bid
Borrowing shall, before 12:00 noon (New York City time) on
the date of such Competitive Bid Borrowing specified in the
notice received from the Administrative Agent pursuant to
clause (A) of the preceding sentence or any later time when
such Lender shall have received notice from the
Administrative Agent pursuant to clause (C) of the preceding
sentence, make available for the account of its Applicable
Lending Office to the Administrative Agent at the
Administrative Agent's Account, in same day funds, such
Lender's portion of such Competitive Bid Borrowing. Upon
fulfillment of the applicable conditions set forth in
Article III and after receipt by the Administrative Agent of
such funds, the Administrative Agent will make such funds
available to the Borrower at the Administrative Agent's
address referred to in Section 8.02. Promptly after each
Competitive Bid Borrowing the Administrative Agent will
notify each Working Capital Lender of the amount of the
Competitive Bid Borrowing.
(vi) The Administrative Agent shall maintain at
its address referred to in Section 8.02 a copy of each
Notice of Competitive Bid Borrowing delivered pursuant to
subsection (a)(i) above and a register for the recordation
of the date, amount, maturity, interest rate, interest
payment dates, other terms and Working Capital Lender of
each Competitive Bid Advance accepted by the Borrower from
time to time pursuant to this subsection (a) (the
"Competitive Bid Register"). The entries in the Competitive
------------------------
Bid Register shall be conclusive and binding for all
purposes, absent demonstrable error, and the Borrower, the
Administrative Agent and the Working Capital Lenders may
treat the entries recorded in the Competitive Bid Register
as evidence of Competitive Bid Advances made pursuant to
this Section 2.03. The Competitive Bid Register shall be
available for inspection by the Borrower, or by any Working
Capital Lender as to its Competitive Bid Advances, at any
reasonable time and from time to time upon reasonable prior
notice.
(b) Each Competitive Bid Borrowing shall be in an
aggregate amount of $10,000,000 or an integral multiple of
$1,000,000 in excess thereof and, following
<PAGE>
30
the making of each Competitive Bid Borrowing, the Borrower shall
be in compliance with the limitation set forth in the proviso to
the first sentence of subsection (a) above.
(c) Within the limits and on the conditions set
forth in this Section 2.03, the Borrower may from time to time
borrow under this Section 2.03, repay or prepay pursuant to
subsection (d) below, and reborrow under this Section 2.03,
provided that a Competitive Bid Borrowing shall not be made
--------
within three Business Days of the date of any other Competitive
Bid Borrowing.
(d) The Borrower shall repay to the
Administrative Agent for the account of each Working Capital
Lender that has made a Competitive Bid Advance, on the maturity
date of each Competitive Bid Advance (such maturity date being
that specified by the Borrower for repayment of such Competitive
Bid Advance in the related Notice of Competitive Bid Borrowing
delivered pursuant to subsection (a)(i) above and recorded in the
Competitive Bid Register with respect to such Competitive Bid
Advance), the then unpaid principal amount of such Competitive
Bid Advance.
(e) The Borrower shall pay interest on the unpaid
principal amount of each Competitive Bid Advance from the date of
such Competitive Bid Advance to the date the principal amount of
such Competitive Bid Advance is repaid in full, at the rate of
interest for such Competitive Bid Advance specified by the
Working Capital Lender making such Competitive Bid Advance in its
notice with respect thereto delivered pursuant to subsection
(a)(ii) above, payable on the interest payment date or dates
specified by the Borrower for such Competitive Bid Advance in the
related Notice of Competitive Bid Borrowing delivered pursuant to
subsection (a)(i) above, as recorded in the Competitive Bid
Register with respect to such Competitive Bid Advance.
(f) The indebtedness of the Borrower resulting
from each Competitive Bid Advance made to the Borrower as part of
a Competitive Bid Borrowing shall be evidenced by a master
Competitive Bid Note of the Borrower payable to the order of the
Administrative Agent for the benefit of the Working Capital
Lender making such Competitive Bid Advance.
SECTION 2.04. Repayment. (a) Working Capital
--------- ---------------
Advances. The Borrower shall repay to the Administrative Agent
--------
for the ratable account of the Working Capital Lenders the
aggregate outstanding principal amount of the Working Capital
Advances on the Termination Date.
<PAGE>
31
(b) Term Advances. The Borrower shall repay to
-------------
the Administrative Agent for the ratable account of the Term
Lenders the aggregate outstanding principal amount of the Term
Advances on the following dates in the amounts indicated:
Date Amount
---- ------
December 31, 1995 $213,414,635
June 30, 1996 $121,951,220
December 31, 1997 $ 60,975,610
December 31, 1998 $ 3,658,538
(c) Letter of Credit Advances. The Borrower
-------------------------
shall repay to the Administrative Agent for the account of each
Issuing Bank and each other Working Capital Lender which has made
a Letter of Credit Advance the outstanding principal amount of
each Letter of Credit Advance made by each of them on demand.
SECTION 2.05. Reduction of the Commitments.
----------------------------
(a) Optional. The Borrower may, upon at least
--------
one Business Days' notice to the Administrative Agent, terminate
in whole or reduce in part the Unused Working Capital Commitments
and the unused portion of the Term Commitments and the Letter of
Credit Commitments; provided, however, that each partial reduction
-------- -------
of a Facility (i) shall be in an aggregate amount of $15,000,000
or an integral multiple of $1,000,000 in excess thereof and (ii)
shall be made ratably among the Appropriate Lenders in accordance
with their Commitments with respect to such Facility.
(b) Mandatory. The Working Capital Commitments
---------
shall be permanently reduced ratably in an aggregate amount of
$350,000,000 on the following dates in the amounts indicated:
Date Amount
---- ------
December 31, 1998 $118,292,684
December 31, 1999 $231,707,316
provided, that there shall be deducted from such amount any
--------
Working Capital Commitment reductions made pursuant to
Section 2.05(a) or Sections 2.06(c) or (d).
SECTION 2.06. Application of Certain Proceeds.
-------------------------------
(a) The Borrower shall prepay and reduce commitments under the
Borrower's Scheduled Debt and Senior Bank Facilities in an
aggregate amount equal to the Prepayment Target from any
combination of the following sources:
(i) Cash Asset Proceeds aggregating up to
$550,000,000;
(ii) Debt Proceeds aggregating up to $800,000,000;
and
(iii) Equity Proceeds aggregating up to
$400,000,000.
(b) The payments and commitment reductions
required by Section 2.06(a) shall be made in forward order of
maturity; provided, however, that proceeds required to be applied
-------- -------
to Scheduled Debt not then due shall be used to prepay the
Working Capital Advances (without reduction of Commitments) or
Debt of the Borrower's Subsidiaries organized outside the United
States.
(c) After the earlier of receipt of
(i) $450,000,000 of Asset Proceeds and (ii) the Prepayment
Target, all Cash Asset Proceeds shall be applied by the Borrower
to prepay the Senior Bank Facilities in forward order of maturity
and to permanently reduce
<PAGE>
32
Commitments in forward order of scheduled Commitment reductions
to the extent applicable to Working Capital Commitments; provided
--------
that the $450,000,000 limit described above in this subsection (c)
shall be increased to an amount not in excess of $550,000,000 to
the extent (on a dollar-for-dollar basis) that the Borrower
hereafter receives Equity Proceeds or Incremental RN Stock in
excess of the aggregate amount of capital contributions contemplated
by Sections 3.02(d) and 3.02(e).
(d) After the earlier of receipt of (i)
$800,000,000 of Debt Proceeds and (ii) the Prepayment Target, 50%
of Net Debt Proceeds shall be applied by the Borrower to prepay
the Senior Bank Facilities in forward order of maturity and to
permanently reduce Commitments in forward order of scheduled
Commitment reductions to the extent applicable to Working Capital
Commitments.
(e) Equity Proceeds and Debt Proceeds not
required to be used to pay or prepay Debt may be used by the
Borrower for any purpose not prohibited hereunder. In addition,
if after the date hereof the Borrower utilizes Equity Proceeds in
excess of $400,000,000 to prepay term Debt and thereafter
achieves receipt of the Prepayment Target within the limits set
forth in Section 2.06(a), the amount of such excess over
$400,000,000 will reduce in the aggregate the Borrower's
prepayment obligations under Section 2.06 (c), (d) and (f) on a
dollar-for-dollar basis; provided that the $400,000,000 amount
--------
described in this subsection (e) shall be increased (solely for
purposes of this subsection (e)) on a dollar-for-dollar basis to
an amount not in excess of $450,000,000 to the extent that the
Borrower applies Equity Proceeds or Incremental RN Stock to the
extent of up to the first $50,000,000 to increase the
$450,000,000 limit described in subsection (c) above.
(f) For purposes of this Section 2.06, the
Borrower shall be deemed to have received Asset Proceeds and Cash
Asset Proceeds on the last day of the fiscal year following the
date of an asset sale transaction in an amount equal to the
excess of the reserve for taxes payable or estimated to be
------
payable in connection with or as a result of such transaction
over taxes actually paid in connection with or as a result of
----
such transaction on or before the last day of such fiscal year.
The Borrower shall apply an amount equal to such deemed Asset
Proceeds or deemed Cash Asset Proceeds in accordance with the
terms of this Section 2.06.
(g) The Borrower may apply proceeds as required
by this Section 2.06 on the last day of any Interest Period next
ending after receipt or, in the case of Asset Proceeds, deemed
receipt, of such proceeds; provided that the Borrower shall apply
--------
such proceeds on or before 30 days after such receipt or deemed
receipt; provided, further that in the case of Asset Proceeds
-------- -------
resulting from the sale of an asset located outside the United
States, such 30 days after such receipt or deemed receipt shall
be extended to 90 days after such receipt or deemed receipt.
(h) All prepayments of Senior Debt Facilities
under this Section 2.06 shall be made together with accrued
interest to the date of such prepayment on the principal amount
prepaid.
<PAGE>
33
SECTION 2.07. Prepayments. (a) Optional. The
----------- --------
Borrower may, upon (i) at least one Business Day's notice in the
case of Base Rate Borrowings and (ii) at least three Business
Days' notice in the case of Eurodollar Rate Borrowings, in each
case to the Administrative Agent stating the proposed date and
aggregate principal amount of the prepayment, and if such notice
is given the Borrower shall, prepay the outstanding aggregate
principal amount of the Advances comprising part of the same
Borrowing in whole or ratably in part, together with accrued
interest to the date of such prepayment on the aggregate
principal amount prepaid; provided, however, that each partial
-------- -------
prepayment shall be in an aggregate principal amount of
$15,000,000 or an integral multiple of $1,000,000 in excess
thereof. Each such prepayment of any Term Advances shall be
applied in such order as the Borrower shall direct.
(b) Mandatory. (i) The Borrower shall, on each
---------
Business Day, prepay an aggregate principal amount of the Working
Capital Advances comprising part of the same Borrowings equal to
the amount by which the (x) sum of (A) aggregate principal amount
of the Working Capital Advances and Competitive Bid Advances then
outstanding, (B) the Available Amount of all Letters of Credit
then outstanding (C) the aggregate outstanding "Capital" of all
"Receivable Interests" (as such terms are defined in the
Receivables Financing Agreements) and (D) from and after the date
that is six months after the date of the initial Borrowing, the
aggregate outstanding principal amount of Debt of any
Subsidiaries of the Borrower incorporated outside of the United
States exceeds (y) the Working Capital Facility.
(ii) All prepayments under this subsection (b)
shall be made together with accrued interest to the date of such
prepayment on the principal amount prepaid.
SECTION 2.08. Interest. (a) Ordinary Interest.
-------- -----------------
The Borrower shall pay interest on the unpaid principal amount of
each Advance owing to each Lender from the date of such Advance
until such principal amount shall be paid in full, at the
following rates per annum:
(i) Base Rate Advances. During such periods as
------------------
such Advance is a Base Rate Advance, a rate per annum equal
at all times to the sum of (A) the Base Rate in effect from
time to time plus (B) the Applicable Margin in effect from
time to time, payable in arrears quarterly on the first day
of each January, April, July, and October, during such
periods and on the date such Base Rate Advance shall be
Converted or paid in full.
(ii) Eurodollar Rate Advances. During such
------------------------
periods as such Advance is a Eurodollar Rate Advance, a rate
per annum equal at all times during each Interest Period for
such Advance to the sum of (A) the Eurodollar Rate for such
Interest Period for such Advance plus (B) the Applicable
Margin in effect on each day during such Interest Period,
payable in arrears on the last day of such Interest Period
and, if such Interest Period has a duration of more than
three months, on each day that
<PAGE>
34
occurs during such Interest Period every three months from
the first day of such Interest Period.
(b) Default Interest. Overdue principal and
----------------
interest in respect of each Advance shall bear interest at a rate
per annum equal to the Base Rate in effect from time to time plus
the sum of (i) 2% and (ii) the Applicable Margin; provided that
--------
each Eurodollar Rate Advance and Competitive Bid Advance shall
bear interest after maturity (whether by acceleration or
otherwise) until the end of the Interest Period then applicable
thereto at a rate per annum equal to 2% in excess of the rate of
interest applicable thereto at maturity.
SECTION 2.09. Fees. (a) Commitment Fee. The
---- --------------
Borrower shall pay to the Administrative Agent for the account of
the Lenders a commitment fee on each Working Capital Lender's
average daily Unused Working Capital Commitment, computed without
regard to clauses (D) and (E) of the definition of Unused Working
Capital Commitment, minus the aggregate amount of Competitive Bid
-----
Advances made by such Lender and on the average daily unused
portion of each Term Lender's Term Commitment from the date
hereof until the Termination Date at the Applicable Percentage,
payable in arrears quarterly on the first Business Day of each
January, April, July and October, commencing January 3, 1995, and
on the Termination Date; provided, however, that from the date
-------- -------
hereof until the date of the initial Borrowing, the Borrower
shall pay to the Administrative Agent for the account of the
Lenders a commitment fee on the difference, if any, between
(i) the average daily Unused Working Capital Commitment of such
Lender plus the average daily portion of such Lender's Term
Commitment and (ii) such Lender's aggregate commitment under the
Existing Credit Agreement; provided, further, that any commitment
-------- -------
fee accrued with respect to any of the Commitments of a
Defaulting Lender during the period prior to the time such Lender
became a Defaulting Lender and unpaid at such time shall not be
payable by the Borrower so long as such Lender shall be a
Defaulting Lender except to the extent that such commitment fee
shall otherwise have been due and payable by the Borrower prior
to such time; and provided, further, that no commitment fee shall
-------- -------
accrue on any of the Commitments of a Defaulting Lender so long
as such Lender shall be a Defaulting Lender.
(b) Administrative Agent's and Arrangers' Fees.
------------------------------------------
The Borrower shall pay to the Administrative Agent and the
Arrangers for their own respective account such fees as may from
time to time be agreed between the Borrower and the
Administrative Agent and the Arrangers.
SECTION 2.10. Conversion of Advances. (a)
----------------------
Optional. The Borrower may on any Business Day, upon notice
--------
given to the Administrative Agent not later than 11:00 A.M.
(New York City time) on the third Business Day prior to the date
of the proposed Conversion and subject to the provisions of
Section 2.11, Convert all or any portion of the Working Capital
Advances or Term Advances of one Type comprising the same
Borrowing into Advances of the other Type; provided, however,
-------- -------
that any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be in an amount not less than the minimum
<PAGE>
35
amount specified in Section 2.02(b) and no Conversion of any
Advances shall result in more separate Borrowings than permitted
under Section 2.02(b). Each such notice of Conversion shall,
within the restrictions specified above, specify (i) the date of
such Conversion, (ii) the Advances to be Converted and (iii) if
such Conversion is into Eurodollar Rate Advances, the duration of
the initial Interest Period for such Advances.
(b) Mandatory. (i) On the date on which the
---------
aggregate unpaid principal amount of Eurodollar Rate Advances
comprising any Borrowing shall be reduced, by payment or
prepayment or otherwise, to less than $15,000,000, such Advances
shall automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the
duration of any Interest Period for any Eurodollar Rate Advances
in accordance with the provisions contained in the definition of
"Interest Period" in Section 1.01, the Administrative Agent will
forthwith so notify the Borrower and the Appropriate Lenders,
whereupon each such Eurodollar Rate Advance will automatically,
on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance.
SECTION 2.11. Increased Costs, Etc. (a) If, due
--------------------
to either (i) the introduction of or any change in or in the
interpretation of any law or regulation after the date hereof or
(ii) the compliance with any guideline or request made after the
date hereof from any central bank or other governmental authority
(whether or not having the force of law), there shall be any
increase in the cost to any Lender of agreeing to make or of
making, funding or maintaining Eurodollar Rate Advances or LIBO
Rate Advances or of agreeing to issue or issuing or maintaining
Letters of Credit or of agreeing to make or of making or
maintaining Letter of Credit Advances, then the Borrower shall
from time to time, upon demand by such Lender (with a copy of
such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased
cost; provided, however, that each Lender agrees to use
-------- -------
reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Applicable
Lending Office or take other steps if to do so would avoid the
need for, or reduce the amount of, such increased cost and would
not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender. A certificate as to the amount
of such increased cost accompanied by a statement setting forth
in reasonable detail the basis for, and amount of, such increased
cost, submitted to the Borrower by such Lender, shall be
conclusive and binding for all purposes, absent demonstrable
error.
(b) If, after the date hereof (i) the
introduction of or any change in any applicable law or regulation
regarding capital adequacy or any change after the date hereof in
the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or (ii) the compliance
by a Lender or its parent with any directive or request made
after the date hereof regarding capital adequacy from any central
bank or other governmental authority (whether or not having the
force of law), has the effect of reducing the rate of return on
such
<PAGE>
36
Lender's or its parent's capital or assets as a consequence of
such Lender's commitment to lend hereunder or other obligations
hereunder to a level below that which such Lender or its parent
would have achieved but for such introduction, change or
compliance (taking into consideration such Lender's or its
parent's policies with respect to capital adequacy), then, upon
demand by such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to the
Administrative Agent for the account of such Lender, from time to
time as specified by such Lender, additional amounts sufficient
to compensate such Lender for such reduction, it being understood
and agreed, however, that such Lender shall not be entitled to
such compensation as a result of such Lender's compliance with,
or pursuant to any directive or request to comply with, any such
law or regulation as in effect on the date hereof; provided,
--------
however, that each Lender agrees to use reasonable efforts
-------
(consistent with its internal policy and legal and regulatory
restrictions) to designated a different Applicable Lending Office
or take other steps if to do so would avoid the need for, or
reduce the amount of, such compensation and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous
to such Lender. A certificate as to such amounts accompanied by
a statement setting forth in reasonable detail the basis for, and
amount of, such increased cost submitted to the Borrower by such
Lender, shall be conclusive and binding for all purposes, absent
demonstrable error.
(c) If, with respect to any Eurodollar Rate
Advances, the Administrative Agent shall have determined that on
any date for determining the Eurodollar Rate for any Interest
Period for such Advances that, by reason of changes arising after
the date hereof affecting the interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the
definition of Eurodollar Rate (i) each such Eurodollar Rate
Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance and
(ii) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrower that such
Lenders have determined that the circumstances causing such
suspension no longer exist.
(d) Notwithstanding any other provision of this
Agreement, if after the date hereof the introduction of or any
change in or in the interpretation of any law or regulation shall
make it unlawful or impracticable, or any central bank or other
governmental authority shall assert that it is unlawful, for any
Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Advances or LIBO
Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances or LIBO Rate Advances hereunder, then, on notice thereof
and demand therefor by such Lender to the Borrower through the
Administrative Agent, (i) each Eurodollar Rate Advance under
which such Lender has a Commitment or LIBO Rate Advance, as the
case may be, will automatically, upon such demand, Convert into a
Base Rate Advance or an Advance that bears interest at the rate
set forth in Section 2.08(a)(i), as the case may be, and (ii) the
obligation of the Appropriate Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended until
the circumstances causing such suspension no longer exist;
provided, however, that such Lender agrees to use reasonable
-------- -------
efforts (consistent with its internal policy and legal and
<PAGE>
37
regulatory restrictions) to designate a different Eurodollar
Lending Office or take other steps if to do so would allow such
Lender or its Eurodollar Lending Office to continue to perform
its obligations to make Eurodollar Rate Advances or to continue
to fund or maintain Eurodollar Rate Advances and would not, in
the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
(e) If the Required Lenders shall so determine,
upon the occurrence and during the continuance of any Default,
the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended.
SECTION 2.12. Payments and Computations. (a) The
-------------------------
Borrower shall make each payment hereunder and under the Notes
not later than 11:00 A.M. (New York City time) on the day when
due in U.S. dollars to the Administrative Agent at the
Administrative Agent's Account in same day funds. The
Administrative Agent will promptly thereafter cause like funds to
be distributed (i) if such payment by the Borrower is in respect
of principal, interest, commitment fees or any other obligation
then payable hereunder and under the Notes to more than one
Lender, to such Lenders for the account of their respective
Applicable Lending Offices ratably in accordance with the amounts
of such respective obligations then payable to such Lenders and
(ii) if such payment by the Borrower is in respect of any
obligation then payable hereunder to one Lender, to such Lender
for the account of its Applicable Lending Office, in each case to
be applied in accordance with the terms of this Agreement. Upon
its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to
Section 8.07(d), from and after the effective date of such
Assignment and Acceptance, the Administrative Agent shall make
all payments hereunder and under the Notes in respect of the
interest assigned thereby to the Lender assignee thereunder, and
the parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.
(b) All computations of interest, fees and Letter
of Credit commissions shall be made by the Administrative Agent
on the basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the last
day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by the
Administrative Agent of an interest rate, fee or commission
hereunder shall be conclusive and binding for all purposes,
absent demonstrable error.
(c) Whenever any payment hereunder or under the
Notes shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in
the computation of payment of interest or commitment fee, as the
case may be; provided, however, that, if such extension would
-------- -------
cause payment of interest on or principal of Eurodollar Rate
Advances or LIBO Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding
Business Day.
<PAGE>
38
(d) Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any
payment is due to any Lender hereunder that the Borrower will not
make such payment in full, the Administrative Agent may assume
that the Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to
each such Lender on such due date an amount equal to the amount
then due such Lender. If and to the extent the Borrower shall
not have so made such payment in full to the Administrative
Agent, each such Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender
repays such amount to the Administrative Agent, at the Federal
Funds Rate.
(e) If the Administrative Agent receives funds
for application to the obligations under the Loan Documents under
circumstances for which the Loan Documents do not specify the
Advances or the Facility to which, or the manner in which, such
funds are to be applied, the Administrative Agent shall apply
such funds to prepay Working Capital Advances (but not reduce the
Working Capital Commitments).
SECTION 2.13. Taxes. (a) Any and all payments by
-----
the Borrower hereunder or under the Notes shall be made, in
accordance with Section 2.12, free and clear of and without
deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding, in the case of each Lender and
---------
the Administrative Agent, net income taxes and franchise taxes
(imposed in lieu of net income taxes) that are imposed by the
United States or any political subdivision or taxing authority
thereof or therein or by a foreign jurisdiction as a result of a
present or former connection between the Administrative Agent or
such Lender and the jurisdiction imposing such tax or any
political subdivision or taxing authority thereof or therein
(other than any such connection arising solely from the
Administrative Agent or such Lender having executed, enforced,
delivered or performed its obligations or received a payment
under this Agreement) (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be
-----
required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under any Note to any Lender or the
Administrative Agent, (i) the sum payable shall be increased as
may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under
this Section 2.13) such Lender or the Administrative Agent (as
the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any
present or future stamp, documentary, excise, property or similar
taxes, charges or levies that arise from any payment made
hereunder or under the Notes or from the execution, delivery or
registration of, or
<PAGE>
39
otherwise with respect to, this Agreement or the Notes
(hereinafter referred to as "Other Taxes").
-----------
(c) The Borrower shall indemnify each Lender and
the Administrative Agent for the full amount of Taxes and Other
Taxes, and for the full amount of taxes imposed by any
jurisdiction on amounts payable under this Section 2.13, paid by
such Lender or the Administrative Agent (as the case may be) and
any liability (including penalties, additions to tax, interest
and expenses) arising therefrom or with respect thereto. The
Administrative Agent or such Lender shall provide the Borrower
with appropriate receipts for any payments or reimbursements made
to the Borrower pursuant to this Section 2.13. This
indemnification shall be made within 45 days from the date such
Lender or the Administrative Agent (as the case may be) makes
written demand therefor.
(d) Within 45 days after the date of any payment
of Taxes, the Borrower shall furnish to the Administrative Agent,
at its address referred to in Section 8.02, the original receipt
of payment thereof or a certified copy of such receipt. In the
case of any payment hereunder or under the Notes by the Borrower
through an account or branch outside the United States or on
behalf of the Borrower by a payor that is not a United States
person, if the Borrower determines that no Taxes are payable in
respect thereof, the Borrower shall furnish, or shall cause such
payor to furnish, to the Administrative Agent, at such address,
an opinion of counsel acceptable to the Administrative Agent
stating that such payment is exempt from Taxes. For purposes of
this subsection (d) and subsection (e), the terms "United States"
-------------
and "United States person" shall have the meanings specified in
--------------------
Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a
jurisdiction outside the United States shall, on or prior to the
date of its execution and delivery of this Agreement in the case
of each Bank, and on the date of the Assignment and Acceptance
pursuant to which it became a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing
by the Borrower or the Administrative Agent (but only so long
thereafter as such Lender remains lawfully able to do so),
provide the Administrative Agent and the Borrower with Internal
Revenue Service form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service,
certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party that
reduces the rate of withholding tax on payments under this
Agreement or the Notes or certifying that the income receivable
pursuant to this Agreement or the Notes is effectively connected
with the conduct of a trade or business in the United States. If
the form provided by a Lender at the time such Lender first
becomes a party to this Agreement indicates a United States
interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from Taxes unless and
until such Lender provides the appropriate form certifying that a
lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods
governed by such form; provided, however, that, if at the date of
-------- -------
the Assignment and Acceptance pursuant to which a Lender assignee
becomes a party to this Agreement, the Lender assignor was
entitled to payments
<PAGE>
40
under subsection (a) in respect of United States withholding tax
with respect to interest paid at such date, then, to such extent,
the term Taxes shall include (in addition to withholding taxes
that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender assignee on such date. If
any form or document referred to in this subsection (e) requires
the disclosure of information, other than information necessary
to compute the tax payable and information required on the date
hereof by Internal Revenue Service form 1001 or 4224, that the
Lender reasonably considers to be confidential, the Lender shall
give notice thereof to the Borrower and shall not be obligated to
include in such form or document such confidential information.
(f) For any period with respect to which a Lender
has failed to provide the Borrower with the appropriate form
described in subsection (e) (other than if such failure is due to
----- ----
a change in law occurring after the date on which a form
originally was required to be provided or if such form otherwise
is not required under subsection (e)), such Lender shall not be
entitled to indemnification under subsection (a) or (c) with
respect to Taxes imposed by the United States; provided, however,
-------- -------
that should a Lender become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower shall
take such steps as such Lender shall reasonably request to assist
such Lender to recover such Taxes.
(g) Any Lender claiming any additional amounts
payable pursuant to this Section 2.13 shall use reasonable
efforts (consistent with its internal policy and legal and
regulatory restrictions) to change the jurisdiction of its
Eurodollar Lending Office or to take other steps if to do so
would avoid the need for, or reduce the amount of, any such
additional amounts that may thereafter accrue and would not, in
the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.14. Sharing of Payments, Etc. If any
------------------------
Lender shall obtain at any time any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or
otherwise) (a) on account of obligations due and payable to such
Lender hereunder and under the Notes at such time under any
Facility in excess of its ratable share (according to the
proportion of (i) the amount of such obligations due and payable
to such Lender at such time under such Facility to (ii) the
aggregate amount of the obligations due and payable to all
Appropriate Lenders hereunder and under the Notes at such time
under such Facility) of payments on account of the obligations
due and payable to all Appropriate Lenders hereunder and under
the Notes at such time under such Facility obtained by all the
Appropriate Lenders at such time or (b) on account of obligations
owing (but not due and payable) to such Lender hereunder and
under the Notes at such time under any Facility in excess of its
ratable share (according to the proportion of (i) the amount of
such obligations owing to such Lender at such time under such
Facility to (ii) the aggregate amount of the obligations owing
(but not due and payable) to all Appropriate Lenders hereunder
and under the Notes at such time under such Facility) of payments
on account of the obligations owing (but not due and payable) to
all Appropriate Lenders hereunder and under the Notes at such
time under such Facility obtained by all the Appropriate Lenders
at such time, such Lender shall forthwith
<PAGE>
41
purchase from the Appropriate Lenders such participations in the
obligations due and payable or owing to them, as the case may be,
as shall be necessary to cause such purchasing Lender to share
the excess payment ratably with each of them; provided, however,
-------- -------
that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each
other Lender shall be rescinded and such other Lender shall repay
to the purchasing Lender the purchase price to the extent of such
other Lender's ratable share (according to the proportion of
(i) the purchase price paid to such Lender to (ii) the aggregate
purchase price paid to all Appropriate Lenders) of such recovery
together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such other
Lender's required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid
or payable by the purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this
Section 2.14 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of
such participation.
SECTION 2.15. Letters of Credit. (a) The Letter
----------------- ----------
of Credit Facility. The Borrower may request any Issuing Bank,
------------------
on the terms and conditions hereinafter set forth, to issue, and
any such Issuing Bank shall, subject to the terms and conditions
hereinafter set forth, issue letters of credit (the "Letters of
----------
Credit") for the account of the Borrower from time to time on any
------
Business Day during the period from the date of the initial
Borrowing until 30 days before the Termination Date (i) in an
aggregate Available Amount for all Letters of Credit issued by
such Issuing Bank not to exceed at any time such Issuing Bank's
Letter of Credit Commitment or Letter of Credit Facility Sublimit
and (ii) in an Available Amount for each such Letter of Credit
not to exceed the Unused Working Capital Commitments of the
Working Capital Lenders on such Business Day; provided, however,
-------- -------
that no Issuing Bank shall be obligated to issue any trade
letters of credit. No Letter of Credit shall have an expiration
date (including all rights of the Borrower or the beneficiary to
require renewal) later than the earlier of 30 days before the
Termination Date and one year after the date of issuance thereof,
but may by its terms be renewable annually with the consent of
the Issuing Bank. Within the limits of the Letter of Credit
Facility Sublimit, and subject to the limits referred to above,
the Borrower may request the issuance of Letters of Credit under
this Section 2.15(a), repay any Letter of Credit Advances
resulting from drawings thereunder pursuant to Section 2.15(c)
and request the issuance of additional Letters of Credit under
this Section 2.15(a).
(b) Request for Issuance. (i) Each Letter of
--------------------
Credit shall be issued upon notice, given not later than
11:00 A.M. (New York City time) on the fifth Business Day prior
to the date of the proposed issuance of such Letter of Credit, by
the Borrower to any Issuing Bank, which shall give to the
Administrative Agent and each Working Capital Lender prompt
notice thereof by telex, telecopier or cable. Each such notice
of issuance of a Letter of Credit (a "Notice of Issuance") shall
------------------
be by telex, telecopier or cable, confirmed immediately in
writing, specifying therein the requested (A) date of such
issuance (which
<PAGE>
42
shall be a Business Day), (B) Available Amount of such Letter of
Credit, (C) expiration date of such Letter of Credit, (D) name
and address of the beneficiary of such Letter of Credit and
(E) form of such Letter of Credit, and shall be accompanied by
such Issuing Bank's customary application and agreement for
letter of credit (a "Letter of Credit Agreement"). If the
--------------------------
requested form of such Letter of Credit is acceptable to such
Issuing Bank in its reasonable discretion, such Issuing Bank
will, upon fulfillment of the applicable conditions set forth in
Article III, make such Letter of Credit available to the Borrower
at its office referred to in Section 8.02 or as otherwise agreed
with the Borrower in connection with such issuance. In the event
and to the extent that the provisions of any Letter of Credit
Agreement shall conflict with, or be duplicative of, provisions
in this Agreement, the provisions of this Agreement shall govern.
(ii) Each Issuing Bank shall furnish (A) to the
Administrative Agent on the first Business Day of each week a
written report summarizing issuance and expiration dates of
Letters of Credit issued by such Issuing Bank during the previous
week and drawings during such week under all Letters of Credit
issued by such Issuing Bank, (B) to each Working Capital Lender
on the first Business Day of each month a written report
summarizing issuance and expiration dates of Letters of Credit
issued by such Issuing Bank during the preceding month and
drawings during such month under all Letters of Credit issued by
such Issuing Bank and (C) to the Administrative Agent and each
Working Capital Lender on the first Business Day of each calendar
quarter a written report setting forth the average daily
aggregate Available Amount during the preceding calendar quarter
of all Letters of Credit issued by such Issuing Bank.
(c) Drawing and Reimbursement. The payment by
-------------------------
any Issuing Bank of a draft drawn under any Letter of Credit
shall constitute for all purposes of this Agreement the making by
such Issuing Bank of a Letter of Credit Advance, which shall be a
Base Rate Advance, in the amount of such draft. Upon written
demand by any Issuing Bank with an outstanding Letter of Credit
Advance, with a copy of such demand to the Administrative Agent,
each other Working Capital Lender shall purchase from such
Issuing Bank, and such Issuing Bank shall sell and assign to each
such other Working Capital Lender, such other Lender's Ratable
Share of such outstanding Letter of Credit Advance as of the date
of such purchase, by making available for the account of its
Applicable Lending Office to the Administrative Agent for the
account of such Issuing Bank, by deposit to the Administrative
Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such Letter of
Credit Advance to be purchased by such Lender. The Borrower
hereby agrees to each such sale and assignment. Each Working
Capital Lender agrees to purchase its Ratable Share of an
outstanding Letter of Credit Advance on (i) the Business Day on
which demand therefor is made by the Issuing Bank which made such
Advance, provided notice of such demand is given not later than
11:00 A.M. (New York City time) on such Business Day or (ii) the
first Business Day next succeeding such demand if notice of such
demand is given after such time. Upon any such assignment by an
Issuing Bank to any other Working Capital Lender of a portion of
a Letter of Credit Advance, such Issuing Bank represents and
warrants to such other Lender that such
<PAGE>
43
Issuing Bank is the legal and beneficial owner of such interest
being assigned by it, but makes no other representation or
warranty and assumes no responsibility with respect to such
Letter of Credit Advance, the Loan Documents or any Loan Party.
If and to the extent that any Working Capital Lender shall not
have so made the amount of such Working Capital Advance available
to the Administrative Agent, such Working Capital Lender agrees
to pay to the Administrative Agent forthwith on demand such
amount together with interest thereon, for each day from the date
of demand by such Issuing Bank until the date such amount is paid
to the Administrative Agent, at the Federal Funds Rate. If such
Lender shall pay to the Administrative Agent such amount for the
account of such Issuing Bank on any Business Day, such amount so
paid in respect of principal shall constitute a Letter of Credit
Advance made by such Lender on such Business Day for purposes of
this Agreement, and the outstanding principal amount of the
Letter of Credit Advance made by such Issuing Bank shall be
reduced by such amount on such Business Day. No Lender shall be
obligated to purchase its Ratable Share of Letter of Credit
Advances under this Section 2.15(c) to the extent that such
Advances result from any Issuing Bank's willful misconduct or
gross negligence.
(d) Obligations Absolute. The obligations of the
--------------------
Borrower under this Agreement, any Letter of Credit Agreement and
any other agreement or instrument relating to any Letter of
Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such
Letter of Credit Agreement and such other agreement or instrument
under all circumstances, including, without limitation, the
following circumstances:
(i) any lack of validity or enforceability of
this Agreement, any Letter of Credit Agreement, any Letter
of Credit or any other agreement or instrument relating
thereto (this Agreement and all of the other foregoing
being, collectively, the "L/C Related Documents");
---------------------
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
obligations of the Borrower in respect of any L/C Related
Document or any other amendment or waiver of or any consent
to departure from all or any of the L/C Related Documents;
(iii) the existence of any claim, set-off, defense
or other right that the Borrower may have at any time
against any beneficiary or any transferee of a Letter of
Credit (or any Persons for whom any such beneficiary or any
such transferee may be acting), any Issuing Bank or any
other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated
transaction;
(iv) any statement or any other document presented
under a Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
<PAGE>
44
(v) payment by any Issuing Bank under a Letter of
Credit against presentation of a draft or certificate that
does not strictly comply with the terms of such Letter of
Credit;
(vi) any exchange, release or non-perfection of
any Collateral or other collateral, or any release or
amendment or waiver of or consent to departure from any
guarantee, for all or any of the obligations of the Borrower
in respect of the L/C Related Documents; or
(vii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing,
including, without limitation, any other circumstance that
might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
provided that notwithstanding the foregoing, the Borrower shall
--------
not be obligated to reimburse any Issuing Bank for any payment
made by such Issuing Bank under a Letter of Credit as a result of
acts or omissions constituting willful misconduct or gross
negligence.
(e) Compensation. (i) The Borrower shall pay to
------------
the Administrative Agent for the account of each Working Capital
Lender a commission on such Lender's Ratable Share of the average
daily aggregate Available Amount of all Letters of Credit
outstanding from time to time at the Applicable Margin applicable
to Eurodollar Rate Advances payable in arrears quarterly on the
first Business Day of each January, April, July and October,
commencing January 3, 1995, and on the Termination Date.
(ii) The Borrower shall pay to each Issuing Bank,
for its own account, such commissions, issuance fees, transfer
fees and other fees and charges in connection with the issuance
or administration of each Letter of Credit as the Borrower and
such Issuing Bank shall agree.
SECTION 2.16. Use of Proceeds. The proceeds of
---------------
the Advances shall be available to pay transaction fees and
expenses, refinance certain Existing Indebtedness and for general
corporate purposes of the Borrower and its Subsidiaries.
SECTION 2.17. Defaulting Lenders. (a) In the
------------------
event that, at any one time, (i) any Lender shall be a Defaulting
Lender, (ii) such Defaulting Lender shall owe a Defaulted Advance
to the Borrower and (iii) the Borrower shall be required to make
any payment hereunder or under any other Loan Document to or for
the account of such Defaulting Lender, then the Borrower may, so
long as no Default shall occur or be continuing at such time and
to the fullest extent permitted by applicable law, set off and
otherwise apply the obligation of the Borrower to make such
payment to or for the account of such Defaulting Lender against
the obligation of such Defaulting Lender to make such Defaulted
Advance. In the event that the Borrower shall so set off and
otherwise apply the obligation of the Borrower to make any such
payment against the obligation of such Defaulting Lender to
<PAGE>
45
make any such Defaulted Advance on any date, the amount so set
off and otherwise applied by the Borrower shall constitute for
all purposes of this Agreement and the other Loan Documents an
Advance by such Defaulting Lender made on such date. Such
Advance shall bear interest at a rate equal to the Base Rate
(without giving effect to the Applicable Margin) and shall be
considered, for all purposes of this Agreement, to comprise part
of the Borrowing in connection with which such Defaulted Advance
was originally required to have been made pursuant to
Section 2.01, even if the other Advances comprising such
Borrowing shall be Eurodollar Rate Advances on the date such
Advance is deemed to be made pursuant to this subsection (a).
The Borrower shall notify the Administrative Agent at any time
the Borrower reduces the amount of the obligation of the Borrower
to make any payment otherwise required to be made by it hereunder
or under any other Loan Document as a result of the exercise by
the Borrower of its right set forth in this subsection (a) and
shall set forth in such notice (A) the name of the Defaulting
Lender and the Defaulted Advance required to be made by such
Defaulting Lender and (B) the amount set off and otherwise
applied in respect of such Defaulted Advance pursuant to this
subsection (a). Any portion of such payment otherwise required
to be made by the Borrower to or for the account of such
Defaulting Lender which is paid by the Borrower, after giving
effect to the amount set off and otherwise applied by the
Borrower pursuant to this subsection (a), shall be applied by the
Administrative Agent as specified in subsection (b) or (c) of
this Section 2.17.
(b) In the event that, at any one time, (i) any
Lender shall be a Defaulting Lender, (ii) such Defaulting Lender
shall owe a Defaulted Amount to the Administrative Agent or any
of the other Lenders and (iii) the Borrower shall make any
payment hereunder or under any other Loan Document to the
Administrative Agent for the account of such Defaulting Lender,
then the Administrative Agent may, on its behalf or on behalf of
such other Lenders and to the fullest extent permitted by
applicable law, apply at such time the amount so paid by the
Borrower to or for the account of such Defaulting Lender to the
payment of each such Defaulted Amount to the extent required to
pay such Defaulted Amount. In the event that the Administrative
Agent shall so apply any such amount to the payment of any such
Defaulted Amount on any date, the amount so applied by the
Administrative Agent shall constitute for all purposes of this
Agreement and the other Loan Documents payment, to such extent,
of such Defaulted Amount on such date. Any such amount so
applied by the Administrative Agent shall be retained by the
Administrative Agent or distributed by the Administrative Agent
to such other Lenders, ratably in accordance with the respective
portions of such Defaulted Amounts payable at such time to the
Administrative Agent and such other Lenders and, if the amount of
such payment made by the Borrower shall at such time be
insufficient to pay all Defaulted Amounts owing at such time to
the Administrative Agent and the other Lenders, in the following
order of priority:
(i) first, to the Administrative Agent for any
-----
Defaulted Amount then owing to the Administrative Agent; and
<PAGE>
46
(ii) second, to any other Lenders for any
------
Defaulted Amounts then owing to such other Lenders, ratably
in accordance with such respective Defaulted Amounts then
owing to such other Lenders.
Any portion of such amount paid by the Borrower for the account
of such Defaulting Lender remaining, after giving effect to the
amount applied by the Administrative Agent pursuant to this
subsection (b), shall be applied by the Administrative Agent as
specified in subsection (c) of this Section 2.17.
(c) In the event that, at any one time, (i) any
Lender shall be a Defaulting Lender, (ii) such Defaulting Lender
shall not owe a Defaulted Advance or a Defaulted Amount and
(iii) the Borrower, the Administrative Agent or any other Lender
shall be required to pay or distribute any amount hereunder or
under any other Loan Document to or for the account of such
Defaulting Lender, then the Borrower or such other Lender shall
pay such amount to the Administrative Agent to be held by the
Administrative Agent, to the fullest extent permitted by
applicable law, in escrow or the Administrative Agent shall, to
the fullest extent permitted by applicable law, hold in escrow
such amount otherwise held by it. Any funds held by the
Administrative Agent in escrow under this subsection (c) shall be
deposited by the Administrative Agent in an interest-bearing
account with Citibank, in the name and under the control of the
Administrative Agent, but subject to the provisions of this
subsection (c). The terms applicable to such account, including
the rate of interest payable with respect to the credit balance
of such account from time to time, shall be Citibank's standard
terms applicable to escrow accounts maintained with it. Any
interest credited to such account from time to time shall be held
by the Administrative Agent in escrow under, and applied by the
Administrative Agent from time to time in accordance with the
provisions of, this subsection (c). The Administrative Agent
shall, to the fullest extent permitted by applicable law, apply
all funds so held in escrow from time to time to the extent
necessary to make any Advances required to be made by such
Defaulting Lender and to pay any amount payable by such
Defaulting Lender hereunder and under the other Loan Documents to
the Administrative Agent or any other Lender, as and when such
Advances or amounts are required to be made or paid and, if the
amount so held in escrow shall at any time be insufficient to
make and pay all such Advances and amounts required to be made or
paid at such time, in the following order of priority:
(i) first, to the Administrative Agent for any
-----
amount then due and payable by such Defaulting Lender to the
Administrative Agent hereunder;
(ii) second, to any other Lenders for any amount
------
then due and payable by such Defaulting Lender to such other
Lenders hereunder, ratably in accordance with such
respective amounts then due and payable to such other
Lenders; and
(iii) third, to the Borrower for any Advance then
-----
required to be made by such Defaulting Lender pursuant to
the Commitment of such Defaulting Lender.
<PAGE>
47
In the event that such Defaulting Lender shall, at any time,
cease to be a Defaulting Lender, any funds held by the
Administrative Agent in escrow at such time with respect to such
Defaulting Lender shall be distributed by the Administrative
Agent to such Defaulting Lender and applied by such Defaulting
Lender to the obligations owing to such Lender at such time under
this Agreement and the other Loan Documents ratably in accordance
with the respective amounts of such obligations outstanding at
such time.
(d) The rights and remedies against a Defaulting
Lender under this Section 2.17 are in addition to other rights
and remedies which the Borrower may have against such Defaulting
Lender with respect to any Defaulted Advance and which the
Administrative Agent or any Lender may have against such
Defaulting Lender with respect to any Defaulted Amount.
SECTION 2.18. Option to Replace Lenders. If any
-------------------------
Lender shall request the Borrower to pay any amounts, or shall
assert any other special rights, under Section 2.11 or 2.13 or if
a Lender is a Defaulting Lender, the Borrower may request one or
more other Lenders or other financial institutions, each of which
is an Eligible Assignee (each a "Replacement Lender") to take
------------------
over all or the affected portion of such Lender's then
outstanding Advances and to assume all or the affected portion of
such Lender's Commitments and obligations hereunder. If one or
more Replacement Lenders shall so agree, the Advances and
Commitments of the Lender to be replaced shall, at the direction
of the Borrower, be assigned to such Replacement Lenders in
accordance with Section 8.07, in such amounts as the Borrower may
designate.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. Conditions Precedent to
-----------------------
Effectiveness. This Agreement shall become effective on the date
-------------
(the "Effective Date") that the Administrative Agent shall have
--------------
received counterparts of this Agreement executed by each party
hereto which effectiveness shall occur after the following
conditions precedent have been satisfied or waived:
(a) There shall have occurred no change to the
terms of the Merger Agreement, except as disclosed by the
Borrower to the Lenders in writing prior to the date hereof,
which the Lead Managing Agents determine to be materially
adverse to the interests of the Lenders.
(b) There shall have occurred no Material Adverse
Change since September 30, 1994, except as disclosed by the
Borrower to the Lenders in writing prior to the date hereof.
<PAGE>
48
(c) Except as disclosed in the Borrower's Annual
Report on Form 10-K for the fiscal year ended December 31,
1993, there shall exist no action, suit, investigation,
litigation or proceeding pending or threatened before any
court, governmental instrumentality or arbitrator that would
be likely to have a Material Adverse Effect.
(d) The Administrative Agent shall have received
on or before the Effective Date, the following, each dated
such day (unless otherwise specified), in form and substance
satisfactory to the Administrative Agent (unless otherwise
specified) and in sufficient copies for each Lender:
(i) The Working Capital Notes and Term Notes to
the order of the Lenders.
(ii) The Competitive Bid Note to the order of the
Administrative Agent.
(iii) Certified copies of the resolutions of
the Board of Directors of each Credit Party
approving each Loan Document to which it is or is
to be a party, and of all documents evidencing
other necessary corporate action and governmental
approvals, if any, with respect to each Loan
Document to which it is a party.
(iv) A copy of each amendment to the charter of
the Borrower dated on or after August 16, 1994,
certified (as of a date reasonably near the
Effective Date) by the Secretary of State of the
State of New Jersey as being a true and correct
copy thereof and a copy of each amendment to the
charter of each Credit Party (other than the
Borrower) certified (as of a date reasonably near
the date of the initial Borrowing) by the Secretary
of State of the State of Delaware as being a true
and correct copy thereof.
(v) A copy of a certificate of the Secretary of
State of the State of New Jersey or Delaware, as
the case may be, dated reasonably near the
Effective Date, listing the charter of each Credit
Party and each amendment thereto on file in his
office and certifying that (A) such amendments are
the only amendments to such Credit Party's charter
on file in his office and (B) such Credit Party is
duly incorporated and in good standing under the
laws of the State of New Jersey or Delaware, as the
case may be.
(vi) A certificate of each Credit Party, signed on
behalf of such Credit Party by its President or a
Vice President and its Secretary or any Assistant
Secretary, dated the Effective Date (the statements
made in which certificate shall be true on and as
of the Effective Date), certifying
<PAGE>
49
as to (A) the absence of any amendments to the
charter of such Credit Party since the date of the
Secretary of State's certificate referred to in
Section 3.01(d)(v), (B) a true and correct copy of
the bylaws of such Credit Party, as in effect on
the Effective Date and (C) the due incorporation
and good standing of such Credit Party as a
corporation organized under the laws of the State
of New Jersey or Delaware, as the case may be, and
the absence of any proceeding for the dissolution
or liquidation of such Credit Party.
(vii) A certificate of each Credit Party,
signed on behalf of such Credit Party by its
President or a Vice President, dated the Effective
Date (the statements made in which certificate
shall be true on and as of the Effective Date),
certifying as to (A) the accuracy in all material
respects of the representations and warranties
contained in this Agreement and each Loan Document
to which it is a party as though made on and as of
the Effective Date, (B) the absence of any event
occurring and continuing, that constitutes a
Default and (C) the payment of all franchise taxes
owed by such Credit Party to the State of New
Jersey or Delaware, as the case may be, as of the
date of such certificate.
(viii) A certificate of the Secretary or an
Assistant Secretary of each Credit Party certifying
the names and true signatures of the officers of
such Credit Party authorized to sign each Loan
Document to which it is or is to be a party and the
other documents to be delivered hereunder and
thereunder.
(ix) A pledge and security agreement in
substantially the form of Exhibit E hereto (as
amended from time to time, the "Pledge Agreement"),
----------------
duly executed by the Pledgor and Subsidiary
Pledgors (as defined therein) together with
certificates representing the Pledged Shares (as
defined in the Pledge Agreement) referred to
therein accompanied by undated stock powers
executed in blank.
(x) Certified copies of each of the Related
Documents, duly executed by the parties thereto and
in form and substance satisfactory to the Lenders,
together with a certificate by an officer of the
Borrower certifying that all such agreements are
fully executed, are in full force and effect and
have not been terminated.
(xi) A favorable opinion of Simpson Thacher &
Bartlett, special New York counsel to the Credit
Parties, and a favorable opinion of Allan L.
Miller, Senior Vice President, Chief Administrative
Officer and General Counsel of the Credit Parties,
in substantially the forms of Exhibits D-1 and D-2
hereto, respectively.
<PAGE>
50
(xii) A favorable opinion of Shearman &
Sterling, counsel for the Lead Managing Agents and
the Administrative Agent, in form and substance
satisfactory to the Lead Managing Agents and the
Administrative Agent.
SECTION 3.02. Conditions Precedent to Initial
-------------------------------
Borrowing. The obligation of each Lender to make an Advance on
---------
the occasion of the initial Borrowing is subject to the following
conditions precedent:
(a) The initial Borrowing shall occur on or
before February 15, 1995.
(b) The Borrower shall have paid all accrued fees
and expenses of the Administrative Agent, the Lead Managing
Agents and the Arrangers unless otherwise agreed to by the
Administrative Agent.
(c) (i) All outstanding amounts under the
Existing Credit Agreement shall have been repaid in full or
will be repaid in full concurrently with the initial
Borrowing, the commitments under such Existing Credit
Agreement shall be terminated, (ii) the conditions precedent
to the "Assignment Date" (as defined in the TM Credit
Agreement) under the TM Credit Agreement shall have been
satisfied or waived and (iii) the conditions precedent to
the "Effective Date" (as defined in each of the applicable
amendments dated as of the date hereof to the Receivables
Financing Agreements) under the applicable amendments dated
as of the date hereof to the Receivables Financing
Agreements shall have been satisfied or waived.
(d) Whitehall Associates, L.P. shall have made
its investment in the Borrower in an amount of no less than
$300,000,000 in RN Stock; such amount of RN Stock shall be
calculated based on the determination of the average of the
average of the high and low sales prices of RN Stock as
reported on the New York Stock Exchange Composite Tape on
each of the ten consecutive trading days immediately
preceding the second trading day prior to a date specified
in a notice from the Borrower to the Administrative Agent
which date shall be during the period commencing on the date
hereof and ending ten days thereafter.
(e) Whitehall Associates, L.P. shall have
delivered an unconditional commitment to contribute
additional RN Stock which, together with the RN Stock
referred to in clause (d) above, will aggregate at least
$400,000,000 by the earlier of (i) one business day
following the consummation of the merger contemplated by the
Merger Agreement or (ii) one hundred twenty (120) days after
the date of the initial Borrowing; such amount of additional
RN Stock shall be calculated based on the determination of
the average of the average of the high and low sales prices
of RN Stock as reported on the New York Stock Exchange
Composite Tape on each of the
<PAGE>
51
ten consecutive trading days immediately preceding the
second trading day prior to the date of such contribution.
(f) A letter dated the date of the initial
Borrowing from each of Simpson Thacher & Bartlett and Allan
L. Miller confirming the opinion of such counsel delivered
pursuant to Section 3.01(d)(xi) hereof.
(g) A letter dated the date of the initial
Borrowing from Shearman & Sterling confirming its opinion
delivered pursuant to Section 3.01(d)(xii) hereof.
SECTION 3.03. Conditions Precedent to Certain
-------------------------------
Borrowings and Issuances. The obligation of each Appropriate
------------------------
Lender to make an Advance (other than a Letter of Credit Advance)
on the occasion of each Borrowing, and the obligation of the
Issuing Banks to issue Letters of Credit, that would in either
case cause the aggregate amount of Advances outstanding and the
Available Amount of Letters of Credit outstanding or to be
outstanding at the close of business on such date to exceed the
aggregate amount of all Advances outstanding (including any
Advances to be paid on the date of such Borrowing) and the
Available Amount of Letters of Credit outstanding immediately
prior to the making of such Advance or such issuance shall be
subject to the further conditions precedent that on the date of
such Borrowing or issuance the following statements shall be true
(and each of the giving of the Notice of Borrowing and the
acceptance by the Borrower of the proceeds of such Borrowing or
such Letter of Credit shall constitute a representation and
warranty by the Borrower that on the date of such Borrowing or
issuance such statements are true):
(a) the representations and warranties contained
in each Loan Document (other than representations and
warranties in respect of the pledge of the stock of the
Borrower's Subsidiaries organized outside the United States)
are correct in all material respects on and as of the date
of such Borrowing or issuance, before and after giving
effect to such Borrowing or issuance and to the application
of the proceeds therefrom, as though made on and as of such
date (other than any such representations or warranties
that, by their terms, are made as of a date other than the
date of such Borrowing or issuance); and
(b) no event has occurred and is continuing, or
would result from such Borrowing or issuance or from the
application of the proceeds therefrom, that constitutes a
Default.
SECTION 3.04. Conditions Precedent to Each
----------------------------
Competitive Bid Borrowing. The obligation of each Working
-------------------------
Capital Lender that is to make a Competitive Bid Advance on the
occasion of a Competitive Bid Borrowing to make such Competitive
Bid Advance as part of such Competitive Bid Borrowing is subject
to the conditions precedent that (a) the Administrative Agent
shall have received the written confirmatory Notice of
Competitive Bid Borrowing with respect thereto and (b) on or
before the date of such Competitive Bid Borrowing, but prior to
such Competitive Bid Borrowing, the Administrative
<PAGE>
52
Agent shall have received for recordation in the Competitive Bid
Register information as to each of the one or more Competitive
Bid Advances to be made by the Working Capital Lenders as part of
such Competitive Bid Borrowing, the principal amount of each such
Competitive Bid Advance and such other terms as were agreed to
for each such Competitive Bid Advance in accordance with Section
2.03.
SECTION 3.05. Determinations Under Sections 3.01
----------------------------------
and 3.02. For purposes of determining compliance with the
--------
conditions specified in Sections 3.01 and 3.02, each Lender shall
be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder
to be consented to or approved by or acceptable or satisfactory
to the Lenders unless an officer of the Administrative Agent
responsible for the transactions contemplated hereby shall have
received notice from such Lender prior to the initial Borrowing
specifying its objection thereto and such Lender shall not have
made available to the Administrative Agent such Lender's ratable
portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of
---------------------------------
the Borrower. The Borrower represents and warrants as follows:
------------
(a) The Borrower (i) is a corporation duly
organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, (ii) is duly
qualified and in good standing as a foreign corporation in
each other jurisdiction in which it owns or leases property
or in which the conduct of its business requires it to so
qualify or be licensed except where the failure to so
qualify or be licensed would not be likely to have a
Material Adverse Effect and (iii) has all requisite
corporate power and authority to own or lease and operate
its properties and to carry on its business as now conducted
and as proposed to be conducted.
(b) Set forth on Schedule 4.01(b) hereto is a
complete and accurate list of all Material Subsidiaries of
the Borrower as of the date of this Agreement, showing as of
the date of this Agreement (as to each such Subsidiary) the
jurisdiction of its incorporation and percentage of the
outstanding shares of each such class owned (directly or
indirectly) by the Borrower. Each such Material Subsidiary
(i) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization,
except where the failure thereof would not be likely to have
a Material Adverse Effect, (ii) is duly qualified and in
good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which
the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be
licensed would not be likely to have a Material Adverse
<PAGE>
53
Effect and (iii) has all requisite corporate power and
authority to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be
conducted except where the failure to have such power would
not be likely to have a Material Adverse Effect.
(c) The execution, delivery and performance by
each Credit Party of this Agreement, the Notes, each other
Loan Document and each Related Document to which it is or is
to be a party, and the consummation of the transactions
contemplated hereby or thereby are within such Credit
Party's corporate powers, have been duly authorized by all
necessary corporate action, and do not (i) contravene such
Credit Party's charter or by-laws, (ii) violate any law,
rule, regulation, order, writ, judgment, injunction, decree,
determination or award, the consequences of which would be
likely to have a Material Adverse Effect, (iii) conflict
with or result in the breach of, or constitute a default
under, any loan agreement, indenture, mortgage, deed of
trust, lease or other instrument in each case involving Debt
obligations of the Borrower of $1,000,000 or more or
(iv) result in or require the creation or imposition of any
Lien upon or with respect to any of the properties of the
Borrower and its Subsidiaries, other than Liens permitted by
Section 5.02 or Liens arising under the Loan Documents.
None of the Borrower or its Subsidiaries is in violation of
any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of
any such contract, loan agreement, indenture, mortgage, deed
of trust, lease or other instrument, the violation or breach
of which would be likely to have a Material Adverse Effect.
(d) All necessary material governmental and third
party approvals required for (i) the due execution,
delivery, recordation, filing or performance by each Credit
Party of this Agreement, the Notes, any other Loan Document
or any Related Document to which it is a party, (ii) the
grant by any Credit Party of the Liens granted by it
pursuant to the Pledge Agreement, (iii) the perfection or
maintenance of the Liens created by the Pledge Agreement
(including the first priority nature thereof) or (iv) to the
extent obtainable on or prior to the date hereof, the
exercise by the Administrative Agent or any Lender of its
rights under the Loan Documents or the remedies in respect
of the Collateral pursuant to the Pledge Agreement, have
been duly obtained, taken, given or made and are in full
force and effect, except for parties to the Related
Documents.
(e) This Agreement has been, and each of the
Notes, each other Loan Document and each Related Document to
which each Credit Party is a party when delivered hereunder
will have been, duly executed and delivered by such Credit
Party. This Agreement is, and each of the Notes, each other
Loan Document and each Related Document to which the
Borrower is a party when delivered hereunder will be, the
legal, valid and binding obligation of the Credit Parties
party thereto, enforceable against each such Credit Party in
accordance with its terms except as enforceability
<PAGE>
54
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or limiting creditors'
rights or by equitable principles generally.
(f) The Consolidated balance sheet of the
Borrower and its Subsidiaries as at December 31, 1993, and
the related Consolidated statement of income and cash flows
of the Borrower and its Subsidiaries for the fiscal year
then ended, accompanied by an opinion of Price Waterhouse,
independent public accountants, and the Consolidated balance
sheet of the Borrower and its Subsidiaries as at
September 30, 1994, and the related Consolidated statement
of income and cash flows of the Borrower and its
Subsidiaries for the nine months then ended, duly certified
by the chief financial officer of the Borrower, copies of
which have been furnished to each Lender, fairly present,
subject, in the case of said balance sheet as at
September 30, 1994, and said statements of income and cash
flows for the nine months then ended, to year-end audit
adjustments, the Consolidated financial condition of the
Borrower and its Subsidiaries as at such date and the
Consolidated results of the operations of the Borrower and
its Subsidiaries for the periods ended on such dates, all in
accordance with generally accepted accounting principles
applied on a consistent basis. Since September 30, 1994,
there has been no Material Adverse Change other than as
disclosed to the Lenders in writing prior to December 6,
1994.
(g) Neither the Information Memorandum nor any
assertion of fact of any Credit Party contained in any other
written information, exhibit or report furnished by such
Credit Party to the Administrative Agent or any Lender in
connection with the negotiation of the Loan Documents or
pursuant to the terms of the Loan Documents contained, as of
its date, any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements
made in the Information Memorandum and such other
information, exhibits and reports (taken as a whole) not
misleading.
(h) There is no action, suit, investigation,
litigation or proceeding affecting the Borrower or any of
its Subsidiaries pending or, to the best of its knowledge,
threatened before any court, governmental agency or
arbitrator that (i) except as disclosed in the Borrower's
Annual Report on Form 10-Q for the fiscal year ended
December 31, 1993, would be likely to have a Material
Adverse Effect or (ii) would be likely to materially
adversely affect the legality, validity or enforceability of
this Agreement and the other Loan Documents (taken as a
whole) or the consummation of the transactions contemplated
hereby.
(i) No proceeds of any Advance will be used to
acquire any equity security of a class that is registered
pursuant to Section 12 of the Securities Exchange Act
of 1934.
<PAGE>
55
(j) Neither the making of any Advance hereunder,
nor the use of the proceeds thereof, will violate the
provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
(k) Each Plan is in substantial compliance with
ERISA and the Internal Revenue Code; no Reportable Event has
occurred with respect to a Plan; no Plan is insolvent or in
reorganization; no Plan has an accumulated or waived funding
deficiency, has permitted decreases in its funding standard
account or has applied for an extension of any amortization
period within the meaning of Section 412 of the Internal
Revenue Code; neither the Borrower nor any or its
Subsidiaries nor any ERISA Affiliate has incurred or
reasonably expects to incur any liability to or on account
of a Plan pursuant to ERISA or the Internal Revenue Code; no
proceedings have been instituted by the PBGC to terminate
any Plan; no condition exists which presents a material risk
to the Borrower, any of its Subsidiaries or any ERISA
Affiliate of incurring a liability to or on account of a
Plan pursuant to ERISA or the Internal Revenue Code; no lien
imposed under the Internal Revenue Code or ERISA on the
assets of the Borrower, any of its Subsidiaries or any ERISA
Affiliate exists or is likely to arise on account of any
Plan; where, with respect to any of the foregoing
representations in this Section 4.01(k), the liability for
or the lien which would arise as a result of, the particular
circumstance or event which is the subject of the
representation, would be likely to result in a Material
Adverse Effect. All representations and warranties made
with respect to any Plan which is a Multiemployer Plan shall
be made to the best knowledge of the Borrower.
(l) The Borrower and each of its Subsidiaries are
in material compliance with all material laws and
regulations relating to pollution and environmental control
or employee safety in all domestic jurisdictions in which
the Borrower and its Subsidiaries is presently doing
business, other than those the non-compliance with which
would not be likely to have a Material Adverse Effect.
(m) The Borrower and each of its Subsidiaries has
filed, has caused to be filed or has been included in all
tax returns (Federal, state, local and foreign) required to
be filed and has paid all taxes shown thereon to be due,
together with applicable interest and penalties, except
where the failure to so file or pay would not be likely to
have a Material Adverse Effect or as disclosed on the
Borrower's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993..
(n) Neither the Borrower nor any of its
Subsidiaries is an "investment company," or a company
"controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended.
(o) The Receivables Financing Agreements are in
full force and effect and Borden Receivables Corp. has
maintained the availability of the "Purchase Limit" and the
"Total Commitments" to the fullest extent reasonably
expected to be
<PAGE>
56
accessible by Borden Receivables Corp. based upon the
"Outstanding Balance" of "Eligible Receivables" in the
"Receivables Pool" (as such terms are defined in the
Receivables Financing Agreements).
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as
---------------------
any Advance shall remain unpaid, any Letter of Credit shall be
outstanding or any Lender shall have any Commitment hereunder,
the Borrower will, unless the Required Lenders shall otherwise
consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause
-------------------------
each of its Subsidiaries to comply with all applicable laws,
rules, regulations and orders, except to the extent the
failure to do so would be likely to have a Material Adverse
Effect.
(b) Payment of Taxes, Etc. Pay and discharge,
---------------------
and cause each of its Subsidiaries to pay and discharge,
before the same shall become delinquent, (i) all taxes,
assessments and governmental charges or levies imposed upon
it or upon its property and (ii) all lawful claims in excess
of $15,000,000 individually or $30,000,000 in the aggregate
that, if unpaid, would by law become a Lien (other than a
Permitted Lien) upon its property; provided, however, that
-------- -------
neither the Borrower nor any of its Subsidiaries shall be
required to pay or discharge any such tax, assessment,
charge or claim that is being contested in good faith and by
appropriate proceedings for which appropriate reserves have
been established in accordance with GAAP.
(c) Compliance with Environmental Laws. Comply,
----------------------------------
and cause each of its Subsidiaries to comply, with all
material laws and regulations relating to pollution and
environmental control or employee safety which may be
imposed in the future in jurisdictions in which the Borrower
or any of its Subsidiaries may then be doing business, other
than those the non-compliance with which would not be likely
to have a Material Adverse Effect; and if required to do so
under any applicable Environmental Law, undertake, and cause
each of its Subsidiaries to undertake, any cleanup, removal,
remedial or other action necessary to remove and clean up
any Hazardous Materials from any Real Property in accordance
with the requirements of all such applicable Environmental
Laws and in accordance with orders and directives of all
governmental authorities; provided that neither the Borrower
--------
nor any of its Subsidiaries shall be required to take any
such action where the failure to do so would not have a
Material Adverse Effect.
(d) Maintenance of Insurance. Maintain, and
------------------------
cause each of its Material Subsidiaries to maintain,
insurance with reputable insurance companies or
<PAGE>
57
associations in such amounts, with such retention and
deductibles, and covering such risks as are in accordance
with normal industry practice.
(e) Preservation of Corporate Existence, Etc.
----------------------------------------
Preserve and maintain, and cause each of its Material
Subsidiaries to preserve and maintain, its corporate
existence, rights (charter and statutory) and franchises
except to the extent that the failure to do so would be
likely to have a Material Adverse Effect; provided, however,
-------- -------
that the Borrower and its Subsidiaries may consummate any
transaction permitted under Section 5.02(c); and provided
--------
further that neither the Borrower nor any of its
-------
Subsidiaries shall be required to preserve any right or
franchise if the Board of Directors of the Borrower or such
Subsidiary shall determine that the preservation thereof is
no longer desirable in the conduct of the business of the
Borrower or such Subsidiary, as the case may be, and that
the loss thereof is not disadvantageous in any material
respect to the Borrower, such Subsidiary or the Lenders.
(f) Visitation Rights. At any reasonable time
-----------------
and upon prior notice, permit the Administrative Agent or
any of the Lenders or any agents or representatives thereof,
to examine and make copies of and abstracts from the records
and books of account of, and visit the properties of, the
Borrower and any of its Subsidiaries, and to discuss the
affairs, finances and accounts of the Borrower and any of
its Subsidiaries with any of their officers or, if
reasonably requested by the Administrative Agent or any
Lender through the officers of the Borrower or such
Subsidiary and with their independent certified public
accountants.
(g) Maintenance of Properties, Etc. Maintain and
------------------------------
preserve, and cause each of its Subsidiaries to maintain and
preserve, all of its properties that are used or useful in
the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and do, or cause
to be done, all things necessary to preserve and keep in
full force and effect its material licenses, permits,
copyrights, patents, trademarks, service marks, tradenames
and rights with respect thereto, except in each case to the
extent that the failure to do so would be likely to have a
Material Adverse Effect.
(h) Transactions with Affiliates. Conduct, and
----------------------------
cause each of its Subsidiaries to conduct, all transactions
with any of their Affiliates on terms that are substantially
as favorable to the Borrower or such Subsidiary than it
would obtain in a comparable arm's-length transaction with a
Person not an Affiliate; provided that the foregoing
--------
restrictions shall not apply to (i) customary annual fees
paid to Kohlberg Kravis Roberts & Co. ("KKR") and its
---
Affiliates for management, consulting and financial services
rendered to the Borrower and its Subsidiaries, and customary
investment banking fees paid to KKR and its Affiliates for
services rendered to the Borrower and its Subsidiaries in
connection with divestitures, acquisitions, financings and
certain other transactions; and (ii) customary fees paid to
members of the Board of Directors of the Borrower and its
Subsidiaries.
<PAGE>
58
(i) Maximize Receivables Financings. Sell
-------------------------------
"Receivables" (as such term is defined in the Receivables
Financing Agreements) (other than any such "Receivables" to
be sold to a Person that is not an Affiliate under a
transaction permitted by Section 5.02(d)) to enable Borden
Receivables Corp. to sell and cause Borden Receivables Corp.
to sell, "Receivable Interests" (as such term is defined in
the Receivables Financing Agreements) under the Receivables
Financing Agreements to the maximum extent permitted
thereunder prior to requesting any Advances pursuant to
Article II hereof, provided that the Borrower need not comply
--------
with this Section 5.01(i): (i) to the extent that the sale
of "Receivable Interests" required hereby would result in an
increase of the aggregate outstanding "Capital" (as such term
is defined in the Receivables Financing Agreements) of less
than $10,000,000 or (ii) if the Borrower has an Investment
Grade Rating.
(j) Deliver Additional Collateral. (i) Within 60
-----------------------------
days of the initial Borrowing, pledge approximately 65% of
the capital stock of each of the Borrower's Subsidiaries
marked with an asterisk on Schedule 4.01(b) to the Lenders
on terms reasonably satisfactory to the Administrative
Agent, (ii) within six months of the initial Borrowing,
pledge approximately 65% of the capital stock of each of the
Borrower's Subsidiaries marked with a double asterisk on
Schedule 4.01(b) to the Lenders on terms reasonably
satisfactory to the Administrative Agent, (iii) as soon as
practical, but in any event within 30 days after receipt of
any Asset Proceeds other than cash, deliver to the
Administrative Agent instruments endorsed in blank,
securities together with blank stock powers and duly
executed mortgages, pledges, assignments and other security
agreements, as requested by and in form and substance
reasonably satisfactory to the Administrative Agent,
securing payment of the obligations of the Credit Parties
under the Loan Documents and constituting Liens on all such
non-cash proceeds, (iv) as soon as practicable, but in any
event within 10 days after the receipt thereof, pledge
pursuant to the Pledge Agreement the first $100,000,000 in
value of Incremental RN Stock, if any, contributed to the
Borrower and (v) within 30 days of such request, deliver to
the Administrative Agent a signed copy of a favorable
opinion, addressed to the Administrative Agent, of counsel
to the Borrower reasonably acceptable to the Administrative
Agent as to the matters contained in clauses (i), (ii) or
(iii) above, as to such security agreements being legal,
valid and binding obligations of the Borrower enforceable in
accordance with their terms, subject, however to customary
qualifications and limitations, and as to such other matters
as the Administrative Agent may reasonably request.
SECTION 5.02. Negative Covenants. So long as any
------------------
Advance shall remain unpaid, any Letter of Credit shall be
outstanding or any Lender shall have any Commitment hereunder,
the Borrower will not, at any time, without the written consent
of the Required Lenders:
<PAGE>
59
(a) Liens, Etc. Create, incur, assume or suffer
----------
to exist, or permit any of its Subsidiaries to create,
incur, assume or suffer to exist, any Lien on or with
respect to any of its properties of any character whether
now owned or hereafter acquired other than:
(i) Permitted Liens;
(ii) Liens securing Indebtedness permitted by
Sections 5.02(viii), (ix) and (xi);
(iii) Liens, if any, arising under, financing
statements filed in connection with, and
assignments of accounts pursuant to the Receivables
Financing Documents;
(iv) other Liens securing Indebtedness outstanding
in an aggregate principal amount not to exceed
$50,000,000 at any time; and
(v) the replacement, extension or renewal of any
Lien permitted by clauses (i) through (iv) above
upon or in the same property theretofore subject
thereto or the replacement, extension or renewal
(without increase in the amount or change in any
direct or contingent obligor) of the Indebtedness
secured thereby.
(b) Indebtedness. Create, incur, assume or
------------
suffer to exist, or permit any of its Subsidiaries to
create, incur, assume or suffer to exist, any Indebtedness
other than:
(i) Indebtedness arising under the Loan
Documents;
(ii) Indebtedness with no principal or sinking
fund payment due prior to June 30, 2000, the Debt
Proceeds of which are applied as provided in
Section 2.06(b), with covenants (taken as a whole)
customary in United States unsecured public debt
financings or private placements (other than bank
financings) for comparably rated issuers and in any
event no more onerous than those contained in this
Agreement (taken as a whole);
(iii) unsecured Indebtedness incurred in the
ordinary course of business for borrowed money,
maturing within one year from the date incurred,
evidenced by commercial paper or comparable
instruments customary for evidencing similar
obligations in jurisdictions other than the United
States in an aggregate principal amount not
exceeding the Unused Working Capital Commitments of
the Working Capital Lenders;
<PAGE>
60
(iv) Indebtedness in respect of acceptance, trade
letter of credit, warehouse receipt or similar
facilities and non-trade letters of credit issued
outside the United States not supporting Debt
entered into in the ordinary course of business;
(v) Indebtedness, if any, arising under the
Receivables Financing Documents;
(vi) Guaranties in respect of Indebtedness
otherwise permitted hereunder;
(vii) Guaranties in the ordinary course of
business in respect of obligations of suppliers,
customers, franchisees and licensees of the
Borrower and its Subsidiaries;
(viii) Indebtedness of the Borrower's
Subsidiaries organized outside the United States in
an aggregate principal amount not exceeding at any
time the excess of $250,000,000 over the proceeds
of sales of accounts receivable by such
Subsidiaries;
(ix) Indebtedness arising under Capitalized Leases
(a) incurred in respect of capital expenditures
permitted by Section 5.04(c) and (b) in an
aggregate principal amount not exceeding
$50,000,000 at any time;
(x) Indebtedness in respect of Hedge Agreements
in an aggregate notional amount not to exceed
$2,500,000,000 at any time outstanding;
(xi) Indebtedness of the Borrower or any of its
Subsidiaries owed to the Borrower or any of its
Subsidiaries;
(xii) additional Indebtedness not contemplated
by clauses (i)-(xi) above in an aggregate principal
amount not exceeding $50,000,000 at any time;
(xiii) any renewal, extension or refinancing of
the foregoing Indebtedness in an amount not
exceeding the amount outstanding at the time of
such renewal, extension or refinancing and, in the
case of any renewal, extension or refinancing of
the Indebtedness specified in clauses (ii)
and (iii) above, otherwise in compliance with the
limitations set forth in clauses (ii) and (iii),
respectively; and
(xiv) the Existing Indebtedness, and any
Indebtedness extending the maturity of, or
refunding or refinancing, in whole or in part, any
Existing Indebtedness, provided that the terms of
--------
any such extending, refunding or
<PAGE>
61
refinancing Indebtedness, and of any agreement
entered into and of any instrument issued in
connection therewith, are otherwise permitted by
the Loan Documents and certain covenants that are
no more onerous than the stricter of those
covenants of this Agreement (taken as a whole) or
those covenants applicable to such Existing
Indebtedness on the date hereof and further
provided that the principal amount of such Existing
Indebtedness shall not be increased above the
principal amount thereof outstanding immediately
prior to such extension, refunding or refinancing
(including additional Indebtedness to the extent
necessary to finance the payment of premiums, make-
wholes or similar payments incurred in connection
with such extension, refunding or refinancing), and
the direct and contingent obligors therefor shall
not be changed, as a result of or in connection
with such extension, refunding or refinancing.
(c) Mergers, Etc. Merge into or consolidate with
------------
any Person or permit any Person to merge into it, or permit
any of its Subsidiaries to do so, except that (i) any
Subsidiary (other than Subsidiaries the capital stock of
which is pledged to the Lenders pursuant to the Pledge
Agreement) of the Borrower may merge into or consolidate
with, or transfer all or a portion of its assets to, any
other Subsidiary of the Borrower, provided that, in the case
--------
of any such consolidation, the Person formed by such
consolidation shall be a Subsidiary of the Borrower,
(ii) any Subsidiary the capital stock of which is pledged to
the Lenders pursuant to the Pledge Agreement may merge into
or consolidate with, or transfer all or a portion of its
assets to, (A) any other Subsidiary of the Borrower,
provided that the stock of the surviving corporation shall
--------
be pledged to the Lenders pursuant to the Pledge Agreement,
or (B) the Borrower, provided that such assets are made
--------
subject to a first priority Lien in favor of the Lenders
pursuant to an agreement in form and substance reasonably
satisfactory to the Administrative Agent, provided, further,
-------- -------
that any such Lien shall be released upon the transfer of
such assets to a Subsidiary the stock of which is pledged to
the Lenders pursuant to the Pledge Agreement, (iii) any of
the Borrower's Subsidiaries (other than Subsidiaries the
capital stock of which is pledged to the Lenders pursuant to
the Pledge Agreement) may merge into the Borrower if the
Borrower is the surviving corporation, (iv) the Borrower may
merge into a wholly-owned Subsidiary of the Borrower that
(A) is incorporated under the laws of any of the States of
Delaware, New York or Ohio and (B) has no material assets or
liabilities, for the sole purpose of changing the state of
incorporation of the Borrower if the surviving corporation
shall expressly assume the liabilities of the Borrower under
the Loan Documents and (v) Borden Acquisition Corp. may
merge into the Borrower pursuant to the Merger Agreement;
provided, however, that in each case, immediately after
-------- -------
giving effect thereto, no event shall occur and be
continuing that constitutes a Default.
(d) Sales, Etc. of Assets. Sell, lease, transfer
---------------------
or otherwise dispose of, or permit any of its Subsidiaries
to sell, lease, transfer or otherwise dispose of, any assets
(other than Excluded Asset Sales) except (i) in a
transaction authorized by
<PAGE>
62
subsection (c) or (e)(i) of this Section, (ii) sales of
accounts receivable by its Subsidiaries organized outside
the United States, (iii) Designated Asset Sales, so long as
such dispositions are for fair value, (iv) sales of other
assets for fair value in an aggregate amount not to exceed
(x) $550,000,000 during the term of this Agreement and
(y) an additional amount not to exceed $100,000,000 in any
calendar year; provided, that consideration for asset sales
--------
permitted by this subsection (d) (other than the disposition
of the dairy business) other than cash shall not exceed
$200,000,000 at any time; provided, further that any sale of
-------- -------
assets permitted pursuant to clause (iii)(y) above but not
made in a prior year (commencing with the year 1995) may be
carried forward and added to the amount permitted by clause
(y) above in subsequent years.
(e) Investments in Other Persons. Make or hold,
----------------------------
or permit any of its Subsidiaries to make or hold, any
Investment in any Person other than:
(i) Investments by the Borrower and its
Subsidiaries in Subsidiaries of the Borrower;
(ii) Investments by the Borrower and its
Subsidiaries in Affiliates of the Borrower in an
aggregate principal amount not to exceed at any
time outstanding the sum of (A) $90,000,000 and
(B) retained earnings of such Affiliates that are
allocable to the Borrower or such Subsidiary;
(iii) loans and advances to customers and
suppliers in the ordinary course of the business of
the Borrower and its Subsidiaries in an aggregate
principal amount not to exceed $50,000,000 at any
time outstanding;
(iv) Investments by the Borrower and its
Subsidiaries in Cash Equivalents;
(v) Investments received in connection with the
bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent
obligations of, and other disputes with, customers
arising in the ordinary course of business;
(vi) Investments consisting of long-term
receivables arising in the ordinary course of
business;
(vii) loans and advances to officers,
directors and employees (A) to finance the purchase
of capital stock of the Borrower or any of its
Subsidiaries, (B) for travel, entertainment, moving
and other relocation expenses and (C) for
additional purposes not contemplated by clauses (A)
and (B) above in an aggregate amount not exceeding
$5,000,000 at any time.
<PAGE>
63
(viii) other Investments in an aggregate amount
invested not to exceed $200,000,000 at any time
plus Equity Proceeds to the extent not required to
----
reduce Debt in accordance with Section 2.06 and not
used for Capital Expenditures;
(ix) other Investments payment for which is made
with capital stock of the Borrower;
(x) Investments constituting non-cash proceeds of
sales of assets to the extent permitted by
Section 5.02(d); and
(xi) Investments other than those described above
existing on the date hereof in an aggregate amount
not to exceed $5,000,000.
(f) Dividends, Etc. Declare or pay any dividends
--------------
(other than dividends payable only in common stock or
Preferred Stock permitted by clause (ii) below of the
Borrower), purchase, redeem, retire, defease or otherwise
acquire for value any of its capital stock or any warrants,
rights or options to acquire such capital stock, now or
hereafter outstanding, return any capital to its
stockholders as such, make any distribution of assets,
capital stock, warrants, rights, options, obligations or
securities to its stockholders as such or issue or sell any
capital stock (other than common stock) or any warrants,
rights or options to acquire such capital stock (other than
common stock), or permit any of its Subsidiaries to
purchase, redeem, retire, defease or otherwise acquire for
value any capital stock of the Borrower or any warrants,
rights or options to acquire such capital stock or to issue
or sell any capital stock (other than common stock) or any
warrants, rights or options to acquire such capital stock
(other than common stock), except that the foregoing shall
not prohibit the exchange or conversion of any capital stock
in accordance with its terms or the redemptions contemplated
by Sections 5.12 and 5.14 of the Merger Agreement, and so long
as no Default described in Sections 6.01(a) or (f) and no Event
of Default shall have occurred and be continuing, the Borrower
may (i) repurchase capital stock, or any warrants, rights or
options to acquire such capital stock held by its officers,
directors and employees, (ii) except as permitted by clause (iii)
below, issue Preferred Stock and pay dividends thereon,
provided that such Preferred Stock (A) shall not obligate
--------
the Borrower to redeem at a fixed or determinable date prior
to January 1, 2000, whether by operation of a sinking fund
or otherwise, or upon the occurrence of a condition not
solely within the control of this issuer and (B) shall not
be redeemable at the option of the holder prior to
January 1, 2000 and (iii) issue and declare and deliver
distributions in respect of securities issued in connection
with the monetization of the RN Stock contributed to the
Borrower.
(g) Change in Nature of Business. Make any
----------------------------
material change in the nature of its business taken as a
whole as carried on at the date hereof, other than as a
result of (i) dispositions of assets approved by the Board
of Directors of the Borrower
<PAGE>
64
or (ii) business activities engaged in by the Borrower or
its Subsidiaries on or prior to the date hereof and other
similar or related activities.
(h) Accounting Changes. Make or permit, or
------------------
permit any of its Material Subsidiaries to make or permit,
any significant change in accounting policies or reporting
practices, except as required or permitted by generally
accepted accounting principles.
(i) Prepayments, Etc. of Scheduled Indebtedness.
-------------------------------------------
(a) Prepay, redeem, purchase, defease or otherwise satisfy
prior to the scheduled maturity thereof in any manner, or
make any payment in violation of any subordination terms of,
any Scheduled Debt or Debt incurred after the date hereof,
other than (i) Debt for which the Borrower has established
at the date hereof an irrevocable in-substance defeasance
trust in an amount not to exceed $5,000,000 in the aggregate
(ii) LYNX Payments and (iii) in an aggregate amount not to
exceed $50,000,000 from the date hereof, or (b) amend,
modify or change in any manner any term or condition of any
Scheduled Debt, Debt incurred after the date hereof or
subordinated Indebtedness in any manner other than that
permitted by refinancings thereof in accordance with
Section 5.02(b)(xiv), or permit any of its Subsidiaries to
do any of the foregoing.
SECTION 5.03. Reporting Requirements. So long as
----------------------
any Advance shall remain unpaid, any Letter of Credit shall be
outstanding or any Lender shall have any Commitment hereunder,
the Borrower will, unless the Required Lenders shall otherwise
consent in writing, furnish to the Lenders:
(a) Default Notice. As soon as possible and in
--------------
any event within three Business Days after any officer of
the Borrower obtains knowledge of each Default continuing on
the date of such statement, a statement of the chief
financial officer of the Borrower setting forth details
thereof and the action that the Borrower has taken and
proposes to take with respect thereto.
(b) Quarterly Financials. 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 Borrower,
a Consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such quarter and Consolidated
statements of income and cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such
quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the
preceding fiscal year, certified (subject to year-end audit
adjustments) by the chief financial officer of the Borrower
as having been prepared in accordance with GAAP, together
with (i) a certificate of said officer stating that, to the
knowledge of such officer, no Default has occurred and is
continuing or, if a Default has occurred and is continuing,
a statement as to the nature thereof and the action that the
Borrower has taken and proposes to take with respect thereto
and (ii) a schedule setting forth in
<PAGE>
65
reasonable detail the computations used by the Borrower in
determining compliance with the covenants contained in
Section 5.04.
(c) Annual Financials. As soon as available and
-----------------
in any event within 90 days after the end of each fiscal
year of the Borrower, a copy of the annual audit report for
such year for the Borrower and its Subsidiaries, including
therein a Consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal year and
Consolidated statements of income and cash flows of the
Borrower and its Subsidiaries for such fiscal year, in each
case accompanied by either an unqualified opinion, or an
opinion acceptable to the Required Lenders, of Price
Waterhouse or Deloitte & Touche or other independent public
accountants of recognized standing acceptable to the
Required Lenders, together with (i) a certificate of such
accounting firm to the Lenders stating that in the course of
the regular audit of the business of the Borrower and its
Subsidiaries, which audit was conducted by such accounting
firm in accordance with generally accepted auditing
standards, such accounting firm has obtained no knowledge
that a Default has occurred and is continuing, or if, in the
opinion of such accounting firm, a Default has occurred and
is continuing, a statement as to the nature thereof
(provided that in no event shall such accountants be liable
as a result of this Agreement by reason of any failure to
obtain knowledge of any Default that would not be disclosed
in the course of their audit examination), (ii) a schedule
setting forth in reasonable detail the computations used by
such accountants in determining, as of the end of such
fiscal year, compliance with the covenants contained in
Section 5.04 and (iii) a certificate of the chief financial
officer of the Borrower stating that, to the knowledge of
such officer, no Default has occurred and is continuing or,
if a Default has occurred and is continuing, a statement as
to the nature thereof and the action that the Borrower has
taken and proposes to take with respect thereto.
(d) Budgets; etc. Not more than 60 days after
------------
the commencement of each fiscal year of the Borrower,
budgets of the Borrower and its Material Subsidiaries in
reasonable detail for each of the four fiscal quarters of
such fiscal year as customarily prepared by management for
its internal use setting forth, with appropriate discussion,
the principal assumptions upon which such budgets are based.
(e) ERISA. As soon as possible and, in any
-----
event, within 10 days after the Borrower, any of its
Subsidiaries or any ERISA Affiliate knows of the occurrence
of any of the following events which, in the aggregate would
be likely to have a Material Adverse Effect, the Borrower
will deliver to each of the Lenders a certificate of the
chief financial officer or other authorized officer of the
Borrower setting forth details as to such occurrence and
such action, if any, which the Borrower, such Subsidiary,
such ERISA Affiliate, the PBGC, a Plan participant or the
Plan administrator with respect thereto: that a Reportable
Event has occurred; that an accumulated funding deficiency
has been incurred or an application is reasonably likely to
be or has been made to the Secretary of the Treasury for a
waiver or
<PAGE>
66
modification of the minimum funding standard (including any
required installment payments) or an extension of any
amortization period under Section 412 of the Internal
Revenue Code with respect to a Plan; that a Plan has been or
is reasonably likely to be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA;
that a Plan has an Unfunded Current Liability giving rise to
a lien under ERISA or the Internal Revenue Code; that
proceedings are reasonably likely to be or have been
instituted to terminate a Plan; that a proceeding has been
instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan; or that the Borrower, any
of its Subsidiaries or any ERISA Affiliate will or is
reasonably likely to incur any liability (including any
contingent or secondary liability) to or on account of the
termination of or withdrawal from a Plan under Section 4062,
4063, 4064, 4069, 4201 or 4204 of ERISA or with respect to a
Plan under Section 4971 or 2975 of the Internal Revenue Code
or Section 409 or 502(i) or 502(l) of ERISA.
(f) Litigation. Promptly after the commencement
----------
thereof, notice of all actions, suits, investigations,
litigation and proceedings before any court or governmental
department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting the Borrower
or any of its Subsidiaries which the Borrower reasonably
believes would be likely to have a Material Adverse Effect.
(g) Securities Reports. Promptly after the
------------------
sending or filing thereof, copies of all proxy statements,
financial statements and reports that the Borrower or any of
its Subsidiaries sends to the Borrower's public
stockholders, and copies of all reports on Forms 10-Q, 10-K
and 8-K, that the Borrower or any of its Subsidiaries files
with the Securities and Exchange Commission or any
governmental authority that may be substituted therefor.
(h) Agreement Notices. Promptly upon receipt
-----------------
thereof, copies of all notices, requests and other documents
received by the Borrower or any of its Subsidiaries under or
pursuant to any Related Document and, from time to time upon
request by the Administrative Agent, such information and
reports regarding the Related Documents as the
Administrative Agent may reasonably request.
(i) Environmental Matters. Promptly after
---------------------
obtaining knowledge of any of the following environmental
matters, unless such environmental matters would not,
individually or when aggregated with all other such matters,
be likely to have a Material Adverse Effect, written notice
of (i) any pending or threatened material Environmental
Claim against the Borrower or any of its Subsidiaries or any
Real Property; (ii) any condition or occurrence on any Real
Property that (x) results in material noncompliance by the
Borrower or any of its Subsidiaries with any applicable
Environmental Law or (y) would be likely to be to form the
basis of a material Environmental Claim against the Borrower
or any of its Subsidiaries or any Real Property; (iii) any
condition or occurrence on any material Real Property that
could reasonably be anticipated to cause such Real Property
to be subject to any restrictions
<PAGE>
67
on the ownership, occupancy, use or transferability of such
Real Property under any Environmental Law; and (iv) the
taking of any material removal or remedial action in
response to the actual or alleged presence of any Hazardous
Material on any Real Property. All such notices shall
describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial
action and the Borrower's response thereto.
(j) Other Information. Such other information
-----------------
respecting the business, condition (financial or otherwise),
operations, performance, properties or prospects of the
Borrower or any of its Subsidiaries as any Lender through
the Administrative Agent may from time to time reasonably
request.
SECTION 5.04. Financial Covenants. So long as any
-------------------
Advance shall remain unpaid, any Letter of Credit shall be
outstanding or any Lender shall have any Commitment hereunder,
the Borrower will, unless the Required Lenders otherwise consent
in writing:
(a) EBITDA/Net Interest Expense. Maintain a
---------------------------
ratio of Consolidated EBITDA to Consolidated Net Interest
Expense of not less than the amount set forth below for each
period of four consecutive fiscal quarters ended at the
dates set forth below:
Quarter Ending Ratio
-------------- -----
March 31, 1995 1.25:1.00
June 30, 1995 1.50:1.00
September 30, 1995 1.75:1.00
December 31, 1995 2.00:1.00
March 31, 1996 2.00:1.00
June 30, 1996 2.00:1.00
September 30, 1996 2.15:1.00
December 31, 1996 2.25:1.00
March 31, 1997 2.25:1.00
June 30, 1997 2.25:1.00
September 30, 1997 2.35:1.00
December 31, 1997 2.50:1.00
March 31, 1998 2.50:1.00
June 30, 1998 2.50:1.00
September 30, 1998 2.60:1.00
December 31, 1998 2.75:1.00
March 31, 1999 2.75:1.00
June 30, 1999 2.75:1.00
September 30, 1999 2.85:1.00
December 31, 1999 3.00:1.00
<PAGE>
68
(b) Total Debt/EBITDA Ratio. Maintain a ratio of
-----------------------
Consolidated Total Debt to Consolidated EBITDA of not more
than the amount set forth below for each period of four
consecutive fiscal quarters ended at the dates set forth
below:
Quarter Ending Ratio
-------------- -----
September 30, 1995 6.85:1.00
December 31, 1995 5.25:1.00
March 31, 1996 5.25:1.00
June 30, 1996 5.25:1.00
September 30, 1996 5.00:1.00
December 31, 1996 4.75:1.00
March 31, 1997 4.75:1.00
June 30, 1997 4.75:1.00
September 30, 1997 4.55:1.00
December 31, 1997 4.35:1.00
March 31, 1998 4.35:1.00
June 30, 1998 4.35:1.00
September 30, 1998 4.15:1.00
December 31, 1998 4.00:1.00
March 31, 1999 4.00:1.00
June 30, 1999 4.00:1.00
September 30, 1999 3.85:1.00
December 31, 1999 3.75:1.00
(c) Capital Expenditures. Not make, or permit
--------------------
any of its Subsidiaries to make, any Capital Expenditures
that would cause the aggregate of all such Capital
Expenditures made by the Borrower and its Subsidiaries in
any fiscal year ended on the dates set forth below to exceed
the amount set forth below for such fiscal year:
Year Ended Amount
---------- ------
December 31, 1995 $275,000,000
December 31, 1996 250,000,000
December 31, 1997 225,000,000
December 31, 1998 225,000,000
December 31, 1999 225,000,000
plus for any fiscal year Debt Proceeds and Equity Proceeds
----
to the extent not required to reduce Debt in accordance with
Section 2.06 and not used to make Investments; provided that
--------
any Capital Expenditure permitted but not made in a prior
year (commencing with the year 1995) may be carried forward
and added to the amounts set forth above.
<PAGE>
69
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the
-----------------
following events ("Events of Default") shall occur and be
-----------------
continuing:
(a) the Borrower shall fail to pay when due any
principal of any Advance, or the Borrower shall fail to pay
any interest or other amount due under any Loan Document and
such failure shall continue for five or more days; or
(b) any representation or warranty made by the
Borrower under or in connection with any Loan Document shall
prove to have been incorrect in any material respect when
made; or
(c) the Borrower shall fail to perform or observe any
term, covenant or agreement contained in Sections 5.01(e),
Section 5.02 or 5.04; or
(d) the Borrower shall fail to perform any other term,
covenant or agreement contained in any Loan Document on its
part to be performed or observed if such failure shall
remain unremedied for 30 days after written notice thereof
shall have been received by the Borrower from the
Administrative Agent or the Required Lenders; or
(e) any Loan Party or any of its Subsidiaries shall
default in any payment with respect to any Indebtedness in
excess of $15,000,000 individually or $30,000,000 in the
aggregate (but excluding Indebtedness outstanding hereunder)
of such Loan Party and its Subsidiaries, when the same
becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument
relating to such Indebtedness; or any other event shall
occur or condition shall exist under any agreement or
instrument relating to any such Indebtedness and shall
continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of
such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness or
otherwise to cause, or to permit the holder thereof to
cause, such Indebtedness to mature; or any such Indebtedness
shall be declared to be due and payable or required to be
prepaid or redeemed (other than by a regularly scheduled
required prepayment or redemption), purchased or defeased,
or an offer to prepay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case
prior to the stated maturity thereof; or
<PAGE>
70
(f) any Loan Party or any of its Material Subsidiaries
shall generally not pay its debts as such debts become due,
or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted
by or against any Loan Party or any of its Material
Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief,
or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its property
and, in the case of any such proceeding instituted against
it (but not instituted by it) that is being diligently
contested by it in good faith, either such proceeding shall
remain undismissed or unstayed for a period of 60 days or
any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any
substantial part of its property) shall occur; or any Loan
Party or any of its Material Subsidiaries shall take any
corporate action to authorize any of the actions set forth
above in this subsection (f); or
(g) any judgment or order for the payment of money in
excess of $15,000,000 individually or $30,000,000 in the
aggregate (to the extent not paid or fully covered by
insurance, provided by a carrier that has acknowledged
coverage) shall be rendered against any Loan Party or any of
its Subsidiaries and any such judgment, or order shall not
have been vacated, discharged or stayed or bonded pending
appeal within 60 days from the entry thereof; or
(h) any material provision of the Pledge Agreement
shall for any reason cease to be valid and binding on or
enforceable against the Borrower or any Credit Party, or the
Borrower or any Credit Party shall so state in writing or
the Pledge Agreement shall for any reason (other than
pursuant to the terms hereof or thereof or as a result of
acts or omissions of any of the Agents or the Lenders) cease
to create a valid and perfected first priority Lien on the
Collateral purported to be covered thereby; or
(i) on or after the consummation of the transactions
contemplated by the Merger Agreement (i) KKR and its
Affiliates or Subsidiaries shall cease to have beneficial
ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities
Exchange Act of 1934), directly or indirectly, of Voting
Stock of the Borrower (or other Securities convertible into
such Voting Stock) representing 50.1% or more of the
combined voting power of all Voting Stock of the Borrower,
provided that the percentage required by this subsection (i)
--------
shall be reduced to 35% or more upon the latest of (A)
eighteen months from the date of the initial Borrowing,
(B) the date that the Borrower's Public Debt Rating is an
Investment Grade Rating and (C) the date that the Borrower
shall have received the Prepayment Target including the
issuance of at least $300,000,000 of additional equity
<PAGE>
71
or monetization of RN Stock contributed to the Borrower; or
(ii) individuals selected by KKR and its Affiliates or
Subsidiaries (other than the Borrower) shall fail to
constitute a majority of the Board of Directors of the
Borrower; or
(j) (i) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof
or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412
of the Internal Revenue Code; any Plan is, shall have been
or is likely to be terminated or the subject of termination
proceedings under ERISA; any Plan shall have an Unfunded
Current Liability; or the Borrower, any Subsidiary or any
ERISA Affiliate has incurred or is likely to incur a
liability to or on account of a Plan under Section 409,
502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of
ERISA or Section 4971 or 4975 of the Internal Revenue Code;
and (ii) there shall result from any such event or events
referred to in clause (i) above the imposition of a lien,
the granting of a security interest, or a liability or a
material risk of incurring a liability, on the part of the
Borrower, any of its Subsidiaries or any ERISA Affiliate,
which in each case would be likely to have a Material
Adverse Effect;
then, and in any such event, the Administrative Agent (i) shall
at the request, or may with the consent, of the Required Lenders,
by notice to the Borrower, declare the obligation of each
Appropriate Lender to make Advances and of any Issuing Bank to
issue Letters of Credit to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may
with the consent, of the Required Lenders, by notice to the
Borrower, declare the Notes, all interest thereon and all other
amounts payable under this Agreement and the other Loan Documents
to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due
and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by
the Borrower; provided, however, that in the event of an actual
-------- -------
or deemed entry of an order for relief with respect to any Loan
Party under the Federal Bankruptcy Code, (x) the obligation of
each Lender to make Advances and of each Issuing Bank to issue
Letters of Credit shall automatically be terminated and (y) the
Notes, all such interest and all such amounts shall automatically
become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of
------------------------------------
Credit Upon Default. If any Event of Default shall have occurred
-------------------
and be continuing, the Administrative Agent shall at the request,
or may with the consent, of the Required Lenders, irrespective of
whether it is taking any of the actions described in Section 6.01
or otherwise, make demand upon the Borrower to, and forthwith
upon such demand the Borrower will, pay to the Administrative
Agent on behalf of the Lenders in same day funds at the
Administrative Agent's office designated in such demand, for
deposit in the L/C Account, an amount equal to the aggregate
Available Amount of all Letters of Credit then outstanding. If
at any time the total amount of such funds is less than the
aggregate Available Amount of all Letters of Credit, the Borrower
will, forthwith upon demand by the Administrative Agent, pay to
the Administrative Agent, as
<PAGE>
72
additional funds to be deposited and held in the L/C Account, an
amount equal to the excess of (a) such aggregate Available Amount
over (b) the total amount of funds, if any, then held in the L/C
Account.
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender
------------------------
hereby appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers
and discretion under this Agreement and the other Loan Documents
as are delegated to the Administrative Agent by the terms hereof
and thereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly
provided for by the Loan Documents (including, without
limitation, enforcement or collection of the Notes), the
Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the
-------- -------
Administrative Agent shall not be required to take any action
that exposes the Administrative Agent to personal liability or
that is contrary to this Agreement or applicable law. The
Administrative Agent agrees to give to each Lender prompt notice
of each notice given to it by the Borrower pursuant to the terms
of this Agreement.
SECTION 7.02. Reliance, Etc. (a) None of the
-------------
Administrative Agent, any Lead Managing Agent or any Arranger or
any of their respective directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it
or them under or in connection with the Loan Documents, except
for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the
Administrative Agent: (i) may treat the payee of any Note as the
holder thereof until the Administrative Agent receives and
accepts an Assignment and Acceptance entered into by the Lender
that is the payee of such Note, as assignor, and an Eligible
Assignee, as assignee, as provided in Section 8.07; (ii) may
consult with legal counsel (including counsel for any Loan
Party), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to
be taken in good faith by it in accordance with the advice of
such counsel, accountants or experts; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations made in
or in connection with the Loan Documents; (iv) shall not have any
duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of any
Loan Document on the part of any Loan Party or to inspect the
property (including the books and records) of any Loan Party;
(v) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any Lien created or
purported to be created under or in connection with, any Loan
Document or any other instrument or document furnished pursuant
hereto; and
<PAGE>
73
(vi) shall incur no liability under or in respect of any Loan
Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopy, cable
or telex) believed by it to be genuine and signed or sent by the
proper party or parties.
(b) The Lead Managing Agents and the Arrangers, as
such, shall have no duties or obligations whatsoever with respect
to this Agreement, the Notes or any other document or any matter
related thereto.
SECTION 7.03. Lead Managing Agents and Affiliates.
-----------------------------------
With respect to their respective Commitments, the Advances made
by them and the Notes issued to them, each of the Lead Managing
Agents shall have the same rights and powers under the Loan
Documents as any other Lender and may exercise the same as though
it or its Affiliate were not the Administrative Agent, a Lead
Managing Agent or an Arranger, as the case may be; and the term
"Lender" or "Lenders" shall, unless otherwise expressly
indicated, include each of the Lead Managing Agents in its
individual capacity. Each of the Lead Managing Agents and its
respective affiliates may accept deposits from, lend money to,
act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business
with, any Loan Party, any of its Subsidiaries and any Person who
may do business with or own securities of any Loan Party or any
such Subsidiary, all as if such Lead Managing Agent or any of its
respective Affiliates were not the Administrative Agent, a Lead
Managing Agent or an Arranger, as the case may be, and without
any duty to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender
----------------------
acknowledges that it has, independently and without reliance upon
the Administrative Agent, the Lead Managing Agents, any Arranger
or any other Lender and based on the financial statements
referred to in Section 4.01 and such other documents and
information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without
reliance upon the Administrative Agent, the Lead Managing Agents,
any Arranger or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 7.05. Indemnification. Each Lender severally
---------------
agrees to indemnify each Agent (to the extent not promptly
reimbursed by the Borrower) from and against such Lender's
ratable share of any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against such Agent in any
way relating to or arising out of the Loan Documents or any
action taken or omitted by such Agent under the Loan Documents;
provided, however, that no Lender shall be liable for any portion
-------- -------
of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting from such Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender
agrees to reimburse each Agent promptly upon
<PAGE>
74
demand for its ratable share of any costs and expenses payable by
the Borrower under Section 8.04, to the extent that such Agent is
not promptly reimbursed for such costs and expenses by the
Borrower. For purposes of this Section 7.05, the Lenders'
respective Ratable Shares of any amount shall be determined, at
any time, according to the sum of (a) the aggregate principal
amount of the Advances outstanding at such time and owing to the
respective Lenders, (b) their respective Ratable Shares of the
aggregate Available Amount of all Letters of Credit outstanding
at such time and (c) the aggregate unused portions of their Term
Commitments and their respective Unused Working Capital
Commitments at such time. In the event that any Defaulted
Advance shall be owing by any Defaulting Lender at any time, such
Lender's Commitment with respect to the Advance under which such
Defaulted Advance was required to have been made shall be
considered to be unused for purposes of this Section 7.05 to the
extent of the amount of such Defaulted Advance. The failure of
any Lender to reimburse any Agent promptly upon demand for its
ratable share of any amount required to be paid by the Lenders to
such Agent as provided herein shall not relieve any other Lender
of its obligation hereunder to reimburse such Agent for its
ratable share of such amount, but no Lender shall be responsible
for the failure of any other Lender to reimburse such Agent for
such other Lender's ratable share of such amount.
SECTION 7.06. Successor Administrative Agent. The
------------------------------
Administrative Agent may resign as to all of the Facilities at
any time by giving written notice thereof to the Lenders and the
Borrower and may be removed at any time with or without cause by
the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall
have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Administrative Agent,
then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which shall be
a commercial bank organized under the laws of the United States
or of any State thereof and having a combined capital and surplus
of at least $250,000,000. Upon the acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative
Agent as to all of the Facilities and upon the execution and
filing or recording of such financing statements, or amendments
thereto, and such other instruments or notices, as may be
necessary or desirable, or that the Required Lenders may request,
in order to continue the perfection of the Liens granted or
purported to be granted by the Pledge Agreement, such successor
Administrative Agent shall succeed to and become vested with all
the rights, powers, discretion, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under
the Loan Documents. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative Agent, the
provisions of this Article VII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
<PAGE>
75
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver
---------------
of any provision of this Agreement or the Notes, nor consent to
any departure by the Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the
Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment,
-------- -------
waiver or consent shall, unless in writing and signed by each
Lender affected thereby (other than any Lender which is, at such
time, a Defaulting Lender) directly: (i) reduce the percentage of
the Commitments or of the aggregate unpaid principal amount of
the Notes, or the number of Lenders, that shall be required for
the Lenders or any of them to take any action hereunder,
(ii) amend this Section 8.01, (iii) extend the scheduled time of
payment of any interest or commitment fee owing to such Lender,
(iv) increase the aggregate amount of the Commitments of such
Lender, (v) reduce the stated rate of interest borne by the
Advances owing to such Lender (other than as a result of waiving
the applicability of any post-default increase in interest
rates), forgive all or any part of the principal amount thereof
or reduce the stated rate for calculating any commitment fee or
Letter of Credit fee owing to such Lender, (vi) extend the final
scheduled maturity of any Advance owing to such Lender; provided
--------
further that no amendment, waiver or consent shall, unless in
-------
writing and signed by each Issuing Bank, in addition to the
Lenders required above to take such action, affect the rights or
obligations of the Issuing Banks under this Agreement; and
provided further that no amendment, waiver or consent shall,
-------- -------
unless in writing and signed by the Administrative Agent in
addition to the Lenders required above to take such action,
affect the rights or duties of the Administrative Agent under
this Agreement or any Note; and provided, further, however, that
-------- ------- -------
the Administrative Agent is hereby authorized to amend this
Agreement solely to effect the transfer, pursuant to that certain
Note Exchange Agreement dated as of the date hereof among the
Borrower, the Administrative Agent, TM, the lenders under the TM
Credit Agreement and Citibank, as administrative agent under the
TM Credit Agreement, of certain Debt of TM to the Borrower and to
add the lenders under the TM Credit Agreement as Term Lenders
under this Agreement.
SECTION 8.02. Notices, Etc. All notices and other
------------
communications provided for hereunder shall be in writing
(including telegraphic, telecopy, telex or cable communication)
and mailed, telegraphed, telecopied, telexed, cabled or
delivered, if to the Borrower, at its address at 180 East Broad
Street, Columbus, Ohio 43215-3799, Attention: Vice President and
Treasurer; if to any Bank, at its Domestic Lending Office
specified opposite its name on Schedule I hereto; if to any other
Lender, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender;
if to Credit Suisse, in its capacity as an Issuing Bank, at its
address at One Liberty Plaza, 165 Broadway, New York, New
York 10006, Attention: Trade Services Department, with a copy to
12 East 49th Street, New York, New York 10017, Attention: Chris
Horgan; and if to the Administrative Agent, at its address at
1 Court Square, 7th Floor, Long Island City, New
<PAGE>
76
York 11120, Attention: John Makrinos, with a copy to 399 Park
Avenue, New York, New York 10043, Attention: Michel Pendill; or,
as to the Borrower or the Administrative Agent, at such other
address as shall be designated by such party in a written notice
to the other parties and, as to each other party, at such other
address as shall be designated by such party in a written notice
to the Borrower and the Administrative Agent. All such notices
and communications shall, when mailed, telegraphed, telecopied,
telexed or cabled, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier,
confirmed by telex answerback or delivered to the cable company,
respectively, except that notices and communications to the
Administrative Agent pursuant to Article II, III or VII shall not
be effective until received by the Administrative Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the
-------------------
part of any Lender, any Arranger or the Administrative Agent to
exercise, and no delay in exercising, any right hereunder or
under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other
or further exercise thereof or the exercise of any other right.
The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower
------------------
agrees to pay on demand (i) all reasonable and documented costs
and out-of-pocket expenses of each Agent in connection with the
preparation, execution, delivery and amendment of the Loan
Documents (including, without limitation, (A) all due diligence,
syndication (including printing, distribution and bank meetings),
transportation, computer, telecommunications, duplication, audit,
insurance, consultant, search, filing and recording fees and all
other out-of-pocket expenses in an aggregate amount agreed to by
the Arrangers and the Borrower and (B) the reasonable and
documented fees and out-of-pocket expenses of counsel for the
Lead Managing Agents and the Arrangers) with respect thereto,
with respect to advising the Administrative Agent as to its
rights and responsibilities, or the perfection, protection or
preservation of rights or interests, under the Loan Documents,
with respect to negotiations with any Loan Party or with other
creditors of any Loan Party or any of its Subsidiaries arising
out of any Default or any events or circumstances that may give
rise to a Default and with respect to presenting claims in or
otherwise participating in or monitoring any bankruptcy,
insolvency or other similar proceeding involving creditors'
rights generally and any proceeding ancillary thereto), (ii) all
reasonable and documented costs and out-of-pocket expenses of the
Administrative Agent in connection with the administration of the
Loan Documents and (iii) all reasonable and documented costs and
out-of-pocket expenses of the Administrative Agent and the
Lenders in connection with the enforcement of the Loan Documents,
whether in any action, suit or litigation, any bankruptcy,
insolvency or other similar proceeding affecting creditors'
rights generally or otherwise (including, without limitation, the
reasonable and documented fees and out-of-pocket expenses of
counsel for the Administrative Agent and each Lender with respect
thereto).
(b) The Borrower agrees to indemnify and hold harmless
each Agent and each Lender and each of their respective
Affiliates and their respective officers, directors,
<PAGE>
77
employees, agents and advisors (each, an "Indemnified Party")
-----------------
from and against any and all claims, damages, losses, liabilities
and expenses (including, without limitation, reasonable and
documented fees and expenses of counsel) that may be incurred by
or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of, or in
connection with the preparation for a defense of, any
investigation, litigation or proceeding arising out of, related
to or in connection with this Agreement (including, without
limitation, the Notes and any of the transactions contemplated
herein or in any other Loan Document or any Related Document or
the actual or proposed use of the proceeds of the Advances)
whether or not such investigation, litigation or proceeding is
brought by any Loan Party, its directors, shareholders or
creditors or an Indemnified Party or any Indemnified Party is
otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated, except to the extent such
claim, damage, loss, liability or expense results from such
Indemnified Party's gross negligence or willful misconduct. The
Borrower also agrees not to assert any claim against any Agent or
any Lender or any of their respective Affiliates or any of their
respective directors, officers, employees, attorneys and agents,
on any theory of liability, for special, indirect, consequential
or punitive damages arising out of or otherwise relating to the
Notes, this Agreement, any of the transactions contemplated
herein or in any other Loan Document or any Related Document or
the actual or proposed use of the proceeds of the Advances.
Each Indemnified Party agrees to notify the Borrower,
promptly after obtaining actual knowledge thereof, of the
assertion against it or any other Person of any claim or the
commencement of any action or proceeding relating to this
Agreement (including, without limitation, the Notes and any of
the transactions contemplated herein or in any other Loan
Document or any Related Document or the actual or proposed use of
the proceeds of the Advances) which such Indemnified Party
considers to be a claim, action or proceeding with respect to
which it is entitled to indemnification hereunder, but failure to
so notify will not relieve the Borrower from any liability under
this Section 8.04(b). Each Indemnified Party will be entitled to
defend any such claim, action or proceeding, and may employ or
retain counsel to represent it in, and to defend, such claim,
action or proceeding and the Borrower will pay the reasonable and
documented fees and out-of-pocket expenses of such counsel;
provided, however, that the Indemnified Parties shall, to the
-------- -------
extent practicable, choose one counsel to act on their behalf at
the Borrower's expense, which counsel, at the request of the
Borrower, shall also represent and defend the Borrower in such
claim, action or proceeding unless an Indemnified Party
reasonably determines based on an opinion of outside counsel that
having common counsel would present such counsel with a conflict
of interest. In the event of such determination, such
Indemnified Party or Parties shall not be required to share
counsel and shall be entitled to full indemnification for such
counsel's fees and expenses as otherwise provided herein.
(c) If any payment of principal of, or Conversion of,
or failure to Convert as a result of a withdrawn notice of
Conversion, any Eurodollar Rate Advance, LIBO Rate Advance or
Fixed Rate Advance is made by the Borrower to or for the account
of a Lender other than on the last day of the Interest Period for
such Advance, as a result of a payment or Conversion pursuant to
Section 2.07, 2.10(b)(i) or 2.11(d), acceleration of the maturity
of the
<PAGE>
78
Notes pursuant to Section 6.01 or for any other reason, the
Borrower shall, after receipt of a written request by such Lender
(which request shall set forth in reasonable detail the basis for
requesting such amount and shall also be sent upon demand by such
Lender (with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such Lender
any amounts required to compensate such Lender for any additional
losses, costs or expenses that it may reasonably incur as a
result of such payment, including, without limitation, any loss
cost or expense (excluding loss of anticipated profits) actually
incurred by reason of the liquidation or reemployment of deposits
or other funds acquired by any Lender to fund or maintain such
Advance.
(d) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in Sections 2.11, 2.13 and
8.04 shall survive the payment in full of the principal and
interest hereunder and under the Notes.
SECTION 8.05. Right of Set-Off. Upon (a) the
----------------
occurrence and during the continuance of any Event of Default and
(b) the making of the request or the granting of the consent
specified by Section 6.01 to authorize the Administrative Agent
to declare the Notes due and payable pursuant to the provisions
of Section 6.01, each Lender and each of its branches and
agencies is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and otherwise
apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at
any time owing by such Lender, its branches or agencies to or for
the credit or the account of the Borrower against any and all of
the obligations of the Borrower now or hereafter existing under
this Agreement and the Note held by such Lender, irrespective of
whether such Lender shall have made any demand under this
Agreement or such Note and although such obligations may be
unmatured. Each Lender agrees promptly to notify the Borrower
after any such set-off and application; provided, however, that
-------- -------
the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender, its
branches or agencies under this Section are in addition to other
rights and remedies (including, without limitation, other rights
of set-off) that such Lender, its branches or agencies may have.
SECTION 8.06. Binding Effect. This amendment and
--------------
restatement of the Existing Credit Agreement shall become
effective when it shall have been executed by the Borrower and
the Administrative Agent and when the Administrative Agent shall
have been notified by each Bank that such Bank has executed it
and thereafter shall be binding upon and inure to the benefit of
the Borrower, the Administrative Agent and each Lender and their
respective successors and assigns, except that the Borrower shall
not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lenders.
SECTION 8.07. Assignments and Participations. (a)
------------------------------
Each Lender (x) may assign to one or more of its Affiliates or
Subsidiaries and (y) may with the prior consent of the
Administrative Agent and the Borrower (such consents not to be
unreasonably withheld or delayed) assign to one or more banks or
other entities, all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a
portion of its
<PAGE>
79
Commitment, the Advances owing to it and the Note held by it);
provided, however, that such assignment or any activity intended
-------- -------
to give rise to an assignment shall not be initiated prior to the
receipt by the Lenders of notice from the Arrangers that the
syndication of this Agreement has been completed; provided
--------
further, however, that (i) each such assignment shall be of a
------- -------
uniform, and not a varying, percentage of all such Lender's
rights and obligations under and in respect of one or more of
(A) the Term Facility and (B) the Working Capital Facility and
the Receivables Back-Stop Facility Agreement (other than any
right to make Competitive Bid Advances or Competitive Bid
Advances owing to it), (ii) except in the case of an assignment
to a Person that immediately prior to such assignment was a
Lender or an assignment of all of a Lender's rights and
obligations under this Agreement the amount of the Commitment of
the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be
less than $10,000,000, (iii) each such assignment shall be to a
Lender, an Eligible Assignee or to an Affiliate or Subsidiary of
the assignor, and (iv) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and
Acceptance, together with any Note subject to such assignment,
and a processing and recordation fee of $3,000 for each
assignment completed after the notice referred to in the first
proviso of this Section 8.07 has been received. Upon such
execution, delivery, acceptance and recording, from and after the
effective date specified in such Assignment and Acceptance,
(x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned
to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and (y) the Lender assignor
thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in
or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of,
or the perfection or priority of any Lien created or purported to
be created under or in connection with, this Agreement or any
other instrument or document furnished pursuant hereto;
(ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under this Agreement or any
other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements
referred to in Section 4.01 and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such assigning Lender or
any other Lender and based on such
<PAGE>
80
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement; (v) such assignee confirms
that it is a Lender, an Eligible Assignee or an Affiliate of the
assignor; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement
as are delegated to the Administrative Agent by the terms hereof,
together with such powers and discretion as are reasonably
incidental thereto; (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations
that by the terms of this Agreement are required to be performed
by it as a Lender and (viii) such assignee consents to be bound
by the terms of that certain Note Exchange Agreement dated as of
the date hereof among the Borrower, the Administrative Agent, TM,
the lenders under the TM Credit Agreement and Citibank, as
administrative agent under the TM Credit Agreement.
(c) The Administrative Agent shall maintain at its
address referred to in Section 8.02 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the
Commitment under each Facility of, and principal amount of the
Advances owing under each Facility to, each Lender from time to
time (the "Register"). The entries in the Register shall be
--------
conclusive and binding for all purposes, absent manifest error,
and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee, together with
any Note or Notes subject to such assignment, the Administrative
Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of Exhibit C hereto, (i) accept
such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice
thereof to the Borrower. Within five Business Days after its
receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for
the surrendered Note or Notes a new Note or Notes to the order of
such assignee in an amount equal to the Commitment assumed by it
under a Facility pursuant to such Assignment and Acceptance and,
if the assigning Lender has retained a Commitment hereunder under
such Facility, new Notes to the order of the assigning Lender in
an aggregate amount equal to the aggregate Commitments retained
by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A-1 or A-2 hereto, as
appropriate.
(e) Each Lender may sell participations in or to all
or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or Notes held
by it); provided, however, that (i) such Lender's obligations
-------- -------
under this Agreement (including, without limitation, its
<PAGE>
81
Commitment) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain
the holder of such Note for all purposes of this Agreement, (iv)
the Borrower, the Agents and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and (v) no
participant under any such participation and no sub-participant
of such participation shall have any right to approve any
amendment or waiver of any provision of any Loan Document, or any
consent to any departure by the Borrower therefrom, except to the
extent that such amendment, waiver or consent would
directly: reduce the stated rate of interest borne by the
Advances owing to such participant (other than as a result of
waiving the applicability of any post-default increase in
interest rates), forgive all or any part of the principal amount
thereof, reduce the stated rate for calculating any commitment
fee or Letter of Credit fee owing to the Lenders or extend the
final scheduled maturity of any Advance owing to such
participant, in each case to the extent subject to such
participation.
(f) Any Lender may, in connection with any assignment
or participation or proposed assignment or participation pursuant
to this Section 8.07, disclose to the assignee or participant or
proposed assignee or participant, any information relating to the
Borrower furnished to such Lender by or on behalf of the
Borrower; provided, however, that, prior to any such disclosure,
-------- -------
the assignee or participant or proposed assignee or participant
shall have executed a confidentiality agreement substantially in
the form of Exhibit F hereto and returned to same to such Lender
and the Borrower.
(g) Notwithstanding any other provision set forth in
this Agreement, any Lender may at any time create a security
interest in all or any portion of its rights under this Agreement
(including, without limitation, the Advances owing to it and the
Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 8.08. Governing Law. This Agreement and the
-------------
Notes shall be governed by, and construed in accordance with, the
laws of the State of New York.
SECTION 8.09. Execution in Counterparts. This
-------------------------
Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Agreement.
SECTION 8.10. Confidentiality. Each Lender has
---------------
heretofore executed a confidentiality agreement in the form of
Exhibit F and returned a copy thereof to the Borrower. Each
Lender shall hold all non-public information obtained pursuant to
this Agreement in accordance with the terms of such
confidentiality agreement and in accordance with safe and sound
banking practices and, subject to Section 8.07, may make
disclosure reasonably requested by any bona fide transferee in
connection with the contemplated transfer
<PAGE>
82
of any Advances or participation therein or as required or
requested by any governmental authority or pursuant to legal
process; provided that each such transferee shall have previously
--------
signed and returned to such Lender a confidentiality agreement in
the form of Exhibit F, and such Lender agrees to send to the
Borrower promptly a copy of each such confidentiality agreement
executed by such transferee.
SECTION 8.11. Receivables Financings Documents. The
--------------------------------
Lenders hereto acknowledge that the transfers of receivables and
"Related Security" (as defined in the Receivables Financing
Documents) from the Borrower to Borden Receivables Corp. under
the Receivables Purchase Agreement dated as of December 15, 1994
between the Borrower and Borden Receivables Corp. are intended to
be the true sales for valid consideration, that none of such
property conveyed shall remain property of the Borrower, and that
Borden Receivables Corp. is a separate corporate entity with its
own creditors who would, in any liquidation of Borden Receivables
Corp. or of its assets, be entitled to be satisfied out of Borden
Receivables Corp.'s assets prior to any value in Borden
Receivables Corp. becoming available to the Borrower, as Borden
Receivables Corp.'s equity holder, or creditors of the Borrower.
SECTION 8.12. No Liability of the Issuing Banks. The
---------------------------------
Borrower assumes all risks of the acts or omissions of any
beneficiary or transferee of any Letter of Credit with respect to
its use of such Letter of Credit. Neither any Issuing Bank nor
any of its officers or directors shall be liable or responsible
for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by such Issuing Bank against
presentation of documents that do not comply with the terms of a
Letter of Credit, including failure of any documents to bear any
reference or adequate reference to the Letter of Credit; or
(d) any other circumstances whatsoever in making or failing to
make payment under any Letter of Credit, except that the Borrower
------
shall have a claim against such Issuing Bank, and the Issuing
Bank shall be liable to the Borrower, to the extent of any
direct, but not consequential, damages suffered by the Borrower
that the Borrower proves were caused by (i) such Issuing Bank's
willful misconduct or gross negligence in determining whether
documents presented under any Letter of Credit comply with the
terms of the Letter of Credit or (ii) such Issuing Bank's willful
failure to make lawful payment under a Letter of Credit after the
presentation to it of a draft and certificates strictly complying
with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, such Issuing
Bank may accept documents that appear on their face to be in
order, without responsibility for further investigation,
regardless of any notice or information to the contrary.
SECTION 8.13. Waiver of Existing Credit Agreement.
-----------------------------------
Each Lender who is a "Lender" (as defined in the Existing Credit
Agreement) agrees to waive the provisions of Sections 5.02(a),
5.02(b) and 6.01(j) of the Existing Credit Agreement to the
extent and only to the extent such provisions apply to entering
into the Merger Agreement and consummating the transactions
contemplated thereby and entering into the Loan Documents from
the
<PAGE>
83
Effective Date until the repayment of all outstanding amounts
under the Existing Credit Agreement and the termination of all
commitments thereunder; provided that the provisions of this
--------
Section 8.13 shall terminate on the earlier of (i) the
termination of this Agreement or (ii) February 15, 1995.
SECTION 8.14. Waiver of Jury Trial. Each of the
--------------------
Borrower, the Agents and the Lenders hereby irrevocably waives
all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to any of the Loan Documents, the
Advances or the actions of any Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
BORDEN, INC.
By /s/
----------------------------
Name:
Title:
CITIBANK, N.A., as
Administrative
Agent
By /s/
----------------------------
Name:
Title:
ARRANGERS
BT SECURITIES CORPORATION,
as Arranger
By /s/
----------------------------
Name:
Title:
<PAGE>
84
CHEMICAL SECURITIES INC.,
as Arranger
By /s/
----------------------------
Name:
Title:
CITICORP SECURITIES, INC.,
as Arranger
By /s/
----------------------------
Name:
Title:
CREDIT SUISSE, as Arranger
By /s/
----------------------------
Name:
Title:
By /s/
----------------------------
Name:
Title:
<PAGE>
85
Banks
=====
Lead Managing Agents
Total Commitment
----------------
$171,030,120.4925 BANKERS TRUST COMPANY
By /s/
----------------------------
Name:
Title:
$171,030,120.4925 CHEMICAL BANK
By /s/
----------------------------
Name:
Title:
$171,030,120.4925 CITIBANK, N.A.
By /s/
----------------------------
Name:
Title:
$171,030,120.4925 CREDIT SUISSE
By /s/
----------------------------
Name:
Title:
By /s/
----------------------------
Name:
Title:
<PAGE>
86
Senior Managing Agents
$ 96,084,337.3500 NATIONAL WESTMINSTER BANK PLC,
NEW YORK BRANCH
By /s/
----------------------------
Name:
Title:
NATIONAL WESTMINSTER BANK PLC,
NASSAU BRANCH
By /s/
----------------------------
Name:
Title:
$ 96,084,337.3500 NATIONSBANK OF NORTH
CAROLINA, N.A.
By /s/
----------------------------
Name:
Title:
$ 96,084,337.3500 THE BANK OF NOVA SCOTIA
By /s/
----------------------------
Name:
Title:
<PAGE>
87
$ 96,084,337.3500 THE CHASE MANHATTAN BANK, N.A.
By /s/
----------------------------
Name:
Title:
$ 96,084,337.3500 CREDIT LYONNAIS NEW YORK
BRANCH
By /s/
----------------------------
Name:
Title:
CREDIT LYONNAIS CAYMAN
ISLAND BRANCH
By /s/
----------------------------
Name:
Title:
Managing Agents
$ 71,742,971.8800 ABN AMRO BANK N.V.,
NEW YORK BRANCH
By /s/
----------------------------
Name:
Title:
By /s/
----------------------------
Name:
Title:
<PAGE>
88
$ 71,742,971.8800 CIBC INC.
By /s/
----------------------------
Name:
Title:
$ 71,742,971.8800 THE BANK OF NEW YORK
By /s/
----------------------------
Name:
Title:
$ 71,742,971.8800 THE BANK OF TOKYO TRUST
COMPANY
By /s/
----------------------------
Name:
Title:
$ 71,742,971.8800 THE FIRST NATIONAL BANK
OF CHICAGO
By /s/
----------------------------
Name:
Title:
$ 71,742,971.8800 THE FUJI BANK, LIMITED
By /s/
----------------------------
Name:
Title:
Total Commitments: $1,595,000,000.0000
<PAGE>
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
<TABLE>
<CAPTION>
Working Letter of
Capital Credit Term Domestic Lending Eurodollar
Name of Bank Commitment Commitment Commitment Office Lending Office
------------ --------------- -------------- --------------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
Bankers Trust 128,138,554.2225 42,891,566.2700 130 Liberty 130 Liberty
Company Street Street
New York, New New York, New
York 10006 York 10006
Chemical Bank 128,138,554.2225 42,891,566.2700 270 Park Avenue 270 Park Avenue
New York, New New York, New
York 10017 York 10017
Citibank, N.A. 128,138,554.2225 42,891,566.2700 399 Park Avenue 399 Park Avenue
New York, New New York, New
York 10043 York 10043
Credit Suisse 128,138,554.2225 300,000,000.0000 42,891,566.2700 12 East 49th 12 East 49th
until Street Street
Termination New York, New New York, New
Date York 10017 York 10017
ABN Amro Bank 53,751,004.0100 17,991,967.8700 500 Park Avenue 500 Park Avenue
N.V. New York, New New York, New
York 10022 York 10022
CIBC Inc. 53,751,004.0100 17,991,967.8700 425 Lexington 425 Lexington
Avenue Avenue
New York, New New York, New
York 10017 York 10017
National 71,987,951.8100 24,096,385.5400 175 Water Street 175 Water Street
Westminster New York, New New York, New
Bank PLC York 10038 York 10038
New York
Branch
Nassau
Branch
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Working Letter of
Capital Credit Term Domestic Lending Eurodollar
Name of Bank Commitment Commitment Commitment Office Lending Office
------------ --------------- -------------- --------------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
NationsBank of 71,987,951.8100 24,096,385.5400 767 5th Avenue 767 5th Avenue
North New York, New New York, New
Carolina, N.A. York 10153 York 10153
The Bank of 53,751,004.0100 17,991,967.8700 One Wall Street, One Wall Street,
New York 8th Floor 8th Floor
New York, New New York, New
York 10286 York 10286
The Bank of 71,987,951.8100 24,096,385.5400 One Liberty One Liberty
Nova Plaza Plaza
Scotia New York, New New York, New
York 10006 York 10006
The Bank of 53,751,004.0100 17,991,967.8700 1251 Avenue of 1251 Avenue of
Tokyo the Americas the Americas
Trust Company New York, New New York, New
York 10118 York 10118
The Chase 71,987,951.8100 24,096,385.5400 1 Chase Plaza 1 Chase Plaza
Manhattan New York, New New York, New
Bank, N.A. York 10081 York 10081
The First 53,751,004.0100 17,991,967.8700 One First One First
National Bank National Plaza National Plaza
of Chicago Chicago, Chicago,
Illinois 60670 Illinois 60670
The Fuji 53,751,004.0100 17,991,967.8700 Two World Trade Two World Trade
Bank Center Center
Limited New York, New New York, New
York 10048 York 10048
Credit 71,987,951.8100 24,096,385.5400 1301 Avenue of 1301 Avenue of
Lyonnais the Americas the Americas
New York New York, New New York, New
Branch York 10019 York 10019
Cayman
Island
Branch
</TABLE>
<PAGE>
EXHIBIT A-1
FORM OF TERM NOTE
$_______________ Dated: _________ __, 1994
FOR VALUE RECEIVED, the undersigned, BORDEN, INC., a
New Jersey corporation (the "Borrower"), HEREBY PROMISES TO PAY
--------
to the order of _________________________ (the "Lender") for the
------
account of its Applicable Lending Office (as defined in the
Credit Agreement referred to below) the aggregate principal
amount of the Term Advance (as defined below) owing to the Lender
by the Borrower pursuant to the Credit Agreement (as defined
below) on December 31, 1999.
The Borrower promises to pay interest on the unpaid
principal amount of each Term Advance from the date of such Term
Advance until such principal amount is paid in full, at such
interest rates, and payable at such times, as are specified in
the Credit Agreement.
Both principal and interest are payable in lawful money
of the United States of America to Citibank, N.A., as
Administrative Agent, at 399 Park Avenue, New York, New York
10043, in same day funds. Each Advance owing to the Lender by
the Borrower and the maturity thereof, and all payments made on
account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached
hereto, which is part of this Promissory Note.
This Promissory Note is one of the Notes referred to
in, and is entitled to the benefits of, the Credit Agreement
dated as of December 15, 1994 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement")
----------------
among the Borrower, the Lender and certain other lenders parties
thereto, BT Securities Corporation, Chemical Securities Inc.,
Citicorp Securities, Inc. and Credit Suisse, as Arrangers, and
Citibank, N.A., as Administrative Agent for the Lender and such
other lenders. The Credit Agreement, among other things,
(i) provides for the making of advances (the "Term Advances") by
-------------
the Lender to the Borrower in an aggregate amount not to exceed
at any time outstanding the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from such
Term Advance being evidenced by this Promissory Note, and
(ii) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.
BORDEN, INC.
By
----------------------------
Title:
<PAGE>
TERM ADVANCE AND PAYMENTS OF PRINCIPAL
Amount of Unpaid
Amount of Principal Principal Notation
Date Term Paid Balance Made By
Advance or Prepaid
<PAGE>
EXHIBIT A-2
FORM OF WORKING CAPITAL NOTE
$_______________ Dated: _________ __, 1994
FOR VALUE RECEIVED, the undersigned, BORDEN, INC., a
New Jersey corporation (the "Borrower"), HEREBY PROMISES TO PAY
--------
to the order of _________________________ (the "Lender") for the
------
account of its Applicable Lending Office (as defined in the
Credit Agreement referred to below) the aggregate principal
amount of the Working Capital Advances (as defined below) owing
to the Lender by the Borrower pursuant to the Credit Agreement
(as defined below) on December 31, 1999.
The Borrower promises to pay interest on the unpaid
principal amount of each Advance from the date of such Advance
until such principal amount is paid in full, at such interest
rates, and payable at such times, as are specified in the Credit
Agreement.
Both principal and interest are payable in lawful money
of the United States of America to Citibank, N.A., as
Administrative Agent, at 399 Park Avenue, New York, New York
10043, in same day funds. Each Advance owing to the Lender by
the Borrower and the maturity thereof, and all payments made on
account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached
hereto, which is part of this Promissory Note.
This Promissory Note is one of the Notes referred to
in, and is entitled to the benefits of, the Credit Agreement
dated as of December 15, 1994 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement")
----------------
among the Borrower, the Lender and certain other lenders parties
thereto, BT Securities Corporation, Chemical Securities Inc.,
Citicorp Securities, Inc. and Credit Suisse, as Arrangers, and
Citibank, N.A., as Administrative Agent for the Lender and such
other lenders. The Credit Agreement, among other things,
(i) provides for the making of advances (the "Working Capital
---------------
Advances") by the Lender to the Borrower from time to time in an
--------
aggregate amount not to exceed at any time outstanding the U.S.
dollar amount first above mentioned, the indebtedness of the
Borrower resulting from each Working Capital Advance being
evidenced by this Promissory Note, and (ii) contains provisions
for acceleration of the maturity hereof upon the happening of
certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and
conditions therein specified.
BORDEN, INC.
By
----------------------------
Title:
<PAGE>
WORKING CAPITAL ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of Amount of
Working Principal Unpaid
Capital Paid Principal Notation
Date Advance or Prepaid Balance Made By
<PAGE>
EXHIBIT A-3
FORM OF COMPETITIVE BID NOTE
U.S.$_________
Dated: , 19
--------- --
FOR VALUE RECEIVED, the undersigned, BORDEN, INC., a
New Jersey corporation (the "Borrower"), HEREBY PROMISES TO PAY
--------
to the order of Citibank, N.A., as Administrative Agent (as
defined in the Credit Agreement dated as of December 15, 1994
among the Borrower, certain Lenders parties thereto, BT
Securities Corporation, Chemical Securities Inc., Citicorp
Securities, Inc. and Credit Suisse, as Arrangers, and Citibank,
N.A., as Administrative Agent for said Lenders (as amended or
modified from time to time, the "Credit Agreement"; the terms
----------------
defined therein being used herein as therein defined)) for the
account of each Lender that now or hereafter makes a Competitive
Bid Advance the principal amount set forth above or, if less, the
aggregate principal amount of all Competitive Bid Advances made
by the Lenders to the Borrower pursuant to the Credit Agreement,
and such principal amount shall become due on the maturity date
specified for such principal amount in the Competitive Bid
Register and the Credit Agreement.
The Borrower promises to pay interest on the unpaid
principal amount hereof from the date hereof until such principal
amount is paid in full, at the interest rate and payable at such
times as are specified from time to time in the Competitive Bid
Register and the Credit Agreement.
Both principal and interest are payable in lawful money
of the United States of America to Citibank, N.A., as
Administrative Agent, at 399 Park Avenue, New York, New York, New
York 10043 in same day funds. Each Competitive Bid Advance
owing to a Lender by the Borrower pursuant to the Credit
Agreement and the applicable Notice of Competitive Bid Borrowing,
and all payments made on account of principal thereof, shall be
recorded by the Administrative Agent and, prior to any transfer
hereof, endorsed on the grid attached hereto which is a part of
this Promissory Note.
This Promissory Note is the Competitive Bid Note
referred to in, and is entitled to the benefits of, the Credit
Agreement. The Credit Agreement, among other things, (i)
provides for the making of Competitive Bid Advances by the
Lenders to the Borrower from time to time in an aggregate amount
not to exceed at any time outstanding the U.S. dollar amount
first above mentioned, the indebtedness of the Borrower resulting
from each such Competitive Bid Advance being evidenced by this
Promissory Note, and (ii) contains provisions for acceleration of
the maturity hereof upon the happening of certain stated events.
The Borrower hereby waives presentment, demand, protest
and notice of any kind. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof
shall operate as a waiver of such rights.
This Promissory Note shall be governed by, and
construed in accordance with, the laws of the State of New York.
<PAGE>
A-3-2
BORDEN, INC.
By
------------------------
Title:
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of
Amount of Principal Unpaid Notation
Date Lender Advance Paid Principal Made By
or Prepaid Balance
<PAGE>
EXHIBIT B-1
FORM OF NOTICE OF BORROWING
Citibank, N.A., as Administrative Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043 [Date]
Attention: _______________
Ladies and Gentlemen:
The undersigned, Borden, Inc., refers to the Credit
Agreement, dated as of December 15, 1994 (as amended,
supplemented or otherwise modified from time to time, the "Credit
------
Agreement", the terms defined therein being used herein as
---------
therein defined), among the undersigned, certain Lenders parties
thereto, BT Securities Corporation, Chemical Securities Inc.,
Citicorp Securities, Inc. and Credit Suisse, as Arrangers, and
Citibank, N.A., as Administrative Agent for said Lenders, and
hereby gives you notice, irrevocably, pursuant to Section 2.02 of
the Credit Agreement that the undersigned hereby requests a
Borrowing under the Credit Agreement, and in that connection sets
forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 2.02(a) of the
------------------
Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
_________ __, 199_.
(ii) The Facility under which the Proposed Borrowing is
requested is the _________ Facility.
(iii) The Type of Advances comprising the Proposed
Borrowing is [Base Rate Advances] [Eurodollar Rate
Advances].
(iv) The aggregate amount of the Proposed Borrowing is
$__________.
[(v) The initial Interest Period for each Eurodollar
Rate Advance made as part of the Proposed Borrowing is
__________ month[s].]
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the
date of the Proposed Borrowing:
<PAGE>
B-1-2
(A) the representations and warranties contained in
Section 4.01 of the Credit Agreement are correct in all
respects, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds therefrom,
as though made on and as of such date; and
(B) no event has occurred and is continuing, or would
result from such Proposed Borrowing or from the application
of the proceeds therefrom, that constitutes a Default.
Very truly yours,
BORDEN, INC.
By
----------------------------
Title:
<PAGE>
EXHIBIT B-2
FORM OF NOTICE OF COMPETITIVE BID BORROWING
Citibank, N.A., as Administrative Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043
[Date]
Attention:
-------------------
Ladies and Gentlemen:
The undersigned, Borden, Inc., refers to the Credit
Agreement, dated as of December 15, 1994 (as amended or modified
from time to time, the "Credit Agreement", the terms defined
----------------
therein being used herein as therein defined), among the
undersigned, certain Lenders parties thereto, BT Securities
Corporation, Chemical Securities Inc., Citicorp Securities, Inc.
and Credit Suisse, as Arrangers and Citibank, N.A., as
Administrative Agent for said Lenders, and hereby gives you
notice, irrevocably, pursuant to Section 2.03 of the Credit
Agreement that the undersigned hereby requests a Competitive Bid
Borrowing under the Credit Agreement, and in that connection sets
forth the terms on which such Competitive Bid Borrowing (the
"Proposed Competitive Bid Borrowing") is requested to be made:
----------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
(A) Date of Competitive Bid Borrowing ________________________
(B) Amount of Competitive Bid Borrowing ________________________
(C) Maturity Date ________________________
(D) Interest Rate Basis ________________________
(E) Interest Payment Date(s) ________________________
(F) ___________________ ________________________
(G) ___________________ ________________________
(H) ___________________ ________________________
</TABLE>
The undersigned hereby certifies that the
following statements are true on the date hereof, and will
be true on the date of the Proposed Competitive Bid
Borrowing:
(a) the representations and warranties contained in
Section 4.01 are correct in all material respects, before
and after giving effect to the Proposed Competitive Bid
Borrowing and to the application of the proceeds therefrom,
as though made on and as of such date; and
<PAGE>
B-2-2
(b) no event has occurred and is continuing, or would
result from the Proposed Competitive Bid Borrowing or from
the application of the proceeds therefrom, that constitutes
a Default.
The undersigned hereby confirms that the Proposed
Competitive Bid Borrowing is to be made available to it in
accordance with Section 2.03(a)(v) of the Credit Agreement.
Very truly yours,
BORDEN, INC.
By
------------------------
Title:
<PAGE>
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of
December 15, 1994 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement") among Borden, Inc., a
----------------
New Jersey corporation (the "Borrower"), the Lenders (as defined
--------
in the Credit Agreement), BT Securities Corporation, Chemical
Securities Inc., Citicorp Securities, Inc. and Credit Suisse, as
Arrangers, and Citibank, N.A., as administrative agent for the
Lenders (the "Administrative Agent"). Terms defined in the
--------------------
Credit Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on
Schedule 1 agree as follows:
1. The Assignor hereby sells and assigns to the
Assignee, without recourse, and the Assignee hereby purchases and
assumes from the Assignor, an interest in and to the Assignor's
rights and obligations under the Credit Agreement as of the date
hereof (other than in respect of Competitive Bid Advances) equal
to the percentage interest specified on Schedule 1 of all
outstanding rights and obligations under the Credit Agreement
Facility or Facilities specified on Schedule 1 (other than in
respect of Competitive Bid Advances). After giving effect to
such sale and assignment, the Assignee's Commitments and the
amount of the Advances owing to the Assignee will be as set forth
on Schedule 1.
2. The Assignor (i) represents and warrants that it
is the legal and beneficial owner of the interest being assigned
by it hereunder and that such interest is free and clear of any
adverse claim; (ii) makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the
Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any Lien created or purported to be
created under or in connection with, the Loan Documents or any
other instrument or document furnished pursuant thereto;
(iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any
Loan Party or the performance or observance by any Loan Party of
any of its obligations under the Loan Documents or any other
instrument or document furnished pursuant thereto; and
(iv) attaches the Note held by the Assignor and requests that the
Administrative Agent exchange such Note for a new Note payable to
the order of the Assignee in an amount equal to the Commitment
assumed by the Assignee pursuant hereto, or new Note payable to
the order of the Assignee in an amount equal to the Commitment
assumed by the Assignee pursuant hereto and the Assignor in an
amount equal to the Commitment retained by the Assignor under the
Credit Agreement, respectively, as specified on Schedule 1.
3. The Assignee (i) confirms that it has received a
copy of the Credit Agreement, together with copies of the
financial statements referred to in Section 4.01 thereof and such
other documents and information as it has deemed appropriate to
make its own
<PAGE>
C-2
credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without
reliance upon the Administrative Agent, the Arrangers, the
Assignor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is an Eligible
Assignee, a Lender or an Affiliate of the Assignor; (iv) appoints
and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers and discretion
under the Credit Agreement as are delegated to the Administrative
Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that
it will perform in accordance with their terms all of the
obligations that by the terms of the Credit Agreement are
required to be performed by it as a Lender; (vi) consents to be
bound by the terms of that certain Note Exchange Agreement dated
as of December 15, 1994 among the Borrower, the Administrative
Agent, TM, the lenders under the TM Credit Agreement and
Citibank, as administrative agent under the TM Credit Agreement;
and (vii) attaches any U.S. Internal Revenue Service forms
required under Section 2.13 of the Credit Agreement.
4. Following the execution of this Assignment and
Acceptance, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The
effective date for this Assignment and Acceptance (the "Effective
---------
Date") shall be the date of acceptance hereof by the
----
Administrative Agent, unless otherwise specified on Schedule 1.
5. Upon such acceptance and recording by the
Administrative Agent, as of the Effective Date, (i) the Assignee
shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall,
to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under
the Credit Agreement.
6. Upon such acceptance and recording by the
Administrative Agent, from and after the Effective Date, the
Administrative Agent shall make all payments under the Credit
Agreement and the Notes in respect of the interest assigned
hereby (including, without limitation, all payments of principal,
interest and commitment fees with respect thereto) to the
Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes
for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed
by, and construed in accordance with, the laws of the State of
New York.
8. This Assignment and Acceptance may be executed in
any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this
<PAGE>
C-3
Assignment and Acceptance by telecopier shall be effective as
delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have
caused Schedule 1 to this Assignment and Acceptance to be
executed by their officers thereunto duly authorized as of the
date specified thereon.
<PAGE>
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
<TABLE>
<S> <C>
As to each Facility in respect of which an interest is being assigned:
Assignee's Commitment: $__________
Aggregate outstanding principal amount of Advances assigned: $__________
Principal amount of Note payable to Assignee: $__________
Principal amount of Note payable to Assignor: $__________
Effective Date (if other than date of acceptance by Administrative Agent):
*_________ __, 199_
</TABLE>
[NAME OF ASSIGNOR], as
Assignor
By
----------------------------
Title:
Dated: _________ __, 199_
[NAME OF ASSIGNEE], as
Assignee
By
----------------------------
Title:
Domestic Lending Office:
Eurodollar Lending Office:
Accepted this _______________ day
of _________ __, 199_
CITIBANK, N.A., as
Administrative Agent
By
-----------------------
Title:
--------------------
* This date should be no earlier than five Business Days after
the delivery of this Assignment and Acceptance to the
Administrative Agent.
<PAGE>
EXHIBIT E
FORM OF PLEDGE AGREEMENT
Dated as of December 15, 1994
From
BORDEN, INC.,
as Pledgor, and
-- -------
BDS ONE, INC.
BDS TWO, INC.
BDS FOUR, INC.,
as Subsidiary Pledgors
-- ---------- --------
to
CITIBANK, N.A.,
as Administrative Agent
-- -------------- -----
<PAGE>
T A B L E O F C O N T E N T S
- - - - - - - - - - - - - - -
Section Page
1. Grant of Security . . . . . . . . . . . . . . . . . . . . 2
2. Security for Obligations . . . . . . . . . . . . . . . . 3
3. Pledgor and Subsidiary Pledgors Remain Liable . . . . . . 3
4. Delivery of the Collateral . . . . . . . . . . . . . . . 3
5. Representations and Warranties . . . . . . . . . . . . . 3
6. Further Assurances . . . . . . . . . . . . . . . . . . . 4
7. Place of Perfection; Records . . . . . . . . . . . . . . 4
8. Voting Rights; Dividends and Distributions; Etc . . . . . 5
9. Transfers and Other Liens; Additional Collateral; Etc. . 6
10. Administrative Agent Appointed Attorney-in-Fact . . . . 7
11. The Administrative Agent's Duties . . . . . . . . . . . 7
12. Remedies . . . . . . . . . . . . . . . . . . . . . . . . 8
13. Amendments; Waivers; Etc . . . . . . . . . . . . . . . . 9
14. Addresses for Notices . . . . . . . . . . . . . . . . . 10
15. Continuing Security Interest; Assignments Under the
Credit Agreement . . . . . . . . . . . . . . . . . . . . 10
16. Termination . . . . . . . . . . . . . . . . . . . . . . 10
17. Security Interest Absolute . . . . . . . . . . . . . . . 11
18. Amendments, Etc. of Certain Agreements. . . . . . . . . 11
19. Governing Law; Terms; Joint and Several Obligations . . 12
20. Execution in Counterparts . . . . . . . . . . . . . . . 12
Schedule I - Pledged Shares
Schedule II - Partnership Interests
Exhibit A - Form of Consent and Agreement
<PAGE>
This PLEDGE AGREEMENT (this "Agreement"), dated as
---------
of December 15, 1994, made by and among Borden, Inc., a New
Jersey corporation (the "Pledgor") and the undersigned
-------
Subsidiaries of the Pledgor (each a "Subsidiary Pledgor" and
------------------
collectively, the "Subsidiary Pledgors"), and Citibank, N.A., as
-------------------
collateral agent for and representative of (in such capacity
herein called the "Administrative Agent") the financial
--------------------
institutions (the "Lenders") party to the Credit Agreement (as
-------
hereinafter defined).
PRELIMINARY STATEMENTS
(1) The Pledgor is the legal and beneficial owner
of the shares of stock (the "Pledged Shares") described in
--------------
Schedule I annexed hereto and issued by the corporations named
therein, which Pledged Shares constitute the percentage of all of
the issued and outstanding shares of capital stock of such
companies identified on said Schedule I and of the indebtedness
(the "Pledged Debt") described from time to time on a schedule
------------
hereafter delivered to the Administrative Agent in accordance
with the terms of the Credit Agreement at the time of receipt by
the Pledgor of non-cash proceeds from sales of assets permitted
by the Credit Agreement.
(2) The Subsidiary Pledgors are the legal and
beneficial owners of the Partnership Interests (the "Pledged
-------
Interests") described opposite the name of such Subsidiary
---------
Pledgor on Schedule II hereto and issued by the partnership named
therein.
(3) The Pledgor and the Lenders have entered into
a Credit Agreement dated as of even date herewith (said Credit
Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "Credit
------
Agreement", the terms defined therein and not otherwise defined
---------
herein being used herein as therein defined), among the Pledgor,
Citibank, as Administrative Agent, BT Securities, Chemical
Securities, Citicorp Securities, Inc. and Credit Suisse, as
Arrangers and BT, Chemical, Citibank and Credit Suisse, as Lead
Managing Agents and the Lenders, pursuant to which the Lenders
have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain
credit facilities to the Pledgor.
(4) It is a condition precedent to the
effectiveness of the Credit Agreement that the Pledgor and each
Subsidiary Pledgor shall have granted the assignment and security
interest and made the pledge contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and
in order to induce the Lenders to make Advances under the Credit
Agreement, the Pledgor and each Subsidiary Pledgor hereby agrees
with the Administrative Agent for its benefit and the ratable
benefit of the Lenders as follows:
SECTION 1. Grant of Security. The Pledgor and each
-----------------
Subsidiary Pledgor hereby transfers, assigns and pledges to the
Administrative Agent for its benefit and the ratable benefit of
the Lenders, and hereby grants to the Administrative Agent for
its benefit and the ratable benefit of the Lenders a security
interest in, the following, whether now owned or existing or
hereafter acquired or existing (collectively, the "Collateral"):
----------
(a) the Pledged Shares and the certificates
representing the Pledged Shares and any interest of the
Pledgor in the entries on the books of any financial
intermediary pertaining to the Pledged Shares, and all
dividends, cash, warrants, rights, instruments and
other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares;
<PAGE>
E-2
(b) the Pledged Interests and the certificates,
if any, representing such Pledged Interests, and all
distributions, cash, instruments and other property and
assets from time to time received, receivable or
otherwise distributed in respect of or in exchange for
any or all of the Pledged Interests;
(c) the Pledged Debt and the instruments
evidencing the Pledged Debt, and all interest, cash,
instruments and other property from time to time
received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged
Debt;
(d) all additional Partnership Interests (whether
as a general partner, limited partner or otherwise)
from time to time acquired by any Subsidiary Pledgor in
any manner and the certificates, if any, representing
such additional Partnership Interests, and all
distributions, cash, instruments, and other property
and assets from time to time received, receivable or
otherwise distributed in respect of or in exchange for
any or all of such Partnership Interests; and
(e) to the extent not covered by clauses
(a) through (d) above, all proceeds of any or all of
the foregoing Collateral. For purposes of this
Agreement, the term "proceeds" includes whatever is
receivable or received when Collateral or proceeds are
sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary,
and includes, without limitation, proceeds of any
indemnity or guaranty payable to the Pledgor or any
Subsidiary Pledgor or the Administrative Agent from
time to time with respect to any of the Collateral.
SECTION 2. Security for Obligations. This Agreement
------------------------
secures the payment of all obligations of the Pledgor and each
Subsidiary Pledgor now or hereafter existing under the Loan
Documents, whether for principal, interest, fees, expenses,
indemnities or otherwise (all such obligations being the "Secured
-------
Obligations"). Without limiting the generality of the foregoing,
-----------
this Agreement secures the payment of all amounts that constitute
part of the Secured Obligations and would be owed by the Pledgor
and the Subsidiary Pledgors to the Administrative Agent or the
Lenders under the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the
Pledgor or any Subsidiary Pledgor.
SECTION 3. Pledgor and Subsidiary Pledgors Remain
--------------------------------------
Liable. Anything herein to the contrary notwithstanding, (a) the
------
Pledgor and each Subsidiary Pledgor shall remain liable under the
contracts and agreements included in the Collateral to the extent
set forth therein to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by the Administrative Agent of any of
the rights hereunder shall not release the Pledgor or any
Subsidiary Pledgor from any of its duties or obligations under
the contracts and agreements included in the Collateral and
(c) neither the Administrative Agent nor any Lender shall have
any obligation or liability under the contracts and agreements
included in the Collateral by reason of this Agreement, nor shall
the Administrative Agent or any Lender be obligated to perform
any of the obligations or duties of the Pledgor or any Subsidiary
Pledgor thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.
SECTION 4. Delivery of the Collateral. All
--------------------------
certificates or instruments, if any, representing or evidencing
the Collateral shall be delivered to and held by or on behalf of
the Administrative Agent pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in
<PAGE>
E-3
blank, all in form and substance reasonably satisfactory to the
Administrative Agent. The Administrative Agent shall have the
right, at any time after the occurrence and during the
continuance of an Event of Default and without notice to the
Pledgor, to transfer to or to register in the name of the
Administrative Agent or any of its nominees any or all of the
Pledged Shares. In addition, the Administrative Agent shall have
the right at any time to exchange certificates or instruments
representing or evidencing Pledged Shares for certificates or
instruments of smaller or larger denominations.
SECTION 5. Representations and Warranties. The
------------------------------
Pledgor and each Subsidiary Pledgor represents and warrants as
follows:
(a) The chief place of business and chief
executive office of such Subsidiary Pledgor and the
office where such Subsidiary Pledgor keeps its records
concerning the Collateral will be located at all times
at the address specified on the signature pages hereto
with respect to such Subsidiary Pledgor or at another
address specified in a notice delivered in accordance
with Section 7.
(b) The Pledgor and such Subsidiary Pledgor is
the legal and beneficial owner of the Collateral
pledged or assigned by the Pledgor or such Subsidiary
Pledgor hereunder free and clear of any Lien, except
for the lien and security interest created by this
Agreement or liens permitted under Section 9 hereof.
(c) As of the date of this Agreement, the Pledged
Shares have been duly authorized and validly issued and
are fully paid and non-assessable. The Pledged
Interests are validly outstanding. As of the date of
this Agreement, the Pledged Shares constitute the
percentage of issued and outstanding shares of stock of
each issuer thereof as identified in Schedule I hereto,
and the Pledged Interests constitute the percentage of
outstanding partnership interests in the issuer thereof
as identified in Schedule II hereto.
(d) This Agreement and the pledge of the
Collateral pursuant hereto create a valid and perfected
first priority security interest in the Collateral,
securing the payment of the Secured Obligations.
(e) The Pledgor or such Subsidiary Pledgor has
full power, authority and legal right to pledge all the
Collateral pledged by the Pledgor or such Subsidiary
Pledgor pursuant to this Agreement.
(f) The pledge of such Pledged Shares pursuant to
this Agreement does not violate Regulation G, T, U or X
of the Board of Governors of the Federal Reserve
System.
SECTION 6. Further Assurances. The Pledgor and each
------------------
Subsidiary Pledgor agrees that at any time and from time to time,
at the expense of the Pledgor and such Subsidiary Pledgor, it
will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary, or
that the Administrative Agent may reasonably request, in order to
perfect and protect any pledge, assignment or security interest
granted or purported to be granted hereby or to enable the
Administrative Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral.
<PAGE>
E-4
SECTION 7. Place of Perfection; Records. Each
----------------------------
Subsidiary Pledgor shall keep its respective chief place of
business and chief executive office and the office where it keeps
its records concerning the Collateral at the location therefor
specified in Section 5(a) or, upon not less than 30 days' prior
written notice to the Administrative Agent, at such other
locations in a jurisdiction where all actions required by
Section 6 shall have been taken with respect to the Collateral.
SECTION 8. Voting Rights; Dividends and
----------------------------
Distributions; Etc. (a) So long as no Event of Default shall
------------------
have occurred and be continuing:
(i) The Pledgor and each Subsidiary Pledgor shall
be entitled to exercise any and all voting and other
consensual rights pertaining to the Collateral or any
part thereof for any purpose not prohibited by the
terms of this Agreement or the other Loan Documents.
(ii) The Administrative Agent shall execute and
deliver (or cause to be executed and delivered) to the
Pledgor and each Subsidiary Pledgor all such proxies
and other instruments as the Pledgor or such Subsidiary
Pledgor may reasonably request for the purpose of
enabling the Pledgor or such Subsidiary Pledgor to
exercise the voting and other rights that it is
entitled to exercise pursuant to paragraph (i) above.
(b) Subject to paragraph (c) below, the Pledgor
and each Subsidiary Pledgor shall be entitled to receive and
retain and to utilize free and clear of the lien of this
Agreement, any and all dividends, distributions and interest paid
in respect of the Collateral, provided, however, that any and all
-------- -------
dividends and other distributions in equity securities shall be,
and shall be forthwith delivered to the Administrative Agent to
hold as, Collateral and shall, if received by the Pledgor or any
Subsidiary Pledgor, be received in trust for the benefit of the
Administrative Agent, be segregated from the other property or
funds of the Pledgor or such Subsidiary Pledgor and be forthwith
delivered to the Administrative Agent as Collateral in the same
form as so received (with any necessary indorsement).
(c) Upon written notice to the Pledgor and each
Subsidiary Pledgor by the Administrative Agent following the
occurrence and during the continuance of an Event of Default,
(i) all rights of the Pledgor or such Subsidiary
Pledgor to exercise or refrain from exercising the
voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to
Section 8(a)(i) shall cease, and all such rights shall
thereupon become vested in the Administrative Agent,
which shall thereupon have the sole right to exercise
or refrain from exercising such voting and other
consensual rights during the continuance of such Event
of Default;
(ii) all rights of the Pledgor or such Subsidiary
Pledgor to receive the dividends, distributions,
principal and interest payments which it would
otherwise be authorized to receive and retain pursuant
to Section 8(b) shall cease, and all such rights shall
thereupon become vested in the Administrative Agent who
shall thereupon have the sole right to receive and hold
as Collateral such dividends and interest payments
during the continuance of such Event of Default;
<PAGE>
E-5
(iii) all dividends, principal and interest
payments which are received by the Pledgor or
Subsidiary Pledgor contrary to the provisions of
Section 8(b) shall be received in trust for the benefit
of the Administrative Agent, shall be segregated from
other funds of the Pledgor or such Subsidiary Pledgor
and shall forthwith be paid over to the Administrative
Agent as Collateral in the same form as so received
(with any necessary indorsements); and
(iv) in order to permit the Administrative Agent
to receive all dividends and other distributions to
which it may be entitled under Section 8(b) above, to
exercise the voting and other consensual rights which
it may be entitled to exercise pursuant to Section
8(c)(i) above, and to receive all dividends,
distributions, principal and interest payments and
other distributions which it may be entitled to receive
under Section 8(c)(ii) above, the Pledgor or such
Subsidiary Pledgor shall, if necessary, upon written
notice from the Administrative Agent, from time to time
execute and deliver to the Administrative Agent
appropriate proxies, dividend payment orders and other
instruments as the Administrative Agent may reasonably
request.
SECTION 9. Transfers and Other Liens; Additional
-------------------------------------
Collateral; Etc. The Pledgor and each Subsidiary Pledgor shall:
---------------
(a) not, except as permitted by the Credit
Agreement, (i) sell or otherwise dispose of, or grant
any option or warrant with respect to, any of the
Collateral or (ii) create or suffer to exist any
consensual Lien upon or with respect to any of the
Collateral, except for the lien and security interest
under this Agreement; provided that in the event the
--------
Pledgor sells assets or monetizes RN Stock or any other
Collateral permitted by the Credit Agreement and such
assets are or include Collateral, the Administrative
Agent shall release such Collateral to the Pledgor or
Subsidiary Pledgor, as appropriate, free and clear of
the lien and security interest under this Agreement
concurrently with (i) the consummation of such sale and
(ii) so long as this Agreement is in effect,
arrangements reasonably satisfactory to the
Administrative Agent being made for delivery to the
Administrative Agent of the proceeds of such sale or
monetization to which the Lenders are entitled under
the Credit Agreement; and
(b) (i) cause each issuer of Pledged Shares
(other than RJR Nabisco Holdings Corp.) not to issue
any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such
issuer, except to the Pledgor (or to employees in
connection with a compensation plan or as otherwise
permitted by the Credit Agreement), and (ii) pledge
hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional shares
of stock or other securities of each such issuer (other
than those issuers organized outside of the United
Sates (with respect to which the Pledgor shall pledge
65 percent of such shares, in the case of issuers
organized under the laws of Colombia, Denmark, or
Panama within 6 months of such acquisition, and, in the
case of all other such issuers within 60 days of such
acquisition) and RJR Nabisco Holdings Corp.) of Pledged
Shares.
SECTION 10. Administrative Agent Appointed
------------------------------
Attorney-in-Fact. The Pledgor and each Subsidiary Pledgor hereby
----------------
irrevocably appoints the Administrative Agent as the Pledgor and
such Subsidiary Pledgor's attorney-in-fact, with full authority
in the place and stead of the Pledgor or such Subsidiary Pledgor
and in the name of the Pledgor or such Subsidiary Pledgor or
otherwise to take any action and to execute any instrument, in
each
<PAGE>
E-6
case after the occurrence and during the continuance of an Event
of Default, that the Administrative Agent may deem reasonably
necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation, (i) to receive, indorse
and collect all instruments made payable to the Pledgor
representing any dividend, interest payment or other distribution
in respect of the Collateral or any part thereof and to give full
discharge for the same, (ii) to exercise all partnership rights,
powers and privileges to the same extent as each Subsidiary
Pledgor, as a partner of the issuer of the Pledged Interests, is
entitled to exercise such rights, powers and privileges and (iii)
to cause the Pledged Interests to be sold in accordance with
Section 12, to cause each purchaser of all or part of any Pledged
Interest to be admitted as a new partner of the issuer of such
Pledged Interest, to cause such Subsidiary Pledgor to withdraw as
a partner of the issuer of such Pledged Interest to the extent
such Pledged Interest is sold and, if appropriate, to cause one
or more restated certificates of limited partnership to be filed
with respect to the issuer of such Pledged Interest.
SECTION 11. The Administrative Agent's Duties. The
---------------------------------
powers conferred on the Administrative Agent hereunder are solely
to protect its interest in the Collateral and shall not impose
any duty upon it to exercise any such powers. Except for the
safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the
Administrative Agent shall have no duty as to any Collateral, as
to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters
relative to any Pledged Shares, whether or not the Administrative
Agent or any Lender has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve
rights against any parties or any other rights pertaining to any
Collateral. The Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which the Administrative
Agent accords its own property.
SECTION 12. Remedies. If any Event of Default shall
--------
have occurred and be continuing:
(a) The Administrative Agent may exercise in
respect of the Collateral, in addition to other rights
and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party
upon default under the Uniform Commercial Code in
effect in the State of New York at such time (the "N.Y.
----
Uniform Commercial Code") (whether or not the N.Y.
-----------------------
Uniform Commercial Code applies to the affected
Collateral) and also may without notice except as
specified below, sell the Collateral or any part
thereof in one or more parcels at public or private
sale, at any exchange, broker's board or at any of the
Administrative Agent's offices or elsewhere, for cash,
on credit or for future delivery, at such price or
prices and upon such other terms as are commercially
reasonable irrespective of the impact of any such sales
on the market price of the Collateral. Each purchaser
at any such sale shall hold the property sold
absolutely free from any claim or right on the part of
the Pledgor or any Subsidiary Pledgor, and the Pledgor
and each Subsidiary Pledgor hereby waive (to the extent
permitted by law) all rights of redemption, stay and/or
appraisal which it now has or may at any time in the
future have under any rule of law or statute now
existing or hereafter enacted. The Pledgor and each
Subsidiary Pledgor agree that, to the extent notice of
sale shall be required by law, at least ten days'
notice to the Pledgor or such Subsidiary Pledgor of the
time and place of any public sale or the time after
which any private sale is to be made shall constitute
reasonable notification. The Administrative Agent
shall not be obligated to make any sale of Collateral
regardless of notice of sale
<PAGE>
E-7
having been given. The Administrative Agent may
adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the
time and place to which it was so adjourned. To the
extent permitted by law, the Pledgor and each
Subsidiary Pledgor hereby waive any claim against the
Administrative Agent arising by reason of the fact that
the price at which any Collateral may have been sold at
such a private sale was less than the price which might
have been obtained at a public sale, even if the
Administrative Agent accepts the first offer received
and does not offer such Collateral to more than one
offeree.
(b) All cash proceeds received by the
Administrative Agent in respect of any sale of,
collection from, or other realization upon all or any
part of the Collateral may, in the discretion of the
Administrative Agent, be held by the Administrative
Agent as collateral for, and/or then or at any time
thereafter applied (after payment of any amounts
payable to the Administrative Agent pursuant to
Section 8.04 of the Credit Agreement) in whole or in
part by the Administrative Agent for the ratable
benefit of the Lenders against, all or any part of the
Secured Obligations in such order as the Administrative
Agent shall elect. Any surplus of such cash or cash
proceeds held by the Administrative Agent and remaining
after payment in full of all the Secured Obligations
shall be paid over to the Pledgor or the Subsidiary
Pledgors or to whomsoever may be lawfully entitled to
receive such surplus.
(c) The Administrative Agent may exercise any and
all rights and remedies of the Pledgor or each
Subsidiary Pledgor in respect of the Collateral.
(d) All payments received by the Pledgor or each
Subsidiary Pledgor after the occurrence and during the
continuance of an Event of Default in respect of the
Collateral shall be received in trust for the benefit
of the Administrative Agent, shall be segregated from
other funds of the Pledgor or such Subsidiary Pledgor
and shall be forthwith paid over to the Administrative
Agent in the same form as so received (with any
necessary indorsement).
(e) The Administrative Agent may not exercise any
rights and remedies hereunder in respect of the Pledged
Interests prior to the redemption of the LP Interest
(as defined in the TMI Associates Limited Partnership
Agreement). This Section 12(e) is intended to benefit
TM as third party beneficiary and may not be modified
or amended without the consent of TM.
(f) The Administrative Agent may not exercise any
rights or remedies relating to the stock of BCP
Management, Inc. without the prior written consent of
the beneficiaries of any commitment by the Borrower or
any of its Subsidiaries (however evidenced) in effect
on the date hereof (or any extension entered into in
connection with an extension or replacement of existing
agreements) to retain a beneficial ownership interest
in Borden Chemicals and Plastics Limited Partnership or
Borden Chemicals and Plastics Operating Limited
Partnership.
SECTION 13. Amendments; Waivers; Etc. No amendment
------------------------
or waiver of any provision of this Agreement, and no consent to
any departure by the Pledgor or any Subsidiary Pledgor herefrom,
shall in any event be effective unless the same shall be in
writing and signed by the Administrative Agent, and then such
waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No
<PAGE>
E-8
failure on the part of the Administrative Agent to exercise, and
no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the
exercise of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any
rights or remedies otherwise available.
SECTION 14. Addresses for Notices. All notices and
---------------------
other communications provided for hereunder shall be in writing
(including telecopier, telegraphic, telex or cable communication)
and, mailed, telegraphed, telecopied, telexed, cabled or
delivered to the Pledgor, a Subsidiary Pledgor or to the
Administrative Agent, as the case may be, in the case of the
Pledgor and each Subsidiary Pledgor, addressed to it at its
address specified on the signature pages hereto and, in the case
of the Administrative Agent, 1 Court Square, 7th Floor, Long
Island City, New York, New York 11120, Attention: John Makrinos,
with a copy to 399 Park Avenue, New York, New York 10043,
Attention: Michel Pendill, or, as to either party, at such other
address as shall be designated by such party in a written notice
to each other party complying as to delivery with the terms of
this Section. All such notices and other communications shall,
when mailed, telecopied, telegraphed, telexed or cabled,
respectively, be effective when deposited in the mails,
telecopied, delivered to the telegraph company, confirmed by
telex answerback or delivered to the cable company, respectively,
addressed as aforesaid.
SECTION 15. Continuing Security Interest;
-----------------------------
Assignments Under the Credit Agreement. This Agreement shall
--------------------------------------
create a continuing security interest in the Collateral and shall
(a) remain in full force and effect until the earlier of the
payment in full in cash of the Secured Obligations and the
termination of the pledge, assignment and security interest
granted hereby pursuant to Section 16, (b) be binding upon the
Pledgor and each Subsidiary Pledgor, its successors and assigns
and (c) inure, together with the rights and remedies of the
Administrative Agent hereunder, to the benefit of the
Administrative Agent, the Lenders and their respective
successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c) and subject to the
provisions of Section 8.07 of the Credit Agreement, any Lender
may assign or otherwise transfer all or any portion of its rights
and obligations under the Credit Agreement (including, without
limitation, all or any portion of its Commitment, the Advances
owing to it and the Note or Notes held by it to any other Person,
and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or
otherwise, in each case as provided in Section 8.07 of the Credit
Agreement.
SECTION 16. Termination. Upon the latest of (x) one
-----------
year from the date of the initial Borrowing, (y) the date that
the Pledgor's Public Debt Rating is an Investment Grade Rating
and (z) the date that the Pledgor shall have received the
Prepayment Target including the issuance of at least $300,000,000
of additional equity or monetization of RN Stock contributed to
the Borrower, the pledge, assignment and security interest
granted hereby shall automatically terminate and all rights to
the Collateral shall revert to the Pledgor or the Subsidiary
Pledgors. It is acknowledged and agreed that Collateral may be
sold from time to time to the extent permitted by the Credit
Agreement; provided that arrangements reasonably satisfactory to
--------
the Administrative Agent have been made for both (i) the making
of any mandatory payments owing and (ii) the pledge of any
additional collateral required pursuant to the Credit Agreement
as a result thereof. Upon any such termination or sale referred
to in this Section 16, the Administrative Agent will, at the
Pledgor or such Subsidiary Pledgor's expense, execute and deliver
to the Pledgor or such Subsidiary Pledgor such documents as the
Pledgor or such Subsidiary Pledgor shall reasonably request to
evidence such termination.
<PAGE>
E-9
SECTION 17. Security Interest Absolute. All rights
--------------------------
of the Administrative Agent and the pledge, assignment and
security interest hereunder, and all obligations of the Pledgor
and the Subsidiary Pledgors hereunder, shall be absolute and
unconditional, irrespective of:
(a) any lack of validity or enforceability of any
Loan Document or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of
payment of, or in other term of, all or any of the
Secured Obligations or any other amendment or waiver of
or any consent to any departure from any Loan Document;
(c) any exchange, release or non-perfection of
any other collateral, or any release or amendment or
waiver of or consent to departure from any guaranty,
for all or any of the Secured Obligations; or
(d) any other circumstance that might otherwise
constitute a defense available to, or a discharge of,
the Pledgor or any Subsidiary Pledgor.
SECTION 18. Amendments, Etc. of Certain Agreements.
--------------------------------------
None of the Pledgor or any Subsidiary Pledgor shall cancel or
terminate any contract or agreement for the licensing of
trademarks, service marks, tradenames and rights with respect
thereto (each a "Material Contract"), or consent to any
-----------------
cancellation or termination thereof, amend or otherwise modify
any Material Contract or give any consent, waiver or approval
thereunder, waive any default under or breach of any Material
Contract, agree to any other amendment, modification or change of
any term or condition of any Material Contract, or permit any of
its Subsidiaries (the capital stock of which is pledged pursuant
to this Agreement) to do any of the foregoing, except for any
cancellation, termination, consent, acceptance, amendment,
modification, waiver, approval, agreement or other action that
would not be likely to have a Material Adverse Effect.
Notwithstanding the foregoing, the Pledgor and its Subsidiaries
may take any action referred to in the preceding sentence not
otherwise prohibited by any of the terms of the Loan Documents if
the management of the Pledgor determines in good faith that such
action is in the best interest of the Pledgor and its
Subsidiaries taken as a whole so long as such determination is
not made for the purpose of denying or limiting any of the
benefits intended to be conferred to or for the benefit of the
Lenders under this Agreement. Furthermore, this Section shall
not limit any rights to effect transfers permitted by Sections
5.02(c), (d) or (e)(i) of the Credit Agreement.
SECTION 19. Governing Law; Terms; Joint and Several
---------------------------------------
Obligations. This Agreement shall be governed by and construed
-----------
in accordance with the laws of the State of New York. Unless
otherwise defined herein or in the Credit Agreement, terms used
in Article 9 of the N.Y. Uniform Commercial Code are used herein
as therein defined. All obligations of the Pledgor and the
Subsidiary Pledgors hereunder shall be joint and several.
SECTION 20. Execution in Counterparts. This
-------------------------
Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which
when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature
page to this Agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this Agreement.
<PAGE>
E-10
IN WITNESS WHEREOF, the Pledgor and each Subsidiary
Pledgor have caused this Agreement to be duly executed and
delivered by its officer thereunto duly authorized as of the date
first above written.
BORDEN, INC., as Pledgor
By
----------------------------
Title:
180 East Broad Street
Columbus, Ohio 43215
Telecopy No.: (614) 225-4930
BDS ONE, INC., as a Subsidiary
Pledgor
By
----------------------------
Title:
One Little Falls Centre
Suite 202
2711 Centerville Road
Wilmington, Delaware 19808
Telecopy No.: (302) 633-7808
BDS TWO, INC., as a Subsidiary
Pledgor
By
----------------------------
Title:
One Little Falls Centre
Suite 202
2711 Centerville Road
Wilmington, Delaware 19808
Telecopy No.: (302) 633-7808
BDS FOUR, INC., as a
Subsidiary Pledgor
By
----------------------------
Title:
One Little Falls Centre
Suite 202
2711 Centerville Road
<PAGE>
E-11
Wilmington, Delaware 19808
Telecopy No.: (302) 633-7808
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
PLEDGED SHARES
Stock Percentage of
Class of Stock/ Certificate Number of Outstanding
Issuer Par Value No(s) Shares Shares
------ --------- ----- ------ ------
<S> <C> <C> <C> <C>
BDS Two, Inc. Common 1 100 100
BDH Two, Inc. Common 1 100 100
BDS Four, Inc. Common 1 100 100
BDS Five, Inc. Common 1 100 100
Borden Receivables Corp. Common 1 1,000 100
BCP Management, Inc. Common 1 100 100
Wilhelm Weber, GmbH (Germany)
Compania Colombiana de
Alimentos Lacteos, S.A.
(Colombia)
The Borden Company, A/S
(Denmark)
Borden France, S.A. (France)
Borden (Nederland) B.V.
(Netherlands)
The Borden Company Limited
(Canada)
Cia. Internacional De Ventas,
S.A. (Panama)
RJR Nabisco Holdings Corp.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE II
PARTNERSHIP INTERESTS
Percentage of
Owner of Type of Outstanding
Issuer of Partnership Interest Partnership Partnership Partnership
------------------------------
Interest Interest Interests
-------- -------- ---------
<S> <C> <C> <C>
T.M.I. Associates, L.P. BDS One, Inc. general 32.54%
T.M.I. Associates, L.P. BDS Two, Inc. general 44.72%
T.M.I. Associates, L.P. BDS Four, Inc. general and .02%
managing
general
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit F
CONFIDENTIALITY AGREEMENT
Memorandum To: Prospective Lenders
Date: July 1994
Subject: Confidentiality Agreement for Borden, Inc.
<S> <C>
In connection with your possible interest in becoming a Lender in the $1,400,000,000 loan facilities
(collectively, the "Credit Facility") for Borden, Inc. ("Borden") and its affiliates, you will be
---------------- ------
receiving certain information which is non-public, confidential or proprietary. Such information
concerning Borden and the T.M. Investors Limited Partnership ("TM Investors") including the structure of
------------
the transaction in which TM Investors is involved or any of Borden's or TM Investors' respective
affiliates (Borden, TM Investors, and such affiliates being collectively referred to as the "Companies")
---------
furnished to you by Citibank N.A., Citicorp Securities, Inc. or their affiliates ("Citicorp") or Credit
--------
Suisse or its affiliates ("Credit Suisse"), or otherwise by or on behalf of the Companies (at any time
-------------
on, before or after the date of this Confidentiality Agreement), together with analyses, compilations,
studies or other documents prepared by you or by your agents, representatives (including attorneys,
accountants and financial advisors) or employees which contain or otherwise reflect such information or
your review of, or interest in, the Companies, and including the structure of the TM Investors
transaction and any information otherwise concerning the Credit Facility, is hereinafter referred to as
the "Information." In consideration of your receipt of the Information, you agree that:
i. The information shall be kept confidential and shall not, without the prior written consent of
Citicorp, Credit Suisse and Borden, be reproduced or disclosed by you or by your affiliates,
agents, representatives or employees in any manner whatsoever, in whole or in part, and shall
not be used by you, your affiliates, agents, representatives or employees, other than in
connection with evaluating whether you wish to become a Lender in the Credit Facility.
Moreover, you agree to reveal Information only to your affiliates, agents, representatives and
employees who need to know the Information for the purpose of evaluating whether you wish to
become a Lender in the Credit Facility, who are informed by you of the confidential nature of
the Information and who agree to be bound by the terms and conditions of this Confidentiality
Agreement. You agree to take all reasonable measures to restrain your affiliates, agents,
representatives and employees from unauthorized disclosure or use of the Information.
ii. Without Citicorp's, Credit Suisse's and Borden's prior written consent, except as required by
law, you and your affiliates, agents, representatives and employees shall not disclose to any
person or entity (including, specifically, any representative of the press or media) the fact
that the Information has been made available, that discussions or negotiations are taking place
concerning a possible transaction involving the Credit Facility, any of the terms, conditions or
other facts with respect to any such possible transaction (including the status thereof), or
that the transaction has been, or is about to be, consummated.
iii. This Confidentiality Agreement shall be inoperative as to such portions of the Information (or
such of the facts referred to in the preceding paragraph) that (i) are or become generally
available to the public on a non-confidential basis through no fault of or action by you or your
affiliates, agents, representatives or employees so long as you have determined in good faith
such portions became generally available from a source (an "Unrestricted Source") not prohibited
-------------------
from disclosing such portions by a contractual, legal or fiduciary obligation to Citicorp,
Credit Suisse or any of the Companies, (ii) become available to you on a non-confidential basis
from a source other than Citicorp, Credit Suisse, their respective affiliates or any of the
Companies or their representatives or agents, which source is an Unrestricted Source or (iii)
was heretofore independently developed or compiled by you, as evidenced by your records, without
the use of the Information.
iv. If and to the extent that you or anyone to whom you transmit the Information pursuant to this
Confidentiality Agreement (i) become legally compelled to disclose any of the Information or the
existence of the transaction pursuant to a subpoena or other court process or (ii) is requested
or required to provide any of the Information or acknowledge the existence of the Information by
an applicable regulatory agency in connection with an examination of your financial institution
by examiners or by your independent auditors, you shall use your best efforts to provide
Citicorp, Credit Suisse and Borden
</TABLE>
<PAGE>
F-2
<TABLE>
<S> <C>
with notice of such event promptly upon your obtaining knowledge thereof so that any one or more of
Citicorp, Credit Suisse and Borden may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions of this Agreement. If and to the extent that such
protective order or other remedy is not obtained, or that Citicorp, Credit Suisse and Borden
waive compliance with the provisions of this Confidentiality Agreement with respect to all or
any portion of the information so sought, you shall disclose such Information in a manner
reasonably designed to preserve its confidential nature.
This Agreement shall be governed by and construed under the laws of the State of New York, without
reference to conflicts of laws principles.
If you are prepared to accept the Information on this basis, please sign and return to Citicorp the
enclosed copy of this Confidentiality Agreement. In the event that you decide not to provide financing
for the Credit Facility, referenced above, you shall, within two business days of that decision, and no
later than the date by which Lenders' commitments are due for the Credit Facility, redeliver to Citicorp
the Information, including the material that was furnished to you by or on behalf of any of the
Companies in connection with the Credit Facility, and represent to Citicorp, Credit Suisse and Borden
that you have returned all copies of such material. All of your obligations hereunder and all of our
rights and remedies hereunder shall survive any return or destruction of the Information.
</TABLE>
Very truly yours,
<TABLE>
<S> <C>
CITICORP SECURITIES, INC. CREDIT SUISSE
By: _______________________ By: _____________________
Title: ______________________ Title: ____________________
ACCEPTED: By: _____________________
__________________________ Title: _____________________
(Name of Lender)
__________, 1994
</TABLE>
<PAGE>
F-3
EXHIBIT A
FORM OF CONSENT AND AGREEMENT
The undersigned hereby acknowledges notice of, and
consents to the terms and provisions of, the Pledge Agreement
dated as of December 15, 1994 (the "Pledge Agreement", the terms
----------------
defined therein being used herein as therein defined) from
Borden, Inc., a New Jersey corporation and the undersigned
Subsidiaries of the Pledgor (each a "Subsidiary Pledgor" and
------------------
collectively, the "Subsidiary Pledgors") to Citibank, N.A., as
-------------------
collateral agent for and representative of (the "Administrative
--------------
Agent") the Lenders referred to therein, and hereby agrees with
-----
the Administrative Agent that the Administrative Agent shall be
entitled to exercise any and all rights and remedies of the
Subsidiary Pledgors in accordance with the terms of the Pledge
Agreement, and the undersigned shall comply in all respects with
such exercise.
This Consent and Agreement shall be binding upon the
undersigned and its successors and assigns, and shall inure,
together with the rights and remedies of the Administrative Agent
hereunder, to the benefit of the Administrative Agent, the
Lenders and their successors, transferees and assigns. This
Consent and Agreement shall be governed by and construed in
accordance with the laws of the State of New York
IN WITNESS WHEREOF, the undersigned has duly executed
this Consent and Agreement as of the date set opposite its name
below.
Dated: December 15, 1994 T.M. INVESTORS LIMITED
PARTNERSHIP
By: Pawling Partners, Inc., as
General Partner
By:
---------------------------
Name:
Title:
EXHIBIT 11(g)(26)
[EXECUTION COPY]
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of December 15, 1994
Among
T.M. INVESTORS LIMITED PARTNERSHIP
as Borrower,
-- --------
and
THE BANKS NAMED HEREIN
as Banks,
-- -----
CITIBANK, N.A.
as Administrative Agent,
-- --------------------
BANKERS TRUST COMPANY
CHEMICAL BANK
CITIBANK, N.A.
CREDIT SUISSE
as Lead Managing Agents
-- --------------------
and
BT SECURITIES CORPORATION
CHEMICAL SECURITIES INC.
CITICORP SECURITIES, INC.
CREDIT SUISSE
as Arrangers
-- ---------
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE 1
DEFINITIONS
1.01. Certain Defined Terms . . . . . . . . . . . . . . 2
1.02. Computation of Time Periods . . . . . . . . . . . 16
1.03. Accounting Terms . . . . . . . . . . . . . . . . 16
ARTICLE 2
AMOUNTS AND TERMS OF THE ADVANCES
2.01. The Advances . . . . . . . . . . . . . . . . . . 16
2.02. Making the Advances; Use of Proceeds . . . . . . 17
2.03. Repayments and Prepayments . . . . . . . . . . . 18
2.04. Interest . . . . . . . . . . . . . . . . . . . . 19
2.05. Interest Rate Determination and Protection . . . 20
2.06. Increased Costs, Etc . . . . . . . . . . . . . . 20
2.07. Illegality . . . . . . . . . . . . . . . . . . . 21
2.08. Payments and Computations . . . . . . . . . . . . 21
2.09. Taxes . . . . . . . . . . . . . . . . . . . . . . 22
2.10. Sharing of Payments, Etc . . . . . . . . . . . . 25
2.11. Option to Replace Lenders . . . . . . . . . . . . 25
ARTICLE 3
CONDITIONS OF LENDING
3.01. Conditions Precedent to the Advances . . . . . . 26
3.02. Additional Conditions Precedent to the Advances . 29
3.03. Conditions Precedent to Effectiveness . . . . . . 29
3.04. Conditions Precedent to Assignment Date . . . . . 32
3.05. Determinations Under Sections 3.03 and 3.04 . . . 33
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
<PAGE>
Section Page
ii
4.01. Representations and Warranties of the Borrower . 33
ARTICLE 5
COVENANTS OF THE BORROWER
5.01. Affirmative Covenants . . . . . . . . . . . . . . 36
5.02. Negative Covenants . . . . . . . . . . . . . . . 36
5.03. Reporting Requirements . . . . . . . . . . . . . 38
ARTICLE 6
EVENTS OF DEFAULT
6.01. Events of Default . . . . . . . . . . . . . . . . 39
ARTICLE 7
THE AGENTS
7.01. Authorization and Action . . . . . . . . . . . . 40
7.02. Reliance, Etc . . . . . . . . . . . . . . . . . . 41
7.03. Lead Managing Agents and Affiliates . . . . . . . 43
7.04. Lender Credit Decision . . . . . . . . . . . . . 44
7.05. Indemnification . . . . . . . . . . . . . . . . . 44
7.06. Successor Administrative Agent . . . . . . . . . 44
ARTICLE 8
MISCELLANEOUS
8.01. Amendments, Etc . . . . . . . . . . . . . . . . . 45
8.02. Notices, Etc . . . . . . . . . . . . . . . . . . 45
8.03. No Waiver; Remedies . . . . . . . . . . . . . . . 47
8.04. Costs and Expenses; Indemnification . . . . . . . 47
8.05. Binding Effect . . . . . . . . . . . . . . . . . 48
8.06. Assignments and Participations . . . . . . . . . 49
8.07. Manager . . . . . . . . . . . . . . . . . . . . . 52
<PAGE>
Section Page
iii
8.08. Non-Recourse Liability . . . . . . . . . . . . . 52
8.09. Execution in Counterparts . . . . . . . . . . . . 53
8.10. Confidentiality . . . . . . . . . . . . . . . . . 53
8.11. Submission to Jurisdiction; Venue . . . . . . . . 53
8.12. Lenders' Consent . . . . . . . . . . . . . . . . 54
8.13. Governing Law . . . . . . . . . . . . . . . . . . 54
8.14. Waiver of Jury Trial . . . . . . . . . . . . . . 54
Schedule I Lending Offices
Schedule 2.01 Assigned Advances
Exhibit A Form of Note
Exhibit B Notice of Borrowing
Exhibit C Assignment and Acceptance
Exhibit D Amended and Restated Pledge, Assignment and
Security Agreement
Exhibit E Confidentiality Agreement
Exhibit F Form of Original Credit Agreement Opinion of
Potter, Anderson & Corroon
Exhibits G-G2 Form of Original Credit Agreement Opinions of
Allan L. Miller, Esq.
Exhibit H Form of Original Credit Agreement Opinion of Dewey
Ballantine
Exhibit I Form of Opinion of Potter, Anderson & Corroon
Exhibits J-J2 Form of Opinions of Allan L. Miller, Esq.
Exhibit K Form of Opinion of Dewey Ballantine
<PAGE>
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated
as of December 15, 1994 among T.M. INVESTORS LIMITED PARTNERSHIP,
a limited partnership organized under the laws of Delaware (the
"Borrower"), the banks (the "Banks") listed on the signature
-------- -----
pages hereof, CITIBANK, N.A. ("Citibank"), as administrative
--------
agent (together with any successor appointed pursuant to Article
VII, the "Administrative Agent") for the Lenders (as hereinafter
--------------------
defined), BT SECURITIES CORPORATION ("BT Securities"), CHEMICAL
--------------
SECURITIES INC. ("Chemical Securities"), CITICORP SECURITIES,
-------------------
INC. ("CSI") and CREDIT SUISSE ("Credit Suisse"), as arrangers
--- -------------
(the "Arrangers"), and BT SECURITIES and CHEMICAL SECURITIES as
---------
co-syndication agents.
PRELIMINARY STATEMENTS:
----------------------
(1) The Borrower entered into the 1991 Credit
Agreement (as defined hereinafter) with the lenders named therein
and Citibank, N.A., as agent for such lenders, pursuant to which
the lenders made loans to the Borrower aggregating $480,000,000
to finance, in part, the Borrower's capital contribution to
Associates LP (as defined hereinafter).
(2) The Borrower entered into the Amended and
Restated Credit Agreement dated as of August 16, 1994 (the
"Original Credit Agreement") with the lenders party thereto (the
-------------------------
"Original Lenders"), Citibank, as administrative agent, and CSI
----------------
and Credit Suisse as arrangers, pursuant to which the Original
Lenders made loans to the Borrower aggregating $480,000,000 in
order to repay in full all of the Borrower's obligations under
the 1991 Credit Agreement and terminate the 1991 Commitments (as
hereinafter defined).
(3) The parties to the Original Credit Agreement
desire to amend and restate the Original Credit Agreement, among
other things, to extend the Termination Date, to provide for
regularly scheduled repayment dates and to include additional
financial institutions as parties thereto.
NOW THEREFORE, in consideration of the promises
and of the mutual covenants and agreements contained herein, the
parties agree that, subject to the conditions to effectiveness
set forth in Section 3.03, the Original Credit Agreement shall be
amended and restated in its entirety to read as follows:
<PAGE>
2
ARTICLE 1
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in
---------------------
this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Administrative Agent" means Citibank, N.A. and
--------------------
each successor Administrative Agent appointed pursuant to
Section 7.06. So long as the Administrative Agent, the
Security Agent and the Escrow Agent are the same Person,
references in Article 7 to the Administrative Agent shall,
unless the context shall otherwise require, be deemed to
refer to all of the Administrative Agent, the Security Agent
and the Escrow Agent.
"Advance" means an advance made by a Lender to the
-------
Borrower or assigned by an Assigning Lender to a Purchasing
Lender pursuant to Article 2.
"Affiliate" means, as to any Person, any other
---------
Person that, directly or indirectly, controls, is controlled
by or is under common control with such Person or is a
director or officer of such Person. For purposes of this
definition, the term "control" (including the terms
"controlling," "controlled by" and "under common control
with") of a Person means the possession, direct or indirect,
of the power to vote 10% or more of the voting stock of such
Person or to direct or cause the direction of the management
and policies of such Person, whether through the ownership
of voting stock, by contract or otherwise.
"Agents" means, collectively, the Administrative
------
Agent, the Lead Managing Agents and the Arrangers.
"Applicable Margin" means, as of any date, a
-----------------
percentage per annum determined by reference to the Public
Debt Rating in effect on such date as set forth below:
Public Debt Applicable Applicable
Rating Margin for Margin for
S&P/Moody's Base Rate Eurodollar
Rate
Advances
Level 1
-------
BBB- or 0% 1%
Baa3 or
above
Level 2
-------
below BBB- .5% 1.75%
and Baa3
but at
least BB or
Ba2
<PAGE>
3
Level 3
-------
below BB 1% 2.25%
and Ba2
provided, that for the period commencing on the Assignment
--------
Date and ending on the first anniversary thereof, the
Applicable Margin shall be Level 2 (if it would otherwise be
Level 2 or Level 1) or Level 3.
"Arrangers" has the meaning specified in the
---------
recital of parties to this Agreement.
"Assigned Advances" has the meaning specified in
-----------------
Section 2.01(b).
"Assigning Lenders" has the meaning specified in
-----------------
Section 2.01(b).
"Assignment Date" means the date on which all of
---------------
the conditions precedent specified in Section 3.03 and 3.04
are satisfied or waived and the Assigned Advances are
assigned to and purchased by the Purchasing Lenders.
"Assignment and Acceptance" means an assignment
-------------------------
and acceptance entered into by a Lender and an Eligible
Assignee, and accepted by the Administrative Agent, in
accordance with Section 8.06 and in substantially the form
of Exhibit C hereto.
"Associates LP" means T.M.I. Associates, L.P., a
-------------
limited partnership organized under the laws of Delaware,
its successors and assigns.
"Associates LP Consent" means the letter of the
---------------------
Borrower to Associates LP, dated as of December 23, 1991,
accepted and agreed by BDS One, BDS Two and BDS Four, and as
amended by the 1994 Amendments, acknowledging their consent
to the assignment by the Borrower of its rights and
interests under the Associates LP Partnership Agreement and
of the LP Interest to the Security Agent pursuant to the
Security Agreement.
"Associates LP Partnership Agreement" means the
-----------------------------------
Amended and Restated Agreement of Limited Partnership of
Associates LP, dated as of December 23, 1991, among BDS One,
BDS Two, and BDS Four, as general partners, and the
Borrower, as limited partner, as amended by the 1994
Amendments, and as further amended by the December
Amendments, and as it may be further amended, supplemented
or otherwise modified from time to time.
"Base Rate" means a fluctuating interest rate per
---------
annum in effect from time to time, which rate per annum
shall at all times be equal to the highest of the following
plus the Applicable Margin in effect from time to time:
----
<PAGE>
4
(a) the rate of interest announced publicly
by Citibank in New York, New York, from time to
time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of
1% or, if there is no nearest 1/4 of 1%, to the
next higher 1/4 of 1%) of (i) 1/2 of 1% per annum,
plus (ii) the rate obtained by dividing (A) the
----
latest three-week moving average of secondary
market morning offering rates in the United States
for three-month certificates of deposit of major
United States money market banks, such three-week
moving average (adjusted to the basis of a year of
360 days) being determined weekly on each Monday
(or, if such day is not a Business Day, on the
next succeeding Business Day) for the three-week
period ending on the previous Friday by Citibank
on the basis of such rates reported by certificate
of deposit dealers to and published by the Federal
Reserve Bank of New York or, if such publication
shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank
from three New York certificate of deposit dealers
of recognized standing selected by Citibank, by
(B) a percentage equal to 100% minus the average
of the daily percentages specified during such
three-week period by the Board of Governors of the
Federal Reserve System (or any successor) for
determining the maximum reserve requirement
(including, but not limited to, any emergency,
supplemental or other marginal reserve
requirement) for Citibank with respect to
liabilities consisting of or including (among
other liabilities) three-month U.S. dollar
non-personal time deposits in the United States,
plus (iii) the average during such three-week
----
period of the annual assessment rates reasonably
estimated by Citibank for determining the then
current annual assessment payable by Citibank to
the Federal Deposit Insurance Corporation (or any
successor) for insuring U.S. dollar deposits of
Citibank in the United States; and
(c) 1/2 of one percent per annum above the
Federal Funds Rate.
"BDS One" means BDS One, Inc., a corporation
-------
organized under the laws of Delaware, its successors and
assigns.
"BDS Two" means BDS Two, Inc., a corporation
-------
organized under the laws of Delaware, its successors and
assigns.
"BDS Three" means BDS Three, Inc., a corporation
---------
organized under the laws of Delaware, its successors and
assigns.
<PAGE>
5
"BDS Four" means BDS Four, Inc., a corporation
--------
organized under the laws of Delaware, its successors and
assigns.
"BDS Five" means BDS Five, Inc., a corporation
--------
organized under the laws of Delaware, its successors and
assigns.
"Borden" means Borden, Inc., a corporation
------
organized under the laws of New Jersey, its successors and
assigns.
"Borden Credit Agreement" means the Credit
-----------------------
Agreement dated as of December 15, 1994 among Borden, the
banks named therein, Citibank, as administrative agent, BT,
Chemical, Citibank and Credit Suisse, as lead managing
agents, and BT Securities, Chemical Securities, Citicorp
Securities and Credit Suisse, as arrangers, as such
agreement may be amended, supplemented, refinanced or
otherwise modified from time to time.
"Borden Consent" means the letter of the Borrower
--------------
to Borden, dated as of December 23, 1991, accepted and
agreed by Borden, and as amended by the 1994 Amendments,
acknowledging Borden's consent to the assignment by the
Borrower of its rights and interests under the Borden #2
Agreement and the Interest Rate Swap Agreement to the
Security Agent pursuant to the Security Agreement.
"Borden #1 Agreement" means the Agreement, dated
-------------------
as of December 23, 1991, given by Borden in favor of
Associates LP and the Liquidator (as defined in the
Associates LP Partnership Agreement) with respect to certain
obligations of BDS One, BDS Two, and BDS Four pursuant to
Section 12.9 of the Associates LP Partnership Agreement, as
the same may be amended, supplemented or otherwise modified
from time to time.
"Borden #2 Agreement" means the Agreement, dated
-------------------
as December 23, 1991, given by Borden in favor of the
Borrower with respect to certain obligations of BDS One,
BDS Two, and BDS Four under the terms of the Associates LP
Partnership Agreement, as amended by amendment dated
December 1, 1993 and the 1994 Amendments, and as further
amended by the December Amendments, and as the same may be
further amended, supplemented or otherwise modified from
time to time.
"Borden #3 Agreement" means the Agreement, dated
-------------------
as of December 23, 1991, given by Borden in favor of the
Borrower with respect to certain obligations of BDS Five
under the terms of the Borrower Partnership Agreement, as
the same may be amended, supplemented or otherwise modified
from time to time.
"Borden #4 Agreement" means the Agreement, dated
-------------------
as of August 16, 1994, given by Borden in favor of the
General Partner, the Class A Limited Partner and the Class B
Limited Partner and their successors and assigns with
respect to
<PAGE>
6
certain obligations of the Borden partners under the terms
of the Associates LP Partnership Agreement, as such
agreement may be amended, supplemented or otherwise modified
from time to time.
"Borrower" means T.M. Investors Limited
--------
Partnership, a limited partnership organized under the laws
of Delaware, its successors and permitted assigns.
"Borrower Partnership Agreement" means the Amended
------------------------------
and Restated Agreement of Limited Partnership of the
Borrower, dated as of December 23, 1991, among Pawling
Partners, Inc., as general partner, and Allstate Life
Insurance Company, as the Class A Limited Partner, and BDS
Five, as the Class B Limited Partner, as amended by the 1994
Amendments and as further amended by the December
Amendments, and as the same may be further amended,
supplemented or otherwise modified from time to time.
"Borrowing" means the borrowing under Section
---------
2.01(a) consisting of simultaneous Advances made on the
Funding Date by the Lenders pursuant to Article 2.
"BT" means Bankers Trust Company.
--
"BT Securities" has the meaning specified in the
-------------
recital of parties to this Agreement.
"Business Day" means a day of the year on which
------------
banks are not required or authorized to close in New York
City and dealings are carried on in the London eurodollar
interbank market.
"Chemical" means Chemical Bank.
--------
"Chemical Securities" has the meaning specified in
-------------------
the recital of parties to this Agreement.
"Citibank" has the meaning specified in the
--------
recital of parties to this Agreement.
"Class A Limited Partner" means Allstate Life
-----------------------
Insurance Company and its successors and assigns, each as a
holder of the class A limited partnership interest of the
Borrower.
"Class B Limited Partner" means BDS Five, and its
-----------------------
successors and assigns, as holder of the class B limited
partnership interests of the Borrower.
<PAGE>
7
"Commitment" has the meaning specified in Section
----------
2.01, provided that the aggregate commitments of the Lenders
--------
to make Advances shall not, at any time, exceed
$480,000,000.
"Contributed Assets" means the assets contributed
------------------
to Associates LP pursuant to Section 2.4 of the Associates
LP Partnership Agreement.
"Counterparty" means Borden, as counterparty under
------------
the Interest Rate Swap Agreement.
"Credit Suisse" has the meaning specified in the
-------------
recital of parties to this Agreement.
"CSI" has the meaning specified in the recital of
---
parties to this Agreement.
"December Amendments" means the amendments dated
-------------------
the date hereof to each of the Security Agreement, the
Interest Rate Swap Agreement, the Interest Rate Swap Fee
Letter, the Reset Note, the note governing the "Borden
Loans" (as defined in the Associates LP Partnership
Agreement), the Borden #2 Agreement, the Associates LP
Partnership Agreement and the Borrower Partnership
Agreement.
"Default" means any Event of Default or event
-------
(other than an event that is a "Liquidating Event" (as
defined in the Associates LP Partnership Agreement)
described in Section 12.1(a) of the Associates LP
Partnership Agreement, or a "Default Event" (as defined in
the Associates LP Partnership Agreement) described in
Section 14.1(e) or 14.1(h) of the Associates LP Partnership
Agreement) that would constitute an Event of Default but for
the requirement that notice be given or time elapse or both.
"Effective Date" has the meaning specified in
--------------
Section 3.03.
"Eligible Assignee" means any of (i) a commercial
-----------------
bank organized under the laws of the United States, or any
State thereof, and having a combined capital and surplus of
at least $250,000,000; (ii) a savings and loan association
or savings bank organized under the laws of the United
States, or any State thereof, and having a combined capital
and surplus of at least $250,000,000; (iii) a commercial
bank organized under the laws of any other country that is a
member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated
with its General Arrangements to Borrow, or a political
subdivision of any such country, and having a combined
capital and surplus of at least $250,000,000, so long as
such bank is acting through a branch or agency located in
the United States or in the country in which it is organized
or another country that is described in this clause (iii);
(iv) the central bank of any country that is a member of the
OECD; and
<PAGE>
8
(v) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership,
trust or other entity) that is engaged in making, purchasing
or otherwise investing in commercial loans in the ordinary
course of its business and having a combined capital and
surplus of at least $100,000,000, in each case as approved
by the Arrangers and the Borrower, such approval not to be
unreasonably withheld or delayed; provided, however, that an
-------- -------
Affiliate of the Borrower shall not qualify as an Eligible
Assignee under this definition.
"Employee Services Agreement" means the Employee
---------------------------
Services Agreement dated as of December 23, 1991 between BDS
Four and Borden, as such agreement may be amended,
supplemented or otherwise modified from time to time.
"Escrow Agreement" means the Escrow Agreement,
----------------
dated as of August 16, 1994, among the general partners of
Associates LP, the Borrower and the Security Agent, as such
agreement may be amended, supplemented or otherwise modified
from time to time.
"Eurocurrency Liabilities" has the meaning
------------------------
assigned to that term in Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Rate" means, for any Interest Period
---------------
for each Advance, an interest rate per annum equal to the
rate per annum obtained by dividing (a) the average (rounded
upward to the nearest whole multiple of 1/16 of 1% per
annum, if such average is not such a multiple) of the rate
per annum at which deposits in U.S. dollars are offered by
the principal office of each of the Reference Banks in
London, England to prime banks in the London interbank
market at 11:00 A.M. (London time) two Business Days before
the first day of such Interest Period in an amount
substantially equal to the Advance made by the respective
Reference Bank and for a period equal to such Interest
Period by (b) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period.
The Eurodollar Rate shall be determined by the
Administrative Agent on the basis of applicable rates
furnished to and received by the Administrative Agent from
the Reference Banks two Business Days before the first day
of such Interest Period.
"Eurodollar Rate Reserve Percentage" for any
----------------------------------
Interest Period for each Eurodollar Rate Advance means the
reserve percentage if and to the extent actually applicable
two Business Days before the first day of such Interest
Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirement
(including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for each Lender with
respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by
<PAGE>
9
reference to which the interest rate on Eurodollar Rate
Advances is determined) having a term equal to such Interest
Period.
"Events of Default" has the meaning specified in
-----------------
Section 6.01.
"Federal Funds Rate" means, for any period, a
------------------
fluctuating interest rate per annum equal for each day
during such period to the weighted average of the quotations
for such day on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal
Funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is
not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions
received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"Funding Date" means the date on which all of the
------------
conditions precedent specified in Sections 3.01 and 3.02
were satisfied or waived and the Advances were made.
"General Partner" means Pawling Partners, Inc. and
--------------
its successors and assigns, as holder of the general partner
interest of the Borrower.
"Indebtedness" of the Borrower means (a) all
------------
indebtedness of the Borrower for borrowed money, (b) all
obligations of the Borrower for the deferred purchase price
of property or services, (c) all obligations of the Borrower
evidenced by bonds, notes, debentures or other similar
instruments, (d) all indebtedness of the Borrower created or
arising under any conditional sale or other title retention
agreement (whether or not the rights and remedies of the
seller or lender under such agreement in the event of
default are limited to repossession or sale of such
property), (e) all obligations of the Borrower as lessee
under leases which shall have been recorded as capital
leases, (f) all obligations, contingent or otherwise, of the
Borrower under acceptance, letter of credit or similar
facilities, (g) all obligations of the Borrower to purchase,
redeem, retire, defease or otherwise acquire for value any
partnership interests of the Borrower, (h) all obligations
of the Borrower in respect of interest rate swap agreements
and other similar agreements designed to hedge against
fluctuations in interest rates, (i) all Indebtedness
referred to in clauses (a) through (h) above guaranteed
directly or indirectly by the Borrower, or in effect
guaranteed directly or indirectly by the Borrower through an
agreement (A) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such
Indebtedness, (B) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily
for the purpose of enabling the debtor to make payment of
such Indebtedness or to assure the holder of such
Indebtedness against loss, (C) to supply funds to or in any
other manner invest in the debtor (including any agreement
to pay for property or services irrespective of whether such
property is
<PAGE>
10
received or such services are rendered) or (D) otherwise to
assure a creditor against loss, (j) all other financial
obligations of the Borrower under any contract or other
agreement to which the Borrower is a party and (k) all
Indebtedness referred to in clauses (a) through (j) above
secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured
by) any Lien on property (including, without limitation,
accounts and contract rights) owned by the Borrower, even
though the Borrower has not assumed or become liable for
payment of such Indebtedness.
"Indemnified Party" has the meaning specified in
-----------------
Section 8.04(b).
"Interest Payment Date" has the meaning specified
---------------------
in Section 2.04.
"Interest Period" means, for each Advance included
---------------
in the Borrowing, each consecutive period commencing on the
last day of the immediately preceding Interest Period and
ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of
each such Interest Period shall be one, two, three, six, or,
to the extent available in the reasonable judgment of the
Administrative Agent, nine or twelve months, as the Borrower
may, upon notice received by the Administrative Agent not
later than 11:00 A.M. (New York City time) on the third
Business Day prior to the first day of such Interest Period,
select; provided, however, that:
-------- -------
(a) no Interest Period shall extend after
the Termination Date;
(b) whenever the last day of any Interest
Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding
Business Day, provided, however, that, if such
-------- -------
extension would cause the last day of such
Interest Period to occur in the next following
calendar month, the last day of such Interest
Period shall occur on the next preceding Business
Day;
(c) whenever the first day of any Interest
Period occurs on a day of an initial calendar
month for which there is no numerically
corresponding day in the calendar month that
succeeds such initial calendar month by the number
of months equal to the number of months in such
Interest Period, such Interest Period shall end on
the last Business Day of such succeeding calendar
month; and
(d) from the Assignment Date through and
including February 28, 1995, only one month
Interest Periods may be selected unless the Lead
Managing Agents shall otherwise agree; and
<PAGE>
11
(e) if the Borrower fails to provide such
notice, the duration of each next Interest Period
shall be three months thereafter, until such time
as such notice is provided in accordance with the
second sentence of this definition.
"Interest Rate Swap Agreement" means the Interest
----------------------------
Rate and Currency Exchange Agreement, dated as of December
15, 1994, between the Borrower and the Counterparty, as such
agreement may be amended, supplemented or otherwise modified
from time to time, including, without limitation, as
supplemented on such date by the Interest Rate Swap Fee
Letter.
"Interest Rate Swap Fee Letter" means that certain
-----------------------------
letter dated as of December 15, 1994 from the Borrower to
Borden relating to certain fees payable by the Borrower to
Borden in connection with the Interest Rate Swap Agreement.
"Lead Managing Agents" means BT, Chemical,
--------------------
Citibank and Credit Suisse.
"Lenders" means the Lenders listed on the
-------
signature pages hereof and each Eligible Assignee that shall
become a party hereto pursuant to Section 8.06, but shall
not include a purchaser of a participation pursuant to
Section 8.06 (except to the extent that such purchaser is
also a Lender or an Eligible Assignee that has become a
party hereto pursuant to Section 8.06).
"Lending Office" means, with respect to any
--------------
Lender, the office of such Lender specified as its Lending
Office opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a
Lender, or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the
Administrative Agent.
"Lien" means any lien, security interest or other
----
similar charge or encumbrance, including, without
limitation, the lien or retained security title of a
conditional vendor.
"Loan Documents" means this Agreement, the Notes
--------------
and the Security Agreement, each as it may be amended,
supplemented or otherwise modified from time to time.
"LP Interest" means the limited partner interest
-----------
in Associates LP acquired and held by the Borrower.
"Manager" means Wilmington Trust Company or any
-------
other institution or independent certified public
accountants of national reputation engaged by the
<PAGE>
12
Borrower to manage the business and affairs of the Borrower
consented to by the Administrative Agent (which consent
shall not be unreasonably withheld).
"Material Adverse Effect" means a circumstance or
-----------------------
condition affecting the business, condition (financial or
otherwise), operations, performance or properties of the
Borrower which would materially adversely affect (a) the
ability of the Borrower to perform its obligations under
this Agreement, the Notes, the other Loan Documents and the
Operative Documents or (b) the rights and remedies of the
Administrative Agent or any Lender under this Agreement and
the other Loan Documents taken as a whole.
"Manager's Engagement Letter" means the Borrower's
---------------------------
engagement letter with the Manager acknowledged by the
Manager, pursuant to which the Borrower engages the Manager
to manage the business and affairs of the Borrower.
"Moody's" means Moody's Investor Services, Inc. or
-------
any successor by merger or consolidation to its business.
"Note" means a promissory note of the Borrower, in
----
substantially the form of Exhibit A, payable to the order of
any Lender, evidencing the indebtedness of the Borrower in
respect of the Advance by such Lender.
"Notice of Assignment" has the meaning specified
--------------------
in Section 2.01(b).
"Notice of Borrowing" has the meaning specified in
-------------------
Section 2.02(a).
"1991 Commitments" means the "Commitments", as
----------------
such term is defined in the 1991 Credit Agreement.
"1991 Credit Agreement" means the Credit Agreement
---------------------
dated as of December 23, 1991 among the Borrower, the banks
named therein and Citibank, as agent, as amended or
otherwise modified to August 16, 1994.
"1994 Amendments" means the amendments dated as of
---------------
August 16, 1994 to each of the "Interest Rate Swap
Agreement" and the "Interest Rate Swap Fee Letter" (in each
case as defined in 1991 Credit Agreement), the Reset Note,
the Borden #2 Agreement, the Associates LP Partnership
Agreement, the Borrower Partnership Agreement, the
Associates LP Consent, the Borden Consent and the Trademark
License Agreement with respect to the Eagle Brands
trademark.
"Operating Account" has the meaning specified in
-----------------
paragraph 5 of the preliminary statements to the Security
Agreement.
<PAGE>
13
"Operative Documents" means the Associates LP
-------------------
Partnership Agreement, the Reset Note, the Borrower
Partnership Agreement, the Interest Rate Swap Agreement, the
Interest Rate Swap Fee Letter, the Borden #1 Agreement, the
Borden #2 Agreement, the Borden #3 Agreement, the Borden #4
Agreement, the Employee Services Agreement, the Trademark
License Agreements, the Manager's Engagement Letter, the
Escrow Agreement, the Transfer Agreement, the Borden Consent
and the Associates LP Consent.
"Original Credit Agreement" has the meaning
-------------------------
specified in the Preliminary Statements to this Agreement.
"Original Lenders" has the meaning specified in
----------------
the Preliminary Statements to this Agreement.
"Other Taxes" has the meaning specified in Section
-----------
2.09(b).
"Person" means an individual, partnership,
------
corporation (including a business trust), joint stock
company, trust, unincorporated association, joint venture or
other entity, or a government or any political subdivision
or agency thereof.
"Pledged Collateral" has the meaning specified in
------------------
Section 1 of the Security Agreement.
"Process Agent Acceptance" means the acceptance by
------------------------
Prentice-Hall Corporation Systems, Inc. of its appointment
as process agent pursuant to Section 8.11.
"Public Debt Rating" means, as of any date, the
------------------
higher of the ratings that have been most recently announced
by either S&P or Moody's, as the case may be, for any class
of long-term senior unsecured debt issued by Borden. For
purposes of the foregoing, (a) if only one of S&P and
Moody's shall have in effect a Public Debt Rating, the
Applicable Margin shall be determined by reference to the
available rating; (b) if neither S&P nor Moody's shall have
in effect a Public Debt Rating, the Applicable Margin will
be set in accordance with Level 3 under the definition of
"Applicable Margin"; (c) if any rating established by S&P or
-----------------
Moody's shall be changed, such change shall be effective as
of the date on which such change is first announced publicly
by the rating agency making such change; and (d) if S&P or
Moody's shall change the basis on which ratings are
established, each reference to the Public Debt Rating
announced by S&P or Moody's, as the case may be, shall refer
to the then equivalent rating by S&P or Moody's, as the case
may be.
"Purchasing Lenders" has the meaning specified in
------------------
Section 2.01(b).
"Reference Banks" means BT, Chemical, Citibank and
---------------
Credit Suisse.
<PAGE>
14
"Register" has the meaning specified in Section
--------
8.06(c).
"Replacement Lender" has the meaning specified in
------------------
Section 2.11.
"Required Lenders" means, at any time, Lenders
----------------
holding at least 51% of the aggregate unpaid principal
amount of the Advances owing to Lenders or, if no Advances
have previously been made, Lenders holding at least 51% of
the aggregate Commitments of all the Lenders.
"Reset Note" means the Guaranteed Reset Note Due
----------
2011 issued on December 11, 1991, by BDS Three in the
original principal sum of $850,000,000, as amended by
amendment dated December 1, 1993 and the 1994 Amendments,
and as further amended by the December Amendments, and as
the same may be further amended, supplemented or otherwise
modified from time to time.
"S&P" means Standard & Poor's Ratings Group or any
---
successor by merger or consolidation to its business.
"Security Agent" means Citibank, N.A., or any
--------------
successor security agent, appointed pursuant to the terms
hereof and acting as such under the Security Agreement.
"Security Agreement" means that certain Amended
------------------
and Restated Pledge, Assignment and Security Agreement,
dated as of August 16, 1994, made by the Borrower to the
Security Agent, pursuant to which the Borrower has pledged
to the Security Agent, for its benefit and the benefit of
the Agents and the Lenders, the Pledged Collateral, in
substantially the form of Exhibit D, as such agreement is
amended by the December Amendments and as it may be further
amended, supplemented or otherwise modified from time to
time.
"Subsidiary" means, with respect to any Person,
----------
(i) a corporation a majority of whose capital stock with
voting power, under ordinary circumstances, to elect
directors is at the time, directly or indirectly, owned by
such Person, by such Person and one or more Subsidiaries of
such Person or by one or more Subsidiaries of such Person or
(ii) any other Person (other than a corporation) a majority
interest in the capital or profits, in the case of a
partnership or joint venture, or a beneficial interest, in
the case of a trust or estate, which is at the time,
directly or indirectly, owned by such Person, such Person
and one or more Subsidiaries of such Person, or by one or
more Subsidiaries of such Person.
"Taxes" has the meaning specified in Section
-----
2.09(a).
<PAGE>
15
"Termination Date" means the earlier of December
----------------
31, 1999 and the date of the prepayment in whole of the
Advances, and all interest thereon and all other amounts
payable under this Agreement, pursuant to Section 2.03.
"Trademark Assets" means the "Trademark Assets"
----------------
(as defined in the Associates LP Partnership Agreement)
contributed to Associates LP pursuant to the terms of the
Associates LP Partnership Agreement.
"Trademark License Agreements" means,
----------------------------
collectively, those six certain Primary Trademark License
Agreements, dated as of December 23, 1991 pertaining to the
Trademark Assets, between Associates LP and Borden, as such
agreement pertaining to the Eagle Brands trademark is
amended by the 1994 Amendments, and as such agreements may
be amended, supplemented or otherwise modified from time to
time.
"Transfer Agreement" means that certain Transfer
------------------
Agreement, dated as of December 23, 1991, by Borden in favor
of the Borrower, as such agreement may be amended,
supplemented or otherwise modified from time to time.
SECTION 1.02. Computation of Time Periods. In
---------------------------
this Agreement in the computation of periods of time from a
specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each means
"to but excluding".
SECTION 1.03. Accounting Terms. All accounting
----------------
terms not specifically defined herein shall be construed in
accordance with United States generally accepted accounting
principles.
ARTICLE 2
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. (a) Each
------------
Original Lender hereby severally agreed, on the terms and
conditions hereinafter set forth, to make a single Advance to the
Borrower on the Funding Date in an amount not to exceed the
amount set forth opposite such Original Lender's name on Schedule
I hereto under the caption "Allocated Commitment" (such amount
being such Lender's "Commitment"). Amounts borrowed hereunder
----------
and repaid or prepaid may not be reborrowed.
(b) Each of the Original Lenders set forth on
Schedule 2.01 hereto (collectively, the "Assigning Lenders")
-----------------
hereby agrees to sell and assign as of the Assignment Date, on
the terms and conditions hereinafter set forth, all of its rights
and interest in and to, and all of its obligations under, the
portion of the "Advance" owing to it under the Original
<PAGE>
16
Credit Agreement set forth opposite the name of such Assigning
Lender on Schedule 2.01 hereto (collectively, the "Assigned
--------
Advances") to the Lenders set forth on Schedule 2.01 hereto
--------
(collectively, the "Purchasing Lenders") and each of the
------------------
Purchasing Lenders hereby agrees to purchase and assign as of the
Assignment Date, on the terms and conditions hereinafter set
forth, an undivided interest in its ratable share of all such
Assigning Lenders' rights and interest in and to, and obligations
under, the Assigned Advances. Each Purchasing Lender, before
11:00 a.m. (New York City time) on the Effective Date, shall make
available for the account of its Lending Office to the
Administrative Agent at the Administrative Agent's Account for
the account of the Assigning Lenders, an amount equal to such
Purchasing Lender's ratable share of the Assigned Advances (it
being understood that the Borrower shall make payment of all
accrued interest and other amounts (including breakage) through
the Assignment Date on such date directly to the Original Lenders
in accordance with the terms of the Original Credit Agreement).
The assignment of the Assigned Advances shall be made on notice
(the "Notice of Assignment"), given not later than 11:00 A.M.
--------------------
(New York City time) on the third Business Day prior to the
Assignment Date by the Borrower to the Administrative Agent,which
shall give to each Lender prompt notice thereof by telecopier,
telex or cable. The failure of any Purchasing Lender to fund its
ratable share of the Assigned Advances shall not relieve any
other Purchasing Lender of its obligation to fund its ratable
share of the Assigned Advances.
SECTION 2.02. Making the Advances; Use of
---------------------------
Proceeds. (a) (i) The Borrowing shall be made on notice, given
--------
not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the Funding Date, by the Borrower to the
Administrative Agent, which shall give to each Lender prompt
notice thereof by telecopier, telex or cable. Such notice of the
Borrowing (the "Notice of Borrowing") shall be by telecopier,
-------------------
telex or cable, confirmed immediately in writing, in
substantially the form of Exhibit B hereto, specifying therein
the requested aggregate amount of such Borrowing. Each Lender
shall, before 12:00 noon (New York City time) on the Funding
Date, make available for the account of its Lending Office to the
Administrative Agent at its address referred to in Section 8.02,
in immediately available funds, such Lender's ratable portion of
the Borrowing. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth
in Article 3, the Administrative Agent will promptly make such
funds available to the Borrower at the Administrative Agent's
aforesaid address.
(ii) The Notice of Assignment shall be irrevocable
and binding on the Borrower. The Borrower shall indemnify each
Lender, after receipt of a written request by such Lender (which
request shall set forth in reasonable detail the basis for such
amount) against any loss, cost or expense actually incurred by
such Lender (excluding loss of anticipated profits) as a result
of any failure of the Borrower to borrow in accordance with the
Notice of Borrowing or the failure of the Purchasing Lenders to
purchase Assigned Advances in accordance with the Notice of
Assignment including, but not limited to, the Borrower's failure
to fulfill on or before the date specified in such Notice of
Borrowing or the Notice of Assignment the applicable conditions
set forth in Article 3, including, without limitation, any loss,
cost or expense reasonably incurred by reason of the liquidation
or reemployment of
<PAGE>
17
deposits or other funds acquired by such Lender to fund the
Advance or purchase the Assigned Advance to be made by such
Lender as part of the Borrowing or the assignment when such
Advance or Assigned Advance, as a result of such failure, is not
made or purchased on such date; provided, however, that the
-------- -------
Borrower shall not be liable to indemnify a Lender against any
such loss, cost or expense to the extent such failure is a direct
consequence of such Lender's failure to fund its Advance or
purchase the Assigned Advance; and provided further, however,
-------- ------- -------
that the failure of any Lender to fund its Advance or purchase
the Assigned Advance shall not relieve the Borrower of its
obligations in respect of the Advances funded or to be funded by
the other Lenders or purchased by the other Purchasing Lenders.
Each Assigning Lender that assigns all of its Advances pursuant
to Section 2.01(b) shall relinquish its rights (except to
indemnities provided for herein) and be released from its
obligations hereunder and cease to be a party hereto.
(b) Unless the Administrative Agent shall have
received notice from a Lender prior to the Funding Date that such
Lender will not make available to the Administrative Agent such
Lender's ratable portion of the Borrowing, the Administrative
Agent may assume that such Lender has made such portion available
to the Agent on such date in accordance with subsection (a) of
this Section 2.02 and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date
a corresponding amount. If and to the extent that such Lender
shall not have so made such ratable portion available to the
Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand
such corresponding amount together with interest thereon, for
each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Borrower, the
interest rate applicable at the time to the Advances comprising
the Borrowing and (ii) in the case of such Lender, the Federal
Funds Rate. If such Lender shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Advance as part of the Borrowing for
purposes of this Agreement.
(c) The failure of any Lender to make the Advance
to be made by it as part of the Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its
Advance on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of such
Borrowing.
(d) The Borrower used the proceeds of the
Advances for the sole purpose of repaying all amounts outstanding
under the 1991 Credit Agreement and terminating the 1991
Commitments.
SECTION 2.03. Repayments and Prepayments. (a)
--------------------------
Mandatory Repayments and Prepayments. (i) The Borrower shall
------------------------------------
repay to the Administrative Agent for the ratable account of the
Lenders the aggregate outstanding principal amount of the
Advances on the following dates in the amounts indicated:
<PAGE>
18
Date Amount
---- ------
December 31, 1995 $ 136,585,366
June 30, 1996 78,048,780
December 31, 1997 39,024,390
December 31, 1998 78,048,780
December 31, 1999 148,292,683
provided, that the unpaid principal amount of all then
---------
outstanding Advances shall be repaid in a single installment on
the earlier of (A) the date on which the Notes, all interest
thereon and all other amounts payable under this Agreement have
become due and payable pursuant to Section 6.01 hereof, and (B)
the Termination Date.
(ii) The Borrower shall prepay the unpaid principal
amount of the Advances with the proceeds of, and in an amount
equal to the following amount (but in no event greater than the
unpaid principal amount of the Advances): (A) any distribution
made to the Borrower pursuant to Section 10.8(b) of the
Associates LP Partnership Agreement (but excluding the
"Retirement Period Guaranteed Payment" (as defined in the
Associates LP Partnership Agreement) paid to the Borrower
pursuant to Section 10.8(b)(ii) of the Associates LP Partnership
Agreement in connection with such distribution), (B) the amount
of any distribution made in respect of the LP Interest in a
liquidation under Section 12.2 of the Associates LP Partnership
Agreement and (C) the amount of any installment of the purchase
price of the LP Interest paid by one or more general partners of
Associates LP pursuant to the exercise of the purchase option for
such LP Interest as provided in Section 14.3 of the Associates LP
Partnership Agreement, each such prepayment to be made within two
Business Days after the date of such distribution to the
Borrower.
(iii) If the Assignment Date hereunder does not
occur on or prior to February 18, 1997, the Borrower shall prepay
the unpaid principal amount of all then outstanding Advances, all
interest thereon and all other amounts payable, on such date.
(b) Optional Prepayments. Subject to the provisions
--------------------
of paragraph (c) below, the Borrower may, at its option, and at
any time and from time to time prepay the unpaid principal amount
of all or any portion of the Advances.
(c) Prior Notice, Etc. Each prepayment or repayment
-----------------
of the Advances shall (other than a repayment on the Termination
Date) be made on not less than three Business Days' prior written
notice from the Borrower to the Administrative Agent and, at the
time of such prepayment or repayment (including a repayment on
the Termination Date), the Borrower shall pay all accrued and
unpaid interest on the principal amount of the Advances being
prepaid or repaid.
SECTION 2.04. Interest. (a) Ordinary Interest. The
-------- -----------------
Borrower shall pay interest on the unpaid principal amount of the
Advance made by each Lender from the date of
<PAGE>
19
such Advance until such principal amount shall be paid in full,
at a rate per annum equal at all times during each Interest
Period for such Advance to the sum of (a) the Eurodollar Rate for
such Interest Period for such Advance plus (b) the Applicable
Margin in effect on each day during such Interest Period, payable
in arrears on the last day of such Interest Period (an "Interest
--------
Payment Date") and, if such Interest Period has a duration of
------------
more than three months, then such Interest Payment Date shall be
on each day that occurs during such Interest Period every three
months from the first day of such Interest Period.
(b) Default Interest. Overdue principal and interest
----------------
in respect of each Advance shall bear interest at a rate per
annum equal to the Base Rate in effect from time to time plus the
sum of (i) 2% and (ii) the Applicable Margin; provided that each
--------
Advance shall bear interest after maturity (whether by
acceleration or otherwise) until the end of the Interest Period
then applicable thereto at a rate per annum equal to 2% in excess
of the rate of interest applicable thereto at maturity.
SECTION 2.05. Interest Rate Determination and
-------------------------------
Protection. (a) The Administrative Agent shall give prompt
----------
notice to the Borrower and the Lenders of the applicable interest
rate determined by the Administrative Agent for purposes of
Section 2.04.
(b) If the Administrative Agent shall have determined
that on any date for determining the Eurodollar Rate for any
Interest Period for any Advance, that, by reason of changes
arising after the date hereof affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the
definition of Eurodollar Rate (i) each such Advance will
automatically, on the last day of the then existing Interest
Period therefor, convert into an Advance bearing interest at the
Base Rate and (ii) the obligation of the Lenders to make Advances
at the Eurodollar Rate shall be suspended until the
Administrative Agent shall notify the Borrower that the Lenders
have determined that the circumstances causing such suspension no
longer exist.
SECTION 2.06. Increased Costs, Etc. (a) If, due to
--------------------
either (i) the introduction of or any change in or in the
interpretation of any law or regulation after the date hereof or
(ii) the compliance with any guideline or request made after the
date hereof from any central bank or other governmental authority
(whether or not having the force of law), there shall be any
increase in the cost to any Lender of agreeing to make or making,
funding or maintaining Advances bearing interest calculated by
reference to the Eurodollar Rate, then the Borrower shall from
time to time, upon demand by such Lender (with a copy of such
demand to the Administrative Agent), pay to the Administrative
Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost;
provided, however, that each Lender agrees to use reasonable
-------- -------
efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Lending Office
or take other steps if to do so would avoid the need for, or
reduce the amount of, such increased cost and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous
to such Lender. A certificate as to the amount of such increased
cost accompanied by a statement setting forth in reasonable
detail the basis for, and amount of, such increased cost,
submitted
<PAGE>
20
to the Borrower by such Lender, shall be conclusive and binding
for all purposes, absent demonstrable error.
(b) If, after the date hereof (i) the introduction of
or any change in any applicable law or regulation regarding
capital adequacy or any change after the date hereof in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or (ii) the compliance
by a Lender or its parent with any directive or request made
after the date hereof regarding capital adequacy from any central
bank or other governmental authority (whether or not having the
force of law), has the effect of reducing the rate of return on
such Lender's or its parent's capital or assets as a consequence
of such Lender's commitment to lend hereunder or other
obligations hereunder to a level below that which such Lender or
its parent would have achieved but for such introduction, change
or compliance (taking into consideration such Lender's or its
parent's policies with respect to capital adequacy, then, upon
demand by such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to the
Administrative Agent for the account of such Lender, from time to
time as specified by such Lender, additional amounts sufficient
to compensate such Lender for such reduction, it being understood
and agreed, however, that such Lender shall not be entitled to
such compensation as a result of such Lender's compliance with,
or pursuant to any directive or request to comply with, any such
law or regulation as in effect on the date hereof; provided,
--------
however, that each Lender agrees to use reasonable efforts
-------
(consistent with its internal policy and legal and regulatory
restrictions) to designate a different Lending Office or take
other steps if to do so would avoid the need for, or reduce the
amount of, such increased cost and would not, in the reasonable
judgment of such Lender, be otherwise disadvantageous to such
Lender. A certificate as to such amounts accompanied by a
statement setting forth in reasonable detail the basis for, and
the amount of, such increased cost submitted to the Borrower by
such Lender, shall be conclusive and binding for all purposes,
absent demonstrable error.
SECTION 2.07. Illegality. Notwithstanding any other
----------
provision of this Agreement, if after the date hereof the
introduction of or any change in or in the interpretation of any
law or regulation shall make it unlawful or impracticable, or any
central bank or other governmental authority shall assert that it
is unlawful, for any Lender or its Lending Office to perform its
obligations hereunder to make Eurodollar Rate Advances or to
continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the
Borrower through the Administrative Agent, (i) each Advance will
automatically, upon such demand, convert into an Advance that
bears interest calculated by reference to the Base Rate, and
(ii) the obligation of the Lenders to fund and maintain Advances
bearing interest calculated by reference to the Eurodollar Rate
shall be suspended until the circumstances causing such
suspension no longer exist; provided, however, that such Lender
-------- -------
agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to designate a
different Lending Office or take other steps if to do so would
allow such Lender or its Eurodollar Office to continue to perform
its
<PAGE>
21
obligations to make Advances or to continue to fund or maintain
Advances and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender.
SECTION 2.08. Payments and Computations. (a) Except
-------------------------
as otherwise provided in this Agreement, the Security Agreement,
or the Notes, each payment hereunder and under the Notes shall be
made not later than 11:00 A.M. (New York City time) on the day
when due in U.S. dollars to the Administrative Agent at its
address referred to in Section 8.02 in same day funds. The
Administrative Agent will promptly thereafter cause to be
distributed like funds (i) if such payment by the Borrower is in
respect of principal, interest, commitment fees or any other
obligation then payable hereunder and under the Notes to more
than one Lender, to such Lenders for the account of their
respective Lending Offices ratably in accordance with the amounts
of such respective obligations then payable to such Lenders
and (ii) if such payment by the Borrower is in respect of any
obligation then payable hereunder to one Lender, to such Lender
for the account of its Lending Office, in each case to be applied
in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Acceptance and recording of the
information contained therein in the Register pursuant to Section
8.06(d), from and after the effective date of such Assignment and
Acceptance, the Administrative Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned
thereby to the Lender assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective
date directly between themselves.
(b) All computations of interest and fees shall be
made by the Administrative Agent on the basis of a year of 360
days, in each case for the actual number of days (including the
first day but excluding the last day) occurring in the period for
which such interest or fees are payable. Each determination by
the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent
demonstrable error.
(c) Whenever any payment hereunder or under the Notes
shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the
computation of payment of interest or commitment fee, as the case
may be; provided, however, if such extension would cause payment
-------- -------
of interest on or principal of Advances bearing interest
calculated by reference to the Eurodollar Rate to be made in the
next following calendar month, such payment shall be made on the
next preceding Business Day.
(d) Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any
payment is due to the Lenders hereunder that the Borrower will
not make such payment in full, the Administrative Agent may
assume that the Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to
each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent the Borrower shall not
have so made such payment in full to the Administrative Agent,
<PAGE>
22
each Lender shall repay to the Administrative Agent forthwith on
demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such
amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.09. Taxes. (a) Any and all payments by the
-----
Borrower hereunder or under the Notes shall be made, in
accordance with Section 2.08, free and clear of and without
deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding, in the case of each Lender and
---------
the Administrative Agent, net income taxes and franchise taxes
(imposed in lieu of net income taxes) that are imposed by the
United States or any political subdivision or taxing authority
thereof or therein or by a foreign jurisdiction as a result of a
present or former connection between the Administrative Agent or
such Lender and the jurisdiction imposing such tax or any
political subdivision or taxing authority thereof or therein
(other than any such connection arising solely from the
Administrative Agent or such Bank having executed, enforced,
delivered or performed its obligations or received payment under
this Agreement) (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be
-----
required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under any Note to any Lender or the
Administrative Agent, (i) the sum payable shall be increased as
may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under
this Section 2.09) such Lender or the Administrative Agent (as
the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or
future stamp, documentary, excise, property or similar taxes,
charges or levies that arise from any payment made hereunder or
under the Notes or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or the Notes
(hereinafter referred to as "Other Taxes").
-----------
(c) The Borrower shall indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other
Taxes, and for the full amount of taxes imposed by any
jurisdiction on amounts payable under this Section 2.09, paid by
such Lender or the Administrative Agent (as the case may be) and
any liability (including penalties, additions to tax, interest
and expenses) arising therefrom or with respect thereto. The
Administrative Agent or such Lender shall provide the Borrower
with appropriate receipts for any payments or reimbursements made
to the Borrower pursuant to this Section 2.09. This
indemnification shall be made within 45 days from the date such
Lender or the Administrative Agent (as the case may be) makes
written demand therefor.
<PAGE>
23
(d) Within 45 days after the date of any payment of
Taxes, the Borrower shall furnish to the Administrative Agent, at
its address referred to in Section 8.02, the original receipt of
payment thereof or a certified copy of such receipt. In the case
of any payment hereunder or under the Notes by the Borrower
through an account or branch outside the United States or on
behalf of the Borrower by a payor that is not a United States
person, if the Borrower determines that no Taxes are payable in
respect thereof, the Borrower shall furnish, or shall cause such
payor to furnish, to the Administrative Agent, at such address,
an opinion of counsel acceptable to the Administrative Agent
stating that such payment is exempt from Taxes. For purposes of
this subsection (d) and subsection (e), the terms "United States"
-------------
and "United States person" shall have the meanings specified in
--------------------
Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a
jurisdiction outside the United States shall, on or prior to the
date of its execution and delivery of this Agreement in the case
of each Bank, and on the date of the Assignment and Acceptance
pursuant to which it became a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing
by the Borrower or the Administrative Agent (but only so long
thereafter as such Lender remains lawfully able to do so),
provide the Administrative Agent and the Borrower with Internal
Revenue Service form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service,
certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party that
reduces the rate of withholding tax on payments under this
Agreement or the Notes or certifying that the income receivable
pursuant to this Agreement or the Notes is effectively connected
with the conduct of a trade or business in the United States. If
the form provided by a Lender at the time such Lender first
becomes a party to this Agreement indicates a United States
interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from Taxes unless and
until such Lender provides the appropriate form certifying that a
lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods
governed by such form; provided, however, that, if at the date of
-------- -------
the Assignment and Acceptance pursuant to which a Lender assignee
becomes a party to this Agreement, the Lender assignor was
entitled to payments under subsection (a) in respect of United
States withholding tax with respect to interest paid at such
date, then, to such extent, the term Taxes shall include (in
addition to withholding taxes that may be imposed in the future
or other amounts otherwise includable in Taxes) United States
withholding tax, if any, applicable with respect to the Lender
assignee on such date. If any form or document referred to in
this subsection (e) requires the disclosure of information, other
than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue
Service form 1001 or 4224, that the Lender reasonably considers
to be confidential, the Lender shall give notice thereof to the
Borrower and shall not be obligated to include in such form or
document such confidential information.
(f) For any period with respect to which a Lender has
failed to provide the Borrower with the appropriate form
described in subsection (e) (other than if such failure is due to
----- ----
a change in law occurring after the date on which a form
originally was required to be
<PAGE>
24
provided or if such form otherwise is not required under
subsection (e)), such Lender shall not be entitled to
indemnification under subsection (a) or (c) with respect to Taxes
imposed by the United States; provided, however, that should a
-------- -------
Lender become subject to Taxes because of its failure to deliver
a form required hereunder, the Borrower shall take such steps as
such Lender shall reasonably request to assist such Lender to
recover such Taxes.
(g) Any Lender claiming any additional amounts payable
pursuant to this Section 2.09 shall use reasonable efforts
(consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Lending Office or
take other steps if to do so would avoid the need for, or reduce
the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender,
be otherwise disadvantageous to such Lender.
(h) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 2.09 shall
survive the payment in full of principal and interest hereunder
and under the Notes.
SECTION 2.10. Sharing of Payments, Etc. If any Lender
------------------------
shall obtain any payment (whether voluntary, involuntary or
otherwise) on account of the Advances owing to it (other than
pursuant to Section 2.06, 2.07 or 2.09) in excess of its ratable
share of payments on account of the Advances obtained by all the
Lenders, such Lender shall forthwith purchase from the other
Lenders such participations in the Advances owing to them as
shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that
-------- -------
if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each
Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Lender's ratable
share (according to the proportion of (i) the amount of such
Lender's required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid
or payable by the purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this
Section 2.10 may, to the fullest extent permitted by law,
exercise all its rights of payment and set off with respect to
such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
SECTION 2.11. Option to Replace Lenders. If any
-------------------------
Lender shall request the Borrower to pay any amount, or shall
assert any other special rights, under Section 2.06, 2.07 or
2.09, the Borrower may request one or more other Lenders or other
financial institutions, each of which is an Eligible Assignee
(each a "Replacement Lender") to take over all or the affected
------------------
portion of such Lender's then outstanding Advances and to assume
all or the affected portion of such Lender's Commitments and
obligations hereunder. If one or more Replacement Lenders shall
so agree, the Advances and Commitments of the Lender to be
<PAGE>
25
replaced shall, at the direction of the Borrower, be assigned to
such Replacement Lenders in accordance with Section 8.06, in such
amounts as the Borrower may designate.
ARTICLE 3
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to the Advances.
------------------------------------
The obligation of each Original Lender to make its Advance on the
Funding Date under the Original Credit Agreement was subject to
satisfaction of the following conditions precedent:
(a) The Original Lenders shall be satisfied with the
legal structure and capitalization of the Borrower and
Associates LP, including the terms of the Borrower
Partnership Agreement, the Associates LP Partnership
Agreement, the Trademark License Agreements, the Reset Note,
the 1994 Amendments and each other agreement or instrument
relating to such structure or capitalization.
(b) There shall have been no material adverse change
in the financial condition, operations or properties of
Borden and its Subsidiaries, taken as a whole, since
December 31, 1993, except as disclosed to the Arrangers
prior to July 26, 1994, or of Associates LP or the Borrower
since the respective dates of their formation that would
materially adversely affect the ability of the Borrower to
perform its obligations under this Agreement.
(c) All advances, interest and fees and all other
amounts payable under the 1991 Credit Agreement shall have
been paid in full in cash prior to or upon the application
of the Advances, and the 1991 Commitments shall have been
terminated.
(d) The 1994 Amendments shall have been fully executed
and shall be in full force and effect.
(e) The Administrative Agent shall have received on or
before the Funding Date the following, each duly executed by
the respective party or parties thereto, and otherwise in
form and substance satisfactory to the Administrative Agent,
and (except for the Notes and the documents listed in
subsections (e)(ii)(A), (B) and (C)) in sufficient copies
for each Original Lender:
(i) A Note payable to the order of each Original
Lender.
(ii) The Security Agreement, together with:
(A) acknowledgment copies, stamped receipt
copies or other evidence of proper termination
statements (Form UCC-3 or a
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26
comparable form), duly filed on or before the date
of the initial Borrowing under the Uniform
Commercial Code of all jurisdictions that may be
necessary or desirable in order to terminate
existing liens on the Pledged Collateral described
in the Security Agreement;
(B) acknowledgment copies or other evidence
of the proper filing of Financing Statements (Form
UCC-1) under the Uniform Commercial Code of all
jurisdictions to the extent necessary or desirable
or required, in the judgment of the Security
Agent, to perfect the security interests created
or purported to be created by the Security
Agreement; and
(C) evidence that all other actions to the
extent necessary or desirable, in the judgment of
the Security Agent, to perfect and protect the
security interests and liens created by the
Security Agreement have been taken.
(iii) A certificate of the Borrower having
attached thereto a true and correct copy of each of (A)
the Operative Documents and all amendments thereto, (B)
the 1994 Amendments, and (C) the contribution
agreements, if any, executed by each of the partners of
the Borrower pursuant to which they made contributions
to the Borrower, certifying that all such attached
agreements are in full force and effect and have not
been terminated.
(iv) Certificates of the Secretary of State of the
State of Delaware with respect to each of the General
Partner, BDS One, BDS Two, BDS Three, BDS Four and BDS
Five, and of the Secretary of State of the State of New
Jersey with respect to Borden, dated within a date
reasonably near to the Funding Date, in each case
attaching the charter of such Person and each amendment
thereto on file in his office and certifying that (A)
such charter is a true and complete copy thereof, (B)
such amendments are the only amendments to such charter
on file in his office, (C) in case of each Delaware
certificate, such Person has paid all franchise taxes
to the date of such certificate and (D) such Person is
duly incorporated and in good standing under the laws
of, in the case of the General Partner, BDS One, BDS
Two, BDS Three, BDS Four and BDS Five, Delaware and, in
the case of Borden, New Jersey.
(v) A certificate of each of the General Partner,
BDS One, BDS Two, BDS Three, BDS Four, BDS Five and
Borden, signed on behalf of each such Person by its
President or a Vice President and the Secretary or any
Assistant Secretary of each such Person (the statements
made in which certificate shall be true and correct on
and as of the Funding Date), certifying as to:
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27
(A) the absence of any amendments to the
charter of such Person since the date of the
certificate referred to in Section 3.01(e)(iv),
(B) a true and correct copy of the by-laws
of such Person as in effect on the Funding Date,
(C) the due incorporation and good standing
of such Person as a corporation under the laws of
the jurisdiction of its incorporation, and the
absence of any proceeding for the dissolution or
liquidation of such Person,
(D) that attached thereto is a true and
complete copy of resolutions duly adopted by the
Board of Directors of such Person authorizing the
execution, delivery and performance of (1) in the
case of the General Partner, the 1994 Amendments
in which it is a party, the Escrow Agreement, and
each Loan Document, (2) in the case of BDS One,
the Escrow Agreement and the 1994 Amendments to
which it is a party, (3) in the case of BDS Two,
the Escrow Agreement and the 1994 Amendments to
which it is a party, (4) in the case of BDS Three,
the Escrow Agreement and the 1994 Amendments to
which it is a party, (5) in the case of BDS Four,
the Escrow Agreement and the 1994 Amendments to
which it is a party, (6) in the case of BDS Five,
the 1994 Amendments to which it is a party and (7)
in the case of Borden, the 1994 Amendments to
which it is a party,
(E) in the case of each such Person, that
such resolutions have not been revoked, annulled
or modified in any manner and are in full force
and effect, and
(F) in the case of each such Person, the
incumbency and specimen signature of each officer
of such person executing the documents described
in items (1)-(7) of clause (D) above, and a
certification of another officer of each such
Person as to the signature of the officers signing
certificates referred to in this subclause (v).
(vi) A favorable opinion of Potter, Anderson and
Corroon, special Delaware counsel to the Borrower, in
substantially the form of Exhibit F attached hereto.
(vii) Favorable opinions of Allan L. Miller,
Esq., Senior Vice President, Chief Administrative
Officer and General Counsel of Borden, in substantially
the form of Exhibits G, G-1 and G-2 attached hereto.
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28
(viii) A favorable opinion of Dewey Ballantine,
counsel to the General Partner, in substantially the
form of Exhibit H attached hereto.
(ix) Favorable opinions of Shearman & Sterling,
counsel to the Administrative Agent, in form and
substance satisfactory to the Administrative Agent.
(x) An instruction letter to the partners of the
Borrower, directing that certain payments be made into
the Operating Account or the Manager Account (as such
terms are defined in the Security Agreement).
(xi) Such other certificates, documents and
opinions as the Administrative Agent or any Lender may
reasonably request.
SECTION 3.02. Additional Conditions Precedent to the
--------------------------------------
Advances. The obligation of each Original Lender to make its
--------
Advance on the Funding Date was subject, in addition to the
conditions specified therefor in Section 3.01, to the further
conditions precedent that on the Funding Date the following
statements shall be true (and each of (a) the giving of the
Notice of Borrowing and (b) the acceptance by the Borrower of the
proceeds of the Borrowing shall constitute a representation and
warranty by the Borrower that on the Funding Date such statements
are true):
(i) The representations and warranties contained
in Section 4.01 hereof and in the other Loan Documents are
correct on and as of the Funding Date, before and after
giving effect to the Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date
(except to the extent that such representations and
warranties relate solely to an earlier date (in which case
such representations and warranties shall have been true and
accurate on and as of such earlier date)); and
(ii) No event has occurred and is continuing, or would
result from the Borrowing or from the application of the
proceeds therefrom, which constitutes a Default.
SECTION 3.03. Conditions Precedent to Effectiveness.
-------------------------------------
This Agreement shall become effective on the date (the "Effective
---------
Date") that the Administrative Agent shall have received
----
counterparts of this Agreement executed by each party hereto
which shall occur after the following conditions precedent shall
have been satisfied or waived:
(a) The conditions to effectiveness under the Borden
Credit Agreement shall have been satisfied or waived;
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29
(b) The Lenders shall be satisfied with the legal
structure and capitalization of the Borrower and Associates
LP, including the terms of the December Amendments and each
other agreement or instrument relating to such structure or
capitalization;
(c) The December Amendments and consents thereto shall
have been fully executed and shall be or concurrently with
the effectiveness hereof, shall become, in full force and
effect;
(d) The Administrative Agent shall have received on or
before the Effective Date the following, each dated the date
of the Effective Date and duly executed by the respective
party or parties thereto, and otherwise in form and
substance satisfactory to the Administrative Agent and in
sufficient copies for each Lender:
(i) A certificate of the Borrower having attached
thereto a true and correct copy of each of (A) the
Operative Documents and (B) the December Amendments,
certifying that all Operative Documents, as amended,
are in full force and effect and have not been
terminated.
(ii) Certificates of the Secretary of State of the
State of Delaware with respect to each of the General
Partner, BDS One, BDS Two, BDS Three, BDS Four and BDS
Five, and of the Secretary of State of the State of New
Jersey with respect to Borden, dated within a date
reasonably near to the Effective Date, in each case
attaching the charter of such Person and each amendment
thereto on file in his office and certifying that (A)
such charter is a true and complete copy thereof, (B)
such amendments are the only amendments to such charter
on file in his office, (C) in case of each Delaware
certificate, such Person has paid all franchise taxes
to the date of such certificate and (D) such Person is
duly incorporated and in good standing under the laws
of, in the case of the General Partner, BDS One, BDS
Two, BDS Three, BDS Four and BDS Five, Delaware and, in
the case of Borden, New Jersey.
(iii) A certificate of each of the General
Partner, BDS One, BDS Two, BDS Three, BDS Four, BDS
Five and Borden, signed on behalf of each such Person
by its President or a Vice President and the Secretary
or any Assistant Secretary of each such Person (the
statements made in which certificate shall be true and
correct on and as of the Effective Date), certifying as
to:
(A) the absence of any amendments to the
charter of such Person since the date of the
certificate referred to in Section 3.03(d)(ii),
(B) a true and correct copy of the by-laws
of such Person as in effect on the Effective Date,
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30
(C) the due incorporation and good standing
of such Person as a corporation under the laws of
the jurisdiction of its incorporation, and the
absence of any proceeding for the dissolution or
liquidation of such Person,
(D) that attached thereto is a true and
complete copy of resolutions duly adopted by the
Board of Directors of such Person authorizing the
execution, delivery and performance of (1) in the
case of the General Partner, this Agreement, the
Notes, the Interest Rate Swap Agreement, the
Interest Rate Swap Fee Letter and the December
Amendments to which it is a party, (2) in the case
of BDS One, the December Amendments to which it is
a party, (3) in the case of BDS Two, the December
Amendments to which it is a party, (4) in the case
of BDS Three, the December Amendments to which it
is a party, (5) in the case of BDS Four, the
December Amendments to which it is a party, (6) in
the case of BDS Five, the December Amendments to
which it is a party and (7) in the case of Borden,
the Interest Rate Swap Agreement, the Interest
Rate Swap Fee Letter and the December Amendments
to which it is a party,
(E) in the case of each such Person, that
such resolutions have not been revoked, annulled
or modified in any manner and are in full force
and effect, and
(F) in the case of each such Person, the
incumbency and specimen signature of each officer
of such person executing the documents described
in items (1)-(7) of clause (D) above, and a
certification of another officer of each such
Person as to the signature of the officers signing
certificates referred to in this subclause (iii).
(iv) A letter dated the date as of the Effective
Date from Potter, Anderson and Corroon, special
Delaware counsel to the Borrower, allowing each
Purchasing Lender to rely on the opinion of such
counsel delivered pursuant to Section 3.01(e)(vi)
hereof, and a favorable opinion of such counsel in
substantially the form of Exhibit I attached hereto.
(v) Favorable opinions of Allan L. Miller, Esq.,
Senior Vice President, Chief Administrative Officer and
General Counsel of Borden, in substantially the form of
Exhibits J-J2 attached hereto.
(vi) A letter dated the date as of the Effective
Date from Dewey Ballantine, counsel to the General
Partner, allowing each Purchasing Lender to rely on the
opinion of such counsel delivered pursuant to
Section 3.01(e)(viii)
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31
hereof and a favorable opinion of such counsel in
substantially the form of Exhibit K attached hereto.
(vii) A letter dated the date as of the
Effective Date from Shearman & Sterling, counsel to the
Lead Managing Agents and the Administrative Agent,
allowing each Purchasing Lender to rely on the opinion
of such counsel delivered pursuant to
Section 3.01(e)(ix) hereof and a favorable opinion of
such counsel, in form and substance satisfactory to the
Lead Managing Agents and the Administrative Agent.
(viii) A certificate of the General Partner,
signed on behalf of such Person by its President or
Vice President certifying as to (A) the truthfulness
and accuracy in all material respects of the
representations and warranties contained in Section
4.01 and in the other Loan Documents on and as of the
Effective Date (except to the extent that such
representations and warranties relate solely to an
earlier date, in which case such representations and
warranties shall have been true and accurate on such
earlier date) and (B) no event has occurred and is
continuing which constitutes a Default.
SECTION 3.04. Conditions Precedent to Assignment Date.
---------------------------------------
The obligation of each Assigning Lender to assign the Assigned
Advances, and of each Purchasing Lender to purchase the Assigned
Advances on the Assignment Date, is subject to the following
conditions precedent:
(a) All interest and all other amounts payable
under the Original Credit Agreement shall have been
paid in full in cash.
(b) The conditions precedent to the initial
borrowing under the Borden Credit Agreement shall have
been satisfied or waived.
(c) The Administrative Agent shall have received
on or before the Assignment Date, dated the date of the
Assignment Date and duly executed by the Borrower, a
Note payable to the order of each Lender.
SECTION 3.05. Determinations Under Sections 3.03 and
--------------------------------------
3.04. For purposes of determining compliance with the conditions
----
specified in Sections 3.03 and 3.04, each Lender shall be deemed
to have consented to, approved or accepted or to be satisfied
with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the
Lenders unless an officer of the Administrative Agent responsible
for the transactions contemplated hereby shall have received
notice from such Lender prior to the Assignment Date specifying
its objection thereto and such Lender shall not have made
available to the Administrative Agent such Lender's ratable
portion of its Advance.
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32
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
-------------------------------------
Borrower. The Borrower represents and warrants as follows:
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(a) The Borrower has been duly formed and is validly
existing in good standing as a limited partnership under the
Delaware Revised Uniform Limited Partnership Act (the "Act")
---
with full partnership power and authority under the Act and
the Borrower Partnership Agreement to execute, deliver and
perform its obligations under this Agreement, each other
Loan Document and the December Amendments to which it is a
party, to acquire the LP Interest and to conduct its
business as described in the Borrower Partnership Agreement.
(b) This Agreement, each other Loan Document and the
December Amendments to which it is a party have been duly
authorized, executed and delivered by the Borrower.
(c) This Agreement, each other Loan Document and the
December Amendments to which it is a party are the legal,
valid and binding obligations of the Borrower enforceable
against it in accordance with their respective terms, except
as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by equitable
principals relating to enforceability.
(d) The execution, delivery and performance by the
Borrower of this Agreement, each other Loan Document and the
December Amendments to which it is a party (i) do not
contravene any provision of the Borrower Partnership
Agreement, and do not contravene any provision of, or
constitute a default under, any contract or other instrument
to which Borrower is a party or by which its property is
bound, (ii) do not contravene any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or
award, the consequences of which would have a Material
Adverse Effect or conflict with any material contractual
restriction binding on or affecting the Borrower or any of
its properties, and (iii) do not result in or require the
creation of any Lien (other than pursuant hereto or pursuant
to the Security Agreement) upon or with respect to any of
its properties.
(e) No authorization or approval or other action by,
and no notice to or filing with, any governmental authority
or regulatory body is required for the due execution,
delivery and performance by the Borrower of this Agreement,
any other Loan Document or of the December Amendments to
which it is a party.
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33
(f) It is not necessary that any of the Loan Documents
or the Interest Rate Swap Agreement be filed or recorded
with any court, agency or other entity in any jurisdiction
(except for filings on Form UCC-1 referenced in
Section 3.01(e)(ii)(B) and any continuation statements with
respect to such filings) or that any stamp, registration or
similar tax be paid on or in relation to any of the Loan
Documents or on or in relation to the December Amendments to
which it is a party, except for any such filing,
recordations or taxes made or paid prior to the date hereof.
(g) Since the date of its formation, there has been no
material adverse change in the financial condition,
operations or properties of the Borrower.
(h) All of the Pledged Collateral covered by the
Security Agreement is owned legally by the Borrower free and
clear of all Liens, except for those created or permitted by
the Loan Documents. The Security Agreement together with
the financing statements filed with respect thereto and the
taking of possession of the Pledged Collateral, as
appropriate, pursuant to the Security Agreement will create
valid and first priority perfected security interests in and
Liens on the Pledged Collateral covered thereby, securing
the payment of all obligations purported to be secured
thereby and subject to no other security interests or Liens.
(i) There are no actions, suits, litigation or
proceedings pending or, to the best knowledge of the
Borrower after due diligence, threatened against or
affecting the Borrower or any of its properties, before any
court, arbitrator or administrative or governmental body
that would be reasonably likely to have a Material Adverse
Effect.
(j) The Borrower has filed or caused to be filed on
its behalf all tax returns (federal, state, local and
foreign) required to be filed by it and has paid or caused
to be paid all taxes due for the periods covered thereby,
including interest and penalties.
(k) Since the date of its formation, the Borrower has
not engaged in any activity other than that contemplated by
the Loan Documents or the Borrower Partnership Agreement or
entered into any commitment or incurred any Indebtedness
other than pursuant to the Loan Documents, the Borrower
Partnership Agreement or the Interest Rate Swap Agreement.
(l) The Borrower possesses all licenses, permits and
certificates and all other approvals, orders, authorizations
and consents and has made all filings and registrations
which are necessary or appropriate for the ownership of its
properties and for the conduct of its activities as
conducted on the Effective Date, other than any such
licenses, permits, certificates, approvals, orders,
authorizations, consents, filings or registration the
absence of which would not, individually or in the
aggregate, have a material adverse effect on the financial
condition, operations or properties of the Borrower or
impair its ability to perform under the Loan Documents.
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34
(m) The Borrower is not in breach of, in default
under, or in violation of, any material agreement,
contractual restriction, or law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award
binding on it or its properties.
(n) Assuming that a total of no more than 75 banks or
other entities (in each case, which shall be treated as a
single Person for purposes of the Investment Company Act of
1940, as amended) will be Lenders or participants or
otherwise have an interest in Advances, the Borrower is not,
and will not upon the Borrowing or upon conveyance of the
capital contributions to Associates LP, be an "investment
company," or be under the "control" of an "investment
company" as such terms are defined in the Investment Company
Act of 1940, as amended.
(o) The representations and warranties of the Borrower
set forth in the other Loan Documents and in the Interest
Rate Swap Agreement are true and correct in all material
respects and such representations and warranties are hereby
incorporated herein by this reference with the same effect
as though set forth in their entirety herein.
(p) The Borrower is not engaged principally, or as one
of its important activities, in the business of extending
credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stock (within the
meaning of Regulation U of the Board of Governors of the
Federal Reserve System or any successor, as amended) and no
part of the proceeds of any Advance hereunder will be used
to buy or carry any margin stock.
ARTICLE 5
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any
---------------------
obligation hereunder shall remain unpaid, the Borrower will:
(a) Compliance with Laws. Except where failure to so
--------------------
perform or comply would not have a material adverse effect
on the financial condition, operations or properties of the
Borrower, perform and promptly comply with, and cause its
properties to be maintained and used in accordance with,
applicable laws, rules, regulations and orders, such
compliance to include, without limitation, paying before the
same become delinquent all taxes, assessments and
governmental charges imposed upon it or upon its property
except to the extent contested in good faith.
(b) Inspection Rights. Upon reasonable notice, at any
-----------------
reasonable time and from time to time, permit the
Administrative Agent or any Lender or any agents or
representatives of the Administrative Agent or such Lender,
to examine and make
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35
copies of and abstracts from the records and books of
account of the Borrower, and to discuss the affairs,
finances and accounts of the Borrower with an officer of the
Borrower, discuss the affairs, finances and accounts of the
Borrower with the Manager and permit the Manager to disclose
to the Administrative Agent or such Lender any and all
financial statements and other information of any kind that
it may have with respect to the Borrower.
(c) Maintenance of Licenses and Permits. Maintain and
-----------------------------------
cause the Manager to maintain all licenses and permits
necessary to own its properties and to conduct its
activities in accordance with all applicable laws, rules,
regulations and orders, except where any such failure so to
do would not have a material adverse effect on the financial
condition, operations or properties of the Borrower.
(d) Compliance with Documents. Maintain in full force
-------------------------
and effect, and perform its obligations (if any) under, and
comply with the provisions of, the Security Agreement, the
Interest Rate Swap Agreement and the Associates LP
Partnership Agreement.
SECTION 5.02. Negative Covenants. So long as any
------------------
obligation hereunder shall remain unpaid, the Borrower will not:
(a) Limitation on Liens. Create, incur, assume or
-------------------
suffer to exist any Lien upon or with respect to any of the
Borrower's assets (including, without limitation, the
Pledged Collateral) of any character (including, without
limitation, accounts), whether now owned or hereafter
acquired, or assign any right to receive income, or sign or
file under the Uniform Commercial Code of any jurisdiction a
financing statement which covers any of the Borrower's
assets (including, without limitation, the Pledged
Collateral) and which names the Borrower as debtor, other
than (i) Liens created by or pursuant to the Loan Documents,
and (ii) Liens for taxes and other governmental charges and
assessments not yet delinquent or being actively contested
in good faith by appropriate proceedings.
(b) Limitation on Indebtedness. Create or suffer to
--------------------------
exist any Indebtedness except pursuant to this Agreement,
the other Loan Documents, the Interest Rate Swap Agreement,
the Process Agent Acceptance, the Manager's Engagement
Letter and in respect of accounts payable, on ordinary
terms, incurred in the course of the activities permitted
under this Agreement.
(c) Sales of Assets. Sell, lease, assign, transfer or
---------------
otherwise dispose of any of the Pledged Collateral, except
as specified or permitted in the Security Agreement.
(d) Nature of Activities. Engage in any activity
--------------------
other than the management and protection of its investment
in Associates LP and such activities as are incidentally
<PAGE>
36
related thereto or as otherwise required or expressly
contemplated in the Loan Documents or in the Interest Rate
Swap Agreement.
(e) Limitation on Amendments. Amend, supplement,
------------------------
terminate, waive or otherwise modify any provision (or agree
to or consent to any of the foregoing) of the Borrower
Partnership Agreement, the Associates LP Partnership
Agreement, the Interest Rate Swap Agreement, the Borden #2
Agreement or the Security Agreement, in each case other than
as provided in the Security Agreement, and except for the
December Amendments.
(f) Terminate Manager Engagement. Cancel or otherwise
----------------------------
suspend the arrangement by which the Manager was engaged to
manage the business and affairs of the Borrower or enter
into any new arrangement with respect to the foregoing,
except that the Borrower may remove the Manager for any
reason, provided that the replacement Manager is (i)
reasonably acceptable to the Administrative Agent and (ii)
engaged by the Borrower pursuant to the Manager's Engagement
Letter, or any other such agreement containing substantially
similar undertakings of the Manager, and compensation levels
not materially greater than those set forth in the Manager's
Engagement Letter.
SECTION 5.03. Reporting Requirements. So long as any
----------------------
obligation hereunder shall remain unpaid, the Borrower will
furnish to the Administrative Agent and, in the case of
Subsection 5.03(iii), the Security Agent:
(i) promptly, and in any event within 90 days after
the end of each fiscal year of the Borrower (or, if later,
within 30 days after the Borrower's receipt of the
information required to be provided to the Borrower under
Section 8.2(b) of the Associates LP Partnership Agreement,
copies of the unaudited balance sheet of the Borrower as at
the end of such fiscal year and the related unaudited
statements of income and cash flow of the Borrower for such
fiscal year, prepared by the Manager together with a
compilation report as defined in accordance with generally
accepted auditing standards (such financial statements to be
complete and correct in all material respects);
(ii) promptly, and in any event within 30 days after
receipt by the Borrower of the information required to be
provided to the Borrower under Section 8.2(b) of the
Associates LP Partnership Agreement, copies of all reports
and financial statements of Associates LP furnished to the
Borrower pursuant to Section 8.2 of the Associates LP
Partnership Agreement, copies of all statements, reports,
and other information furnished to the Borrower pursuant to
Section 8.5 of the Associates LP Partnership Agreement, and
copies of all other statements, reports, and notices
furnished to the Borrower pursuant to the terms of the
Associates LP Partnership Agreement;
<PAGE>
37
(iii) promptly, and in any event within 45 days
after the end of each fiscal quarter of the Borrower, a
summary of quarterly activity of the Borrower prepared by
the Manager setting forth Additional Credit Amounts and
Additional Equity Amounts incurred during such fiscal
quarter, together with a statement that, to the knowledge of
the Manager, no default has occurred or is continuing, or,
if a default has occurred and is continuing, a statement as
to the nature thereof and the action that the Borrower has
taken and proposes to take in respect thereof; and
(iv) such other information available to the Borrower
respecting the condition, financial or otherwise, of the
Borrower and its properties as any Lender through the
Administrative Agent may from time to time reasonably
request.
ARTICLE 6
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the
-----------------
following events ("Events of Default") shall occur and be
-----------------
continuing:
(a) The Borrower shall fail to pay (i) any principal
of any Note when the same becomes due and payable, (ii) any
interest on any Note within two Business Days after the same
becomes due and payable, or (iii) any other amount payable
by it under this Agreement or under any other Loan Document
within ten Business Days after the Borrower's receipt of
written notice from any Lender, through the Administrative
Agent, that such amount is due; or
(b) Any "Event of Default" or "Termination Event"
under the Interest Rate Swap Agreement shall occur; or
(c) Any written representation or warranty made by the
Borrower herein or in any other Loan Document, the Interest
Rate Swap Agreement or the Borrower Partnership Agreement
shall prove to have been incorrect in any material respect
when made or deemed made; or
(d) The Borrower (i) shall fail to perform or observe
any term, covenant or agreement contained in Section 5.02 if
such failure shall remain unremedied for ten Business Days
after written notice thereof shall have been received by the
Borrower from the Administrative Agent or any Lender, or
(ii) shall fail to perform or observe any other term,
covenant or agreement contained in any Loan Document on its
part to be performed or observed if such failure shall
remain unremedied for thirty days after written notice
thereof shall have been received by the Borrower from the
Administrative Agent or the Required Lenders; or
<PAGE>
38
(e) The Borrower shall generally not pay its debts as
such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Borrower
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any
substantial part of its property and, in the case of any
such proceeding instituted against it (but not instituted by
it) that is being diligently contested by it in good faith,
either such proceeding shall remain undismissed or unstayed
for a period of 60 days or any of the actions sought in such
proceeding (including, without limitation, the entry of an
order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur; or the
Borrower shall take any corporate action to authorize any of
the actions set forth above in this subsection (e); or
(f) The Security Agreement, after delivery thereof,
shall for any reason, except to the extent permitted by the
terms thereof or solely as the result of the action or
inaction of the Security Agent, cease to create a valid and
perfected lien on, or security interest in, the Pledged
Collateral purported to be covered thereby subject to no
superior security interests or liens; or
(g) The Borrower shall for any reason dissolve; or
(h) A Liquidating Event (as defined in the Associates
LP Partnership Agreement) shall have occurred other than a
Liquidating Event arising from delivery of a Default Notice
solely given as a result of the occurrence of an event
described in Section 14.1(e) or 14.1(h) of the Associates LP
Partnership Agreement;
then, and in any such event, the Administrative Agent shall at
the request, or may with the consent, of the Required Lenders, by
notice to the Borrower, (x) declare the obligation of each Lender
to make Advances to be terminated, whereupon the same shall
forthwith terminate, and (y) declare the Notes, all interest
thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Notes, all such interest
and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice
of any kind, all of which are hereby expressly waived by the
Borrower; provided, however, that, in the event of an actual or
-------- -------
deemed entry of an order for relief with respect to the Borrower
under the Federal Bankruptcy Code, (A) the obligation of any
Lender to make Advances shall automatically terminate and (B) the
Notes, all such interest and all such amounts shall automatically
become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
<PAGE>
39
ARTICLE 7
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender
------------------------
hereby appoints Citibank, N.A. as the Administrative Agent
hereunder and as the Security Agent under the Security Agreement,
and authorizes Citibank, N.A. to take such action as agent on its
behalf and to exercise such powers and discretion under this
Agreement, the other Loan Documents and the Escrow Agreement as
are delegated to the Administrative Agent and Security Agent by
the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. The Administrative Agent
undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement, the other Loan
Documents and the Escrow Agreement on its part to be performed
and no implied covenants or obligations shall be read in this
Agreement or the other Loan Documents against the Administrative
Agent. The Administrative Agent shall not be required to
exercise any discretionary power granted to it under the Loan
Documents, and as to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or
collection of the Notes and enforcement of the Security
Agreement), the Administrative Agent shall not be required to
exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in
so acting or refraining from acting) upon the written
instructions of the Required Lenders or, in the case of the
Security Agent, the Required Lenders or the Administrative Agent,
and only if furnished with indemnity satisfactory to the
Administrative Agent or Security Agent, as applicable, by the
person making the request, and such instructions shall be binding
upon all Lenders and all holders of Notes; provided, however,
-------- -------
that the Administrative Agent shall not be required to take any
action that exposes it to personal liability or that is contrary
to this Agreement or the Security Agreement or applicable law.
The Administrative Agent agrees to give to each Lender prompt
notice of each notice and copies of all other documents given to
it by the Borrower and the Security Agent pursuant to the terms
of this Agreement or the Security Agreement, and agrees to give
the Security Agent prompt notice of each notice and copies of all
other documents given to it by the Borrower and the Lenders
pursuant to the terms of this Agreement. The Security Agent
agrees to give to the Administrative Agent prompt notice of each
notice and copies of all other documents given to it by the
Borrower and the Lenders pursuant to the terms of the Security
Agreement.
SECTION 7.02. Reliance, Etc. (a) Reliance, Etc.
------------- -------------
None of the Administrative Agent, any Lead Managing Agent or any
Arranger or any of their respective directors, officers, agents
or employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or
willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (i) may treat the payee of
any Note as the holder thereof until the Administrative Agent
receives and accepts an Assignment and Acceptance entered into by
such Lender, as assignor, and an Eligible Assignee, as assignee,
as provided in Section 8.06;
<PAGE>
40
(ii) may consult with legal counsel (including counsel for the
Borrower or any partner of the Borrower), or independent public
accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith
by it in accordance with the advice of such counsel, accountants
or experts; (iii) shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it in
good faith; (iv) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in
connection with the Loan Documents; (v) shall not have any duty
to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of any Loan Document
(except to verify deposits (but not the amounts thereof) into the
Operating Account (as defined in the Security Agreement) in
accordance with Section 6 of the Security Agreement) on the part
of the Borrower or to inspect the property (including the books
and records) of the Borrower; (vi) shall not be responsible to
any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Loan
Document or any other instrument or document furnished pursuant
hereto or thereto; (vii) shall not be liable to any Lender or any
holder of a Note for any losses incurred as the result of any
sale or disposition of Permitted Investments (as defined in the
Security Agreement) in accordance with the Security Agreement;
(viii) makes no representation or warranty and shall have no
responsibility concerning the value or validity of the Pledged
Collateral (as defined in the Security Agreement) or the validity
or the perfection of the pledge thereof; and (ix) shall incur no
liability under or in respect of any Loan Document by acting upon
any notice, consent, certificate or other instrument or writing
(which may be by telegram, telecopy, cable or telex) believed by
it to be genuine and signed or sent by the proper party or
parties.
(b) Notices to Security Agent. (i) At least one
-------------------------
Business Day prior to each Interest Payment Date, the
Administrative Agent agrees to give the Security Agent notice of
the amount of each payment to be made by the Security Agent on
such Interest Payment Date in respect of (i) amounts then payable
by the Borrower under Section 2 of the Interest Rate Swap
Agreement and fees payable by the Borrower under the terms of the
Interest Rate Swap Fee Letter and (ii) amounts then payable by
the Borrower in respect of interest under the Credit Agreement,
it being understood by the Administrative Agent, the Lenders and
holders of the Notes that the Security Agent shall have no
obligation to make any such payments unless and until it has
received the respective notice from the Administrative Agent.
(ii) Upon (a) any voluntary redemption of the LP
Interest by Associates LP pursuant to Section 10.8 of the
Associates LP Partnership Agreement, (b) the purchase of the LP
Interest by one or more of the general partners of Associates LP
pursuant to Section 14.3 of the Associates LP Partnership
Agreement and (c) the liquidation of the LP Interest pursuant to
Section 12 of the Associates LP Partnership Agreement, and until
all distributions to be made by the Security Agent under the
Security Agreement upon the occurrence of any such event shall
have been made, the Agent agrees to give the Security Agent
prompt notice in writing of the date and amount of each payment
to be made by the Security Agent in respect of (i) amounts
payable by the Borrower under Section 2 of the Interest Rate Swap
Agreement, (ii) fees payable by the Borrower under the terms of
the Interest Rate Swap Fee Letter, (iii) amounts payable by the
Borrower under the Loan Documents (other than principal) and (iv)
amounts payable by the Borrower in respect of principal under
this Agreement, it being understood by the Administrative Agent,
the Lenders and holders of the
<PAGE>
41
Notes that the Security Agent shall have no obligation to make
any such payments unless and until it has received the respective
notice from the Administrative Agent.
(iii) The Administrative Agent agrees to promptly
notify the Security Agent of (A) the occurrence of a Default, (B)
each Assignment and Acceptance delivered to and accepted by it
and (C) the payment in full of the Obligations (as defined in the
Security Agreement) after the termination of the Commitments
under this Agreement. The Security Agent shall not be deemed to
have knowledge of any Default unless informed in writing by the
Administrative Agent, any Lender or the Borrower.
(iv) The Lenders hereby authorize and direct the
Administrative Agent, upon its receipt of notice from the
Security Agent that the proceeds of any voluntary redemption of
the LP Interest by Associates LP pursuant to Section 10.8 of the
Associates LP Partnership Agreement or of the liquidation of the
LP Interest pursuant to Section 12 of the Associates LP
Partnership Agreement have been deposited into the Operating
Account, to notify the Counterparty, pursuant to the Interest
Rate Swap Fee Letter, of the Borrower's election to reduce the
notional principal amount outstanding under the Interest Rate
Swap Agreement by an amount equal to the principal amount
required to be prepaid pursuant to Section 2.03 hereof.
(v) The Lenders hereby authorize and direct the
Security Agent to deliver to the managing general partner of
Associates LP on any date on or prior to the 1999 Default Event,
a "Default Notice" (as defined in the Associates LP Partnership
Agreement), such "Default Notice" to be effective 100 days prior
to December 31, 1999 with respect to the Default Event (as
defined in the Associates LP Partnership Agreement) described in
Section 14.1(e) of the Associates LP Partnership Agreement,
provided that the Security Agent shall not rescind such Default
--------
Notice without the consent of all of the Lenders. The Lenders
hereby authorize and direct the Security Agent to rescind the
Default Notice previously delivered by the Security Agent in
accordance with Section 7.02(b)(v) of the Original Credit
Agreement.
(c) Other Agents. The Lead Managing Agents and the
------------
Arrangers, as such, shall have no duties or obligations
whatsoever with respect to this Agreement, the Notes, the
Security Agreement or any other document or any matter related
thereto.
SECTION 7.03. Lead Managing Agents and Affiliates.
-----------------------------------
With respect to their respective Commitments, the Advances made
by them and the Notes issued to them, each of the Lead Managing
Agents shall have the same rights and powers under the Loan
Documents as any other Lender and may exercise the same as though
it or its Affiliate were not the Administrative Agent, a Lead
Managing Agent or an Arranger, as the case may be; and the term
"Lender" or "Lenders" shall, unless otherwise expressly
indicated, include each of the Lead Managing Agents in its
individual capacity. Each of the Lead Managing Agents, and its
respective Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of
<PAGE>
42
business with the Borrower, any of its affiliates and any Person
who may do business with or own interests in any of them, all as
if such Lead Managing Agent or any of its respective Affiliates
were not the Administrative Agent, a Lead Managing Agent or an
Arranger, as the case may be, and without any duty to account
therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender
----------------------
acknowledges that it has, independently and without reliance upon
the Administrative Agent, the Lead Managing Agents, any Arranger
or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance
upon the Administrative Agent, the Lead Managing Agents, any
Arranger or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to
---------------
indemnify each Agent (to the extent not promptly reimbursed by
the Borrower), ratably according to the respective principal
amounts of the Notes then held by each of them (or if no Notes
are at the time outstanding or if any Notes are held by persons
that are not Lenders, ratably according to the respective amounts
of their Commitments), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted
against such Agent in any way relating to or arising out of the
Loan Documents or any action taken or omitted by such Agent under
the Loan Documents; provided, however, that no Lender shall be
-------- -------
liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse each Agent promptly upon demand for
its ratable share of any out-of-pocket expenses (including
counsel fees) incurred by such Agent in connection with the
preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal
proceedings, or otherwise) of, or legal advice in respect of
rights or responsibilities under the Loan Documents, to the
extent that such Agent is not promptly reimbursed for such costs
and expenses by the Borrower.
SECTION 7.06. Successor Administrative Agent. The
------------------------------
Administrative Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint
a successor Agent. Such resignation shall become effective upon
the acceptance of the appointment by the successor Agent. If no
successor Administrative Agent shall have been so appointed by
the Required Lenders, and shall have accepted the appointment as
Administrative Agent, within 30 days after the retiring
Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders,
appoint a successor as Administrative Agent. Any successor
Administrative Agent hereunder shall be a commercial bank
organized or licensed under the laws of the United States of
America or of any State thereof and have a combined capital and
surplus of at least $250,000,000. Upon the
<PAGE>
43
acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, notice of the appointment
and acceptance of such successor Administrative Agent shall be
given by the Required Lenders to the Borrower, such successor
Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, discretion, privileges and duties of
the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. After any retiring
Administrative Agent's resignation hereunder as Administrative
Agent, the provisions of this Article 7 shall inure to its
benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
ARTICLE 8
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment,
---------------
supplement, modification or waiver of any provision of this
Agreement or the Notes or consent to any departure by the
Borrower therefrom shall be effective unless the same shall be in
writing and signed by the Borrower and the Required Lenders, and
then such amendment, supplement, modification or waiver shall be
effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment,
-------- -------
supplement, modification or waiver shall, unless in writing and
signed by the Administrative Agent and each Lender affected
thereby directly: (a) reduce the percentage of the Commitments
or of the aggregate unpaid principal amount of the Notes, or the
number of Lenders, which shall be required for the Lenders or any
of them to take any action under this Agreement; (b) amend this
Section 8.01; (c) extend the scheduled time of payment of any
interest owing to such Lenders; (d) increase the aggregate amount
of the Commitments of such Lenders; (e) reduce the stated rate of
interest borne by the Advances owing to such Lender (other than
as a result of waiving the applicability of any post-default
increase in interest rates) or forgive all or any part of the
principal amount thereof owing to such Lender; (f) extend the
final scheduled maturity of any Advance owing to such
Lender; (g) amend, modify or waive any of the provisions of
Section 5.02(e) or consent to any departure therefrom; or
(h) amend Section 7.02(b)(v); provided further that no amendment,
-------- -------
waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above
to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or any Note.
SECTION 8.02. Notices, Etc. All notices and other
------------
communications provided for hereunder shall be in writing
(including facsimile, telegraphic, telex or cable communication)
and mailed, telecopied, telegraphed, telexed, cabled or delivered
as follows:
<PAGE>
44
If to the Borrower:
T.M. Investors Limited Partnership
c/o Wilmington Trust Company
Corporate Trust Administration
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Ann Roberts
with a copy to:
Allstate Life Insurance Company
Allstate Plaza West
Northbrook, Illinois 60062
Attention: Investment Department --
Private Placement Division J2A
BDS Five, Inc.
One Little Falls Center, Suite 202
2711 Centerville Road
Wilmington, Delaware 19808
Attention: Phyllis Yeatman
David Elliman
18 East 74th Street
New York, New York 10021
If to the Administrative Agent:
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Attention: Michel Pendill
<PAGE>
45
If to any Lender:
At the address of its Lending Office specified
opposite its name on Schedule I hereto
----------
or, as to the Borrower, at such other address as shall be
designated by such party in a written notice to the other parties
and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and
the Administrative Agent; provided, however, any party shown
-------- -------
above to receive copies of such notices and communications to the
Borrower may, by written notice to the Administrative Agent,
waive any right to receive such copies from the Administrative
Agent or any Lender. Except as otherwise specified in this
Agreement, all such notices and communications shall, when sent
by registered or certified mail, telecopied, telegraphed,
telexed, cabled or sent by overnight courier, be effective when
received in the case of mail, or when transmitted by telecopier
(followed by delivery of the original of such notice or
communication), delivered to the telegraph company, confirmed by
telex answerback, delivered to the cable company or delivered to
the courier company, respectively, except that notices and
communications to the Administrative Agent pursuant to Article 2
or 7 shall not be effective until received by the Administrative
Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the
-------------------
part of any Lender, any Arranger or the Administrative Agent to
exercise, and no delay in exercising,
any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses; Indemnification.
-----------------------------------
(a) The Borrower agrees to pay on demand all reasonable and
documented costs and out-of-pocket expenses of each Agent in
connection with the administration (other than ordinary costs and
expenses), amendment, supplement, modification or waiver of the
Loan Documents and the other documents to be delivered under the
Loan Documents, including, without limitation, the reasonable and
documented fees and out-of-pocket expenses of counsel for the
Administrative Agent with respect thereto and with respect to
advising the Administrative Agent as to its rights and
responsibilities as Administrative Agent and as Security Agent
under and in connection with the Loan Documents. The Borrower
further agrees to pay on demand all reasonable and documented
costs and out-of-pocket expenses, if any (including, without
limitation, reasonable and documented counsel fees and out-of-
pocket expenses), of the Administrative Agent and the Lenders in
connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of the Loan Documents and the
other documents to be delivered under the Loan Documents
including, without limitation, reasonable and documented counsel
fees and out-of-pocket expenses in connection with the
enforcement of rights under this Section 8.04.
<PAGE>
46
(b) The Borrower covenants and agrees,
unconditionally, absolutely and irrevocably, to indemnify and
hold harmless each Agent and each Lender and each of their
respective affiliates, directors, officers, employees, agents and
advisors (each an "Indemnified Party"), upon demand by any such
-----------------
Indemnified Party, from and against any and all claims, damages,
losses, liabilities, penalties and reasonable and documented
expenses (including, without limitation, reasonable and
documented fees and disbursements of counsel) that may be
incurred by or awarded against any such Indemnified Party, in
each case arising out of or in connection with or by reason of
(or in connection with the preparation for a defense of) any
investigation, litigation or proceeding, whether or not such
Indemnified Party is a party thereto, arising out of, related to,
or in connection with such Person having been an Agent or a
Lender or rendering or having rendered any services to or on
behalf of the Borrower and the transactions contemplated hereby
and under the other Loan Documents; provided, however, that no
-------- -------
such indemnification shall be required hereunder for any such
claims, damages, losses, liabilities, penalties and expenses
resulting from the gross negligence or willful misconduct of any
such Indemnified Party.
(c) The indemnities set forth in this Section 8.04
shall be in addition to any other obligations or liabilities of
the Borrower hereunder or at common law or otherwise. Without
prejudice to the survival of any other obligation of the Borrower
under this Agreement, the indemnities and obligations contained
in this Section 8.04 shall survive the payment in full of the
principal of and interest on the Notes or any other termination
of this Agreement.
(d) If any payment of principal of any Advance bearing
interest calculated by reference to the Eurodollar Rate is made
other than on the last day of an Interest Period relating to such
Advance, as a result of a prepayment or conversion pursuant to
Section 2.03 or 2.07, respectively, or acceleration of the
maturity of the Notes pursuant to Section 6.01 or for any other
reason, the Borrower shall, after receipt of a written request by
such Lender (which request shall set forth in reasonable detail
the basis for requesting such amount and shall also be sent upon
demand by any Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses which it may
reasonably incur as a result of such payment, including, without
limitation, any loss, cost or expense (excluding loss of
anticipated profits) actually incurred by reason of the
liquidation or reemployment of deposits or other funds acquired
by such Lender to fund or maintain such Advance.
SECTION 8.05. Binding Effect. This Agreement shall
--------------
become effective when it shall have been executed by the Borrower
and the Administrative Agent and when the Administrative Agent
shall have been notified by each Lender that such Lender has
executed it and thereafter shall be binding upon and inure to the
benefit of the Borrower, the Agent and each Lender and their
respective successors and assigns, except that the Borrower shall
not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lenders.
<PAGE>
47
SECTION 8.06. Assignments and Participations. (a)
------------------------------
Each Lender may with the prior consent of the Administrative
Agent and the Borrower (such consents not be unreasonably
withheld or delayed), assign to one or more banks or other
entities all or a portion of its rights and obligations under
this Agreement (including, without limitation, the Advance owing
to it and the Note held by it); provided, however, that such
-------- -------
assignment or any activity intended to give rise to an assignment
shall not be initiated prior to the receipt by the Lenders of
notice from the Arrangers that the syndication of this Agreement
has been completed; provided, further, however, that (i) except
-------- ------- -------
in the case of an assignment to a Person that immediately prior
to such assignment was a Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, the amount
of the Advance of the assigning Lender being assigned pursuant to
each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event
be less than $5,000,000, (ii) each such assignment shall be to a
Lender, an Eligible Assignee or to an Affiliate of the assignor
and (iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together
with any Note subject to such assignment, and a processing and
recordation fee of $3,000 for each assignment completed after the
notice referred to in the first proviso of this Section 8.06 has
been received. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations hereunder (and, in
the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in
or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished
pursuant hereto; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement and such other
documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently
and without reliance upon the Administrative Agent, such
assigning Lender or any other Lender and based on such documents
and information as it shall deem appropriate at the time,
continue to make its own
<PAGE>
48
credit decisions in taking or not taking action under this
Agreement; (v) such assignee confirms that it is a Lender, an
Eligible Assignee or an Affiliate of an assignor and that the
conditions of this Section 8.06 have been satisfied; (vi) such
assignee appoints and authorizes the Administrative Agent to take
such action as Administrative Agent on its behalf and to exercise
such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; (vii) such assignee
agrees that it will perform in accordance with their terms all of
the obligations that by the terms of this Agreement are required
to be performed by it as a Lender; and (viii) such assignee
consents to be bound by the terms of that certain Note Exchange
Agreement dated as of the date hereof among the Borrower, Borden,
the Lenders, the Administrative Agent and Citibank, as
administrative agent under the Borden Credit Agreement.
(c) The Administrative Agent shall maintain at its
address referred to in Section 8.02 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the
principal amount of the Advance owing to each Lender from time to
time (the "Register"). The entries in the Register shall be
--------
conclusive and binding for all purposes, absent manifest error,
and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee representing that
it is an Eligible Assignee and that the conditions of this
Section 8.06 have been satisfied, together with the Note subject
to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to
the Borrower. Within five Business Days after its receipt of
such notice, the Borrower, at its own expense, shall execute and
deliver to the Administrative Agent in exchange for the
surrendered Note a new Note to the order of such assignee in a
principal amount equal to the principal portion of the Advance
assigned to it pursuant to such Assignment and Acceptance and, if
the assigning Lender has retained a portion of its Advance
hereunder, a new Note to the order of the assigning Lender in a
principal amount equal to the principal portion of its Advance
retained by it hereunder. Such new Notes shall be in an
aggregate principal amount equal to the aggregate principal
amount of such surrendered Note, shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A hereto.
(e) Each Lender may sell participations to one or more
banks or other entities in or to all or a portion of its rights
and obligations under this Agreement (including, without
limitation, all or a portion of the Advance owing to it and the
Note held by it); provided, however, that (i) such Lender's
-------- -------
obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties
hereto for the
<PAGE>
49
performance of such obligations, (iii) such Lender shall remain
the holder of any such Note for all purposes under this
Agreement, (iv) the Borrower, the Agents and the other Lenders
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement and (v) no participant under any such participation and
no sub-participant of such participant shall have any right to
approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by the Borrower
therefrom, except to the extent that such amendment, waiver or
consent would directly: reduce the stated rate of interest borne
by the Advances owing to such participant (other than as a result
of waiving the applicability of any post-default increase in
interest rates), forgiving all or any part of the principal
amount thereof or reduce the stated rate for or extend the final
maturity of any Advance owing to such participant, in each case
to the extent subject to such participation.
(f) Any attempted assignment or grant of a
participation or subparticipation prior to the time expressly
permitted in paragraphs (a) and (e) of this Section 8.06, or
otherwise in violation of this Section 8.06, shall be void. No
participant shall be entitled to receive any greater benefit
pursuant to Sections 2.06 and 2.09 than the Lender would have
been entitled to receive with respect to the rights transferred.
(g) Notwithstanding anything to the contrary set forth
in this Section 8.06, the Borrower shall in no event be required
to provide its consent to any proposed assignment or grant of a
participation interest in any Advance or portion thereof if,
after giving effect to such assignment or participation, the
total number of Lenders and participants holding interests in the
Advances would be greater than 75 Persons.
(h) Any Lender may, in connection with any assignment
or participation or proposed assignment or participation pursuant
to this Section 8.06, disclose to the assignee or participant or
proposed assignee or participant approved by the Borrower, any
information relating to the Borrower furnished to such Lender by
or on behalf of the Borrower; provided, however, that, prior to
-------- -------
any such disclosure, the assignee or participant or proposed
assignee or participant shall have executed a confidentiality
agreement substantially in the form attached hereto as Exhibit E
and returned the same to such Lender and the Borrower.
(i) Notwithstanding any other provision set forth in
this Agreement, any Lender may at any time create a security
interest in all or any portion of its rights under this Agreement
(including, without limitation, the Advances owing to it and the
Note or Notes held by it) in favor of any Federal Reserve Bank.
SECTION 8.07. Manager. Pursuant to the Manager's
-------
Engagement Letter, the Borrower has delegated and assigned to
Manager certain duties and responsibilities of the Borrower
pursuant to this Agreement and the other Loan Documents. The
Borrower acknowledges and agrees that the Lenders, the
Administrative Agent and the Security Agent shall be entitled to
rely on the written directions, instructions, consents,
approvals, and other
<PAGE>
50
actions taken by the Manager on behalf or for the account of the
Borrower pursuant to the terms of this Agreement and the other
Loan Documents.
SECTION 8.08. Non-Recourse Liability. (a) No
----------------------
recourse under any obligation, covenant or agreement of the
Borrower contained in this Agreement or the other Loan Documents
shall be had against any partner of the Borrower or the Manager,
or any beneficiary, stockholder, trustee, employee, officer or
director of any partner of the Borrower or the Manager, or of any
of their respective affiliates (except for the Borrower itself),
by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise; it being
expressly agreed and understood that no personal liability
whatever shall attach to or be incurred by any partner of the
Borrower or by the Manager, or any beneficiary, stockholder,
trustee, employee, officer or director of any partner of the
Borrower or the Manager, or any of their respective affiliates
(except for the Borrower itself), or any of them, under or by
reason of any of the obligations, covenants or agreements of the
Borrower contained in this Agreement or the other Loan Documents,
or implied therefrom; and it being further expressly agreed and
understood that any and all personal liability of any partner of
the Borrower or the Manager, as such, and of every such
beneficiary, stockholder, trustee, employee, officer, or director
of any partner of the Borrower or the Manager, or any of their
respective affiliates (except for the Borrower itself), for
breaches by the Borrower of any of such obligations, covenants or
agreements, either at common law or at equity, or by statute or
constitution, is hereby expressly waived by the Administrative
Agent and each Lender as a condition of and consideration for the
execution of this Agreement.
(b) Each Agent and each Lender hereby irrevocably
agrees that, in furtherance of the provisions of the preceding
paragraph (a) of this Section 8.08, (i) it shall not institute
against, or join any other Person in instituting against, any
partner of the Borrower, as such, or any beneficiary,
stockholder, trustee, employee, officer or director of any
partner of the Borrower, as such, or any of their respective
affiliates (except for the Borrower itself), any bankruptcy,
reorganization, insolvency or liquidation proceeding, or other
proceeding under federal or state bankruptcy or similar law, in
connection with any claim relating to the transactions
contemplated hereby, (ii) in the event of any reorganization
under the Bankruptcy Reform Act of 1978, as amended, of any
partner of the Borrower, or the Borrower, it will make the
election under Section 1111(b)(2) of such Act and (iii) if for
any reason, whether or not related to the Bankruptcy Reform Act
of 1978, as amended, it shall recover from the Borrower or any
partner of the Borrower, any assets or amounts other than the
assets constituting the Pledged Collateral, it promptly shall
return such asset or amount recovered to such entity. Nothing
contained in this subsection 8.08(b) shall prevent any Lender
from enforcing as a full recourse obligation (and retaining the
proceeds thereof) any obligation under this Agreement or any
other Loan Document that is expressed as being an obligation of
any entity other than the Borrower.
SECTION 8.09. Execution in Counterparts. This
-------------------------
Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of
which taken together
<PAGE>
51
shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.10. Confidentiality. Each Lender has
---------------
heretofore executed a confidentiality agreement in the form of
Exhibit E and returned a copy thereof to the Borrower. Each
Lender shall hold all non-public information obtained pursuant to
this Agreement in accordance with the terms of such
confidentiality agreement and in accordance with safe and sound
banking practices and, subject to Section 8.06, may make
disclosure reasonably requested by any bona fide transferee in
connection with the contemplated transfer of any Advances or
participation therein or as required or requested by any
governmental authority or pursuant to legal process; provided
--------
that each such transferee shall have previously signed and
returned to such Lender a confidentiality agreement in the form
of Exhibit E, and such Lender agrees to send to the Borrower
promptly a copy of each such confidentiality agreement executed
by such transferee.
SECTION 8.11. Submission to Jurisdiction; Venue. (a)
---------------------------------
Any legal action or proceeding with respect to this Agreement or
any other Loan Document may be brought in the courts of the State
of New York located in the county of New York or of the United
States for the Southern District of New York, and, by execution
and delivery of this Agreement, the Borrower hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The
Borrower hereby irrevocably appoints The Prentice-Hall
Corporation System, Inc. with offices on the date hereof at One
Gulf & Western Plaza, New York, New York 10023-7773 (or any
successor appointed by the General Partner) as its designee,
appointee and agent to receive, accept and acknowledge, for and
on its behalf, and in respect of its property, service of process
out of any of the aforementioned courts in any such action or
proceeding. A copy of process so served shall be mailed to the
Borrower by registered or certified mail, postage prepaid, to it
at its address for notices pursuant to Section 8.02, except that
unless otherwise provided by applicable law, any failure to mail
such copy shall not affect the validity of service of process.
In addition to the foregoing, the Borrower hereby consents to the
service of process upon it by registered or certified mail,
postage prepaid, to such address. Nothing herein shall affect
the right of the Administrative Agent or any Lender to serve
process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Borrower in any
other jurisdiction.
(b) The Borrower hereby irrevocably waives any
objection which it may now or hereafter have to the laying of
venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Agreement or any other Loan
Document brought in the courts referred to in clause (a) above
and hereby further irrevocably waives and agrees not to plead or
claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient
forum.
<PAGE>
52
SECTION 8.12. Lenders' Consent. Each Lender hereby
----------------
consents and agrees to the execution and delivery of, and
performance by, the Borrower of each December Amendment to which
it is a party, that certain consent to the December Amendments
dated as of the date hereof and that certain Consent and
Agreement dated as of the date hereof in respect of the "Pledge
Agreement" (as defined in the Borden Credit Agreement).
SECTION 8.13. Governing Law. This Agreement and the
-------------
Notes shall be governed by, and construed in accordance with, the
laws of the State of New York.
SECTION 8.14. Waiver of Jury Trial. Each of the
--------------------
Borrower, the Agents and the Lenders hereby irrevocably waives
all right to trial by jury in any action, proceeding or
counterclaim (whether based on a contract, tort or otherwise)
arising out of or relating to any of the Loan Documents, the
Advances or the action of any Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.
<PAGE>
53
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
T.M. INVESTORS LIMITED PARTNERSHIP
By:
Pawling Partners, Inc., as General
Partner
By: /s/
--------------------------------
Name:
Title:
CITIBANK, N.A., as Administrative
Agent
By: /s/
--------------------------------
Name:
Title:
ARRANGERS
BT SECURITIES CORPORATION, as
Arranger
By: /s/
--------------------------------
Name:
Title:
CHEMICAL SECURITIES INC., as
Arranger
By: /s/
--------------------------------
Name:
Title:
<PAGE>
54
CITICORP SECURITIES, INC., as
Arranger
By: /s/
--------------------------------
Name:
Title:
CREDIT SUISSE, as Arranger
By: /s/
--------------------------------
Name:
Title:
By: /s/
--------------------------------
Name:
Title:
LENDERS
BANKERS TRUST COMPANY
By: /s/
--------------------------------
Name:
Title:
CHEMICAL BANK
By: /s/
--------------------------------
Name:
Title:
<PAGE>
55
CITIBANK, N.A.
By: /s/
--------------------------------
Name:
Title:
CREDIT SUISSE
By: /s/
--------------------------------
Name:
Title:
By: /s/
--------------------------------
Name:
Title:
ABN AMRO BANK N.V.,
NEW YORK BRANCH
By: /s/
--------------------------------
Name:
Title:
By: /s/
--------------------------------
Name:
Title:
CIBC INC.
By: /s/
--------------------------------
Name:
Title:
<PAGE>
56
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/
--------------------------------
Name:
Title:
CREDIT LYONNAIS
CAYMAN ISLAND BRANCH
By: /s/
--------------------------------
Name:
Title:
NATIONSBANK OF NORTH CAROLINA, N.A.
By: /s/
--------------------------------
Name:
Title:
NATIONAL WESTMINSTER BANK PLC
NEW YORK BRANCH
By: /s/
--------------------------------
Name:
Title:
<PAGE>
57
NATIONAL WESTMINSTER BANK PLC
NASSAU BRANCH
By: /s/
--------------------------------
Name:
Title:
THE BANK OF NEW YORK
By: /s/
--------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
By: /s/
--------------------------------
Name:
Title:
THE BANK OF TOKYO TRUST COMPANY
By: /s/
--------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, N.A.
By: /s/
--------------------------------
Name:
Title:
<PAGE>
58
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/
--------------------------------
Name:
Title:
THE FUJI BANK, LIMITED
By: /s/
--------------------------------
Name:
Title:
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By: /s/
--------------------------------
Name:
Title:
By: /s/
--------------------------------
Name:
Title:
WACHOVIA BANK OF GEORGIA, N.A.
By: /s/
--------------------------------
Name:
Title:
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
APPLICABLE LENDING OFFICES AND COMMITMENTS
Original Credit
Agreement Allocated
Name of Lender Lending Office Commitment
-------------- -------------- ----------
<S> <C> <C>
Bankers Trust Company 130 Liberty Street $0
New York, New York 10006
Chemical Bank 270 Park Avenue $0
New York, New York 10017
Citibank, N.A. 399 Park Avenue $48,000,000.00
New York, New York 10043
Credit Suisse 12 East 49th Street $48,000,000.00
New York, New York 10017
ABN AMRO Bank, N.V., 500 Park Avenue $32,000,000.00
New York Branch New York, NY 10022
The Bank of New York One Wall Street, 8th Floor $32,000,000.00
New York, NY 10286
New York Corporate Division
The Bank of Nova Scotia One Liberty Plaza $32,000,000.00
New York, NY 10006
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Original Credit
Agreement Allocated
Name of Lender Lending Office Commitment
-------------- -------------- ----------
<S> <C> <C>
The Bank of Tokyo 100 Broadway $32,000,000.00
Trust Company New York, NY 10005
The Chase Manhattan One Chase Manhattan Plaza $32,000,000.00
Bank, N.A. New York, NY 10081
CIBC Inc. Two Places West $32,000,000.00
2727 Paces Ferry Road,
Suite 1200
Atlanta, GA 30339
Credit Lyonnais New 1301 Avenue of the Americas $0
York Branch New York, New York 10019
Credit Lyonnais Cayman 1301 Avenue of the Americas $0
Island Branch New York, New York 10019
The First National Bank One First National Plaza $32,000,000.00
of Chicago Chicago, IL 60670
The Fuji Bank, Limited Two World Trade Center, $32,000,000.00
79th Floor
New York, NY 10048
NationsBank of North 1 NationsBank Plaza $32,000,000.00
Carolina, N.A. NC 1002-06-19
Charlotte, NC 28255
</TABLE>
<PAGE>
3
<TABLE>
<CAPTION>
Original Credit
Agreement Allocated
Name of Lender Lending Office Commitment
-------------- -------------- ----------
<S> <C> <C>
National Westminster 175 Water Street, 21st Floor $32,000,000.00
Bank PLC, New York, NY 10038
New York Branch
National Westminster 175 Water Street, 21st Floor $32,000,000.00
Bank PLC New York, NY 10038
Nassau Branch
Union Bank of Switzerland 299 Park Avenue $32,000,000.00
New York, NY 10171
Wachovia Bank of 191 Peachtree Street $32,000,000.00
Georgia, N.A. Atlanta, GA 30303
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Schedule 2.01
Assigned Advances
A. Name of Advances under Amount of Assigned Advances after
Assigning Lender Original Credit Agreement Advances Assignment Date
---------------- ------------------------- ------------------ ---------------
<S> <C> <C> <C>
Citibank, N.A. $48,000,000.00 $0 $51,469,879.5125
Credit Suisse $48,000,000.00 $0 $51,469,879.5125
The Bank of Nova Scotia $32,000,000.00 $3,084,317.35 $28,915,682.65
The Chase Manhattan, N.A. $32,000,000.00 $3,084,317.35 $28,915,682.65
NationsBank of
North Carolina, N.A. $32,000,000.00 $3,084,317.35 $28,915,682.65
National Westminster Bank, PLC $32,000,000.00 $3,084,317.35 $28,915,682.65
New York Branch
Nassau Branch
ABN AMRO Bank, N.V.
New York Branch $32,000,000.00 $10,409,638.55 $21,590,361.45
The Bank of New York $32,000,000.00 $10,409,638.55 $21,590,361.45
The Bank of Tokyo Trust Company $32,000,000.00 $10,409,638.55 $21,590,361.45
CIBC Inc. $32,000,000.00 $10,409,638.55 $21,590,361.45
The First National Bank of Chicago $32,000,000.00 $10,409,638.55 $21,590,361.45
The Fuji Bank, Limited $32,000,000.00 $10,409,638.55 $21,590,361.45
Union Bank of Switzerland $32,000,000.00 $32,000,000.00 $0
Wachovia Bank of Georgia, N.A. $32,000,000.00 $32,000,000.00 $0
</TABLE>
<TABLE>
<CAPTION>
B. Name of Purchasing Lender Assigned Advances Purchased Advances after Assignment Date
------------------------- --------------------------- ------------------------------
<S> <C> <C>
Bankers Trust Company $51,469,879.5125 $51,469,879.5125
Chemical Bank $51,469,879.5125 $51,469,879.5125
Citibank, N.A. $3,469,879.5125 $51,469,879.5125
Credit Lyonnais $28,915,662.6500 $28,915,662.6500
</TABLE>
<PAGE>
5
<TABLE>
<S> <C> <C>
New York Branch
Cayman Islands Branch
Credit Suisse $3,469,879.5125 $51,469,879.5125
</TABLE>
<PAGE>
EXHIBIT A
FORM OF PROMISSORY NOTE
$______________ Dated: ________, 199_
FOR VALUE RECEIVED, the undersigned, T.M. INVESTORS LIMITED
PARTNERSHIP, a limited partnership organized under the laws of the State
of Delaware, (the "Borrower"), HEREBY PROMISES TO PAY to the order of
--------
_________________
________________________________________________________________________
(the "Lender") for the account of its applicable Lending Office (as
------
defined in the Credit Agreement referred to below) the principal amount of
the Advance (as defined in the Credit Agreement) owing to the Lender by
the Borrower pursuant to the Credit Agreement (as defined below), payable
in accordance with the terms of the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal
amount of the Advance from the date of such Advance until such principal
amount is paid in full, at such interest rates, and payable at such times,
as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America at the office of the Administrative Agent at 399
Park Avenue, New York, New York 10043, for the account of the Lender's
Lending Office (as defined in the Credit Agreement) in same day funds.
The Advance owing to the Lender by the Borrower and the maturity thereof,
and all payments made on account of principal thereof, shall be recorded
by the Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto, which is part of this Promissory Note; provided that any
--------
such failure to endorse on the grid attached hereto shall not affect the
obligations of the Borrower hereunder.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Second Amended and Restated Credit
Agreement dated as of December 15, 1994 ( as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement") among the
----------------
Borrower, the Lender and certain other lenders parties thereto, and
Citibank, N.A., as Administrative Agent (as defined in the Credit
Agreement), for the Lender and such other lenders, and BT Securities
Corporation, Chemical Securities Inc., Citicorp Securities, Inc. and
Credit Suisse, as Arrangers. The Credit Agreement, among other things,
(i) provides for the making of a single Advance by the Lender to the
Borrower in an amount not to exceed the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from such Advance
being evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to
the maturity hereof upon the terms and conditions therein specified.
This Promissory Note is secured by and entitled to the benefits
of the Amended and Restated Pledge, Assignment and Security Agreement
dated as of August 16, 1994, as amended, modified or otherwise
supplemented from time to time.
No recourse under any obligation, covenenant or agreement of the
Borrower contained in this Promissory Note shall be had against any
partner of the Borrower or the Manager (as defined in the Credit
Agreement), or any beneficiary, stockholder, trustee, employee, officer or
director of any partner of the Borrower or the Manager, or of any of their
respective affiliates (except for the Borrower itself), by the
<PAGE>
2
enforcement of any assessment or by any legal or equitable proceeding, by
virtue of any statute or otherwise; it being expressly agreed and
understood that no personal liability whatever shall attach to or be
incurred by any partner of the Borrower or by the Manager, or any
beneficiary, stockholder, trustee, employee, officer or director of any
partner of the Borrower or the Manager, or any of their respective
affiliates (except for the Borrower itself), or any of them, under or by
reason of any of the obligations, covenants or agreements of the Borrower
contained in this Promissory Note, or implied therefrom; and it being
further expressly agreed and understood that any and all personal
liability of any partner of the Borrower or the Manager, as such, and of
every such beneficiary, stockholder, trustee, employee, officer, or
director of any partner of the Borrower or the Manager, or any of their
respective affiliates (except for the Borrower itself), for breaches by
the Borrower of any of such obligations, covenants or agreements, either
at common law or at equity, or by statute or constitution, is hereby
expressly waived by the Administrative Agent and each Lender as a
condition of and consideration for the execution of this Promissory Note.
The holder of this Promissory Note hereby irrevocably agrees
that, in furtherance of the provisions of the preceding paragraph, (i) it
shall not institute against, or join any other Person in instituting
against, any partner of the Borrower, as such, or any beneficiary,
stockholder, trustee, employee, officer or director of any partner of the
Borrower, as such, or any of their respective affiliates (except for the
Borrower itself), any bankruptcy, reorganization, insolvency or
liquidation proceeding, or other proceeding under federal or state
bankruptcy or similar law, in connection with any claim relating to the
transactions contemplated hereby, (ii) in the event of any reorganization
under the Bankruptcy Reform Act of 1978, as amended, of any partner of the
Borrower, or the Borrower, it will make the election under Section
1111(b)(2) of such Act, and (iii) if for any reason, whether or not
related to the Bankruptcy Reform Act of 1978, as amended, it shall recover
from the Borrower or any partner of the Borrower, any assets or amounts
other than the assets constituting the Pledged Collateral (as defined in
the Credit Agreement), it promptly shall return such asset or amount
recovered to such entity.
T.M. INVESTORS LIMITED PARTNERSHIP
By:
Pawling Partners, Inc., as General
Partner
By:
--------------------------------
Name:
Title:
<PAGE>
PAYMENTS OF PRINCIPAL
Amount of Principal Unpaid Principal Notation
Date Paid or Prepaid Balance Made By
<PAGE>
EXHIBIT B
FORM OF NOTICE OF BORROWING
To the Lenders and Arrangers
party to the Credit Agreement referred to below
and Citibank, N.A., as Administrative
Agent for such Lenders
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Attention: Michael Pendill
[Date]
Ladies and Gentlemen:
The undersigned, T.M. Investors Limited Partnership,
refers to the Second Amended and Restated Credit Agreement, dated
as of December 15, 1994 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement", the terms
----------------
defined therein and not otherwise defined herein being used
herein as therein defined), among the undersigned, the Lenders
parties thereto, Citibank, N.A., as Administrative Agent for such
Lenders and BT Securities Corporation, Chemical Securities Inc.,
Citicorp Securities, Inc. and Credit Suisse, as Arrangers, and
hereby gives you notice pursuant to Section 2.02(a) of the Credit
Agreement that the undersigned hereby requests the following
Borrowing under the Credit Agreement, and in that connection sets
forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 2.02(a) of the
------------------
Credit Agreement:
The Business Day of the Proposed Borrowing is
, 19 .
---------- --
The aggregate amount of the Proposed Borrowing is
$ .
----------
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the
date of the Proposed Borrowing:
(A) the representations and warranties contained in
each Loan Document are correct, before and after giving
effect to the Proposed Borrowing and to the application of
the proceeds therefrom, as though made on and as of such
date; and
(B) no event has occurred and is continuing, or would
result from such Proposed Borrowing or from the application
of the proceeds therefrom, that constitutes a Default.
Very truly yours,
<PAGE>
2
T.M. INVESTORS LIMITED PARTNERSHIP
By:
Pawling Partners, Inc., as General
Partner
By:
--------------------------------
Name:
Title:
<PAGE>
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Second Amended and Restated
Credit Agreement dated as of December 15, 1994 ( as amended,
supplemented or otherwise modified from time to time, the "Credit
------
Agreement") among T.M. Investors Limited Partnership, a limited
---------
partnership organized under the laws of the State of Delaware
(the "Borrower"), the Lenders parties thereto, Citibank, N.A., as
--------
Administrative Agent for such Lenders, and BT Securities
Corporation, Chemical Securities Inc., Citicorp Securities, Inc.
and Credit Suisse, as Arrangers. Terms defined in the Credit
Agreement and not otherwise defined herein are used herein as
therein defined.
The "Assignor" and the "Assignee" referred to on
Schedule 1 agree as follows:
1. The Assignor hereby sells and assigns to the
Assignee, without recourse, and the Assignee hereby purchases and
assumes from the Assignor, an interest in and to the Assignor's
rights and obligations under the Credit Agreement as of the date
hereof equal to the percentage interest specified on Schedule 1
of all outstanding rights and obligations under the Credit
Agreement. After giving effect to such sale and assignment, the
amount of the Advances owing to the Assignee will be as set forth
on Schedule 1.
2. The Assignor (i) represents and warrants that it
is the legal and beneficial owner of the interest being assigned
by it hereunder and that such interest is free and clear of any
adverse claim; (ii) makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant
thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any
of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto; and (iv)
attaches the Note held by the Assignor and requests that the
Administrative Agent exchange such Note for a new Note payable to
the order of the Assignee in an amount equal to the Advances
assumed by the Assignee pursuant hereto or new Notes payable to
the order of the Assignee in an amount equal to the Advances
assumed by the Assignee pursuant hereto and the Assignor in an
amount equal to the Advances retained by the Assignor under the
Credit Agreement, respectively, as specified on Schedule 1.
3. The Assignee (i) confirms that it has received a
copy of the Credit Agreement, together with such other documents
and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without
reliance upon the Administrative Agent, the Assignor or any other
Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee, a
Lender or
<PAGE>
2
an Affiliate of the Assignor and that the conditions set forth in
Section 8.06 of the Credit Agreement have been satisfied; (iv)
appoints and authorizes the Administrative Agent to take such
action as Administrative Agent and Security Agent on its behalf
and to exercise such powers and discretion under the Credit
Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; (v)
agrees that it will perform in accordance with their terms all of
the obligations that by the terms of the Credit Agreement are
required to be performed by it as a Lender; (vi) agrees to be
bound by, and perform in accordance with, the terms of that
certain Note Exchange Agreement among the Borrower, Borden, the
Lenders, the Administrative Agent and Citibank, as administrative
agent under the Borden Credit Agreement as if it were a party
thereto, [and (vii) if the Assignee is organized under the laws
of a jurisdiction outside the United States, such Assignee agrees
that it will attach any United States Internal Revenue Service
forms required under Section 2.09 of the Credit Agreement].
4. Following the execution of this Assignment and
Acceptance, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The
effective date for this Assignment and Acceptance (the "Effective
---------
Date") shall be the date of Acceptance hereof by the
----
Administrative Agent, unless otherwise specified on Schedule 1.
5. Upon such acceptance and recording by the
Administrative Agent, as of the Effective Date, (i) the Assignee
shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall,
to the extent provided in this Assignment and Acceptance,
relinquish its rights (other than its rights to indemnity under
the Credit Agreement including, without limitation, as provided
in Section 2.10 and Section 8.04) and be released from its
obligations under the Credit Agreement [(and, in the case of an
Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under the Credit
Agreement, such Lender shall cease to be a party to the Credit
Agreement)].
6. Upon such acceptance and recording by the
Administrative Agent, from and after the Effective Date, the
Administrative Agent shall make all payments under the Credit
Agreement and the Note in respect of the interest assigned hereby
(including, without limitation, all payments of principal and
interest with respect thereto) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under
the Credit Agreement and the Note for periods prior to the
Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed
by, and construed in accordance with, the laws of the State of
New York.
8. This Assignment and Acceptance may be executed in
any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this
<PAGE>
3
Assignment and Acceptance by telecopier shall be effective as
delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have
caused Schedule 1 to this Assignment and Acceptance to be
executed by their officers thereunto duly authorized as of the
date specified thereon.
<PAGE>
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
Percentage interest assigned: %
----------
Assignee's Commitment: $
----------
Aggregate outstanding principal amount
of Advances assigned: $
----------
Principal amount of Note payable
to Assignee: $
----------
Principal amount of Note payable
to Assignor: $ ]
----------
Effective Date (if other than date
of acceptance by Administrative Agent): 1 , 19
---------- --
[NAME OF ASSIGNOR], as Assignor
By:
-----------------------------
Title:
Dated:
--------------------------
, 19
------- ---
[NAME OF ASSIGNEE], as Assignee
By:
-----------------------------
Title:
Lending Office:
Accepted this day
----
of , 19
-------------------- ---
CITIBANK, N.A., as Administrative Agent
By:
-----------------------------------------
Title:
--------------------
1 This date should be no earlier than five Business Days after
the delivery of this Assignment and Acceptance to the
Administrative Agent.
<PAGE>
EXHIBIT D
AMENDED AND RESTATED PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT
Dated as of August 16, 1994
Between
T.M. INVESTORS LIMITED PARTNERSHIP
as Pledgor
----------
and
CITIBANK, N.A.
as Security Agent
-----------------
<PAGE>
AMENDED AND RESTATED PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT
--------------------------------------------------------------
TABLE OF CONTENTS
SECTION 1. Pledge and Assignment . . . . . . . . . . . . . . . . 2
SECTION 2. Security for Obligations . . . . . . . . . . . . . . 3
SECTION 3. Delivery of Pledged Collateral . . . . . . . . . . . 4
SECTION 4. Pledgor Remains Liable . . . . . . . . . . . . . . . 4
SECTION 5. Maintaining the Operating Account . . . . . . . . . . 4
SECTION 6. Deposit of Funds into the Operating Account . . . . . 5
SECTION 7. Investing of Amounts in the Operating Account . . . . 5
SECTION 8. Transfers from the Operating Account . . . . . . . . 6
SECTION 9. Representations and Warranties . . . . . . . . . . . 10
SECTION 10. Further Assurances . . . . . . . . . . . . . . . . . 11
SECTION 11. Transfers and Other Liens . . . . . . . . . . . . . 12
SECTION 12. Concerning the Assigned Agreements . . . . . . . . . 13
SECTION 13. Security Agent Appointed Attorney-in-Fact . . . . . 14
SECTION 14. Security Agent May Perform . . . . . . . . . . . . . 14
SECTION 15. Reasonable Care . . . . . . . . . . . . . . . . . . 14
SECTION 16. Rights, Remedies and Obligations . . . . . . . . . . 15
SECTION 17. Remedies upon Default . . . . . . . . . . . . . . . 16
SECTION 18. Indemnity and Expenses . . . . . . . . . . . . . . . 18
SECTION 19. Amendments, Etc. . . . . . . . . . . . . . . . . . . 19
SECTION 20. Addresses for Notices . . . . . . . . . . . . . . . 19
SECTION 21. Continuing Assignment and Security Interest;
Transfer of Advances . . . . . . . . . . . . . . . . 20
i
<PAGE>
SECTION 22. Governing Law; Terms . . . . . . . . . . . . . . . . 21
SECTION 23. Non-Recourse Liability . . . . . . . . . . . . . . . 21
SECTION 24. Execution in Counterparts . . . . . . . . . . . . . 22
SECTION 25. Headings . . . . . . . . . . . . . . . . . . . . . . 22
ii
<PAGE>
AMENDED AND RESTATED PLEDGE, ASSIGNMENT AND SECURITY AGREEMENT
--------------------------------------------------------------
AMENDED AND RESTATED PLEDGE, ASSIGNMENT AND SECURITY
AGREEMENT (this "Agreement"), dated as of August 16, 1994, made by
---------
T.M. INVESTORS LIMITED PARTNERSHIP, a limited partnership organized
under the laws of Delaware (the "Pledgor"), to CITIBANK, N.A., a
-------
national banking association, as security agent (together with any
successor appointed pursuant to the Credit Agreement (as hereinafter
defined), the "Security Agent") for the lenders (the "Lenders") party
-------------- -------
to the Credit Agreement and for Citibank, N.A. as Administrative Agent
(as defined in the Credit Agreement) for the Lenders.
PRELIMINARY STATEMENTS
(1) The Pledgor is entering into an Amended and Restated
Credit Agreement, dated as of even date herewith (said Agreement, as
it may hereafter be amended or otherwise modified from time to time,
being the "Credit Agreement"; terms defined therein and not otherwise
----------------
defined herein being used herein as therein defined) with the Lenders
party thereto, Citicorp Securities, Inc. and Credit Suisse, as
Arrangers, and Citibank, N.A., as Administrative Agent for the
Lenders. It is a condition precedent to the extension of credit by
the Lenders under the Credit Agreement that the Pledgor shall make the
pledge contemplated by this Agreement.
(2) The Pledgor owns and holds a limited partnership
interest (the "LP Interest") in T.M.I. Associates, L.P. ("Associates
----------- ----------
LP").
--
(3) The Pledgor has entered into an Interest Rate Swap
Agreement, dated as of December 23, 1991, and amended as of even date
herewith, with Borden, Inc. ("Borden"), as counterparty (the
------
"Counterparty") (said Agreement, as it may hereafter be further
------------
amended or otherwise modified from time to time, being the "Interest
--------
Rate Swap Agreement").
-------------------
(4) The Pledgor is the beneficiary of the Borden #2
Agreement, dated as of December 23, 1991, and amended as of even date
herewith, made by Borden (said Agreement, as it may hereinafter be
further amended or otherwise modified from time to time, being the
"Borden #2 Agreement").
-------------------
(5) The Pledgor has opened the following accounts (a)
with Citibank, N.A., at its offices at 120 Wall Street, New York, New
York 10043: Account No. 102020 (such account, and any subaccounts
thereunder from time to time, being the "Operating Account"), such
-----------------
Operating Account being in the name of the Pledgor but under the sole
control and dominion of, and exclusive right of withdrawal by, the
Security Agent and subject to the terms of this Agreement, and (b)
with Wilmington Trust Company, Wilmington, Delaware: Account No.
2524-6506 (such account, and any subaccounts thereunder from time to
time, being the "Manager Account"), such Manager Account being in the
---------------
name of the Pledgor with the Manager sharing control and dominion as
attorney-in-fact of the Pledgor.
<PAGE>
2
NOW, THEREFORE, in consideration of the premises and in
order to induce the Lenders to extend credit under the Credit
Agreement, the Pledgor hereby agrees with the Security Agent for its
benefit and the benefit of the Administrative Agent and the Lenders as
follows:
SECTION 1. Pledge and Assignment.
---------------------
The Pledgor hereby pledges, transfers and assigns to the
Security Agent for its benefit and the benefit of the Lenders and the
Administrative Agent, and grants to the Security Agent for its benefit
and the benefit of the Lenders and the Administrative Agent a security
interest in, all right, title and interest of the Pledgor (whether now
owned or hereafter acquired) in, to and under the following (the
"Pledged Collateral"):
------------------
(a) the Associates LP Partnership Agreement, the Borden
#2 Agreement, the Transfer Agreement and the Interest Rate Swap
Agreement (collectively, the "Assigned Agreements") including,
-------------------
without limitation, (i) all rights of the Pledgor to receive
monies and other assets due and to become due to the Pledgor
under or pursuant to each Assigned Agreement, (ii) all claims
of the Pledgor for damages arising out of or for breach of or
default under any Assigned Agreement, (iii) all rights of the
Pledgor to receive proceeds of any insurance, indemnity,
warranty or guaranty with respect to any Assigned Agreement and
(iv) all rights of the Pledgor to perform thereunder and to
compel performance and otherwise exercise all remedies
thereunder;
(b) the LP Interest and all interest, cash, instruments
and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or
all of the LP Interest including, without limitation, the
proceeds of the sale of the LP Interest to one or more of the
general partners of Associates LP;
(c) the Operating Account and all funds held therein and
all certificates and instruments, if any, from time to time
representing or evidencing such Operating Account;
(d) all Permitted Investments (as such term is defined in
Section 7) from time to time in the Operating Account and all
certificates and instruments, if any, from time to time
representing or evidencing the Permitted Investments, and all
interest, earnings and proceeds in respect thereof;
(e) all notes, certificates of deposit, securities, and
other instruments, if any, from time to time hereafter
delivered to or otherwise possessed by the Security Agent for
or on behalf of the Pledgor in substitution for or in addition
to any or all of the then existing Pledged Collateral;
(f) all other personal property of the Pledgor (except
the Manager Account), whether now owned or existing or
hereafter acquired or arising, or in which the Pledgor may have
an interest, and wheresoever located, whether or not of a type
which may be subject to a security interest under the Uniform
Commercial Code; and
<PAGE>
3
(g) to the extent not covered by clauses (a) through (f)
above, all proceeds of any or all of the foregoing.
Notwithstanding the foregoing, any and all (x) tax distributions under
Section 4.1(b) of the Associates LP Partnership Agreement (the
"Pledgor Tax Distributions") and (y) indemnification to the extent
-------------------------
attributable to any Person other than the Pledgor under Sections
5.5(a) or 5.5(b) of the Associates LP Partnership Agreement and under
Section 1 of the Borden #2 Agreement in respect thereof (collectively,
"the Pledgor Indemnification Payments") are hereby excluded from the
--------------------------------
Pledged Collateral and the Pledgor retains the right to Pledgor Tax
Distributions in respect of taxes paid or payable by the parties of
the Pledgor and to Pledgor Indemnification Payments in respect of
certain costs, expenses, losses or damages incurred by the parties of
the Pledgor, and the Security Agent agrees to promptly transfer to the
Manager Account an amount equal to any and all Pledgor Tax
Distributions and Pledgor Indemnification Payments to the extent
received by it and certified to it in writing as Pledgor Tax
Distributions or Pledgor Indemnification Payments by the Manager.
SECTION 2. Security for Obligations.
------------------------
This Agreement secures the payment of all obligations of
the Pledgor now or hereafter existing under the Credit Agreement, the
Notes, this Agreement and the Escrow Agreement, whether for principal,
interest, fees, expenses, indemnities or otherwise (all such
obligations of the Pledgor being the "Obligations"). Without limiting
-----------
the generality of the foregoing, this Agreement secures the payment of
all amounts that constitute part of the Obligations and would be owed
by the Pledgor to the Administrative Agent and the Lenders under the
Loan Documents but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or
similar procedure involving the Pledgor.
SECTION 3. Delivery of Pledged Collateral.
------------------------------
All instruments and certificates representing or
evidencing the Pledged Collateral shall be delivered to and held by or
on behalf of the Security Agent on behalf of itself, the
Administrative Agent and the Lenders pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by
duly executed instruments of transfer or assignment in blank and
undated, all in form and substance satisfactory to the Security Agent.
The Security Agent shall have the right, at any time in its discretion
after the occurrence of an Event of Default, to transfer to or to
register in the name of the Security Agent or any of its nominees any
or all of such Pledged Collateral. Promptly after any such transfer
or registration, the Security Agent shall give notice thereof to the
Pledgor, but the failure to give such notice shall not affect any of
the rights or remedies of the Security Agent hereunder. The Security
Agent shall have the right at any time to exchange instruments or
certificates representing or evidencing such Pledged Collateral for
instruments or certificates of smaller or larger denominations,
subject to the terms thereof.
SECTION 4. Pledgor Remains Liable.
----------------------
Anything herein to the contrary notwithstanding, (i) the
Pledgor shall remain liable under the contracts and agreements
included in the Pledged Collateral to the extent set forth therein
<PAGE>
4
to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (ii) the exercise
by the Security Agent of any of the rights hereunder shall not release
the Pledgor from any of its duties or obligations under the contracts
and agreements included in the Pledged Collateral, and (iii) the
Security Agent shall not have any obligation or liability under the
contracts and agreements included in the Pledged Collateral by reason
of this Agreement, nor shall the Security Agent be obligated to
perform any of the obligations or duties of the Pledgor thereunder or
to take any action to collect or enforce any claim for payment
assigned hereunder.
SECTION 5. Maintaining the Operating Account.
---------------------------------
Until the payment in full of the Obligations:
(a) The Pledgor will maintain the Operating Account only
with the Security Agent.
(b) It shall be a term and condition of the Operating
Account, notwithstanding any term or condition to the contrary
in any other agreement relating to such Operating Account, and
except as otherwise provided in Section 8 hereof concerning
transfers and payments or in Section 17 hereof concerning
default, that no amount (including interest on Investments held
in such Operating Account) shall be paid or released from such
Operating Account to or for the account of, or withdrawn by or
for the account of, the Pledgor or any other person or entity.
The Operating Account shall be subject to such applicable laws, and
such applicable regulations of the Board of Governors of the Federal
Reserve System and of any other competent banking or governmental
authority, as may now or hereafter be in effect.
SECTION 6. Deposit of Funds into the Operating Account.
-------------------------------------------
(a) The Pledgor shall instruct Associates LP that all
payments due under or in respect of the LP Interest, and all payments
due to the Pledgor under or in respect of the Associates LP
Partnership Agreement shall be deposited directly into the Operating
Account, except for Pledgor Tax Distributions and Pledgor
Indemnification Payments, which shall be deposited directly into the
Manager Account or made to whomsoever the Manager determines shall be
legally entitled thereto.
(b) The Pledgor shall instruct the partners of the
Pledgor that all additional cash capital contributions made by any
partner of the Pledgor, in respect of Additional Credit Amounts (as
defined in the Borrower Partnership Agreement) shall be deposited
directly into the Operating Account; provided, however, that
-------- -------
additional cash contributions made by any partner of the Pledgor in
respect of Additional Equity Amounts (as defined in the Borrower
Partnership Agreement) or in respect of any fees payable under the
Interest Rate Swap Fee Letter, shall be deposited directly into the
Manager Account.
(c) The Pledgor shall instruct Borden that all amounts
payable (i) by Borden under the Borden #2 Agreement and (ii) by
Borden, as Counterparty, under the Interest Rate Swap Agreement,
shall, in each case, be deposited directly into the Operating Account,
except for Pledgor
<PAGE>
5
Indemnification Payments, which shall be paid directly into the
Manager Account or made to whomsoever the Manager determines shall be
legally entitled thereto.
The Security Agent shall immediately notify the Pledgor and the
Administrative Agent (if other than the Security Agent) of any such
deposit and shall provide to the Pledgor and the Administrative Agent
(if other than the Security Agent) monthly reports of holdings and
transactions as to the Operating Account.
SECTION 7. Investing of Amounts in the Operating Account.
---------------------------------------------
The Security Agent shall, subject to the provisions set
forth in Section 8 hereof concerning transfers and payments and in
Section 17 hereof concerning default, from time to time (a) invest, in
accordance with its customary practice, amounts on deposit in the
Operating Account in (i) to the extent practicable, United States
Treasury Bills having a remaining term of approximately ninety days or
(ii) a money market deposit account maintained by the Security Agent
(collectively referred to as the "Permitted Investments"), and (b) to
---------------------
the extent practicable, invest interest and other earnings from the
Permitted Investments referred to in clause (a) above, and reinvest
the proceeds from any such maturing Permitted Investments, in each
case in Permitted Investments, as the Security Agent may select;
provided, however, that the Security Agent shall endeavor to invest
-------- -------
such amounts in the Permitted Investment which at the time of such
investment has the highest return on such investment for a term of
approximately 90 days; and provided further the Security Agent may
-------- -------
liquidate any Investment prior to its maturity if the proceeds of such
liquidation are necessary for any payment required to be made by the
Security Agent in accordance with the provisions of Section 8 hereof.
Interest and proceeds that are not invested or reinvested as provided
above shall be deposited and held in the Operating Account. The
Security Agent shall not be liable for any losses incurred as the
result of any sale or disposition of Permitted Investments, and the
Pledgor hereby releases the Security Agent from any liability arising
out of, or in connection with, any investment or liquidation made by
it hereunder, except where such liability arises from the Security
Agent's gross negligence or willful misconduct.
SECTION 8. Transfers from the Operating Account.
------------------------------------
(a) Transfers in Respect of Non-Principal Payments Under
----------------------------------------------------
the Loan Documents. (i) On each Interest Payment Date, the Security
------------------
Agent shall transfer and pay, promptly upon receipt thereof, to the
parties specified below the amounts indicated for such parties, solely
from, and to the extent of, funds then held in the Operating Account
(such funds, less funds then held in respect of payments under Section
8(b) below, being "Applicable Funds"), such transfers and payments to
----------------
be made free and clear of any pledge or security interest hereunder:
(1) First, to the Security Agent, an amount equal to the
-----
sum of the aggregate amount of fees then owing to the Security
Agent and any Additional Credit Amounts then due and payable to
the Security Agent;
(2) Second, to the Administrative Agent, individually and
------
on behalf of the Lenders, an amount equal to the sum of the
aggregate amount of fees then owing to the
<PAGE>
6
Administrative Agent and any Additional Credit Amounts then due
and payable to the Administrative Agent or to the Lenders;
(3) Third, to the Administrative Agent on behalf of the
-----
Lenders, an amount equal to the aggregate amount of interest
payable on such date to the Lenders under the terms of Sections
2.04 and 2.05 of the Credit Agreement, as advised by the
Administrative Agent;
(4) Fourth, to the Counterparty, an amount equal to the
------
amount, if any, then payable by the Pledgor under Section 2 of
the Interest Rate Swap Agreement, as advised by the
Administrative Agent;
(5) Fifth, to the Counterparty, an amount equal to the
-----
fees, if any, then due and payable to the Counterparty by the
Pledgor under the terms of the Interest Rate Swap Fee Letter,
as advised by the Administrative Agent;
(6) Sixth, to the Manager, an amount equal to any
-----
Additional Equity Amounts then due and payable as requested by
the Manager in writing; and
(7) Seventh, to the Manager, an amount equal to the First
-------
Preference Return (as defined in the Borrower Partnership
Agreement) plus the amounts, if any, distributed pursuant to
Section 4.1(b)(ii) of the Borrower Partnership Agreement, in
each case as requested by the Manager in writing.
(ii) (A) From time to time, upon the Security Agent's
receipt of a notice from the Administrative Agent in respect of
Additional Credit Amounts (as defined in the Borrower Partnership
Agreement) then due and payable, or a notice from the Manager in
respect of Additional Equity Amounts (as defined in the Borrower
Partnership Agreement) then due and payable), the Security Agent shall
transfer and pay to the Administrative Agent or the Manager, as the
case may be, from the Applicable Funds, an amount equal to such
Additional Credit Amount or Additional Equity Amount, as the case may
be, and, whether or not the Applicable Funds are sufficient to make
such requested payment, if, at the time of such payment, there exists
a "Deficiency" calculated in accordance with the following sentence,
the Security Agent shall give a Deficiency Notice (as defined below)
as provided under paragraph (B) below. A "Deficiency" means, at any
time, (x) the amount then due and payable by the Pledgor in respect of
Additional Interest and Tax Burden (as defined in the Borrower
Partnership Agreement), and/or (y) the excess of the aggregate amount
------
then due and payable by the Pledgor in respect of the Obligations, the
Interest Rate Swap Agreement, the Interest Rate Swap Fee Letter,
Additional Equity Amounts and Additional Credit Amounts (other than
Additional Interest and Tax Burden), plus amounts then distributable
in respect of the First Preference Return over the sum of Applicable
----
Funds plus any amounts then due and payable by Borden as Counterparty
under Section 2 of the Interest Rate Swap Agreement, as advised by the
Administrative Agent.
(B) In the event of a Deficiency, the Security Agent
shall, within one Business Day of its determination of such
Deficiency, give notice (a "Deficiency Notice") to the Manager, the
-----------------
Pledgor, the partners of the Pledgor and the Administrative Agent
stating that an Additional Credit
<PAGE>
7
Amount or an Additional Equity Amount, as the case may be, has been
requested, the amount or amounts requested in respect thereof and
setting forth in reasonable detail the Deficiency.
(C) Upon the Security Agent's receipt of a notice from
the Administrative Agent in respect of Additional Credit Amounts then
due and payable, or a notice from the Manager in respect of Additional
Equity Amounts then due and payable, or its own determination of an
Additional Credit Amount then due and payable to it, the Security
Agent shall, within one Business Day of receipt of such notice from
the Administrative Agent, receipt of such notice from the Manager or
such determination, as the case may be, provide copies of such notices
or notice of such determination, as the case may be, to the Manager,
the Pledgor, the partners of the Pledgor and the Administrative Agent.
In the case of the Security Agent's determination of an Additional
Credit Amount then due and payable to it, the notice of such
determination shall set forth in reasonable detail the basis therefor.
(iii) Notwithstanding anything to the contrary set forth in
paragraphs (i) and (ii) of this Section 8(a), (A) upon the Security
Agent's receipt of notice from the Pledgor or the Administrative Agent
of the occurrence and continuance of a Default (other than an Event of
Default) under the Credit Agreement and until such time as the
Security Agent shall have received notice from the Administrative
Agent that such Default is no longer continuing, no transfers or
payments of funds from the Operating Account pursuant to clause (5),
(6) or (7) of paragraph (i) of this Section 8(a) shall be required to
be made by the Security Agent and, at the option of the Security
Agent, any funds that would otherwise be transferred to the
Counterparty pursuant to clause (5) or to the Manager pursuant to
clause (6) or (7) of paragraph (i) of Section 8(a) above shall
continue to be held in the Operating Account; and (B) upon the
Security Agent's receipt of notice from the Pledgor or the
Administrative Agent of the occurrence and continuance of an Event of
Default under the Credit Agreement and until such time as the Security
Agent receives notice from the Administrative Agent that such Event of
Default has been rescinded, the Security Agent shall be entitled to
apply all or any portion of such funds deposited into the Operating
Account pursuant to Section 8(a) to amounts then owing under the
Credit Agreement or the other Loan Documents, as advised by the
Administrative Agent.
(b) Transfers from the Operating Account in Respect of
--------------------------------------------------
Principal Payments Under the Credit Agreement. (i) Upon receipt by
---------------------------------------------
the Security Agent of any proceeds identified to it as being in
respect of any voluntary redemption of the LP Interest by Associates
LP pursuant to Section 10.8 of the Associates LP Partnership Agreement
and any associated Retirement Period Guaranteed Payment (as defined in
the Associates LP Partnership Agreement), the Security Agent shall
transfer and pay, promptly upon receipt thereof, to the parties
specified below the amounts indicated for such parties, solely from,
and to the extent of, such funds received:
(1) First, to the Administrative Agent on behalf of the
-----
Lenders, the Administrative Agent and the Security Agent, an
amount equal to the aggregate amount then due and payable by
the Pledgor under the Loan Documents other than in respect of
the unpaid principal amount of outstanding Advances, as advised
by the Administrative Agent;
<PAGE>
8
(2) Second, to the Administrative Agent on behalf of the
------
Lenders, an amount equal to the aggregate unpaid principal
amount of all outstanding Advances then due and payable, as
advised by the Administrative Agent;
(3) Third, to the Counterparty, an amount equal to the
-----
amount, if any, then payable by the Pledgor under Section 2 of
the Interest Rate Swap Agreement, as advised by the
Administrative Agent;
(4) Fourth, to the Counterparty, an amount equal to the
------
fees, if any, then due and payable by the Pledgor under the
terms of the Interest Rate Swap Fee Letter, as advised by the
Administrative Agent;
(5) Fifth, to the Manager, an amount equal to any
-----
Additional Equity Amounts then due and payable, as requested by
the Manager in writing; and
(6) Sixth, if such redemption is of all (but not less
-----
than all) of the LP Interest, to the Manager, all funds then
remaining in the Operating Account.
(ii) Upon receipt by the Security Agent of any proceeds
identified to it as being in respect of (A) the purchase of the LP
Interest by one or more of the general partners of Associates LP
pursuant to Section 14.3 of the Associates LP Partnership Agreement or
(B) the liquidation of the LP Interest pursuant to Section 12 of the
Associates LP Partnership Agreement and any associated Liquidation
Period Guaranteed Payment (as defined in the Associates LP Partnership
Agreement), the Security Agent shall transfer and pay, promptly upon
receipt thereof, to the parties specified below the amounts indicated
for such parties, solely from, and to the extent of, such funds
received:
(1) First, to the Administrative Agent on behalf of the
-----
Lenders, the Administrative Agent and the Security Agent, an
amount equal to the aggregate amount payable by the Pledgor
under the Loan Documents other than in respect of the unpaid
principal amount of outstanding Advances, as advised by the
Administrative Agent;
(2) Second, to the Administrative Agent on behalf of the
------
Lenders, an amount equal to the aggregate unpaid principal
amount of all outstanding Advances then due and payable, as
advised by the Administrative Agent;
(3) Third, to the Counterparty, an amount equal to the
-----
amount, if any, then payable by the Pledgor under Section 2 of
the Interest Rate Swap Agreement, as advised by the
Administrative Agent;
(4) Fourth, to the Counterparty, an amount equal to the
------
aggregate unpaid fees, if any, then due and payable by the
Pledgor under the terms of the Interest Rate Swap Fee Letter,
as advised by the Administrative Agent; and
(5) Fifth, to the Manager, all funds then remaining in
-----
the Operating Account.
<PAGE>
9
(iii) Notwithstanding anything to the contrary set forth in
paragraph (i) of this Section 8(b), (A) upon the Security Agent's
receipt of notice from the Pledgor or the Administrative Agent of the
occurrence and continuance of a Default (other than an Event of
Default) under the Credit Agreement and until such time as the
Security Agent shall have received notice from the Administrative
Agent that such Default is no longer continuing, no transfers or
payments of funds from the Operating Account other than pursuant to
----- ----
clauses (1), (2) and (3) of paragraph (i) of this Section 8(b) shall
be required to be made by the Security Agent and, at the option of the
Security Agent, any funds that would otherwise be transferred to the
Counterparty pursuant to clause (4) of paragraph (i) above, or to the
Manager pursuant to clause (5) or (6) of paragraph (i) of this Section
8(b), shall continue to be held in the Operating Account; and (B) upon
the Security Agent's receipt of notice from the Pledgor or the
Administrative Agent of the occurrence and continuance of an Event of
Default under the Credit Agreement and until such time as the Security
Agent receives notice from the Administrative Agent that such Event of
Default has been rescinded, the Security Agent shall be entitled to
apply all or any portion of such funds deposited into the Operating
Account pursuant to Section 8(b) to amounts then owing under the
Credit Agreement or the other Loan Documents.
SECTION 9. Representations and Warranties.
------------------------------
The Pledgor represents and warrants to the Security Agent
as follows:
(a) None of the Assigned Agreements has been amended or
otherwise modified, except as described in the Preliminary
Statements to this Agreement, and each Assigned Agreement is in
full force and effect. Neither the Pledgor, nor any other
party thereto, is in default of its obligations under any
Assigned Agreement.
(b) The Associates LP Partnership Agreement and the
Interest Rate Swap Agreement have been duly authorized,
executed and delivered by the Pledgor and are each a legal,
valid and binding obligation of the Pledgor, enforceable in
accordance with their respective terms.
(c) The Pledgor is the legal owner of the Pledged
Collateral free and clear of any lien, security interest,
option or other charge or encumbrance except for the pledge and
security interest created by this Agreement.
(d) This Agreement creates a valid security interest in
the Pledged Collateral, securing the payment of the Obligations
and subject to no superior security interests or liens and all
filings and other actions necessary to perfect such security
interest have been duly taken.
(e) No consent of any other person or entity (other than
Borden, BDS One, BDS Two, BDS Four, and the Counterparty, which
consents have been duly and validly obtained and are, or upon
release from escrow shall be, in full force and effect) and no
authorization, approval, or other action by, and no notice to
or filing with, any governmental authority or regulatory body
(other than the filings referred to in Section 9(d) above) is
required either
<PAGE>
10
(i) for the pledge by the Pledgor of the Pledged Collateral
pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by the Pledgor or (ii) for the
exercise by the Security Agent of the rights provided for in
this Agreement or the remedies in respect of the Pledged
Collateral pursuant to this Agreement (except as may be
required in connection with such disposition by laws affecting
the offering and sale of securities generally).
(f) The execution, delivery and performance by the
Pledgor of this Agreement are within the Pledgor's partnership
powers, have been duly authorized by all necessary action, and
do not contravene (i) the Borrower Partnership Agreement or any
Assigned Agreement or (ii) any law, regulation, order or
contractual restriction binding on or affecting the Pledgor.
(g) The Pledgor has irrevocably instructed each other
party to each of the Assigned Agreements that, except as
otherwise provided in Section 16(a), all payments due or to
become due under or in connection with such agreement shall be
made directly to the Operating Account.
(h) The chief place of business and chief executive
office of the Pledgor and the office where the Pledgor keeps
the original copies of each Assigned Agreement are located at
the address specified for the Borrower in Section 20 as the
address for the General Partner.
SECTION 10. Further Assurances.
------------------
(a) The Pledgor agrees that at any time and from time to
time, at the expense of the Pledgor, the Pledgor will promptly execute
and deliver all further instruments and documents, and take all
further action that the Security Agent may reasonably request, in
order to perfect and protect any assignment and security interest
granted or purported to be granted hereby or to enable the Security
Agent to exercise and enforce its rights and remedies hereunder with
respect to any Pledged Collateral. Without limiting the generality of
the foregoing, the Pledgor will, upon the reasonable request of the
Security Agent, (i) execute and deliver to the Security Agent such
financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or desirable, or as
the Security Agent may request, in order to perfect and preserve the
security interests granted or purported to be granted hereby and (ii)
deliver to the Security Agent promptly upon receipt thereof all
instruments representing or evidencing any of the Pledged Collateral
duly endorsed and accompanied by duly executed instruments of transfer
or assignment, all in form and substance satisfactory to the Security
Agent.
(b) The Pledgor hereby authorizes the Security Agent to
file one or more financing or continuation statements, and amendments
thereto, relating to all or any part of the Pledged Collateral without
the signature of the Pledgor where permitted by law. A photocopy or
other reproduction of this Agreement or any financing statement
covering the Pledged Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
<PAGE>
11
(c) The Pledgor will not, without the prior written
consent of the Security Agent (after having given the Security Agent
not less than 30 days' prior written notice thereof and after having
executed and delivered to the Security Agent such further instruments
and documents in connection therewith as may be requested by the
Security Agent pursuant to this Section 10) move or transfer from the
location specified in Section 20 hereof (or any subsequent location)
its principal place of business or chief executive office, or the
location of the Pledgor's books and records with respect to the
Pledged Collateral.
(d) The Pledgor will, upon reasonable notice by the
Security Agent to the Manager, the Pledgor and the partners of the
Pledgor, at any reasonable time and from time to time, permit the
Security Agent or any agents or representatives of the Security
Agent, at the Pledgor's expense, to examine and make copies of and
abstracts from the records and books of account of the Pledgor, to
discuss the affairs, finances and accounts of the Pledgor with
representatives of the Manager, and to discuss the affairs, finances
and accounts of the Pledgor with its independent certified public
accountants and permit such accountants to disclose to the Security
Agent any and all financial statements and other information of any
kind that they may have with respect to the Pledgor; provided, that
--------
the Security Agent shall permit the Pledgor or any partners of the
Pledgor to be present at any such examination or discussion.
SECTION 11. Transfers and Other Liens.
-------------------------
The Pledgor agrees that it will not (i) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, any of the Pledged Collateral, except pursuant
to the purchase options in favor of the general partners of Associates
LP as provided in Section 14.3 of the Associates LP Partnership
Agreement, or (ii) create or permit to exist any lien, security
interest, or other charge or encumbrance upon or with respect to any
of the Pledged Collateral, except for the security interest under this
Agreement and liens for taxes or other governmental charges and
assessments not yet delinquent or being contested in good faith by
appropriate proceedings.
SECTION 12. Concerning the Assigned Agreements.
----------------------------------
(a) The Pledgor agrees that it will observe and perform
all the terms and provisions of each Assigned Agreement to be
performed or observed by it, maintain the LP Interest (in accordance
with paragraph (b) below) and each Assigned Agreement in full force
and effect, enforce in all material respects each Assigned Agreement
in accordance with its terms and take all such action to such end as
may be reasonably requested from time to time by the Security Agent.
(b) Except as otherwise provided in Section 16(f) below
and so long as no Event of Default has occurred and is continuing, the
Pledgor shall be entitled to exercise all consensual and voting rights
under the Associates LP Partnership Agreement; provided, however, that
-------- -------
the Pledgor agrees that it will not furnish any consent under the
Associates LP Partnership Agreement, agree to fix the rate of interest
under the Reset Note, appoint a liquidator or appraiser under the
Associates LP Partnership Agreement or consent to any amendment,
supplement, modification or waiver of any provision of, any Assigned
Agreement (other than (x) an immaterial consent, amendment, supplement
<PAGE>
12
or modification in the case of the Master Lease, an Individual Leasing
Record, any Affiliate Loan, any License Agreement and any Additional
Capital Contribution Agreement (as each such term is defined in the
Associates LP Partnership Agreement), (y) a consent under Section
5.1(j)(ii) of the Associates LP Partnership Agreement to extend the
statute of limitations for certain assessments of tax deficiencies and
(z) a consent to permit partial retirement in excess of 80% of the LP
Interest under Section 10.8(a)(i)(A) of the Associates LP Partnership
Agreement), without the prior written consent of the Security Agent
and the Required Lenders; provided further, however, that no
-------- ------- -------
amendment, supplement, modification or waiver shall, unless in writing
and signed by the Security Agent and all Lenders, do any of the
following: (i) terminate any Assigned Agreement or consent to or
accept any cancellation or termination thereof, (ii) waive any default
under or breach of any Assigned Agreement, (iii) amend the Associates
LP Partnership Agreement or increase the Capital Contribution (as
defined in the Associates LP Partnership Agreement) of the Pledgor or
subject it to any additional obligations under the Associates LP
Partnership Agreement, (iv) reduce the obligations of any general
partner of Associates LP under the Associates LP Partnership
Agreement, (v) amend the terms or timing of allocation or distribution
under Sections 3 or 4, respectively, of the Associates LP Partnership
Agreement, (vi) amend the definition of "Permitted Assets" (as defined
in the Associates LP Partnership Agreement) or the Portfolio
Requirements set forth in Section 5.7 of the Associates LP Partnership
Agreement, (vii) release Borden from any of its obligations under the
Borden #2 Agreement or the Transfer Agreement, or give the consent
described in Section 2(b) of the Transfer Agreement (viii) reduce the
notional principal amount subject to the Interest Rate Swap Agreement
(other than by reason of (x) reductions in amounts equal to the
principal prepayments made as a result of voluntary redemptions of the
LP Interest by Associates LP pursuant to Section 10.8 of the
Associates LP Partnership Agreement or (y) the liquidation of the LP
Interest pursuant to Section 12 of the Associates LP Partnership
Agreement), or (ix) otherwise impair in any material respect the value
or interest or rights of the Pledgor in the Pledged Collateral.
SECTION 13. Security Agent Appointed Attorney-in-Fact.
-----------------------------------------
The Pledgor hereby appoints the Security Agent the
Pledgor's attorney-in-fact, with full authority in the place and
stead of the Pledgor and in the name of the Pledgor or otherwise, from
time to time in the Security Agent's discretion, to take any action
and to execute any instrument that the Security Agent may deem
necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation, to make demand on Associates LP and
each general partner thereof or Borden for all amounts due under the
Assigned Agreement to which it is a party, to receive, endorse and
collect all instruments made payable to the Pledgor representing any
payment or other distribution in respect of the Pledged Collateral or
any part thereof and to give full discharge for the same, and to file
any claims or take any action or institute any proceedings that the
Security Agent may deem necessary or desirable for the collection of
any of the Pledged Collateral or otherwise to enforce compliance with
the terms and conditions of each Assigned Agreement or the rights of
the Security Agent with respect to any of the Pledged Collateral.
SECTION 14. Security Agent May Perform.
--------------------------
<PAGE>
13
If the Pledgor fails to perform any agreement contained
herein, the Security Agent may itself perform, or cause performance
of, such agreement, and the expenses of the Security Agent incurred in
connection therewith shall be payable by the Pledgor under Section 18
hereof.
SECTION 15. Reasonable Care.
---------------
The powers conferred on the Security Agent hereunder are
solely to protect its interest in the Pledged Collateral and shall not
impose any duty upon it to exercise any such powers. The Security
Agent shall be deemed to have exercised reasonable care in the custody
and preservation of the Pledged Collateral in its possession if the
Pledged Collateral is accorded treatment substantially equal to that
which an ordinary person accords its own property, it being understood
that none of the Security Agent, the Administrative Agent or the
Lenders shall have any responsibility for taking any necessary steps
to preserve rights against any parties with respect to any Pledged
Collateral. Other than the safe custody of any Pledged Collateral in
its possession and the accounting for moneys actually received by it
hereunder, the Security Agent shall not have responsibility for taking
any necessary steps to preserve rights against any parties with
respect to any Pledged Collateral.
SECTION 16. Rights, Remedies and Obligations.
--------------------------------
(a) The Pledgor agrees, and has effectively and
irrevocably instructed each other party to each of the Assigned
Agreements, that all payments due or to become due under or in
connection with such agreement shall be made directly to the Operating
Account, excluding, however, Pledgor Tax Distributions and Pledgor
Indemnification Payments (as provided in Section 1 above).
(b) All payments received by the Pledgor under or in
connection with any Assigned Agreement contrary to the provisions of
this Agreement shall be received in trust for the benefit of the
Security Agent, shall be segregated from other funds of the Pledgor,
and shall forthwith be paid over to the Security Agent in the same
form as so received (with any necessary endorsement).
(c) The Pledgor shall not be entitled to elect to receive
any distribution made pursuant to Section 10.8(b) or Section 12.2 of
the Associates LP Partnership Agreement in assets other than cash or
to demand that in-kind distributions be made to the partners of
Associates LP in liquidation of their respective interests in
Associates LP, unless the Security Agent has given its prior written
consent. Upon any such demand for in-kind distributions, the
distribution to the Pledgor of any Permitted Assets other than Borden
Loans, Borden Guaranteed Loans, Reset Notes, or Cash Equivalents (each
as defined in the Associates LP Partnership Agreement) shall require
the prior written consent of the Pledgor and the Security Agent.
Unless otherwise agreed in writing by the Security Agent, if the
Pledgor has not (i) deposited sufficient funds into the Operating
Account to redeem any non-cash assets distributed or to be distributed
pursuant to Section 10.8(b) or Section 12.2 of the Associates LP
Partnership Agreement or (ii) delivered to the Security Agent written
assurances satisfactory to the Security Agent and the Administrative
Agent that sufficient funds will be deposited into the Operating
Account upon receipt of such assets by the Security Agent, in either
case by 9:00 A.M. (New York City time) on the applicable Retirement
Date (as defined in the
<PAGE>
14
Associates LP Partnership Agreement), the Security Agent shall
liquidate such assets promptly upon the receipt thereof.
(d) The Security Agent shall instruct the Pledgor with
respect to the election of a Liquidator (as defined in and pursuant to
Section 12.9 of the Associates LP Partnership Agreement) upon the
occurrence of a Liquidating Event (as defined in the Associates LP
Partnership Agreement); provided, however, that the Security Agent
-------- -------
shall not instruct the Pledgor to vote for a Liquidator who is (i) an
Affiliate (as defined in the Associates LP Partnership Agreement) of
Borden or (ii) a member of Borden's consolidated corporate group.
(e) The Pledgor agrees that it will not, without the
prior written consent of the Security Agent, file or join in the
filing of a petition for the commencement of proceedings under the
federal bankruptcy laws with respect to Associates LP or the Pledgor.
(f) So long as this Agreement shall remain in effect, and
regardless of whether any Event of Default under the Credit Agreement
shall have occurred, each of the Pledgor and the Security Agent shall
be entitled, in its own right and without consent from the other, to
deliver a Default Notice (as defined in the Associates LP Partnership
Agreement) pursuant to Section 14.2 of the Associates LP Partnership
Agreement in the manner and with the effect provided therein;
provided, however, that any Default Notice delivered by the Security
-------- -------
Agent as a result of the occurrence of the Default Event described in
Section 14.1(e) of the Associates LP Partnership Agreement shall not
have an effective date prior to September 10, 1996; provided further,
-------- -------
however, that the Security Agent shall deliver a Default Notice upon
-------
the written instructions of the Required Lenders in accordance with
Section 7.01 of the Credit Agreement, or, upon the written
instructions of any Lender in the event the Default Notice relates to
the Default Event described in Section 14.1(e) of the Associates LP
Partnership Agreement. In addition, if any such Default Notice shall
have been delivered pursuant to the terms of the Associates LP
Partnership Agreement by the Pledgor, any partner of the Pledgor or
the Security Agent, any notice delivered to the managing general
partner of Associates LP rescinding such Default Notice as provided in
Section 14.2 of the Associates LP Partnership Agreement shall not be
effective unless both the Pledgor and the Security Agent have given
their prior written consent to such notice of rescission.
SECTION 17. Remedies upon Default.
---------------------
If any Event of Default shall have occurred and be
continuing:
(a) The Security Agent may exercise in respect of the
Pledged Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the
rights and remedies of a secured party under the Uniform
Commercial Code (the "Code") in effect in the State of New York
----
at that time (whether or not the Code applies to the Pledged
Collateral at issue), and the Security Agent may also, without
notice except as specified below, sell the Pledged Collateral
or any part thereof in one or more parcels at public or private
sale, or at any of the Security Agent's offices or elsewhere,
for cash, on credit or for future delivery, and upon such other
terms as the Security Agent may deem commercially reasonable.
The Pledgor agrees that, to the extent notice of sale shall be
<PAGE>
15
required by law, at least ten days' notice to the Pledgor of
the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable
notification. The Security Agent shall not be obligated to
make any sale of Pledged Collateral regardless of notice of
sale having been given. The Security Agent may adjourn any
public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was
so adjourned.
(b) Any cash held by the Security Agent as Pledged
Collateral and all cash proceeds received by the Security Agent
in respect of any sale of, collection from, or other
realization upon all or any part of the Pledged Collateral
shall be paid promptly after receipt thereof (and after payment
of any amounts payable to the Security Agent pursuant to
Section 18 hereof) in whole or in part by the Security Agent:
(1) First, to the Administrative Agent on behalf of
-----
itself and the Lenders, an amount equal to the Obligations
then outstanding under the Loan Documents, as advised by
the Administrative Agent;
(2) Second, to the Counterparty, an amount equal to
------
the amount, if any, then payable by the Pledgor under
Section 2 of the Interest Rate Swap Agreement as advised
by the Administrative Agent;
(3) Third, to the Counterparty, an amount equal to
-----
the aggregate unpaid fees, if any, then due and payable by
the Pledgor under the Interest Rate Swap Fee Letter, as
advised by the Administrative Agent; and
(4) Fourth, to the Manager or whomever may be
------
lawfully entitled, an amount equal to that remaining after
the foregoing payments.
(c) All rights of the Pledgor to exercise any voting
rights or other discretionary or consensual rights under any
Assigned Agreement that it would otherwise be entitled to
exercise shall cease, and all such rights shall thereupon
become vested in the Security Agent who shall thereupon have
the sole right to exercise such voting and other consensual
rights until such time as the Security Agent has sold or
transferred the LP Interest pursuant to the terms hereof or the
Obligations have been paid in full; provided that (i) upon the
--------
occurrence of a Default Event (as defined in the Associates LP
Partnership Agreement) and prior to any exercise by the
Security Agent of its right to foreclose on the Pledged
Collateral pursuant to this Section 17, the Pledgor shall
continue to be entitled to give the Default Notice as provided
in Section 14.2 of the Associates LP Partnership Agreement in
the manner and with the effect provided therein, provided,
--------
however, that if any such Default Notice shall have been
-------
delivered by the Pledgor, any partner of the Pledgor or the
Security Agent (upon written instructions from the Required
Lenders, except in the case of the Default Event described in
Section 14.1(e) of the Associates LP Partnership Agreement,
upon the written instructions of any Lender), any notice
delivered to the managing general partner of Associates LP
rescinding such Default Notice as provided in Section 14.2 of
the
<PAGE>
16
Associates LP Partnership Agreement shall not be effective
unless both the Pledgor and the Security Agent have given their
prior written consent to such notice of rescission; and (ii) if
a Liquidating Event (as defined in the Associates LP
Partnership Agreement) has occurred, the Security Agent shall
not be entitled to amend or waive Sections 12 and 14 of the
Associates LP Partnership Agreement unless the Pledgor consents
to such amendment or waiver.
SECTION 18. Indemnity and Expenses.
----------------------
(a) The Pledgor covenants and agrees, unconditionally,
absolutely and irrevocably, at its sole cost and expense, to indemnify
and hold harmless the Security Agent (in its capacity as Security
Agent hereunder or as Escrow Agent under the Escrow Agreement), the
Administrative Agent and the Lenders, their respective affiliates,
directors, officers, employees, attorneys, agents, servants, trustees,
beneficiaries and advisors, and their respective successors and
assigns (each being an "Indemnified Party"), upon demand by any such
-----------------
Indemnified Party, from and against any and all claims, damages,
losses, liabilities, penalties and expenses (including, without
limitation, reasonable fees and disbursements of counsel) that may be
incurred by or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (or in connection
with the preparation for a defense of) any investigation, litigation
or proceeding, whether or not such Indemnified Party is a party
thereto, arising out of, related to, or in connection with the
execution, delivery and performance of this Agreement, the Escrow
Agreement and each of the other Loan Documents and any and all
transactions related to or consummated in connection herewith or
therewith; provided, however, no such indemnification shall
-------- -------
be required hereunder for any such claims, damages, losses,
liabilities, penalties and expenses resulting from the gross
negligence or willful misconduct of any such Indemnified Party.
(b) The Pledgor will pay to the Security Agent the amount
of any and all reasonable out-of-pocket expenses, including the
reasonable fees and expenses of its counsel and of any experts and
agents, which the Security Agent may incur in connection with (i) the
administration (other than ordinary costs and expenses) of this
Agreement or the Escrow Agreement, (ii) the preservation of, or the
sale of, collection from, or other realization upon, any of the
Pledged Collateral, (iii) the enforcement of any of the rights of the
Security Agent, the Administrative Agent or the Lenders hereunder, or
(iv) the failure by the Pledgor to perform or observe any of the
provisions hereof.
(c) Pledgor agrees to pay any present or future stamp or
documentary taxes or any other excise, property or transfer taxes,
charges or similar levies that arise from any transfer made hereunder,
from possession arising hereunder, from any action of the Security
Agent contemplated herein, or from the execution, delivery, or
registration of, or otherwise with respect to, this Agreement.
(d) The indemnities set forth in this Section 18 shall be
in addition to any other obligations or liabilities of the Pledgor
hereunder or at common law or otherwise. Without prejudice to the
survival of any other obligation of the Pledgor under this Agreement,
the indemnities and
<PAGE>
17
obligations contained in this Section 18 shall survive the payment in
full of the Obligations or any other termination of this Agreement.
SECTION 19. Amendments, Etc.
---------------
No amendment or waiver of any provision of this Agreement
nor consent to any departure by the Pledgor herefrom, shall in any
event be effective unless the same shall be in writing and signed by
the Pledgor, the Security Agent, the Administrative Agent and the
Required Lenders except that the consent of all the Lenders shall be
required for any amendment or waiver of Section 12, Section 18, this
Section 19 or to release any Pledged Collateral, and in any case such
waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given. No failure on the part of
the Security Agent to exercise, and no delay in exercising any right
hereunder, shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
SECTION 20. Addresses for Notices.
---------------------
All notices and other communications provided for
hereunder shall be in writing (including facsimile transmission) and
mailed, delivered or telecopied (and confirmed by mail) as follows:
If to the Pledgor:
T.M. Investors Limited
Partnership
c/o Wilmington Trust Company
Corporate Trust Administration
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Ann Roberts
Allstate Life Insurance Company
Allstate Plaza West
Northbrook, Illinois 60062
Attention: Investment Department--
Private Placement Division J2A
BDS Five, Inc.
One Little Falls Centre, Suite 202
2711 Centerville Road
Wilmington, Delaware 19808
<PAGE>
18
Attention: Phyllis Yeatman
David Elliman
18 East 74th Street
New York, New York 10021
If to the Security Agent:
Citibank, N.A.
120 Wall Street, 13th Floor
New York, New York 10043
Attention: Corporate Trust Department
with a copy to the Administrative Agent:
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Attention: Michael Pendill
or, as to each party, at such other address or telecopy number as
shall be designated by such party in a written notice to each other
party complying as to delivery with the terms of this Section 20;
provided, however, any party shown above to receive copies of such
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notices and communications to the Pledgor may, by written notice to
the Security Agent, waive any right to receive such copies from the
Security Agent. Unless otherwise stated herein, all such notices
shall be effective when mailed, addressed or sent as aforesaid.
SECTION 21. Continuing Assignment and Security Interest;
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Transfer of Advances.
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This Agreement shall create a continuing security interest
in the Pledged Collateral and shall (i) remain in full force and
effect until payment in full of the Obligations, (ii) be binding upon
the Pledgor and its successors and assigns, and (iii) inure, together
with the rights and remedies of the Security Agent hereunder, to the
benefit of the Security Agent, the Administrative Agent and the
Lenders and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (iii), each
Lender may assign any interest in the Advances made by it to any other
person or entity to the extent permitted by Section 8.06(a) of the
Credit Agreement, and such other person or entity shall thereupon
become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise. Upon the payment in full of the
Obligations, the Pledgor shall be entitled to the return, upon its
request and at its expense, of such of the Pledged Collateral as shall
not have been sold or otherwise applied pursuant to the terms hereof.
SECTION 22. Governing Law; Terms.
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19
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York. Unless otherwise
defined herein or in the Credit Agreement, terms defined in Article 9
of the Uniform Commercial Code in the State of New York are used
herein as therein defined.
SECTION 23. Non-Recourse Liability.
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(a) No recourse under any obligation, covenant or
agreement of the Pledgor contained in this Agreement or the other Loan
Documents shall be had against any partner of the Pledgor or the
Manager, or any beneficiary, stockholder, trustee, employee, officer
or director of any partner of the Pledgor or the Manager, or of any of
their respective affiliates (except for the Pledgor itself), by the
enforcement of any assessment or by any legal or equitable proceeding,
by virtue of any statute or otherwise; it being expressly agreed and
understood that no personal liability whatever shall attach to or be
incurred by any partner of the Pledgor or the Manager, or any
beneficiary, stockholder, trustee, employee, officer or director of
any partner of the Pledgor or the Manager, or any of their respective
affiliates (except for the Pledgor itself), or any of them, under or
by reason of any of the obligations, covenants or agreements of the
Pledgor contained in this Agreement or the other Loan Documents, or
implied therefrom; and it being further expressly agreed and
understood that any and all personal liability of any partner of the
Pledgor or the Manager, as such, and of every such beneficiary,
stockholder, trustee, employee, officer, or director of any partner of
the Pledgor or the Manager, or any of their respective affiliates
(except for the Pledgor itself), for breaches by the Pledgor of any of
such obligations, covenants or agreements, either at common law or at
equity, or by statute or constitution, is hereby expressly waived by
the Security Agent as a condition of and consideration for the
execution of this Agreement.
(b) The Security Agent hereby irrevocably agrees that, in
furtherance of the provisions of the preceding paragraph (a) of this
Section 23, (i) it shall not institute against, or join any other
Person in instituting against, any partner of the Pledgor, as such, or
any beneficiary, stockholder, trustee, employee, officer or director
of any partner of the Pledgor, as such, or any of their respective
affiliates (except for the Pledgor itself), any bankruptcy,
reorganization, insolvency or liquidation proceeding, or other
proceeding under federal or state bankruptcy or similar law, in
connection with any claim relating to the transactions contemplated
hereby, (ii) in the event of any reorganization under the Bankruptcy
Reform Act of 1978, as amended, of any partner of the Pledgor, or the
Pledgor, it will make the election under Section 1111(b)(2) of such
Act and (iii) if for any reason, whether or not related to the Act, it
shall recover from the Pledgor or any partner of the Pledgor, any
assets or amounts other than the assets constituting the Pledged
Collateral, it promptly shall return such asset or amount recovered to
such entity. Nothing contained in this subsection 23(b) shall prevent
any Lender from enforcing as a full recourse obligation (and retaining
the proceeds thereof) any obligation under this Agreement or any other
Loan Document that is expressed as being an obligation of any entity
other than the Pledgor.
SECTION 24. Execution in Counterparts.
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20
This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and
all of which taken together shall constitute one and the same
agreement.
SECTION 25. Headings.
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Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of the
Agreement for any other purpose.
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38
IN WITNESS WHEREOF, the Pledgor and the Security Agent
have caused this Agreement to be duly executed and delivered by its
officer thereunto duly authorized as of the date first above written.
T.M. INVESTORS LIMITED PARTNERSHIP
By: Pawling Partners, Inc.,
Its Sole General Partner
By:
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Title:
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CITIBANK, N.A., as Security Agent
By:
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Name:
Title:
<PAGE>
EXHIBIT E
FORM OF CONFIDENTIALITY AGREEMENT
Reference is made to the Second Amended and Restated
Credit Agreement dated as of December 15, 1994 (as amended,
supplemented or otherwise modified from time to time, the "Credit
------
Agreement") among T.M. Investors Limited Partnership (the
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"Borrower"), the Lenders parties thereto, Citibank, N.A., as
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Administrative Agent for such Lenders, and BT Securities
Corporation, Chemical Securities Inc., Citicorp Securities, Inc.
and Credit Suisse, as Arrangers. Terms defined in the Credit
Agreement and not otherwise defined herein are used herein as
therein defined.
In connection with your status as an assignee or
participant or proposed assignee or participant under the Credit
Agreement, you have received or shall be receiving certain
information which is non-public, confidential or proprietary in
nature. That information and any other information concerning the
Borrower, Associates LP or Borden, Inc. ("Borden") furnished to you
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by the Administrative Agent, any Lender or any of their respective
subsidiaries or affiliates or otherwise by or on behalf of the
Borrower, Associates LP or Borden (at any time on, before or after
the date of this letter), together with analyses, compilations,
studies or other documents prepared by you, or by your agents,
representatives (including attorneys, accountants and financial
advisors) or employees which contain or otherwise reflect such
information or your review of, or interest in the Borrower,
Associates LP and Borden, and including any information concerning
the credit facility pursuant to the Credit Agreement (the "Credit
------
Facility"), is hereinafter referred to as the "Information."
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In consideration of your receipt of the Information, you
agree that:
1. The Information shall be kept confidential and shall
not, without the prior written consent of the Administrative Agent,
Borden and the Borrower, be reproduced or disclosed by you, or by
your agents, representatives or employees in any manner whatsoever,
in whole or in part, and shall not be used by you, your agents,
representatives or employees, other than in connection with
evaluating your participation in the Credit Facility. Moreover,
you agree to reveal the Information only to your agents,
representatives and employees who need to know the Information for
the purpose of evaluating your participation in the Credit
Facility, who are informed by you of the confidential nature of the
Information, and who agree to be bound by the terms and conditions
of this Agreement. You agree to take all reasonable measures to
restrain your agents, representatives and employees from
unauthorized disclosure or use of the Information.
2. Without the Administrative Agent's, Arrangers',
Borden's and the Borrower's prior written consent, you and your
agents, representatives and employees shall not disclose to any
Person the fact that Information has been made available and that
discussions or negotiations are taking place concerning your
possible participation in the Credit Facility.
3. This agreement shall be inoperative as to such
portions of the Information (or such of the facts referred to in
the preceding paragraph) that (i) are or become generally available
to the public on a non-confidential basis through no fault or
action by you or by your agents, representatives or employees, or
(ii) become available to you on a non-confidential basis from a
source other than the Administrative Agent, the Lead Managing
Agents, the Arrangers,
<PAGE>
2
Borden, the Borrower, Associates LP or their representatives or
agents, which is not prohibited from disclosing such portions to
you by a contractual, legal or fiduciary obligation to the
Administrative Agent, Borden, the Arrangers, the Borrower or
Associates LP.
4. In the event that you or anyone to whom you transmit
the Information pursuant to this Agreement becomes legally
compelled to disclose any of the Information or the existence of
the transaction, you shall provide the Administrative Agent, the
Arrangers, Borden and the Borrower with notice of such event
promptly, upon your obtaining knowledge thereof so that the
Administrative Agent, Borden, the Arrangers and the Borrower may
seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Agreement. In the event
that such protective order or other remedy is not obtained, or that
the Administrative Agent, the Arrangers, Borden and the Borrower
waive compliance with the provisions of this Agreement, you shall
furnish only that portion of the Information that you are advised
by written opinion of counsel is legally required (a copy of such
opinion to be furnished to the Administrative Agent, the Arrangers,
Borden and the Borrower) and shall disclose the Information in a
manner reasonably designed to preserve its confidential nature.
If you are prepared to accept the Information on this
basis, please sign and return to us the enclosed copy of this
Letter. In the event that you decide not to become an assignee
under or participant in the Credit Facility, you shall redeliver to
the Administrative Agent, within two business days after request by
such Lender or the Administrative Agent, the material that was
furnished to you by or on behalf of the Borrower, Associates LP or
Borden in connection with the Credit Facility or represent to the
undersigned that you have destroyed all copies of such material.
Very truly yours,
CITIBANK, N.A.,
as Administrative Agent
By_________________
Title: _______________
Date: _______________
Accepted:
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(Name of [Prospective]
Lender or Participant)
By_________________
Title: _______________
Date: _______________
