<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D. C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
----------------------------------------
Commission file number 1-71
----------------------------------------
BORDEN, INC.
New Jersey 13-0511250
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
180 East Broad Street, Columbus, OH 43215
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(Address of principal executive offices)
(614) 225-4000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Number of shares of common stock, $0.625 par value, outstanding as of the close
of business on October 22, 1994: 141,545,838
Page 1 of 16
<PAGE> 2
<TABLE>
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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
BORDEN, INC
<CAPTION>
Three Months Ended
September 30
-------------------------
(In millions except per share data) 1994 1993
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUE Net sales $1,440.1 $1,386.4
- ---------------------------------------------------------------------------------------
COSTS AND Cost of goods sold 1,077.4 1,022.9
EXPENSES Marketing, general and administrative
expenses 332.9 303.3
Restructuring (40.3)
Interest expense 34.3 30.6
Equity in income of affiliates (4.5) (3.4)
Minority interest 10.2 9.8
Other (income) and expense, net 86.2 10.6
Income taxes 15.7 4.1
-------- --------
1,511.9 1,377.9
-------- --------
- ---------------------------------------------------------------------------------------
EARNINGS (Loss) income from continuing operations (71.8) 8.5
Discontinued operations:
Loss from operations (17.9)
Loss on disposal (58.7)
------- --------
Net loss $ (130.5) $ (9.4)
======== ========
- ---------------------------------------------------------------------------------------
SHARE DATA (Loss) income from continuing operations $ (0.51) $ 0.06
Discontinued operations:
Loss from operations (0.13)
Loss on disposal (0.41)
-------- --------
Net loss per common share $ (0.92) $ (0.07)
======== ========
Cash dividends paid per common share $ 0.075 $ 0.150
Average number of common shares
outstanding during the period 141.5 141.2
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</TABLE>
Page 2 of 16
<PAGE> 3
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<CAPTION>
BORDEN, INC.
Nine Months Ended
September 30
------------------------------
(In millions except per share data) 1994 1993
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUE Net sales $4,082.1 $4,036.5
- ---------------------------------------------------------------------------------------
COSTS AND Cost of goods sold 3,075.4 2,966.8
EXPENSES Marketing, general and administrative
expenses 858.6 802.6
Restructuring (40.3)
Interest expense 91.9 92.9
Equity in income of affiliates (9.4) (9.7)
Minority interest 29.4 30.0
Other (income) and expense, net 104.4 28.8
Income taxes 27.0 42.4
-------- --------
4,137.0 3,953.8
-------- --------
- --------------------------------------------------------------------------------------
EARNINGS (Loss) income from continuing operations (54.9) 82.7
Discontinued operations:
Loss from operations (46.4)
Loss on disposal (58.7)
-------- --------
(Loss) income before cumulative effect of
accounting changes (113.6) 36.3
Cumulative effect of change in
accounting for postemployment
benefits (18.0)
-------- --------
Net (loss) income $ (113.6) $ 18.3
======== ========
- ---------------------------------------------------------------------------------------
SHARE DATA (Loss) income from continuing operations $ (0.39) $ 0.59
Discontinued operations:
Loss from operations (0.33)
Loss on disposal (0.41)
-------- --------
(Loss) income before cumulative effect of
accounting changes (0.80) 0.26
Cumulative effect of change in
accounting for postemployment
benefits (0.13)
-------- --------
Net (loss) income per common share $ (0.80) $ 0.13
======== ========
Cash dividends paid per common share $ 0.225 $ 0.750
Average number of common shares
outstanding during the period 141.5 140.9
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</TABLE>
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<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<CAPTION>
BORDEN, INC.
Nine Months Ended
September 30
--------------------------
(In millions) 1994 1993
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS
FROM OPERATING Cash used in operations $ (49.3) $ (4.9)
ACTIVITIES ------- -------
- ------------------------------------------------------------------------------------------------------------------
CASH FLOWS Capital expenditures (102.0) (123.7)
FROM Divestiture of businesses 191.8 18.9
INVESTING ------- -------
ACTIVITIES 89.8 (104.8)
------- -------
- ------------------------------------------------------------------------------------------------------------------
CASH FLOWS Increase (decrease) in short-term debt 44.4 (58.3)
FROM Reduction in long-term debt (115.1) (71.7)
FINANCING Long-term debt financing 220.9 268.9
ACTIVITIES Decrease in receivables sold (140.0)
Dividends paid (31.8) (105.6)
Other 1.1 6.8
------- -------
(20.5) 40.1
------- -------
- ------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and equivalents 20.0 (69.6)
Cash and equivalents at beginning
of period 100.3 186.0
------- -------
Cash and equivalents at end
of period $ 120.3 $ 116.4
======= =======
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SUPPLEMENTAL Interest paid $ 109.2 $ 94.3
DISCLOSURES Income taxes paid (6.1) 27.3
OF CASH FLOW
INFORMATION
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
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<TABLE>
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
BORDEN, INC.
(In millions)
<CAPTION>
September 30 December 31
--------------- -------------
ASSETS 1994 1993
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CURRENT Cash and equivalents $ 120.3 $ 100.3
ASSETS Accounts receivable (less allowance
for doubtful accounts of $12.5 and
$8.9 respectively) 477.0 334.7
Inventories:
Finished and in-process goods 359.0 319.4
Raw materials and supplies 180.5 171.0
Other current assets 163.5 142.6
Net assets of discontinued operations 70.0 222.2
-------- --------
1,370.3 1,290.2
-------- --------
- --------------------------------------------------------------------------------------------------
INVESTMENTS Investments in and advances to
AND OTHER affiliated companies 89.3 91.3
ASSETS Deferred income taxes 346.7 225.4
Other assets 124.7 126.6
-------- --------
560.7 443.3
-------- --------
- --------------------------------------------------------------------------------------------------
PROPERTY Land 101.4 105.5
AND Buildings 595.4 609.6
EQUIPMENT Machinery and equipment 1,962.9 1,949.3
-------- --------
2,659.7 2,664.4
Less accumulated depreciation (1,338.4) (1,327.7)
-------- ----------
1,321.3 1,336.7
-------- ----------
- --------------------------------------------------------------------------------------------------
INTANGIBLES Intangibles resulting from
business acquisitions 761.8 801.5
-------- --------
- --------------------------------------------------------------------------------------------------
$4,014.1 $3,871.7
-------- --------
</TABLE>
Page 5 of 16
<PAGE> 6
<TABLE>
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
BORDEN, INC.
(In millions except share and per share data)
<CAPTION>
September 30 December 31
---------------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY 1994 1993
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CURRENT Debt payable within one year $ 397.0 $ 410.6
LIABILITIES Accounts and drafts payable 507.2 433.3
Restructuring reserve 63.5 145.9
Income taxes 79.0 56.5
Other current liabilities 371.1 325.2
-------- --------
1,417.8 1,371.5
-------- --------
- -------------------------------------------------------------------------------------------
OTHER Long-term debt 1,415.5 1,240.8
Deferred income taxes 52.1 47.1
Postretirement benefit obligations 349.1 353.8
Other long-term liabilities 133.3 103.8
Minority interest 506.6 508.8
-------- --------
2,456.6 2,254.3
-------- --------
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SHAREHOLDERS' Common stock - $0.625 par value
EQUITY Authorized 480,000,000 shares
Issued 194,983,374 shares 121.9 121.9
Paid in capital 88.4 88.1
Accumulated translation adjustment (132.9) (171.1)
Minimum pension liability (95.5) (95.5)
Retained earnings 689.6 835.1
-------- --------
671.5 778.5
Less common stock in treasury (at
cost) - 53,442,636 shares and
53,625,339 shares, respectively (531.8) (532.6)
-------- --------
139.7 245.9
-------- --------
- --------------------------------------------------------------------------------------------
$4,014.1 $3,871.7
======== ========
</TABLE>
Page 6 of 16
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(dollars in millions except per share amounts)
1. INTERIM FINANCIAL STATEMENTS
The accompanying unaudited interim consolidated financial statements
contain all adjustments, consisting only of normal adjustments, which in
the opinion of management are necessary for a fair statement of the
results for the interim periods. Results for the interim periods are not
necessarily indicative of results for the full years.
Third quarter 1994 results include a net pretax charge of $181.2. The
charges include an addition of $104.5 ($64.8 after tax) to the reserve for
loss on disposal of discontinued operations (primarily related to
less-than-estimated divestiture proceeds); $3.7 for loss on two other
business disposals; $52.2 for transaction fees and expenses with respect
to Borden's pending merger with an affiliate of Kohlberg Kravis Roberts &
Co. (KKR); $54.4 for the writedown of two partnerships and of goodwill
related to the Fisher cheese brand; and $16.5 for additions to
environmental, litigation and idle property reserves. In arriving at the
net charge of $181.2, these charges were partially offset by a credit of
$50.1 for the reversal of prior restructuring charges, of which $40.3
applied to continuing operations and $9.8 applied to discontinued
operations.
The net pretax charge of $181.2 is recorded in the income statement as
follows: $28.9 is in marketing, general and administrative expenses; a
credit of $40.3 is in restructuring; $97.9 is included in other income and
expense; and $94.7 is included in discontinued operations.
2. ACQUISITION AND MERGER
On September 23, 1994 the Company entered into a merger agreement ("Merger
Agreement") providing for the acquisition of all of the outstanding common
stock of the Company by an affiliate of Kohlberg Kravis Roberts & Co.
(together with its affiliates, unless the context otherwise requires,
"KKR") in exchange for RJR Nabisco Holdings Corp. (RJR) common stock owned
by KKR and its affiliates.
The Merger Agreement provides for an exchange offer by KKR in which
holders of the Company's common stock would have the right to exchange
their shares for RJR common stock valued at $14.25 per Borden share. The
exact number of RJR shares to be exchanged for each Borden share will be
based on the average price of RJR common stock during a 10-day trading
period. However, in no event will the Company's stockholders receive
greater than 2.375 RJR shares, or fewer than 1.78125 RJR shares for each
Borden share.
On September 23, 1994 the Company and KKR also entered into a Conditional
Purchase/Stock Option Agreement under which KKR was granted a right to
purchase from the Company at $11.00 per share, newly issued or treasury
shares of the Company equal to 19.9% of the Company's currently
outstanding shares payable in RJR stock. If the option is exercised prior
to the close of the exchange offer, KKR must purchase at least 41% of the
Company's outstanding common stock in the exchange offer if it acquires
any shares in the exchange offer. If KKR acquires at least 41%, but less
Page 7 of 16
<PAGE> 8
than or equal to 50%, of the Company's common stock in the exchange offer,
the option must be exercised by KKR, to the extent necessary for KKR to
own more than 50% of the Company's outstanding common stock. If KKR
purchases at least 41% of the outstanding shares in the exchange offer, it
must pursue subject to any required shareholder approval, a merger in
which all remaining shares of the Company's common stock will be converted
into the same number of RJR shares as were paid in the exchange offer.
On September 29, 1994, the Company filed with the Federal Trade
Commission ("FTC") and the U.S. Department of Justice Antitrust Division
(the "Antitrust Division") a Premerger Notification and Report Form in
connection with the proposed KKR transaction. On October 19, 1994, the
Company and KKR each received a request from the FTC for additional
information and documentary material, this matter having been cleared to
the FTC by the Antitrust Division, and KKR responded to such request on
November 4, 1994. Accordingly, the exchange of Borden common stock
pursuant to the exchange offer may not be consummated until the expiration
of a 20-calendar day waiting period following the date of substantial
compliance by KKR with such request, unless the waiting period is sooner
terminated by the FTC. Thereafter, the waiting period could be extended
only by court order. Borden is currently engaged in complying with this
request. While the Company has a duty substantially to comply with the
request within a reasonable period of time, its compliance does not affect
the waiting period.
In the Merger Agreement, the Company has agreed to make any and all
divestitures or undertakings required by the FTC, or any other applicable
governmental entity in connection with the proposed KKR transaction, which
divestitures in each case shall be reasonably acceptable to KKR.
3. DISCONTINUED OPERATIONS
In December 1993 the Company recorded a pretax charge of $637.4, $490.0
after tax, to accrue the estimated cost of a business divestiture program.
The estimated cost of the program included operating losses from December
31, 1993 to date of disposal of $78.1. An additional charge of $104.5 was
recorded in third quarter 1994.
Businesses divested as of September 30, 1994 include seafood, foodservice,
jams and jellies, sauces, mashed potatoes, model kits, hobby paints, and
various snack businesses. Year to date proceeds for discontinued
operations and other divestitures total $191.8, including $146.4 million
from discontinued operations and $45.4 million from other divestitures.
Pretax losses on disposal of $328.1 and pretax operating losses of $61.8,
severance and other costs of $9.2 have been charged to the reserve as of
September 30, 1994, which are in line with estimates as adjusted in the
third quarter. The remaining reserve at September 30, 1994 includes $16.2
for future operating losses until disposal of discontinued operations.
Management believes that the sale or closure of the discontinued
operations will be substantially complete by late 1994 or early 1995.
Page 8 of 16
<PAGE> 9
PART I FINANCIAL INFORMATION
----------------------------
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
ACQUISITION AND MERGER
On September 23, 1994 the Company entered into a merger agreement providing for
the acquisition of all of the outstanding common stock of the Company by a
Kohlberg Kravis Roberts & Co. affiliate in exchange for RJR Nabisco Holdings
Corp. common stock owned by KKR and its affiliates. See Note 2 to the
Consolidated Financial Statements.
RESULTS OF OPERATIONS
QUARTER ENDED SEPTEMBER 30, 1994 VERSUS QUARTER ENDED SEPTEMBER 30, 1993
Net sales from continuing operations for the quarter ended September 30, 1994
increased 3.9% to 1.44 billion from $1.39 billion in 1993. The Company
reported a net loss for third quarter 1994 of $130.5 million, or $0.92 per
share, compared with a restated net loss of $9.4 million, or $0.07 per share,
in 1993 primarily as a result of net pretax charges of $181.2 million. These
charges include an addition of $104.5 million ($64.8 million after tax) to the
reserve for loss on disposal of discontinued operations (primarily related to
less-than-estimated divestiture proceeds); $3.7 million for loss on two other
business disposals; $52.2 million for transaction fees and expenses with
respect to Borden's pending merger with an affiliate of KKR; $54.4 million for
the writedown of two partnerships and of goodwill related to the Fisher cheese
brand; and $16.5 million for additions to environmental, litigation and idle
property reserves. These charges were partly offset by a credit of $50.1
million for the reversal of prior restructuring charges. Management reviewed
the prior restructuring programs in light of recent events and determined that
portions of the reserves for these programs would not be utilized.
The loss from continuing operations for third quarter 1994 was $71.8 million
compared to income from continuing operations of $8.5 million in 1993.
Division operating income in third quarter 1994 increased 21.3% to $75.3
million from $62.0 million in 1993. The 1994 amount includes a $23.9 million
credit for the reversal of prior restructuring charges and a $28.9 million
charge for the write-off of cheese goodwill.
The reversal of prior restructuring charges is allocated by division as
follows:
North American Foods $ 8.6
International Foods 1.7
Packaging 13.6
Corporate 16.4
----
Continuing Operations 40.3
Discontinued Operations 9.8
----
TOTAL $ 50.1
====
Page 9 of 16
<PAGE> 10
North American Foods sales decreased 1.3% to $680.2 million from $689.1 million
in 1993 primarily as a result of 1993 divestitures and decreased sales for most
niche grocery products, partially offset by slightly higher sales for pasta and
dairy products. Including the write-off of cheese goodwill and a credit of
$8.6 million for the reversal of prior restructuring charges, the 1994
operating loss was $7.4 million compared to an operating loss of $2.9 million
in 1993. The increased operating loss was primarily due to substantial losses
in dairy, and income declines in pasta products as a result of continued high
durum wheat costs. Income was down slightly in niche grocery products as a
result of higher marketing costs associated with the introduction of an Eagle
Brand sweetened milk line extension, partially offset by improvements in
Cremora non-dairy creamer, Cracker Jack products, ReaLemon juice and Wyler's
and Steero bouillon.
International Foods sales increased 0.4% to $232.4 million from $231.4 million
in 1993. The increase is due to higher sales in the European bakery, grocery
and pasta businesses, partially offset by decreases in international milk
powder sales. Including a credit of $1.7 million for the reversal of prior
restructuring charges, operating income declined 14.7% to $19.0 million from
$22.2 million in 1993 as a result of declines in the European bakery and Latin
American food businesses, partially offset by improvements in the KLIM milk
powder export business.
Packaging and Industrial Products sales increased 13.2% to $527.5 million from
$466.0 million in 1993. The increase is primarily the result of higher sales
in worldwide resins, Latin American operations and plastic film and packaging
products. Including a credit of $13.6 million for the reversal of prior
restructuring charges, operating income increased 49.4% to $63.7 million from
$42.7 million in 1993 as a result of increased income contributions from Borden
Chemicals and Plastics Limited Partnership and improvements in Latin American
operations and worldwide resins, partially offset by slight declines in
non-food consumer products and plastic film and packaging products.
Net sales of discontinued operations decreased 34.3% to $196.9 million from
$299.8 million in 1993 primarily as a result of the divestitures of the
foodservice, clam products, and jam and jellies businesses. The net loss from
discontinued operations was $7.4 million compared to $17.9 million in 1993.
The net loss has been charged against the reserve for loss on discontinued
operations. The 1994 loss is in line with the estimates made to establish the
reserve.
In November 1994, the Company announced a reorganization which will result in a
reduction of staff by approximately 200 positions. As a result, a charge to
income will be recorded in the fourth quarter for an as yet undetermined
amount.
NINE MONTHS ENDED SEPTEMBER 30, 1994 VERSUS NINE MONTHS ENDED SEPTEMBER 30,
1993
Net sales from continuing operations for the nine months ended September 30,
1994 increased 1.1% to $4.08 billion from $4.04 billion in 1993. As a result
of the previously mentioned charges, the Company recorded a net loss for the
first nine months of 1994 of $113.6 million, or $0.80 per share, compared to
restated net income of $18.3 million, or $0.13 per share, in 1993. Results for
1994 include a $58.7 million loss on disposal of discontinued operations while
the 1993 results include a $46.4 million loss from discontinued operations and
an $18.0 million charge for the cumulative effect of an accounting change. The
loss from continuing operations for the first nine months of 1994 was $54.9
million compared to income from continuing operations of $82.7 million in 1993.
Including
Page 10 of 16
<PAGE> 11
the reversal of prior restructuring charges, division operating income
decreased 28.3% to $195.2 million from $272.0 million in 1993.
Generally the explanations previously discussed for the quarter ended September
30, 1994 also apply to the nine month period ended September 30, 1994.
LIQUIDITY AND CAPITAL RESOURCES
Cash used in operating activities during the first nine months of 1994 was
$49.3 million compared to $4.9 million for the first nine months of 1993. The
decrease in operating cash flows primarily reflects the decline in operating
results, partially offset by reduced working capital requirements.
Capital expenditures for new facilities and improvements to existing facilities
were $102.0 million in 1994 compared to $123.7 million in 1993. The reduced
capital spending in 1994 reflects efforts at cash conservation and the effect
of discontinued operations.
Cash provided by the divestiture of businesses was $191.8 million in 1994 and
$18.9 million in 1993. The 1994 proceeds include the sale of the seafood,
foodservice, jams and jellies, sauces, mashed potatoes, model kits, hobby
paints and various snack businesses. Divestitures in 1993 consisted of two
snack and one candy businesses.
Short term debt increased $44.4 million in 1994 compared to a decrease of $58.3
million in 1993. A portion of the 1994 increase is due to lower sales of
accounts receivable. Sales of accounts receivable are made without recourse
and there is no provision in the sales agreement for repurchasing sold
receivables. The decrease in 1993 reflects repayment of commercial paper with
proceeds from long-term debt financing.
In August 1994 the Company entered into a $1.4 billion, 2-1/2 year
credit facility arranged by Citibank and Credit Suisse. The facility provides
for direct borrowings, sale of up to $300 million of accounts receivable, and
back up for commercial paper borrowings. This facility replaces a revolving
facility that expired in September and other backup credit facilities,
consolidates other financings in place and provides for the normal financing
requirements of the businesses. Also included in the $1.4 billion facility was
a separate agreement for the refinancing of the credit agreement of T.M.
Investors Limited Partnership.
The 1994 long-term debt financing includes borrowings under the $1.4 billion
credit facility. The 1993 long-term debt financing includes proceeds from a
$250.0 million issuance of 30-year, 7 7/8% debentures.
At September 30, 1994 the Company's current maturities of long-term debt
totaled $40.5 million, while short term obligations relating to agreements
which must be settled within one year were $156.6 million. The Company expects
to satisfy its debt repayment obligations over the next twelve months using
cash flows from operations, net proceeds in excess of $200 million from several
pending dispositions where the Company has either signed contracts or oral
agreements, and amounts borrowed under its credit agreements. At October 22,
1994 the Company had available $50.7 million under the $1.4 billion credit
facility, and $259.8 million under various advised foreign bank lines of
credit.
The Company's new credit facility contains certain restrictive covenants that,
among other things, limit the ability of the Company to incur indebtedness, pay
Page 11 of 16
<PAGE> 12
dividends, create liens, engage in mergers and consolidations and sell
or transfer assets. The Company anticipates that either a new financing
facility will be put in place before the consummation of the transaction with
KKR or, in connection with a commitment for a facility to be put in place after
the consummation of the transaction with KKR, the Company will obtain a waiver
of these covenants.
Upon the occurrence of both a change of control and a downgrade of the
Company's long term debt rating, the Company may be required to purchase all or
part of its approximately $48.7 million of outstanding 9 1/4% sinking fund
debentures. Also upon a change of control, the Company is obligated to offer
to purchase $150 million of outstanding senior notes of Borden Chemicals and
Plastics Limited Partnership. The Company anticipates entering into an
arrangement with the holders of the securities under which a premium would be
paid but the Company would not be required to purchase the notes.
Under the Merger Agreement, KKR's obligation to consummate the exchange offer
is conditioned upon, among other matters, (i) the obtaining of all consents and
waivers on terms satisfactory to KKR necessary in order that the consummation
of the transactions contemplated by the Merger Agreement and the Conditional
Purchase/Stock Option Agreement not constitute (A) an event of default or an
event which with or without notice or the passage of time would constitute an
event of default under any indebtedness, partnership agreement or
equityholders' agreement of the Company or any subsidiary (or Borden Chemicals
and Plastics Limited Partnership, Borden Chemicals and Plastics Operating
Limited Partnership and T.M. Investors Limited Partnership) ("Indebtedness"),
including, without limitation, the Company's $1.4 billion credit facility, or
(B) an event which would individually or in combination with other events give
rise to an obligation on the part of the Company to repay or repurchase any
Indebtedness, partnership interest or equity interest, which event of default
or other event described in clause (A) or (B) above would give rise to, with or
without notice or the passage of time and taking into account any
cross-acceleration or cross-default provisions, the obligation to repay prior
to maturity or the acceleration of an aggregate of at least $25 million of
Indebtedness or other obligations; and (ii) the Company having refinanced, or
received commitments for refinancing or indications satisfactory to KKR from
lenders that it will be able to refinance, in each case on market terms
reasonably acceptable to KKR, the principal bank credit facilities of the
Company and T.M. Investors Limited Partnership, provided that such refinancing
shall not be required to increase the available lines of credit under such
facilities except to meet the working capital and other reasonable needs of the
Company and its subsidiaries and shall principally be related to extending
maturities and renegotiating repayment schedules under such facilities as
appropriate to meet the business plan as determined by KKR and the Company.
The Merger Agreement also contains covenants restricting the conduct of the
business of the Company. Under the Merger Agreement, the Company has agreed,
among other things, to (i) redeem all outstanding Preferred Share Purchase
Rights at a redemption price of one and two-thirds cents per Right effective
immediately prior to the acceptance of exchange of any shares pursuant to the
exchange offer so long as certain conditions to the offer are met; (ii) redeem
all outstanding shares of Series B Preferred Stock at a redemption price of $39
per share plus accrued interest prior to any record date in connection with the
merger provided that certain conditions to the offer are met; and (iii) not
declare or pay quarterly dividends on common stock in excess of $0.01 per share.
On October 26, 1994 the Company announced that its Board of Directors had
declared a quarterly dividend on the common stock of $0.01 per share, reduced
from $0.075 per share for the prior quarter of 1994.
Page 12 of 16
<PAGE> 13
PART II OTHER INFORMATION
-------------------------
Item 3: LEGAL PROCEEDINGS
ENVIRONMENTAL PROCEEDINGS
- -------------------------
The Company has been notified that it is or may be a potentially responsible
party with respect to the cleanup of certain waste sites (currently
approximately 50 in number) in proceedings brought under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") or similar
state environmental laws. While the Company cannot predict with certainty the
total cost of such cleanup, the Company's ultimate liability will depend on
many factors including its volumetric share of waste, the financial viability
of other responsible parties, the remediation methods and technology used, the
amount of time necessary to accomplish remediation, and the availability of
insurance coverage.
The Company has established reserves for environmental remediation costs
for these and other sites in amounts which it believes are probable and
reasonably estimable. Based on currently available information and analysis,
the Company believes that it is reasonably possible that costs associated with
such sites may exceed current reserves by amounts that may prove insignificant
or by amounts, in the aggregate, up to approximately $40 million. This
estimate of the range of reasonably possible additional costs is less certain
than the estimates upon which reserves are based, and in order to establish the
upper limit of such range, assumptions least favorable to the Company among the
range of reasonably possible outcomes were used. In estimating both its
current reserves for environmental remediation and the possible range of
additional costs, the Company has not assumed that it will bear the entire cost
of remediation of every site to the exclusion of other known potentially
responsible parties who may be jointly and severally liable. The ability of
other potentially responsible parties to participate has been taken into
account, based generally on the parties' probable contribution on a per site
basis. No attempt has been made to discount the estimated amounts to net
present value, and no amounts have been recorded for potential recoveries from
insurance carriers. Based upon previous experience and the information
presently available, however, management believes that, as of the date hereof,
future costs incurred will not have a material adverse effect on the financial
condition of the Company.
Private actions against the Company and numerous other defendants are
currently pending in U.S. District Court in Baton Rouge, Louisiana alleging
personal injuries and property damage in connection with a waste disposal site
in Louisiana. Similar actions are pending in state court in Camden, New Jersey
in connection with a waste disposal site in New Jersey and in state court in
Los Angeles, California in connection with a landfill site in Monterey Park,
California (September 1994).
The U.S. Environmental Protection Agency ("EPA") has issued a notice of
violation alleging the violation of air pollution regulations by a plant in
Massachusetts (September 1988).
A notice of violation has been issued by the Maine Department of Environmental
Protection (April 1991) alleging the violation of certain solid waste and
wetlands regulations at a Scarborough, Maine facility.
Page 13 of 16
<PAGE> 14
A notice of violation has been issued by the Puerto Rican sewer and water
authority (July 1994) alleging violations of wastewater regulations by an ice
cream plant in Mantecados Nevada, Puerto Rico.
Borden Chemicals and Plastics Limited Partnership
In 1987, the Company's basic chemical and PVC resin businesses located at
Geismar, Louisiana and Illiopolis, Illinois were acquired by the Borden
Chemicals and Plastics Limited Partnership ("BCP"). Under an Environmental
Indemnity Agreement ("EIA"), the Company has agreed, subject to certain
conditions and limitations, to indemnify BCP from certain environmental
liabilities arising from facts or circumstances that existed and requirements
in effect prior to November 30, 1987, and share on an equitable basis those
arising from facts or circumstances existing and requirements in effect both
prior to and after such date. No claim can be made by BCP under the EIA after
November 30, 2002 and no claim can, with certain exceptions, be made with
respect to the first $500,000 of liabilities which Borden would otherwise be
responsible for thereunder in any year, but such excluded amounts may not
exceed $3.5 million in the aggregate. Excluded amounts under the EIA have
aggregated approximately $2.0 million through September 30, 1994. Accordingly,
certain BCP legal proceedings are discussed below.
In February 1993, an EPA Administrative Law Judge held that the Illiopolis,
Illinois facility had violated CERCLA and the Emergency Planning and Community
Right to Know Act ("EPCRA") by failing to report certain relief valve releases
which occurred between February 1987 and July 1989, that BCP and the Company
believe are exempt from CERCLA and EPCRA reporting. BCP's petition for
reconsideration was denied, a penalty hearing will be scheduled and further
appeals are possible if the parties cannot reach an agreement. Management does
not believe that any ultimate penalty arising from this proceeding would have a
material adverse effect on the Company.
On October 27, 1994, the U.S. Department of Justice ("DOJ") acting on behalf of
the EPA, filed an action against BCP and its General Partner, BCP Management,
Inc., a wholly owned subsidiary of the Company, in U.S. District Court for the
Middle District of Louisiana. The Complaint seeks civil penalties for alleged
violations of the Resource Conservation and Recovery Act ("RCRA"), CERCLA and
the Clean Air Act as well as corrective action, at the Geismar facility. BCP
plans to vigorously defend against all the allegations. If BCP is unsuccessful
in defending itself against the allegations, it could be subject to penalties,
costs for corrective action and costs needed to obtain a RCRA permit.
As to penalties, although the maximum statutory penalties that would apply in a
successful enforcement action by the government could be in excess of $150.0
million, BCP believes, assuming it is unsuccessful and based on information
currently available to it, that the more likely amount of any liability for
civil penalties would not exceed several million dollars.
If unsuccessful, BCP could also be subject to costs for facility-wide
corrective action to address the contamination at the Geismar complex. The
cost of any corrective action could be significant, depending on the scope of
such corrective action which cannot be determined at this time.
The extent to which any costs that may be incurred by BCP in any of the above
described legal proceedings will be subject to the EIA will depend, in large
Page 14 of 16
<PAGE> 15
part, on whether such costs or penalties are attributable to facts or
circumstances that existed and requirements in effect prior to November 30,
1987.
OTHER LEGAL PROCEEDINGS
- -----------------------
The States of West Virginia, Ohio and Louisiana have filed suits (12/93, 8/93
and 10/94) alleging antitrust violations in connection with the sale of milk to
schools in certain of their school districts. A private antitrust suit filed
in Federal Court in Oklahoma (4/93) on behalf of four school districts sought,
but was denied, class action certification. Although Federal Grand Jury
investigations are pending in Oklahoma (8/92), Ohio (2/93) and the Plains
States (9/93), only the Plains States investigation is continuing. Private
antitrust suits alleging price fixing of wholesale/retail accounts have been
filed in Florida (7/93) and W. Virginia (9/93).
The Company is a defendant in litigation in Montreal, Canada involving
allegations of personal injury or property damage arising from the
misapplication of, or defects in, a urea-formaldehyde foam insulation product
which the Company manufactured from 1973 through 1980. The litigation, which
was tried from September 1983 through December 1989, was dismissed by the trial
court in December 1991. An Appeal filed by plaintiffs will be heard in the
second half of 1995.
The Company and its Directors have been sued in Federal District Court in New
York (December 1993) for alleged violations of the Securities Exchange Act of
1934 in connection with certain 1993 financial projections.
Twelve class actions have been filed by purported Company shareholders in the
New Jersey and Ohio state courts against the Company, members of the Board and,
in five of the New Jersey cases, KKR. These actions allege, among other
things, that the Company is being sold at too low a price, and that the
Company's directors have breached their fiduciary duties by failing to
"auction" the Company and by "locking up" a transaction that is not in the best
interests of shareholders. KKR is alleged to have aided and abetted these
breaches of fiduciary duty. The complaints seek preliminary and permanent
relief, including a preliminary injunction, damages in an unspecified amount
and attorneys' fees. The parties have agreed to consolidate all pending New
Jersey actions into one action in Mercer County. The Ohio cases have been
stayed pursuant to a court order pending resolution of the New Jersey
consolidated action.
The Company has also been named as a defendant in a shareholder derivative
action filed against RJR in the Court of Chancery of the State of Delaware.
That action alleges that the proposed acquisition by RJR of a stake in the
Company constitutes a breach of the fiduciary duty of loyalty of RJR's Board of
Directors because the transaction is unfair to the public shareholders of RJR.
The complaint seeks to enjoin RJR's purchase of Company shares and damages in
an unspecified amount.
The Company is involved in other litigation throughout the United States which
is considered to be in the ordinary course of the Company's business.
The Company believes, based upon the information it presently possesses, and
taking into account its established reserves for estimated liability and its
insurance coverage, that the ultimate outcome of the foregoing proceedings and
actions is unlikely to have a materially adverse effect on the Company's
financial position or operating results.
Page 15 of 16
<PAGE> 16
Item 6: EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
10. Amended and Restated Credit Agreement of the Company dated
as of August 16, 1994.
27. Financial Data Schedule
b. Reports on Form 8-K
On September 12, 1994 the Registrant filed a Form 8-K
announcing that a letter of intent had been signed for the
acquisition of the Registrant by a Kohlberg Kravis Roberts & Co.
(KKR) affiliate.
On September 27, 1994 the Registrant filed a Form 8-K announcing
the signing of a formal agreement and plan of merger with
Whitehall Associates, L.P., a KKR affiliate.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BORDEN, INC.
Date: November 14, 1994 By /s/ James C. Van Meter
----------------------------
James C. Van Meter
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer and
duly authorized signing officer)
Page 16 of 16
<PAGE> 1
Exhibit 10
EXECUTION COPY
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of August 16, 1994
Among
BORDEN, INC.
as Borrower,
-----------
and
THE BANKS NAMED HEREIN
as Banks,
--------
CITIBANK, N.A.
as Administrative Agent
-----------------------
and
CITICORP SECURITIES, INC.
CREDIT SUISSE
as Arrangers
------------
<PAGE> 2
<TABLE>
T A B L E O F C O N T E N T S
<CAPTION>
SECTION PAGE
<S> <C> <C>
PRELIMINARY STATEMENT
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02. Computation of Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
1.03. Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. The Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.02. Making the Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.03. Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.04. Reduction of the Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.05. Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.06. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.07. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.08. Conversion of Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.09. Increased Costs, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.10. Payments and Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.11. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.12. Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.13. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.14. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.15. Defaulting Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE III
CONDITIONS OF LENDING
3.01. Conditions Precedent to Initial Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.02. Conditions Precedent to Each Borrowing and Issuance . . . . . . . . . . . . . . . . . . . . 40
3.03. Conditions Precedent to Certain Borrowings and Issuances . . . . . . . . . . . . . . . . . 40
</TABLE>
<PAGE> 3
iii
<TABLE>
SECTION PAGE
<S> <C> <C>
3.04. Determinations Under Section 3.01 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrower . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE V
COVENANTS OF THE BORROWER
5.01. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.02. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.03. Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
5.04. Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
6.02. Actions in Respect of the Letters of Credit Upon Default . . . . . . . . . . . . . . . . . 63
ARTICLE VII
THE AGENTS
7.01. Authorization and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.02. Reliance, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.03. Citibank, Credit Suisse and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 65
7.04. Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
7.05. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
7.06. Successor Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.02. Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
</TABLE>
<PAGE> 4
iv
<TABLE>
SECTION PAGE
<S> <C> <C>
8.03. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.04. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.05. Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
8.06. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
8.07. Assignments and Participations . . . . . . . . . . . . . . . . . . . . . . 71
8.08. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
8.09. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 73
8.10. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
8.11. Receivables Financings Documents . . . . . . . . . . . . . . . . . . . . . 74
8.12. No Liability of the Issuing Bank. . . . . . . . . . . . . . . . . . . . . . 74
8.13. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
</TABLE>
SCHEDULES
- ---------
Schedule I - Commitments and Applicable Lending Offices
Schedule 3.01 - Disclosed Litigation
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Authorizations and Consents
Schedule 4.01(z) - Existing Indebtedness
Schedule 5.02(a) - Liens
Schedule 5.02(e) - Asset Sales
<PAGE> 5
v
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Notice of Borrowing
Exhibit C - Assignment and Acceptance
Exhibit D-1 - Form of Opinion of New York Counsel for the Borrower
Exhibit D-2 - Form of Opinion of In-house Counsel to the Borrower
<PAGE> 6
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of August
16, 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) and syndication agent, Citicorp Securities, Inc. and
Credit Suisse ("CREDIT SUISSE"), as arrangers (the "ARRANGERS"), and Credit
Suisse, as Issuing Bank (as defined below) and documentation agent.
PRELIMINARY STATEMENT
The Borrower, Citibank and Credit Suisse, as Banks, the
Administrative Agent and the Arrangers are parties to the Credit Agreement
dated as of August 16, 1994 (the "EXISTING CREDIT AGREEMENT"). The parties to
the Existing Credit Agreement desire to amend and restate the Existing Credit
Agreement, among other things, to provide for a letter of credit subfacility
and to include additional financial institutions as parties thereto.
NOW THEREFORE, in consideration of the premises and of
the mutual covenants and agreements contained herein, the parties hereto agree
that, subject to the condition to effectiveness set forth in Section 8.06, the
Existing Credit Agreement is amended and restated in its entirety to read as
follows:
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 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
<PAGE> 7
2
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, 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
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 Lender's Eurodollar Lending Office in the case
of a Eurodollar Rate Advance.
"APPLICABLE MARGIN" means (a) so long as the Borrower's
long term senior unsecured public debt is rated BB or better by S&P or
Ba2 or better by Moody's and not lower than BB- by S&P or Ba3 by
Moody's, 1/4% per annum for Base Rate Advances and 1-1/2% per annum
for Eurodollar Rate Advances or (b) so long as the Borrower's long
term senior unsecured public debt is rated (i) lower than BB by S&P
and lower than Ba2 by Moody's or (ii) lower than BB- by S&P or lower
than Ba3 by Moody's, 3/4% per annum for Base Rate Advances and 2% per
annum for Eurodollar Rate Advances.
"ARRANGERS" has the meaning specified in the recital of
parties to this Agreement.
"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.
<PAGE> 8
3
"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 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
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 2.06(a)(i).
"BORROWING" means a borrowing consisting of simultaneous
Advances of the same Type made by the Lenders.
<PAGE> 9
4
"BORROWER" 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.
"CAPITAL EXPENDITURES" means, for any period, the sum,
without duplication, of (a) all expenditures during such period for
equipment, fixed assets, real property or improvements, or for
replacements or substitutions therefor or additions thereto, that have
a useful life of more than one year plus (b) the aggregate principal
amount of all Debt (including obligations under Capitalized Leases)
assumed or incurred in connection with any such expenditures. For
purposes of this definition, the purchase price of equipment that is
purchased simultaneously with the trade-in of existing equipment or
with insurance proceeds shall be included in Capital Expenditures only
to the extent of the gross amount of such purchase price less the
credit granted by the seller of such equipment for the equipment being
traded in at such time or the amount of such proceeds, as the case may
be.
"CAPITALIZED LEASES" has the meaning specified in clause
(e) of the definition of Debt.
"CASH EQUIVALENTS" means any of the following, to the
extent owned by the Borrower free and clear of all Liens and having a
maturity of not greater than 90 days from the date of acquisition
thereof: (a) readily marketable direct obligations of the Government
of the United States or any agency or instrumentality thereof or
obligations unconditionally guaranteed by the full faith and credit of
the Government of the United States, (b) insured certificates of
deposit of or time deposits with any commercial bank that is a Lender
or a member of the Federal Reserve System, issues (or the parent of
which issues) commercial paper rated as described in clause (c), is
organized under the laws of the United States or any State thereof and
has combined capital and surplus of at least $1 billion or (c)
commercial paper in an aggregate amount of no more than $25,000,000
per issuer outstanding at any time, issued by any corporation
organized under the laws of any State of the United States and rated
at least "Prime-1" (or the then equivalent grade) by Moody's or "A-1"
(or the then equivalent grade) by S&P.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
<PAGE> 10
5
"CITIBANK" has the meaning specified in the recital of
parties to this Agreement.
"COMMITMENT" has the meaning specified in Section 2.01.
"CONFIDENTIAL INFORMATION" means information that the
Borrower furnishes to any Agent or any Lender in a writing designated
as confidential, but does not 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 2.08 or 2.09.
"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), (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 (or for which the holder of such Debt has an existing
right to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of
such 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 Section 2.01 at or prior to such time
which has not been so made as
<PAGE> 11
6
of such time; PROVIDED, HOWEVER, any Advance made by the Administrative
Agent for the account of such Lender pursuant to Section 2.02(e) 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(e). In the event that a portion of a
Defaulted Advance shall be deemed made pursuant to Section 2.15(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) the Issuing Bank pursuant to Section
2.13(b) to purchase a portion of a Letter of Credit Advance made by
the Issuing Bank, (b) the Administrative Agent pursuant to Section
2.02(e) 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 2.12 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 2.15(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).
"DISCLOSED LITIGATION" has the meaning specified in
Section 3.01(c).
"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.
"EBIT" means, for any period, net income (or net loss)
PLUS the sum of (a) Net Interest Expense, (b) income tax expense, (c)
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
<PAGE> 12
7
income) including, without limitation, cumulative effects of
accounting changes, discontinued operations, restructuring charges and
non-cash charges and (d) in the case of the fiscal year ending in
December 1994 only, other non-cash charges in an amount not to exceed
$100,000,000, in each case determined in accordance with GAAP for such
period.
"EBITDA" means, for any period, net income (or net loss)
PLUS the sum of (a) Net Interest Expense, (b) income tax expense, (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 and (f) in the
case of the fiscal year ending in December 1994 only, other non-cash
charges in an amount not to exceed $100,000,000, in each case
determined in accordance with GAAP for such period.
"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 $250,000,000, 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.
"ENVIRONMENTAL ACTION" means any administrative,
regulatory or judicial action, suit, demand, demand letter, claim,
notice of non-compliance or violation, investigation, proceeding,
consent order or consent agreement relating in any way to any
Environmental Law or any Environmental Permit including, without
limitation, (a) any claim by any governmental or regulatory authority
for enforcement, cleanup, removal, response, remedial or other actions
or damages
<PAGE> 13
8
pursuant to any Environmental Law and (b) any claim 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 of injury to health, safety
or the environment.
"ENVIRONMENTAL LAW" means any federal, state or local
law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award relating to the environment, health, safety or
Hazardous Materials, including, without limitation, CERCLA, the
Resource Conservation and Recovery Act, the Hazardous Materials
Transportation Act, the Clean Water Act, the Toxic Substances Control
Act, the Clean Air Act, the Safe Drinking Water Act, the Atomic Energy
Act, the Federal Insecticide, Fungicide and Rodenticide Act and the
Occupational Safety and Health Act.
"ENVIRONMENTAL PERMIT" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
"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" of any Person means any other Person
that for purposes of Title IV of ERISA is a member of such Person's
controlled group, or under common control with such Person, within the
meaning of Section 414 of the Internal Revenue Code.
"ERISA EVENT" with respect to any Person means (a) the
occurrence of a reportable event, within the meaning of Section 4043
of ERISA, with respect to any Plan of such Person or any of its ERISA
Affiliates unless the 30-day notice requirement with respect to such
event has been waived by the PBGC; (b) the provision by the
administrator of any Plan of such Person or any of its ERISA
Affiliates of a notice of intent to terminate such Plan, pursuant to
Section 4041(a)(2) of ERISA (including any such notice with respect to
a plan amendment referred to in Section 4041(e) of ERISA); (c) the
cessation of operations at a facility of such Person or any of its
ERISA Affiliates in the circumstances described in Section 4062(e) of
ERISA; (d) the withdrawal by such Person or any of its ERISA
Affiliates from a Multiple Employer Plan during a plan year for which
it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (e) the failure by such Person or any of its ERISA Affiliates
to make a payment to a Plan required under Section 302(f)(1) of ERISA;
(f) the adoption of an amendment to a Plan of such Person or any of
its ERISA Affiliates requiring the provision of security to such Plan,
pursuant to Section 307 of ERISA; or (g) the institution by the PBGC
of proceedings to terminate a Plan of such Person or any of its ERISA
Affiliates, pursuant to Section 4042 of ERISA, or the
<PAGE> 14
9
occurrence of any event or condition described in Section 4042 of
ERISA that could constitute grounds for the termination of, or the
appointment of a trustee to administer, such Plan.
"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 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, SUBJECT, HOWEVER, to the
provisions of Section 2.08.
"EURODOLLAR RATE ADVANCE" means an Advance that bears
interest as provided in Section 2.06(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 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 maximum reserve
requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank
of the Federal Reserve System in New York City with respect to
liabilities or assets
<PAGE> 15
10
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.
"EXISTING CREDIT AGREEMENT" has the meaning specified in
the Preliminary Statement.
"EXISTING INDEBTEDNESS" means Indebtedness of the
Borrower and its Subsidiaries outstanding on the date hereof.
"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.
"GAAP" has the meaning specified in Section 1.03.
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum
products, natural or synthetic gas, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation and radon gas,
(b) any 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 Environmental Law and (c) any other
substance exposure to which is regulated under any Environmental Law.
"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.
"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 to purchase,
redeem, retire, defease or otherwise make any payment in respect of
any capital stock of or other ownership or profit interest in such
Person or any other Person or any warrants, rights or options to
acquire such capital stock,
<PAGE> 16
11
valued, in the case of Redeemable Preferred Stock, at the greater of
its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends except to the extent that such Obligations are
satisfied by the issuance of common equity, (d) all Obligations of
such Person in respect of Hedge Agreements, (e) all Indebtedness of
others referred to in clauses (a) through (d) 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, and (f) all Indebtedness referred to in clauses (a)
through (d) 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 such Person, even though such
Person has not assumed or become liable for the payment of such
Indebtedness.
"INDEMNIFIED PARTY" has the meaning specified in Section
8.04(b).
"INFORMATION MEMORANDUM" means the information memorandum
dated August 1994 used by the Arrangers in connection with the
syndication of the Commitments.
"INSUFFICIENCY" means, with respect to any Plan, the
amount, if any, of its unfunded benefit liabilities, as defined in
Section 4001(a)(18) of ERISA.
"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 or six 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:
<PAGE> 17
12
(a) the Borrower may not select any Interest
Period that ends after the Termination 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 November 30, 1994, only
one month Interest Periods may be selected.
"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
investment in such Person, including, without limitation, any
arrangement pursuant to which the investor incurs Indebtedness of the
types referred to in clauses (e) and (f) of the definition of
"INDEBTEDNESS" in respect of such Person.
"INVESTMENT GRADE RATING" means the Borrower's long term
senior unsecured public debt is rated at least BBB- by S&P and Baa3 by
Moody's.
"ISSUING BANK" means Credit Suisse, as issuer of a Letter
of Credit.
<PAGE> 18
13
"L/C CASH COLLATERAL ACCOUNT" means a cash collateral
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 2.13(e).
"LETTER OF CREDIT" has the meaning specified in Section
2.13(a).
"LETTER OF CREDIT ADVANCE" means an advance made by the
Issuing Bank or any Lender pursuant to Section 2.13(c).
"LETTER OF CREDIT AGREEMENT" has the meaning specified
in Section 2.13(b).
"LETTER OF CREDIT FACILITY" means $100,000,000.
"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.
"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 and each
Letter of Credit Agreement.
"LOAN PARTIES" means the Borrower, TM and Borden
Receivables Corp.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means any change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects 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, the other
Loan Documents and the Related Documents.
"MATERIAL ADVERSE EFFECT" means a circumstance or
condition affecting the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Borrower and
its Subsidiaries taken as a whole which would materially adversely
affect (a) the ability of the Borrower to perform
<PAGE> 19
14
its Obligations under this Agreement, the Notes and the Related
Documents or (b) the rights and remedies of the Administrative Agent
or any Lender under this Agreement and the other Loan Documents.
"MOODY'S" means Moody's Investor Services, Inc. or any
successor by merger or consolidation to its business.
"MULTIEMPLOYER PLAN" of any Person means a multiemployer
plan, as defined in Section 4001(a)(3) of ERISA, to which such Person
or any of its ERISA Affiliates is making or accruing an obligation to
make contributions, or has within any of the preceding five plan years
made or accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" of any Person means a single
employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of such Person or any of its ERISA Affiliates
and at least one Person other than such Person and its ERISA
Affiliates or (b) was so maintained and in respect of which such
Person or any of its ERISA Affiliates could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were
to be terminated.
"NET CASH PROCEEDS" means, with respect to any sale of
any asset or the sale or issuance of any Debt or capital stock, any
securities convertible into or exchangeable for capital stock or any
warrants, rights or options to acquire capital stock by any Person,
the aggregate amount of cash received from time to time by or on
behalf of such Person in connection with such transaction after
deducting therefrom only (a) reasonable and customary brokerage
commissions, underwriting fees and discounts, legal fees, finder's
fees and other similar fees and commissions, (b) the amount of taxes
payable in connection with or as a result of such transaction, (c) the
amount of any Debt related to such asset that, by the terms of such
transaction, is required to be repaid upon such disposition and (d)
any such other usual and customary 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,
actually paid to a Person that is not an Affiliate and are properly
attributable to such transaction or to the asset that is the subject
thereof.
"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 and (b) minority interest expense as set forth on the
Borrower's Consolidated statement of income.
<PAGE> 20
15
"NOTE" means a promissory note of the Borrower payable to
the order of any Lender, in substantially the form of Exhibit A
hereto.
"NOTICE OF BORROWING" has the meaning specified in
Section 2.02(a).
"OBLIGATION" means, with respect to any Person, any
obligation of such Person of any kind, including, without limitation,
any liability of such Person on any claim, whether or not the right of
any creditor to payment in respect of such claim is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and
whether or not such claim is discharged, stayed or otherwise affected
by any proceeding referred to in Section 6.01(f). Without limiting
the generality of the foregoing, the Obligations of the Borrower under
the Loan Documents include (a) the obligation to pay principal,
interest, Letter of Credit commissions, charges, expenses, fees,
attorneys' fees and disbursements, indemnities and other amounts
payable by the Borrower under any Loan Document and (b) the obligation
to reimburse any amount in respect of any of the foregoing that any
Lender, in its sole discretion, may elect to pay or advance on behalf
of the Borrower.
"OECD" means the Organization for Economic Cooperation
and Development.
"OTHER TAXES" has the meaning specified in Section
2.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation or
any successor thereof.
"PERMITTED LIENS" means such of the following as to which
no enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) Liens for taxes, assessments and
governmental charges or levies to the extent not required to be paid
under Section 5.01(b) hereof; (b) Liens imposed by law, such as
materialmen's, mechanics', carriers', workmen's and repairmen's Liens
and other similar Liens arising in the ordinary course of business
securing obligations that are not overdue; and (c) pledges or deposits
to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations.
"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 a Single Employer Plan or a Multiple
Employer Plan.
<PAGE> 21
16
"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.
"RATABLE SHARE" of any amount means, with respect to any
Lender at any time, the product of (a) a fraction the numerator of
which is the amount of such Lender's Commitment at such time and the
denominator of which is the Working Capital Facility at such time and
(b) such amount.
"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.
"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 may be
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 may be amended, supplemented or
otherwise modified from time to time.
"REDEEMABLE" means, with respect to any capital stock,
Indebtedness or other right or Obligation, any such right or
Obligation that (a) the issuer has undertaken to redeem at a fixed or
determinable date or dates, whether by operation of a sinking fund or
otherwise, or upon the occurrence of a condition not solely within the
control of the issuer or (b) is redeemable at the option of the
holder.
"REFERENCE BANKS" means 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.
<PAGE> 22
17
"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.
"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 or, if no
such principal amount and no Letters of Credit are outstanding at such
time, Lenders holding at least 51% of the aggregate Commitments 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 the 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 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 Commitments.
"S&P" means Standard & Poor's Ratings Group or any
successor by merger or consolidation to its business.
"SINGLE EMPLOYER PLAN" of any Person means a single
employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of such Person or any of its ERISA Affiliates
and no Person other than such Person and its ERISA Affiliates or (b)
was so maintained and in respect of which such Person or any of its
ERISA Affiliates could have liability under Section 4069 of ERISA in
the event such plan has been or were to be terminated.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person
on a particular date, that on such date (a) the fair value of the
property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of
such Person, (b) the present fair salable value of the assets of such
Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability
to pay as such debts and liabilities mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
<PAGE> 23
18
"SUBSIDIARY" of any Person means any corporation,
partnership, joint venture, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of
such corporation (irrespective of whether at the time capital stock of
any other class or classes of such corporation shall or might have
voting power upon the occurrence of any contingency), (b) the interest
in the capital or profits of such partnership or joint venture or (c)
the beneficial interest in such trust or estate is at the time
directly or indirectly owned or controlled by such Person, by such
Person and one or more of its other Subsidiaries or by one or more of
such Person's other Subsidiaries.
"TAXES" has the meaning specified in Section 2.11(a).
"TAX CERTIFICATE" has the meaning specified in Section
5.03(n).
"TERMINATION DATE" means the earlier of February 18, 1997
and the date of termination in whole of the 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 Amended and Restated
Credit Agreement dated as of August 16, 1994 among TM, the lenders
named therein and the agents named therein for such lenders, 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 the amendment dated
the date hereof, and as it may be further amended, supplemented or
otherwise modified from time to time.
"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) minority interest as set forth on the Borrower's Consolidated
balance sheet.
"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.
<PAGE> 24
19
"UNUSED COMMITMENT" means, with respect to any Lender at
any time, (a) such Lender's Commitment at such time MINUS (b) the sum,
without duplication, of (i) the aggregate principal amount of Advances
made by such Lender and outstanding at such time, PLUS (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 the Issuing
Bank pursuant to Section 2.13(c) and outstanding at such time and (C)
the aggregate outstanding "Capital" of all "Receivable Interests" (as
such terms are defined in the Receivables Financing Agreements) at
such time.
"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.
"WELFARE PLAN" means a welfare plan, as defined in
Section 3(1) of ERISA.
"WITHDRAWAL LIABILITY" has the meaning specified in Part
I of Subtitle E of Title IV of ERISA.
"WORKING CAPITAL ADVANCE" has the meaning specified in
Section 2.01.
"WORKING CAPITAL FACILITY" means, at any time, the
aggregate amount of the Commitments at such 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 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 consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(f) ("GAAP").
<PAGE> 25
20
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. THE ADVANCES. Each 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
aggregate amount not to exceed at any time outstanding (a) the amount set forth
opposite such Lender's name on the signature pages hereof or, if such Lender
has entered into any Assignment and Acceptance, set forth for such Lender in
the Register maintained by the Administrative Agent pursuant to Section
8.07(c), as such amount may be reduced pursuant to Section 2.04 (such Lender's
"COMMITMENT") LESS (b) such Lender's Ratable Share of the sum of (i) the
aggregate Available Amount of all Letters of Credit outstanding and Letter of
Credit Advances outstanding plus (ii) the aggregate outstanding "Capital" of
all "Receivable Interests" (as such terms are defined in the Receivables
Financing Agreements). Each Borrowing shall be in an aggregate amount not less
than $25,000,000 or an integral multiple of $1,000,000 in excess thereof and
shall consist of Advances of the same Type made on the same day by the Lenders
ratably according to their respective Commitments. Within the limits of each
Lender's Commitment, the Borrower may borrow under this Section 2.01, prepay
pursuant to Section 2.05 and reborrow under this Section 2.01.
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 Lender prompt notice thereof by telex, telecopier or cable. Each such
notice of a Borrowing (a "NOTICE OF BORROWING") shall be by 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) Type of Advances comprising such Borrowing, (iii) aggregate amount of such
Borrowing and (iv) 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 Lender of the applicable interest rate under
Section 2.06(b). Each 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
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
<PAGE> 26
21
will make such funds available to the Borrower; PROVIDED, HOWEVER, that, in the
case of any 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 the Issuing Bank and by any other Lender and outstanding on
the date of such Borrowing, plus interest accrued and unpaid thereon to and as
of such date, available to the Issuing Bank and such other Lenders for
repayment of such Letter of Credit Advances.
(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 $25,000,000 or if the
obligation of the Lenders to make Eurodollar Rate Advances shall then be
suspended pursuant to Section 2.09 and (ii) the Advances made on any date may
not be outstanding as part of more than six separate 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 Lender against any loss, cost or expense
incurred by such Lender 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
(including loss of anticipated profits), cost or expense 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 a Lender prior to the time of any Borrowing 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 2.06 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.
<PAGE> 27
22
(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.
SECTION 2.03. REPAYMENT. (a) WORKING CAPITAL ADVANCES.
The Borrower shall repay to the Administrative Agent for the ratable account of
the Lenders the aggregate outstanding principal amount of the Working Capital
Advances on the Termination Date.
(b) LETTER OF CREDIT ADVANCES. The Borrower
shall repay to the Administrative Agent for the account of the Issuing Bank and
each other 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 2.04. REDUCTION OF THE COMMITMENTS. (a)
OPTIONAL. The Borrower may, upon at least three Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the unused portions
of the Commitments; PROVIDED, HOWEVER, that each partial reduction of the
Commitments (i) shall be in an aggregate amount of $25,000,000 or an integral
multiple of $1,000,000 in excess thereof and (ii) shall be made ratably among
the Lenders in accordance with their Commitments.
(b) MANDATORY. The Commitments shall be
permanently reduced on the date of receipt of the Net Cash Proceeds from (i)
the sale of any assets of the Borrower or any of its Subsidiaries incorporated
within the United States and, to the extent the aggregate Net Cash Proceeds of
sales of assets permitted by Section 5.02(e)(x) exceeds $100,000,000 during the
term of this Agreement, such sales of assets, (ii) the incurrence or issuance
by the Borrower or any of its Subsidiaries of any Debt and (iii) the sale or
issuance by the Borrower or any of its Subsidiaries of any capital stock, any
securities convertible into or exchangeable for capital stock or any warrants,
rights or options to acquire capital stock, by an amount equal to the amount of
such Net Cash Proceeds; PROVIDED, HOWEVER, that no such reduction shall be
required (x) from sales of assets permitted by clauses (i), (iii), (iv), (vi)
and (vii) of Section 5.02(e) or (y) if, on such date, the Borrower has an
Investment Grade Rating and an amount equal to such Net Cash Proceeds is
applied to the redemption of the limited partnership interest under the TMI
Associates Limited Partnership Agreement pursuant to Section 10.08 thereof.
To the extent that any reduction of the Commitments pursuant to this Section
2.04(b) results in an aggregate of Commitments equal to $100,000,000 or less,
the Letter of Credit Facility shall be reduced by an amount equal to such
reduction of the Commitments.
SECTION 2.05. PREPAYMENTS. (a) OPTIONAL. The Borrower
may, upon at least three Business Days' notice to the Administrative Agent
stating the
<PAGE> 28
23
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 $25,000,000 or an
integral multiple of $1,000,000 in excess thereof.
(b) MANDATORY. (i) The Borrower shall, on each
Business Day, prepay an aggregate principal amount of the Advances comprising
part of the same Borrowings equal to the amount by which the (x) sum of (A)
aggregate principal amount of the Advances then outstanding, (B) the Available
Amount of all Letters of Credit then outstanding and (C) the aggregate
outstanding "Capital" of all "Receivable Interests" (as such terms are defined
in the Receivables Financing Agreements) exceeds (y) the aggregate amount of
the Commitments.
(ii) The Borrower shall, on each Business Day, pay
to the Administrative Agent for deposit into the L/C Cash Collateral Account an
amount sufficient to cause the aggregate amount on deposit in such Account to
equal the amount by which the aggregate Available Amount of all Letters of
Credit then outstanding exceeds the Letter of Credit Facility on such Business
Day.
(iii) 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 2.06. 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
<PAGE> 29
24
three months, on each day that occurs during such Interest Period
every three months from the first day of such Interest Period.
(b) DEFAULT INTEREST. Upon the occurrence and
during the continuance of a Default, the Borrower shall pay interest on (i) the
unpaid principal amount of each Advance owing to each Lender, payable in
arrears on the dates referred to in clause (a)(i) or (a)(ii) above, at a rate
per annum equal at all times to 2% per annum above the rate per annum required
to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii)
the amount of any interest, fee or other amount payable hereunder which is not
paid when due, from the date such amount shall be due until such amount shall
be paid in full, payable in arrears on the date such amount shall be paid in
full and on demand, at a rate per annum equal at all times to 2% per annum
above the rate per annum required to be paid on Base Rate Advances pursuant to
clause (a)(i) above.
SECTION 2.07. FEES. (a) COMMITMENT FEE. The Borrower
shall pay to the Administrative Agent for the account of the Lenders a
commitment fee on each Lender's average daily Unused Commitment from the date
hereof in the case of each Bank and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender in the case of
each other Lender until the Termination Date at the rate of 1/2 of 1% per
annum, payable in arrears quarterly on the first Business Day of each January,
April, July and October, commencing October 3, 1994, and on the Termination
Date; PROVIDED, HOWEVER, 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 2.08. 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 2.09, Convert all or any portion of the Advances of one Type comprising
the same Borrowing into Advances of the other Type; PROVIDED, HOWEVER, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances,
any Conversion of Base Rate Advances into Eurodollar
<PAGE> 30
25
Rate Advances shall be in an amount not less than the minimum 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. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
(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
$25,000,000, 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
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 2.09. 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 or (ii) the compliance with any guideline or request 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 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, before making any such demand, each
Lender agrees to use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to designate a different Applicable
Lending Office if the making of such a designation 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 manifest error.
(b) If, due to either (i) the introduction of or
any change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the amount of capital required or
<PAGE> 31
26
expected to be maintained by any Lender or any corporation controlling such
Lender as a result of or based upon the existence of such Lender's commitment
to lend hereunder and other commitments of such type or the issuance or
maintenance of Letters of Credit (or similar contingent obligations), 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 in the light of such circumstances, to the
extent that such Lender reasonably determines such increase in capital to be
allocable to the existence of such Lender's commitment to lend hereunder or to
the issuance or maintenance of any Letters of Credit. 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 manifest
error.
(c) If, with respect to any Eurodollar Rate
Advances, the Required Lenders notify the Administrative Agent that the
Eurodollar Rate for any Interest Period for such Advances will not adequately
reflect the cost to such Lenders of making, funding or maintaining their
Eurodollar Rate Advances for such Interest Period, the Administrative Agent
shall forthwith so notify the Borrower and the Lenders, whereupon (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 the introduction of or any change in or in the interpretation of
any law or regulation shall make it unlawful, 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 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 Eurodollar Rate
Advance will automatically, upon such demand, 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 Lender has determined that the
circumstances causing such suspension no longer exist; PROVIDED, HOWEVER, that,
before making any such demand, such Lender agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different Eurodollar Lending Office if the making of such a
designation 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
judgment of such Lender, be otherwise disadvantageous to such Lender.
<PAGE> 32
27
(e) Upon the occurrence and during the
continuance of any Default, (i) each 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.
SECTION 2.10. 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) The Borrower hereby authorizes each Lender,
if and to the extent payment owed to such Lender is not made when due hereunder
or under the Note held by such Lender, to charge from time to time against any
or all of the Borrower's accounts with such Lender any amount so due.
(c) 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 manifest error.
(d) 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
<PAGE> 33
28
principal of Eurodollar Rate Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.
(e) 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.
SECTION 2.11. TAXES. (a) Any and all payments by the
Borrower hereunder or under the Notes shall be made, in accordance with Section
2.10, 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 that are imposed by the United States
and franchise taxes and net income taxes that are imposed on such Lender or the
Administrative Agent by the state or foreign jurisdiction under the laws of
which such Lender or the Administrative Agent (as the case may be) is organized
or any political subdivision thereof and, in the case of each Lender, franchise
taxes and net income taxes that are imposed on such Lender by the state or
foreign jurisdiction of such Lender's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "TAXES"). If the 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 2.11) 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").
<PAGE> 34
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(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 2.11, 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. This indemnification
shall be made within 30 days from the date such Lender or the Administrative
Agent (as the case may be) makes written demand therefor.
(d) Within 30 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
<PAGE> 35
30
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 2.11 shall use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office if the making of such a change
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 2.12. 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 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 to
(ii) the aggregate amount of the Obligations due and payable to all Lenders
hereunder and under the Notes at such time) of payments on account of the
Obligations due and payable to all Lenders hereunder and under the Notes at
such time obtained by all the 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 in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations owing to such Lender at such
time to (ii) the aggregate amount of the Obligations owing (but not due and
payable) to all Lenders hereunder and under the Notes at such time) of payments
on account of the Obligations owing (but not due and payable) to all Lenders
hereunder and under the Notes at such time obtained by all the Lenders at such
time, such Lender shall forthwith purchase from the other 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
<PAGE> 36
31
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
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 2.12 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 2.13. LETTERS OF CREDIT. (a) THE LETTER OF
CREDIT FACILITY. The Borrower may request the Issuing Bank, on the terms and
conditions hereinafter set forth, to issue, and Issuing Bank may, if in its
sole discretion it elects to do so, 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 60 days before
the Termination Date (i) in an aggregate Available Amount for all Letters of
Credit not to exceed at any time the Letter of Credit Facility and (ii) in an
Available Amount for each such Letter of Credit not to exceed the Unused
Commitments on such Business Day. 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 60 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, and subject to the limits referred to above, so long as the
Issuing Bank, in its sole discretion, elects to issue Letters of Credit, the
Borrower may request the issuance of Letters of Credit under this Section
2.13(a), repay any Letter of Credit Advances resulting from drawings thereunder
pursuant to Section 2.13(c) and request the issuance of additional Letters of
Credit under this Section 2.13(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 the Issuing Bank, which shall give
to the Administrative Agent and each 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 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 application and agreement for letter
of credit (a "LETTER OF CREDIT AGREEMENT")
<PAGE> 37
32
as the Issuing Bank may specify to the Borrower for use in connection with such
requested Letter of Credit. If (x) the requested form of such Letter of Credit
is acceptable to the Issuing Bank in its sole discretion, (y) in its sole
discretion, it elects to issue the requested Letter of Credit and (z) it has
not received notice of objection to such issuance from the Required Lenders,
the 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 this
Agreement, the provisions of this Agreement shall govern.
(ii) The 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 during the previous
week and drawings during such week under all Letters of Credit, (B) to each
Lender on the first Business Day of each month a written report summarizing
issuance and expiration dates of Letters of Credit issued during the preceding
month and drawings during such month under all Letters of Credit and (C) to the
Administrative Agent and each 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.
(c) DRAWING AND REIMBURSEMENT. The payment by
the Issuing Bank of a draft drawn under any Letter of Credit shall constitute
for all purposes of this Agreement the making by the 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 Issuing Bank, with a copy of such demand to the
Administrative Agent, each other Lender shall purchase from the Issuing Bank,
and the Issuing Bank shall sell and assign to each such other 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 the
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 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, 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
the Issuing Bank to any other Lender of a portion of a Letter of Credit
Advance, the Issuing Bank represents and warrants to such other Lender that the
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 Lender shall not
have so made the amount of such Working Capital
<PAGE> 38
33
Advance available to the Administrative Agent, such 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 the 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 the 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 the 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
2.13(c) to the extent that such Advances result from the 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),
the 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;
(v) payment by the 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;
<PAGE> 39
34
(vi) any exchange, release or non-perfection of
any 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.
(e) COMPENSATION. (i) The Borrower shall pay to
the Administrative Agent for the account of each 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 rate of (A) 1-1/2% per
annum, so long as the Borrower's long term senior unsecured public debt is
rated BB or better by S&P or Ba2 or better by Moody's and not lower than BB- by
S&P or Ba3 by Moody's or (B) 2% per annum, so long as the Borrower's long term
senior unsecured public debt is rated (1) lower than BB by S&P and lower than
Ba2 by Moody's or (2) lower than BB- by S&P or lower than Ba3 by Moody's, in
each case payable in arrears quarterly on the first Business Day of each
January, April, July and October, commencing October 3, 1994, and on the
Termination Date.
(ii) The Borrower shall pay to the 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 the Issuing Bank shall agree.
SECTION 2.14. USE OF PROCEEDS. The proceeds of the
Advances shall be available (and the Borrower agrees that it shall use such
proceeds) solely to pay transaction fees and expenses, refinance certain
Existing Indebtedness and for general corporate purposes of the Borrower and
its Subsidiaries.
SECTION 2.15. 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 make any such Defaulted
Advance on any date, the amount so set off and otherwise applied by the
Borrower shall constitute for all
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35
purposes of this Agreement and the other Loan Documents an Advance by such
Defaulting Lender made on such date. Such Advance shall be a Base Rate Advance
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 2.15.
(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
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36
(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 2.15.
(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 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
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37
(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.
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 2.15 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.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL BORROWING.
The obligation of each Lender to make an Advance on the occasion of the initial
Borrowing under the Existing Credit Agreement was subject to the following
conditions precedent:
(a) The Lenders shall be satisfied with the
corporate and legal structure and capitalization of the Borrower,
including the terms and conditions of its charter, bylaws, each class
of capital stock and each agreement or instrument relating to such
structure or capitalization.
(b) There shall have occurred no Material Adverse
Change since December 31, 1993, except as disclosed by the Borrower to
the Lenders in writing prior to August 30, 1994.
(c) There shall exist no action, suit,
investigation, litigation or proceeding pending or threatened before
any court, governmental agency or arbitrator that (i) would be
reasonably likely to have a Material Adverse Effect other than the
matters described on Schedule 3.01 (the "DISCLOSED LITIGATION") or (ii)
purports to affect the legality, validity or enforceability of this
Agreement, any Note, any Related Document or the consummation of the
transactions contemplated hereby and thereby, and there shall have
been no change in the status of, or financial effect on, the Borrower
and its Subsidiaries taken as a whole of the Disclosed Litigation from
that described on Schedule 3.01 that would
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38
materially adversely affect the ability of the Borrower to perform its
Obligations under this Agreement, the Notes or any Related Document.
(d) The Borrower shall have paid all accrued fees
and expenses of the Administrative Agent, the Arrangers and the
Lenders (including the reasonable fees and expenses of counsel to the
Administrative Agent) unless otherwise agreed to by the Administrative
Agent.
(e) The Administrative Agent shall have received
on or before the date of the initial Borrowing, but not later than
September 30, 1994, the following, each dated such day (unless
otherwise specified), in form and substance satisfactory to the
Administrative Agent (unless otherwise specified) and (except for the
Notes) in sufficient copies for each Lender:
(i) The Notes to the order of the Lenders.
(ii) Certified copies of the resolutions of the
Board of Directors of the Borrower approving this
Agreement, the Notes and each Related 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 this
Agreement, the Notes and each Related Document to which
it is a party.
(iii) A copy of the charter of the Borrower and
each amendment thereto, certified (as of a date
reasonably near the date of the initial Borrowing) by the
Secretary of State of the State of New Jersey as being a
true and correct copy thereof.
(iv) A copy of a certificate of the Secretary of
State of the State of New Jersey, dated reasonably near
the date of the initial Borrowing, listing the charter of
the Borrower and each amendment thereto on file in his
office and certifying that (A) such amendments are the
only amendments to the Borrower's charter on file in his
office and (B) the Borrower is duly incorporated and in
good standing under the laws of the State of New Jersey.
(v) A certificate of the Borrower, signed on
behalf of the Borrower by its President or a Vice
President and its Secretary or any Assistant Secretary,
dated the date of the initial Borrowing (the statements
made in which certificate shall be true on and as of the
date of the initial Borrowing), certifying as to (A) the
absence of any amendments to the charter of the Borrower
since the date of the Secretary of State's certificate
referred to in Section 3.01(e)(iv), (B) a true and
correct copy of the bylaws of the Borrower, as in effect
on
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39
the date of the initial Borrowing and (C) the due
incorporation and good standing of the Borrower as a
corporation organized under the laws of the State of New
Jersey, and the absence of any proceeding for the
dissolution or liquidation of the Borrower.
(vi) A certificate of the Borrower, signed on
behalf of the Borrower by its President or a Vice
President, dated the date of the initial Borrowing (the
statements made in which certificate shall be true on and
as of the date of the initial Borrowing), certifying as
to (A) the truth of the representations and warranties
contained in this Agreement and each Related Document to
which it is a party as though made on and as of the date
of the initial Borrowing, (B) the absence of any event
occurring and continuing, or resulting from the initial
Borrowing, that constitutes a Default and (C) the payment
of all franchise taxes owed by the Borrower to the State
of New Jersey as of the date of such certificate.
(vii) A certificate of the Secretary or an
Assistant Secretary of the Borrower certifying the names
and true signatures of the officers of the Borrower
authorized to sign this Agreement, the Notes, and each
Related Document to which it is or is to be a party and
the other documents to be delivered hereunder and
thereunder.
(viii) 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,
shall be in full force and effect not later than
September 2, 1994 and have not been terminated.
(ix) Such financial, business and other
information regarding the Borrower and its Subsidiaries
as the Lenders shall have requested, including, without
limitation, information as to possible contingent
liabilities, tax matters, environmental matters,
obligations under ERISA and Welfare Plans, collective
bargaining agreements and other arrangements with
employees, annual financial statements dated December 31,
1993, interim financial statements dated the end of the
most recent fiscal quarter for which financial statements
are available (or, in the event the Lenders' due
diligence review reveals material changes since such
financial statements, as of a later date within 45 days
of the day of the initial Borrowing), pro forma financial
statements as to the Borrower and projections prepared by
management of the Borrower, in form and substance
satisfactory to the Lenders, of balance sheets, income
statements and cash flow
<PAGE> 45
40
statements on a quarterly basis for the first year
following the day of the initial Borrowing and on an
annual basis for each year thereafter until the
Termination Date.
(x) Letters and certificates, in form and
substance satisfactory to the Lenders, attesting to the
Solvency of the Borrower after giving effect to the
transactions contemplated hereby, from its chief
financial officer and Houlihan, Lokey, Howard & Zukin,
Inc.
(xi) Environmental information, in form and
substance reasonably satisfactory to the Lenders, as to
any costs or liabilities under Environmental Laws to
which the Borrower may be subject, the amount and nature
of which and the Borrower's plans with respect to which
shall be reasonably acceptable to the Lenders, together
with evidence, in form and substance reasonably
satisfactory to the Lenders, that all applicable
Environmental Laws necessary to avoid a Material Adverse
Effect shall have been complied with. To the extent
either the report or any other information that may
become available to the Lenders shall disclose any costs
or liabilities under Environmental Laws that the Lenders
deem material, the Lenders shall be satisfied that such
costs or liabilities were adequately reflected in the
Borrower's financial reserves shown on the financial
statements included in the Information Memorandum or
that, to the extent not so reflected, the Borrower has
made adequate provision for such costs or liabilities.
(xii) A favorable opinion of Sidley & Austin,
special New York counsel to the Borrower, and a favorable
opinion of Allan L. Miller, Senior Vice President, Chief
Administrative Officer and General Counsel of the
Borrower, in substantially the forms of Exhibits D-1 and
D-2 hereto, respectively, and as to such other matters as
any Lender through the Administrative Agent may
reasonably request.
(xiii) A favorable opinion of Shearman & Sterling,
counsel for the Administrative Agent, in form and
substance satisfactory to the Administrative Agent.
SECTION 3.02. CONDITIONS PRECEDENT TO EACH BORROWING AND
ISSUANCE. The obligation of each Lender to make an Advance (other than a
Letter of Credit Advance) on the occasion of each Borrowing, and the right of
the Borrower to request the issuance of Letters of Credit, shall be subject to
the further conditions precedent that on the date of such Borrowing or issuance
(a) 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
<PAGE> 46
41
a representation and warranty by the Borrower that on the date of such
Borrowing or issuance such statements are true):
(i) the representations and warranties contained
in Section 4.01 (except the representations set forth in the last
sentence of subsection (f) thereof and in subsection (i) thereof
(other than clause (ii) thereof)) 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; and
(ii) 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;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Lender or the Issuing Bank through the
Administrative Agent may reasonably request.
SECTION 3.03. CONDITIONS PRECEDENT TO CERTAIN BORROWINGS
AND ISSUANCES. The obligation of each Lender to make an Advance (other than a
Letter of Credit Advance) on the occasion of any Borrowing, and the right of
the Borrower to request the issuance of 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
condition precedent that on the date of such Borrowing or issuance the
representations and warranties contained in Section 4.01 hereof shall be true
and correct in all material respects on and as of the date of such Borrowing or
issuance as though made on and as of such date (and each of the giving of the
applicable Notice of Borrowing and the acceptance by the Borrower of the
proceeds of such Borrowing or such Letter of Credit shall be deemed to
constitute a representation and warranty by the Borrower that on the date of
such Borrowing or issuance such representations and warranties are true and
correct).
SECTION 3.04. DETERMINATIONS UNDER SECTION 3.01. For
purposes of determining compliance with the conditions specified in Section
3.01, 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
<PAGE> 47
42
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 is not reasonably 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 Subsidiaries of the Borrower,
showing as of the date hereof (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 Subsidiary (i) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its organization, (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 is not reasonably 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.
(c) The execution, delivery and performance by
the Borrower of this Agreement, the Notes and each Related Document to
which it is or is to be a party, and the consummation of the
transactions contemplated hereby, are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action,
and do not (i) contravene the Borrower's charter or by-laws, (ii)
violate any law (including, without limitation, the Securities
Exchange Act of 1934 and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970),
rule, regulation (including, without limitation, Regulation X of the
Board of Governors of the Federal Reserve System), order, writ,
judgment, injunction, decree, determination or award,
<PAGE> 48
43
(iii) conflict with or result in the breach of, or constitute a
default under, any contract, loan agreement, indenture, mortgage, deed
of trust, lease or other instrument binding on or affecting the
Borrower, any of its Subsidiaries or any of their properties 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. 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 is reasonably
likely to have a Material Adverse Effect.
(d) No authorization or approval or other action
by, and no notice to or filing with, any governmental authority or
regulatory body or any other third party is required for (i) the due
execution, delivery, recordation, filing or performance by the
Borrower of this Agreement, the Notes or any Related Document to which
it is or is to be a party, or for the consummation of the transactions
contemplated hereby, or (ii) the exercise by the Administrative Agent
or any Lender of its rights under the Loan Documents, except for the
authorizations, approvals, actions, notices and filings listed on
Schedule 4.01(d), and other than parties to the Related Documents, all
of which have been duly obtained, taken, given or made and are in full
force and effect.
(e) This Agreement has been, and each of the
Notes, and each Related Document to which the Borrower is a party when
delivered hereunder will have been, duly executed and delivered by the
Borrower. This Agreement is, and each of the Notes and each Related
Document to which the Borrower is a party when delivered hereunder
will be, the legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms.
(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
March 31, 1994, and the related Consolidated statement of income and
cash flows of the Borrower and its Subsidiaries for the three 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 March 31,
1994, and said statements of income and cash flows for the three
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 December 31,
<PAGE> 49
44
1993, there has been no Material Adverse Change other than as
disclosed to the Lenders in writing prior to August 30, 1994.
(g) The Consolidated projected balance sheets and
Consolidated and consolidating income statements and cash flows
statements of the Borrower and its Subsidiaries delivered to the
Lenders pursuant to Section 3.01(e)(ix) or 5.03 were prepared in good
faith on the basis of the assumptions stated therein, which
assumptions were fair in the light of conditions existing at the time
of delivery of such projections, and represented, at the time of
delivery, the Borrower's best estimate of its future financial
performance.
(h) Neither the Information Memorandum nor any
other information, exhibit or report furnished by the Borrower 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 any untrue statement of a material fact or omitted to state
a material fact necessary to make the statements made therein not
misleading.
(i) There is no action, suit, investigation,
litigation or proceeding affecting the Borrower or any of its
Subsidiaries, including any Environmental Action, pending or, to the
best of its knowledge, threatened before any court, governmental
agency or arbitrator that (i) would be reasonably likely to have a
Material Adverse Effect (other than the Disclosed Litigation) or (ii)
purports to affect the legality, validity or enforceability of this
Agreement, any Note or any Related Document or the consummation of the
transactions contemplated hereby, and there has been no Material
Adverse Change in the status, or financial effect on the Borrower or
any of its Subsidiaries, of the Disclosed Litigation from that
described on Schedule 3.01.
(j) 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.
(k) The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying Margin
Stock, and no proceeds of any Advance will be used to purchase or
carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any Margin Stock.
(l) Following application of the proceeds of each
Advance, not more than 25 percent of the value of the assets (either
of the Borrower only or of the Borrower and its Subsidiaries on a
Consolidated basis) subject to the provisions of Section 5.02(a) or
5.02(f) or subject to any restriction contained in any agreement or
instrument between the Borrower and any Lender or any
<PAGE> 50
45
Affiliate of any Lender relating to Indebtedness and within the scope
of Section 6.01(e) will be Margin Stock.
(m) No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan of the Borrower or any of
its ERISA Affiliates that has resulted in or is reasonably likely to
result in a Material Adverse Effect.
(n) As of January 1, 1994, no unfunded current
liability in excess of $55,000,000 existed for any Plan of the
Borrower or any of its ERISA Affiliates.
(o) Neither the Borrower nor any of its ERISA
Affiliates has incurred or is reasonably expected to incur any
Withdrawal Liability exceeding $10,000,000 to any Multiemployer Plan.
(p) Neither the Borrower nor any of its ERISA
Affiliates has been notified by the sponsor of a Multiemployer Plan of
the Borrower or any of its ERISA Affiliates that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning
of Title IV of ERISA, and no such Multiemployer Plan is reasonably
expected to be in reorganization or to be terminated, within the
meaning of Title IV of ERISA.
(q) The aggregate annualized cost (including,
without limitation, the cost of insurance premiums) with respect to
post-retirement benefits under Welfare Plans for which the Borrower
and its Subsidiaries are liable does not exceed $30,000,000.
(r) Neither the business nor the properties of
the Borrower or any of its Subsidiaries are affected by any fire,
explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or
other casualty (whether or not covered by insurance) that would be
reasonably likely to have a Material Adverse Effect.
(s) The operations and properties of the Borrower
and each of its Subsidiaries comply in all material respects with all
Environmental Laws, the Borrower and its Subsidiaries are in
compliance in all material respects with all Environmental Permits now
in effect, and no circumstances exist that would be reasonably likely
to (i) form the basis of an Environmental Action against the Borrower
or any of its Subsidiaries or any of their properties that could have
a Material Adverse Effect or (ii) cause any property material to the
operations of the business of the Borrower and its Subsidiaries, taken
as a whole, to be subject to any restrictions on ownership, occupancy,
use or transferability under any Environmental Law.
<PAGE> 51
46
(t) None of the properties of the Borrower or any
of its Subsidiaries is listed or proposed for listing on the National
Priorities List under CERCLA or on the Comprehensive Environmental
Response, Compensation and Liability Information System maintained by
the Environmental Protection Agency or any analogous state list of
sites requiring investigation or cleanup.
(u) Neither the Borrower nor any of its
Subsidiaries has transported or arranged for the transportation of any
Hazardous Materials to any location that is listed or proposed for
listing on the National Priorities List under CERCLA or on the
Comprehensive Environmental Response, Compensation and Liability
Information System maintained by the Environmental Protection Agency
or any analogous state list, Hazardous Materials have not been
generated, used, treated, handled, stored or disposed of on, or
released or transported to or from, any property of the Borrower or
any of its Subsidiaries or, to the best of its knowledge, any
adjoining property, except for limited quantities required in
connection with the normal operation and maintenance of such
properties and used or stored at such properties in compliance with
all Environmental Laws and Environmental Permits or as would not be
reasonably likely to have a Material Adverse Effect, and, to the best
of its knowledge, all other wastes generated at any such properties
have been disposed of in compliance with all Environmental Laws and
Environmental Permits or as would not be reasonably likely to have a
Material Adverse Effect.
(v) Neither the Borrower nor any of its
Subsidiaries is a party to any indenture, loan or credit agreement or
any lease or other agreement or instrument or subject to any charter
or corporate restriction that would be reasonably likely to have a
Material Adverse Effect.
(w) 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
reasonably likely to have a Material Adverse Effect.
(x) Neither the Borrower nor any of its
Subsidiaries is an "investment company," a company "controlled" by, or
"promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as
amended. Neither the making of any Advances, nor the issuance of any
Letters of Credit, nor the application of the proceeds or repayment
thereof by the Borrower, nor the consummation of the other
transactions contemplated hereby, will violate any provision of such
Act or any rule, regulation or order of the Securities and Exchange
Commission thereunder.
<PAGE> 52
47
(y) The Borrower is, individually and together
with its Subsidiaries, Solvent.
(z) Set forth on Schedule 4.01(z) hereto is a
complete and accurate list of all Existing Indebtedness outstanding in
an amount of $10,000,000 or more, showing as of the date hereof the
principal amount outstanding thereunder.
(aa) 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 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, in all material respects, with all
applicable laws, rules, regulations and orders, such compliance to
include, without limitation, compliance with ERISA and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970.
(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 that, if unpaid, might by law become a 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 proper proceedings and as to which appropriate reserves are
being maintained, unless and until any Lien resulting therefrom
attaches to its property and becomes enforceable against its other
creditors.
(c) COMPLIANCE WITH ENVIRONMENTAL LAWS. Except
where the failure to do so would not be reasonably likely to have a
Material Adverse Effect,
<PAGE> 53
48
(i) comply, and cause each of its Subsidiaries and all lessees and
other Persons occupying its properties to comply, in all material
respects, with all Environmental Laws and Environmental Permits
applicable to its operations and properties; (ii) obtain and renew all
Environmental Permits necessary for its or its Subsidiaries'
operations and properties; and (iii) conduct, and cause each of its
Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials from any of
its properties, in accordance with the requirements of all
Environmental Laws; PROVIDED, HOWEVER, that neither the Borrower nor
any of its Subsidiaries shall be required to undertake any such
cleanup, removal, remedial or other action to the extent that its
obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with respect
to such circumstances.
(d) MAINTENANCE OF INSURANCE. Maintain, and
cause each of its Subsidiaries to maintain, insurance with responsible
and reputable insurance companies or associations in such amounts,
with such retentions and deductibles, and covering such risks as is
usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Borrower or
such Subsidiary operates.
(e) PRESERVATION OF CORPORATE EXISTENCE, ETC.
Preserve and maintain, and cause each of its Subsidiaries to preserve
and maintain, its corporate existence, rights (charter and statutory)
and franchises; PROVIDED, HOWEVER, that the Borrower and its
Subsidiaries may consummate any merger or consolidation permitted
under Section 5.02(d); 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 from time to time, 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, their directors and with
their independent certified public accountants.
<PAGE> 54
49
(g) PREPARATION OF ENVIRONMENTAL REPORTS. At the
request of the Required Lenders from time to time, use its best
efforts to provide to the Lenders within 60 days after such request,
at the expense of the Borrower, an environmental site assessment
report for any of its and its Subsidiaries' properties which contain
environmental conditions that may reasonably be expected to result in
a Material Adverse Effect, prepared by an environmental consulting
firm acceptable to the Administrative Agent and the Borrower,
indicating the presence or absence of Hazardous Materials and the
estimated cost of any compliance, removal or remedial action in
connection with any Hazardous Materials on such properties; without
limiting the generality of the foregoing, if the Administrative Agent
determines at any time that a material risk exists that any such
report will not be provided within the time referred to above and the
same is reasonably likely to result in a Material Adverse Effect, the
Administrative Agent may retain an environmental consulting firm to
prepare such report at the expense of the Borrower, and the Borrower
hereby grants and agrees to cause any Subsidiary of the Borrower which
owns any property described in such request to grant at the time of
such request, to the Administrative Agent, the Lenders, such firm and
any agents or representatives thereof an irrevocable non-exclusive
license, subject to the rights of tenants, to enter onto their
respective properties to undertake such an assessment.
(h) KEEPING OF BOOKS. Keep, and cause each of
its Subsidiaries to keep, proper books of record and account, in which
full and correct entries shall be made of all financial transactions
and the assets and business of the Borrower and each such Subsidiary
in accordance with generally accepted accounting principles on a
Consolidated basis in effect from time to time.
(i) 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.
(j) TRANSACTIONS WITH AFFILIATES. Conduct, and
cause each of its Subsidiaries to conduct, all transactions otherwise
permitted under the Loan Documents with any of their Affiliates on
terms that are fair and reasonable and no less favorable to the
Borrower or such Subsidiary than it would obtain in a comparable
arm's-length transaction with a Person not an Affiliate, other than
transactions between and among the Borrower and its wholly-owned
Subsidiaries.
(k) 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(e)) to enable Borden Receivables Corp. to sell and cause Borden
Receivables Corp. to sell, "Receivable Interests" (as such
<PAGE> 55
50
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 at any time that (i) the aggregate outstanding Advances and
Available Amount of Letters of Credit outstanding exceeds
$620,000,000, PROVIDED that the Borrower need not comply with this
Section 5.01(k)(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) the
Borrower does not have an Investment Grade Rating.
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:
(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 (including, without limitation, accounts)
whether now owned or hereafter acquired, or sign or file, or permit
any of its Subsidiaries to sign or file, under the Uniform Commercial
Code of any jurisdiction, a financing statement that names the
Borrower or any of its Subsidiaries as debtor, or sign, or permit any
of its Subsidiaries to sign, any security agreement authorizing any
secured party thereunder to file such financing statement, or assign,
or permit any of its Subsidiaries to assign, any accounts or other
right to receive income, EXCLUDING, HOWEVER, from the operation of the
foregoing restrictions the following:
(i) Liens created by the Loan Documents;
(ii) Permitted Liens;
(iii) the Liens described on Schedule 5.02(a);
(iv) Liens securing Indebtedness owed to the
Borrower or any of its wholly-owned Subsidiaries;
(v) Liens, if any, arising under, financing
statements filed in connection with, and assignments of
accounts pursuant to the Receivables Financing Documents;
(vi) Liens upon real or personal property owned by
its Subsidiaries incorporated outside of the United
States to secure Indebtedness of such Subsidiaries in an
aggregate amount of
<PAGE> 56
51
$325,000,000 at any time outstanding; PROVIDED that such
amount shall be reduced on the date of receipt of the
Net Cash Proceeds from the sale of any assets owned by
such Subsidiaries, other than sales of assets permitted
by clauses (i) and (iv) of Section 5.02(e), by an amount
equal to such Net Cash Proceeds;
(vii) Liens arising in connection with Capitalized
Leases in an aggregate principal amount not to exceed
$30,000,000 at any time outstanding;
(viii) other Liens securing Indebtedness outstanding
in an aggregate principal amount not to exceed
$25,000,000; and
(ix) the replacement, extension or renewal of any
Lien permitted by clauses (iii) through (viii) 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) in the case of the Borrower,
(A) Indebtedness under the Loan
Documents,
(B) unsecured Indebtedness with no
principal or sinking fund payment due prior to
February 28, 1998, the Net Cash Proceeds of which are
applied as provided in Section 2.04(b),
(C) unsecured Indebtedness incurred in
the ordinary course of business for borrowed money,
maturing within one year from the date incurred,
evidenced by commercial paper and aggregating at any
time not more than an amount equal to the aggregate
of the Unused Commitments, and
(D) Guaranties of Indebtedness permitted
by clause (iv) below;
(ii) in the case of any of its Subsidiaries,
Indebtedness owed to the Borrower or to a wholly-owned
Subsidiary of the Borrower;
(iii) in the case of the Borrower and any of its
Subsidiaries,
<PAGE> 57
52
(A) Indebtedness secured by Liens
permitted by Section 5.02(a)(vi) or (vii) not to
exceed in the aggregate the amount set forth in such
Section,
(B) 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 refinancing Indebtedness, and
of any agreement entered into and of any instrument
issued in connection therewith, are otherwise
permitted by the Loan Documents 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,
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) indorsement of negotiable
instruments for deposit or collection or similar
transactions in the ordinary course of business,
(D) Indebtedness in respect of Hedge
Agreements in an aggregate notional amount not to
exceed $2,500,000,000 at any time outstanding,
(E) Indebtedness in respect of
acceptance, letter of credit, warehouse receipt or
similar facilities not to exceed $225,000,000 at any
time outstanding; and
(F) Indebtedness, if any, arising under
the Receivables Financing Documents; and
(iv) in the case of any of its Subsidiaries
incorporated outside of the United States, $325,000,000;
PROVIDED that such amount shall be reduced on the date of
receipt of the Net Cash Proceeds from the sale of any
assets owned by such Subsidiaries, other than sales of
assets permitted by clauses (i) and (iv) of Section
5.02(e), by an amount equal to such Net Cash Proceeds but
not to an amount less than $150,000,000.
(c) LEASE OBLIGATIONS. Create, incur, assume or
suffer to exist, or permit any of its Subsidiaries to create, incur,
assume or suffer to exist, any obligations as lessee (i) for the
rental or hire of real or personal property in connection with any
sale and leaseback transaction, or (ii) for the rental or hire of
other real or personal property of any kind under leases or agreements
to lease
<PAGE> 58
53
(excluding Capitalized Leases) having an original term of one year or
more that would cause the direct and contingent liabilities of the
Borrower and its Subsidiaries, on a Consolidated basis, in respect of
all such obligations to exceed $70,000,000 payable in any period of 12
consecutive months.
(d) 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 of the Borrower
may merge into or consolidate with 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 of the Borrower's Subsidiaries may merge into the
Borrower if the Borrower is the surviving corporation and (iii) 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, (B) has no material assets or liabilities and (C)
has a certificate of incorporation reasonably acceptable to the
Administrative Agent, 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; PROVIDED, HOWEVER, that in each case, immediately after
giving effect thereto, no event shall occur and be continuing that
constitutes a Default.
(e) 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, or grant any
option or other right to purchase, lease or otherwise acquire any
assets other than inventory to be sold in the ordinary course of its
business, except (i) sales of inventory in the ordinary course of its
business, (ii) in a transaction authorized by subsection (d) of this
Section, (iii) sales of accounts receivable and "Related Security" (as
such term is defined in the Receivables Financing Documents) pursuant
to the Receivables Financing Documents, (iv) sales of accounts
receivable by its Subsidiaries incorporated outside of the United
States, (v) sales of the assets listed on Schedule 5.02(e), (vi) sales
of assets for cash and for fair value in an aggregate amount not to
exceed $5,000,000 in any year, (vii) sales of assets for proceeds
other than cash and for fair value in an aggregate amount not to
exceed $20,000,000 during the term of this Agreement, (viii) the sale
of any asset by the Borrower or any of its Subsidiaries (other than a
bulk sale of inventory and a sale of receivables other than delinquent
accounts for collection purposes only) so long as (A) the purchase
price paid to the Borrower or such Subsidiary for such asset shall be
no less than the fair market value of such asset at the time of such
sale and (B) the purchase price for such asset shall be paid to the
Borrower or such Subsidiary solely in cash or other consideration to
the extent permitted by clause (vii) above, (ix) so long as no Default
shall occur and be continuing, the grant of any option or other right
to purchase any asset in a transaction which would be permitted under
the provisions of clause (viii) above and (x) sales of the assets
owned by its
<PAGE> 59
54
Subsidiaries incorporated outside of the United States provided that
the Net Cash Proceeds of such sales shall be used to permanently
reduce, without duplication, the Indebtedness of, and commitments to
lend to, such Subsidiaries.
(f) 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) $100,000,000 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 as presently conducted in an
aggregate principal amount not to exceed $30,000,000 at
any time outstanding;
(iv) Investments by the Borrower and its
Subsidiaries in Cash Equivalents in an aggregate
principal amount not to exceed $300,000,000 at any time
outstanding; PROVIDED that the aggregate principal amount
of such Investments shall not exceed $170,000,000 for any
period of more than 30 consecutive days;
(v) Investments in new operations, properties or
franchises through the purchase or other acquisition of
assets of any Person or stock of new Subsidiaries where
the Borrower or the Subsidiary of the Borrower making
such purchase or acquisition determines in its prudent
business judgment that such purchase or acquisition would
be beneficial in lieu of making Capital Expenditures; and
(vi) other Investments in an aggregate amount
invested not to exceed $25,000,000.
(g) DIVIDENDS, ETC. Declare or pay any
dividends, 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 or any
warrants, rights or options to acquire such capital stock, or permit
any of its Subsidiaries to purchase,
<PAGE> 60
55
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 or any
warrants, rights or options to acquire such capital stock, except
that, so long as no Default shall have occurred and be continuing, the
Borrower may (i) declare and deliver dividends and distributions
payable only in common stock of the Borrower, (ii) do and permit its
Subsidiaries to do so if the aggregate annual amount of such dividends
and distributions does not exceed $45,000,000 and (iii) do so with
respect to issuances of Preferred Stock if the aggregate annual amount
thereof does not exceed 10% of the amount of the Net Cash Proceeds of
such Preferred Stock issuance applied to reduce the Commitments
pursuant to Section 2.04(b).
(h) CHANGE IN NATURE OF BUSINESS. Make, or
permit any of its Subsidiaries to make, any material change in the
nature of its business as carried on at the date hereof, other than in
connection with dispositions of assets approved by the Board of
Directors of the Borrower.
(i) CHARTER AMENDMENTS. Amend, or permit any of
its Subsidiaries to amend, its certificate of incorporation or amend,
or permit any of its Subsidiaries to amend, its by-laws other than in
the ordinary course of business.
(j) ACCOUNTING CHANGES. Make or permit, or
permit any of its Subsidiaries to make or permit, any significant
change in accounting policies or reporting practices, except as
required or permitted by generally accepted accounting principles.
(k) PREPAYMENTS, ETC. OF INDEBTEDNESS. 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 Indebtedness, other than (i) the
prepayment of the Advances in accordance with the terms of this
Agreement, (ii) regularly scheduled or required repayments or
redemptions of Existing Indebtedness and (iii) 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, or amend, modify or change in any manner any term or
condition of any Existing Indebtedness or subordinated Indebtedness,
or permit any of its Subsidiaries to do any of the foregoing other
than to prepay any Indebtedness payable to the Borrower.
(l) PARTNERSHIPS. Become a general partner in
any general or limited partnership not comprised solely of any of the
Borrower and its wholly-owned Subsidiaries, or permit any of its
Subsidiaries to do so.
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
<PAGE> 61
56
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 the occurrence of each
Default continuing on the date of such statement, a statement of the
chief financial officer of the Borrower setting forth details of such
Default 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, all
in reasonable detail and duly 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 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 in form satisfactory
to the Administrative Agent of 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 an opinion acceptable to the Required Lenders of
Price Waterhouse 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,
(ii) a schedule in form satisfactory to the Administrative Agent of
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
<PAGE> 62
57
officer of the Borrower stating that 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) ANNUAL PROJECTIONS. As soon as available and
in any event no later than 15 days before the end of each fiscal year
of the Borrower, projections prepared by management of the Borrower,
in form satisfactory to the Administrative Agent, of balance sheets,
income statements and cash flow statements on a quarterly basis for
the fiscal year following such fiscal year then ended and on an annual
basis for each fiscal year thereafter until the Termination Date.
(e) ERISA EVENTS. Promptly and in any event
within 10 days after any Loan Party or any of its ERISA Affiliates
knows or has reason to know that any ERISA Event with respect to any
Loan Party or any of its ERISA Affiliates has occurred, a statement of
the chief financial officer of the Borrower describing such ERISA
Event and the action, if any, that such Loan Party or such ERISA
Affiliate has taken and proposes to take with respect thereto.
(f) PLAN TERMINATIONS. Promptly and in any event
within five Business Days after receipt thereof by the Borrower or any
of its ERISA Affiliates, copies of each notice from the PBGC stating
its intention to terminate any Plan of the Borrower or any of its
ERISA Affiliates or to have a trustee appointed to administer any such
Plan.
(g) PLAN ANNUAL REPORTS. Promptly and in any
event within 30 days after the filing thereof with the Internal
Revenue Service, copies of each Schedule B (Actuarial Information) to
the annual report (Form 5500 Series) with respect to each Plan of the
Borrower or any of its ERISA Affiliates having assets or liabilities
in excess of $100,000,000.
(h) MULTIEMPLOYER PLAN NOTICES. Promptly and in
any event within five Business Days after receipt thereof by the
Borrower or any of its ERISA Affiliates from the sponsor of a
Multiemployer Plan of the Borrower or any of its ERISA Affiliates,
copies of each notice concerning (i) the imposition of Withdrawal
Liability by any such Multiemployer Plan or (ii) the reorganization or
termination, within the meaning of Title IV of ERISA, of any such
Multiemployer Plan, where, in either case, the amount of liability
incurred, or that may be incurred, by the Borrower or any of its ERISA
Affiliates may be in excess of $10,000,000.
(i) LITIGATION. Promptly after the commencement
thereof, notice of all actions, suits, investigations, litigation and
proceedings before any court or
<PAGE> 63
58
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting the Borrower or any of
its Subsidiaries of the type described in Section 4.01(i), and
promptly after the occurrence thereof, notice of any change in the
status of the Disclosed Litigation which the Borrower reasonably
believes is reasonably likely to have a Material Adverse Effect.
(j) 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 stockholders, and copies of all regular,
periodic and special reports, and all registration statements, that
the Borrower or any of its Subsidiaries files with the Securities and
Exchange Commission or any governmental authority that may be
substituted therefor, or with any national securities exchange.
(k) CREDITOR REPORTS. Promptly after the
furnishing thereof, copies of any statement or report furnished to any
other holder of the securities of the Borrower or of any of its
Subsidiaries pursuant to the terms of any indenture, loan or credit or
similar agreement and not otherwise required to be furnished to the
Lenders pursuant to any other clause of this Section 5.03.
(l) 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.
(m) REVENUE ADMINISTRATIVE AGENT REPORTS. Within
10 days after receipt, copies of all Revenue Administrative Agent
Reports (Internal Revenue Service Form 886), or other written
proposals of the Internal Revenue Service, that propose, determine or
otherwise set forth positive adjustments to the Federal income tax
liability of the affiliated group (within the meaning of Section
1504(a)(1) of the Internal Revenue Code) of which the Borrower is a
member aggregating $10,000,000 or more.
(n) TAX CERTIFICATES. Promptly, and in any event
within five Business Days after the due date (with extensions) for
filing the final Federal income tax return in respect of each taxable
year, a certificate (a "TAX CERTIFICATE"), signed by the President or
the chief financial officer of the Borrower, stating that the Borrower
has paid to the Internal Revenue Service or other taxing authority the
full amount that such affiliated group is required to pay in respect
of Federal income tax for such year and that the Borrower and its
Subsidiaries have received any amounts payable to them, and have not
paid amounts in respect of taxes (Federal, state, local or foreign) in
excess of the amount they are required to pay, in respect of such
taxable year.
<PAGE> 64
59
(o) ENVIRONMENTAL CONDITIONS. Promptly after the
occurrence thereof, notice of any condition or occurrence on any
property of the Borrower or any of its Subsidiaries that would be
reasonably likely to form the basis of an Environmental Action against
the Borrower or any of its Subsidiaries or such property and that
could have a Material Adverse Effect.
(p) 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 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 |
+-------------------+------------------------------------+-------------+
| | December 31, 1994 | 2.25:1.00 |
+-------------------+------------------------------------+-------------+
| | March 31, 1995 | 2.25:1.00 |
+-------------------+------------------------------------+-------------+
| | June 30, 1995 | 2.25:1.00 |
+-------------------+------------------------------------+-------------+
| | September 30, 1995 | 2.35:1.00 |
+-------------------+------------------------------------+-------------+
| | December 31, 1995 | 2.35:1.00 |
+-------------------+------------------------------------+-------------+
| | March 31, 1996 | 2.35:1.00 |
+-------------------+------------------------------------+-------------+
| | June 30, 1996 | 2.35:1.00 |
+-------------------+------------------------------------+-------------+
| | September 30, 1996 | 2.50:1.00 |
+-------------------+------------------------------------+-------------+
| | December 31, 1996 | 2.50:1.00 |
+-------------------+------------------------------------+-------------+
(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:
<PAGE> 65
60
+-------------------+-----------------------------------+-----------+
| | QUARTER ENDING | RATIO |
+-------------------+-----------------------------------+-----------+
| | December 31, 1994 | 5.85:1.00 |
+-------------------+-----------------------------------+-----------+
| | March 31, 1995 | 5.85:1.00 |
+-------------------+-----------------------------------+-----------+
| | June 30, 1995 | 5.85:1.00 |
+-------------------+-----------------------------------+-----------+
| | September 30, 1995 | 5.00:1.00 |
+-------------------+-----------------------------------+-----------+
| | December 31, 1995 | 5.00:1.00 |
+-------------------+-----------------------------------+-----------+
| | March 31, 1996 | 5.00:1.00 |
+-------------------+-----------------------------------+-----------+
| | June 30, 1996 | 5.00:1.00 |
+-------------------+-----------------------------------+-----------+
| | September 30, 1996 | 4.25:1.00 |
+-------------------+-----------------------------------+-----------+
| | December 31, 1996 | 4.25:1.00 |
+-------------------+-----------------------------------+-----------+
(c) EBIT/NET INTEREST EXPENSE AND DIVIDENDS
RATIO. Maintain a ratio of Consolidated EBIT to the sum of (i)
Consolidated Net Interest Expense and (ii) cash dividends paid by the
Borrower for each period of four consecutive fiscal quarters of not
less than 1.25:1.00, commencing with the fiscal quarter ended December
31, 1994.
(d) 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, 1994 | $175,000,000 |
+-------------------+-------------------------------+---------------+
| | December 31, 1995 | 225,000,000 |
+-------------------+-------------------------------+---------------+
| | December 31, 1996 | 225,000,000 |
+-------------------+-------------------------------+---------------+
PROVIDED that, for purposes of this Section 5.04(d), Investments made
during any period in reliance on Section 5.02(f)(v) shall be deemed to
be a Capital Expenditure made during such period by the Borrower and
its Subsidiaries on a Consolidated basis in an amount equal to the
aggregate amount of such Investment (including, without limitation,
the aggregate principal amount of Indebtedness incurred or assumed in
connection therewith).
<PAGE> 66
61
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 any principal
of, or interest on, any Advance, or the Borrower shall fail to make
any other payment under any Loan Document, in each case when the same
becomes due and payable; or
(b) any representation or warranty made by the
Borrower (or any of its officers) 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 Section 5.02, 5.03 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 given to the
Borrower by the Administrative Agent or any Lender; or
(e) any Loan Party or any of its Subsidiaries
shall fail to pay any principal of, premium or interest on or any
other amount payable in respect of any Indebtedness that is
outstanding in a principal or notional amount of at least $10,000,000
in the aggregate (but excluding Indebtedness outstanding hereunder) of
such Loan Party or such Subsidiary (as the case may be), 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> 67
62
(f) any Loan Party or any of its 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 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 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 $10,000,000 shall be rendered against any Loan
Party or any of its Subsidiaries and either (i) enforcement
proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 10 consecutive
days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be
rendered against any Loan Party or any of its Subsidiaries that is
reasonably likely to have a Material Adverse Effect, and there shall
be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal
or otherwise, shall not be in effect; or
(i) any provision of any Loan Document after
delivery thereof pursuant to Section 3.01 shall for any reason cease
to be valid and binding on or enforceable against the Borrower, or the
Borrower shall so state in writing; or
(j) (i) any Person or two or more Persons acting
in concert shall have acquired 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 20% or more of the combined voting
power of all Voting Stock of the Borrower; or (ii) during any period
of up to 24 consecutive months, commencing after the date of this
Agreement, individuals who at the beginning of such 24-month period
were directors of the
<PAGE> 68
63
Borrower shall cease for any reason (other than solely as a result of
(A) death or disability or (B) voluntary retirement of any individual
in the ordinary course and not for reasons related to an actual or
proposed change in control of the Borrower) to constitute a majority
of the board of directors of the Borrower; or (iii) any Person or two
or more Persons acting in concert shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement that,
upon consummation, will result in its or their acquisition of, the
power to exercise, directly or indirectly, a controlling influence
over the management or policies of the Borrower or control over Voting
Stock of the Borrower (or other securities convertible into such
securities) representing 20% or more of the combined voting power of
all Voting Stock of the Borrower; or
(k) any ERISA Event shall have occurred with
respect to a Plan of the Borrower or any of its ERISA Affiliates and
the sum (determined as of the date of occurrence of such ERISA Event)
of the Insufficiency of such Plan and the Insufficiency of any and all
other Plans of the Borrower and its ERISA Affiliates with respect to
which an ERISA Event shall have occurred and then exist (or the
liability of the Borrower and its ERISA Affiliates related to such
ERISA Event) exceeds $10,000,000; or
(l) the Borrower or any of its ERISA Affiliates
shall have been notified by the sponsor of a Multiemployer Plan of any
Loan Party or any of its ERISA Affiliates that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that,
when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Borrower and its ERISA Affiliates as
Withdrawal Liability (determined as of the date of such notification),
exceeds $10,000,000; or
(m) the Borrower or any of its ERISA Affiliates
shall have been notified by the sponsor of a Multiemployer Plan of the
Borrower or any of its ERISA Affiliates that such Multiemployer Plan
is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, and as a result of such reorganization or
termination the aggregate annual contributions of the Loan Parties and
their ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be increased over
the amounts contributed to such Multiemployer Plans for the plan years
of such Multiemployer Plans immediately preceding the plan year in
which such reorganization or termination occurs by an amount exceeding
$10,000,000;
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 Lender to make Advances 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
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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 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
Cash Collateral Account, an amount equal to the aggregate Available Amount of
all Letters of Credit then outstanding. If at any time the Administrative
Agent determines that any funds held in the L/C Cash Collateral Account are
subject to any right or claim of any Person other than the Administrative Agent
and the Lenders or that 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 additional funds to be deposited and held in the L/C Cash Collateral
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 Cash
Collateral Account that the Administrative Agent determines to be free and
clear of any such right and claim.
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)
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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 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 any Loan Document or any other instrument or document furnished
pursuant hereto; and (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 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. CITIBANK, CREDIT SUISSE AND AFFILIATES.
With respect to their respective Commitments, the Advances made by them and the
Notes issued to them, Citibank and Credit Suisse, as the case may be, shall
have the same rights and powers under the Loan Documents as any other Lender
and may exercise the same as though it were not the Administrative Agent or an
Arranger, as the case may be; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include Citibank and Credit Suisse, as the case
may be in its individual capacity. Citibank, Credit Suisse and their
respective affiliates may accept deposits from, lend money to, act as trustee
under indentures of, accept investment banking engagements from and generally
engage
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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 Citibank or Credit Suisse were not the Administrative
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, 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, 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 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) their respective
Unused 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.
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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 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, 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.
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 all the Lenders (other than any
Lender which is, at such time, a Defaulting Lender), do any of the following at
any time: (i) waive any of the conditions specified in Section 3.01 or, in the
case of the initial Borrowing, 3.02 or 3.03, (ii) change 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, (iii) amend this Section 8.01, (iv) increase the
Commitments of the Lenders or subject the Lenders to any additional
obligations, (v) reduce the principal of, or interest on, the Notes or any fees
or other amounts payable hereunder or (vi) postpone any date fixed for any
payment of principal of, or interest on, the Notes or any fees or other amounts
payable hereunder; PROVIDED FURTHER that no amendment, waiver or consent shall,
unless in writing and signed by the Issuing Bank, in addition to the Lenders
required above to take such action, affect the rights or obligations of the
Issuing Bank under this Agreement; and PROVIDED FURTHER that no amendment,
waiver or consent
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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
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 the Issuing Bank, at its address at 12 East 49th Street,
New York, New York 10017, Attention: Trade Services Department; and if to the
Administrative Agent, at its address at 1 Court Square, 7th Floor, Long Island
City, New 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 costs and 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 (including,
without limitation, the provider of the letters required pursuant to Section
3.01(e)(x)), 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 fees and expenses of counsel for the Administrative Agent
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
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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 costs and expenses of
the Administrative Agent in connection with the administration of the Loan
Documents and (iii) all costs and 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 fees and 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, employees, agents and advisors (each, an
"INDEMNIFIED PARTY") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable 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 (i) 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) or (ii) the actual or alleged presence of Hazardous Materials on any
property of any Loan Party or any of its Subsidiaries or any Environmental
Action relating in any way to any Loan Party or any of its Subsidiaries, in
each case 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 is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
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
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(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 fees and
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, any Eurodollar 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 2.05, 2.08(b)(i) or
2.09(d), acceleration of the maturity of the Notes pursuant to Section 6.01 or
for any other reason, the Borrower shall, 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
(including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.
(d) If the Borrower fails to pay when due any
costs, expenses or other amounts payable by it under any Loan Document,
including, without limitation, fees and expenses of counsel and indemnities,
such amount may be paid on behalf of the Borrower by the Administrative Agent
or any Lender, in its sole discretion.
(e) Without prejudice to the survival of any
other agreement of the Borrower hereunder, the agreements and obligations of
the Borrower contained in Sections 2.09, 2.11 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
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to declare the Notes due and payable pursuant to the provisions of Section
6.01, each Lender and each of its Affiliates 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 or such Affiliate 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
and its Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender and its Affiliates 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 may 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 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 this Agreement and the Receivables
Back-Stop Facility Agreement, (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 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
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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 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 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; and (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.
(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 of, and principal
amount of the Advances owing to, each Lender from time to time (the
"REGISTER"). The entries in the Register shall be
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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 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 an amount equal to the Commitment assumed by it
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment hereunder, a new Note to the order of the assigning
Lender in an amount equal to the Commitment 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, 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 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 held by it); PROVIDED, HOWEVER, that (i) such Lender's
obligations under this Agreement (including, without limitation, its
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 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 reduce the principal of, or interest on, the
Notes or any fees or other amounts payable to the Lenders hereunder, in each
case to the extent subject to such participation, or postpone any date fixed
for any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, 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
<PAGE> 79
74
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 agree to
preserve the confidentiality of any Confidential Information received by it
from such Lender.
(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 Note 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. None of the
Administrative Agent, any Arranger or any Lender shall disclose any
Confidential Information to any Person without the consent of the Borrower,
other than (a) to the Administrative Agent's, such Arranger's, or such Lender's
Affiliates and their officers, directors, employees, agents and advisors and to
actual or prospective Eligible Assignees and participants, and then only on a
confidential basis, (b) as required by any law, rule or regulation or judicial
process and (c) as requested or required by any state, federal or foreign
authority or examiner regulating banks or banking. Nothing contained in this
Section 8.10 shall be construed to limit the applicability of any other
confidentiality agreement executed by any party hereto in connection with the
transactions contemplated hereby.
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 August 16, 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.
<PAGE> 80
75
SECTION 8.12. NO LIABILITY OF THE ISSUING BANK. 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 the 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 the
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 the 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) the 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) the 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, the 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 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.
<PAGE> 81
76
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
-------------------------------------
Title:
CITIBANK, N.A., as Administrative
Agent
By
-------------------------------------
Title:
ARRANGERS
CITICORP SECURITIES, INC.,
as Arranger
By
-------------------------------------
Title:
CREDIT SUISSE, as Arranger
By
-------------------------------------
Title:
By
-------------------------------------
Title:
<PAGE> 82
77
BANKS
COMMITMENT
- ----------
$92,000,000.02 CITIBANK, N.A.
By:
-------------------------
Title:
$92,000,000.02 CREDIT SUISSE
By:
-------------------------
Title:
By:
-------------------------
Title:
MANAGING AGENTS
$61,333,333.33 ABN AMRO BANK N.V.,
NEW YORK BRANCH
By:
-------------------------
Name:
Title:
$61,333,333.33 CIBC INC.
By:
-------------------------
Name:
Title:
<PAGE> 83
78
$61,333,333.33 NATIONAL WESTMINSTER BANK PLC,
NEW YORK BRANCH
By:
----------------------------------
Name:
Title:
NATIONAL WESTMINSTER BANK PLC,
NASSAU BRANCH
By:
----------------------------------
Name:
Title:
$61,333,333.33 NATIONSBANK OF NORTH
CAROLINA, N.A.
By:
----------------------------------
Name:
Title:
$61,333,333.33 THE BANK OF NEW YORK
By:
----------------------------------
Name:
Title:
<PAGE> 84
79
$61,333,333.33 THE BANK OF NOVA SCOTIA
By:
------------------------------
Name:
Title:
$61,333,333.33 THE BANK OF TOKYO TRUST
COMPANY
By:
------------------------------
Name:
Title:
$61,333,333.33 THE CHASE MANHATTAN BANK, N.A.
By:
------------------------------
Name:
Title:
$61,333,333.33 THE FIRST NATIONAL BANK
OF CHICAGO
By:
------------------------------
Name:
Title:
$61,333,333.33 THE FUJI BANK, LIMITED
By:
------------------------------
Name:
Title:
<PAGE> 85
80
$61,333,333.33 UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By:
---------------------------
Name:
Title:
By:
---------------------------
Name:
Title:
$61,333,333.33 WACHOVIA BANK OF GEORGIA, N.A.
By:
---------------------------
Name:
Title:
Total Commitments: $920,000,000
<PAGE> 86
EXHIBIT A
PROMISSORY 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 Advances (as defined below) owing to the
Lender by the Borrower pursuant to the Credit Agreement (as defined below) on
February 18, 1997.
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 Amended and Restated Credit Agreement dated
as of August 16, 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, 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 "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 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> 87
<TABLE>
ADVANCES AND PAYMENTS OF PRINCIPAL
<CAPTION>
<S> <C> <C> <C> <C>
++==================+====================+==========================+=====================+==============++
|| | | AMOUNT OF | UNPAID | ||
|| | AMOUNT OF | PRINCIPAL PAID | PRINCIPAL | NOTATION ||
|| DATE | ADVANCE | OR PREPAID | BALANCE | MADE BY ||
|+==================+====================+==========================+=====================+==============+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
|+------------------+--------------------+--------------------------+---------------------+--------------+|
|| | | | | ||
++==================+====================+==========================+=====================+==============++
</TABLE>
<PAGE> 88
EXHIBIT B
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 Amended and
Restated Credit Agreement, dated as of August 16, 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, 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 Type of Advances comprising the Proposed
Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is
$__________.
[(iv) 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:
(A) the representations and warranties contained in
Section 4.01 of the
<PAGE> 89
Credit Agreement [(except the representations set forth in the last
sentence of subsection (f) thereof and in subsection (i) thereof
(other than clause (ii) thereof))]1 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,
BORDEN, INC.
By
Title:
____________________
1 To be included only when the aggregate amount of
Advances is not increased after giving effect to the
Proposed Borrowing.
<PAGE> 90
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Credit Agreement
dated as of August 16, 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),
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 equal to the percentage interest
specified on Schedule 1 of all outstanding rights and obligations under the
Credit Agreement specified on Schedule 1. 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 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
<PAGE> 91
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 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; and
(vi) attaches any U.S. Internal Revenue Service forms required under Section
2.11 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 Assignment and
Acceptance by telecopier shall be effective as delivery of a manually executed
counterpart of this Assignment and Acceptance.
<PAGE> 92
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> 93
Exhibit D-1
SIDLEY & AUSTIN
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
ONE FIRST NATIONAL PLAZA
LOS ANGELES CHICAGO, ILLINOIS 60603 LONDON
----- TELEPHONE 312: 653-7000 -----
NEW YORK TELEX 25-4364 SINGAPORE
----- FACSIMILE 312: 853-7036 -----
WASHINGTON, D.C. TOKYO
125TH
ANNIVERSARY
1866-1991
WRITER'S DIRECT NUMBER
August 30, 1994
To: The Lenders and Arrangers party to the Credit Agreement referred to
below and Citibank, N.A., as Administrative Agent for such Lenders
and the Institutions listed on Annex A Hereto
Re: Borden, Inc.
-----------
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of August 16, 1994 (the
"Credit Agreement") among Borden, Inc., a New Jersey corporation (the
"Borrower"), the banks listed on the signature page thereof and Citibank, N.A.,
as administrative agent for such banks. This opinion is being delivered to you
pursuant to the requirement of Section 3.01(e) (xii) of the Credit Agreement.
Capitalized terms used herein without definition shall have the meanings set
forth in the Credit Agreement.
We have acted as New York counsel for the Borrower in connection with
the preparation, execution and delivery of, and the initial Borrowing made
under, the Credit Agreement. In connection with the foregoing, we have examined
executed counterparts of the Loan Documents.
We have also examined the originals, or copies certified to our
satisfaction, of such other corporate records of the Borrower, certificates of
public officials and of officers of the Borrower and agreements, instruments
and other documents, and have made such other investigation, as we have deemed
necessary as a basis for the opinions expressed below. As to questions of fact
material to such opinions, we have relied upon certificates of the Borrower or
its officers or of public officials. In our examination of the documents
described above, we have assumed, without independent investigation (i) the
genuineness of the signatures of and legal capacity of all natural persons and
the corporate power and authority of all entities signing all documents in
connection with which this opinion is rendered; (ii) the authenticity of all
documents submitted to us as originals;
<PAGE> 94
SIDLEY & AUSTIN CHICAGO
To: The Lenders and Arrangers party to the Credit Agreement referred to
below and Citibank, N.A., as Administrative Agent for such Lenders
and the Institutions listed on Annex A Hereto
Re: Borden, Inc.
August 30, 1994
Page 2
and (iii) the conformity to authentic original documents of all documents
submitted to us as certified, conformed, or photostatic copies. To the extent
that our opinions expressed below involve conclusions as to the matters
governed by New Jersey law set forth in paragraph 1 or 2 and the first sentence
of paragraph 3 of the opinion of Allan L. Miller (the "Allan Miller Opinion")
delivered to you of even date herewith, we have assumed without independent
investigation (but with your permission) the correctness of the opinions set
forth therein.
Based upon the foregoing examination of documents and assumptions and
upon such investigation as we have deemed necessary, and subject to the
qualifications set forth below, we are of the opinion that:
1. The Loan Documents constitute legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance
with their respective terms.
2. No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required under the laws of the State of New York or the Federal laws of the
United States of America for the due execution, delivery and performance by the
Borrower of any of the Loan Documents. Neither the execution and delivery by
the Borrower of the Loan Documents, nor the consummation or performance of the
transactions contemplated thereby, conflicts with or constitutes on the part of
the Borrower a violation of, breach or default under any existing law, rule or
regulation having applicability to it under the laws of the State of New York
or the Federal laws of the United States of America.
3. The Borrower is not an "investment company" nor a company
"controlled by" an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended.
Our opinions above are subject to the following qualifications:
(a) Our opinion in paragraph 1 above is subject to the effect
of applicable bankruptcy, insolvency, fraudulent conveyance, reorganization and
other laws affecting creditor's rights generally. In addition, our opinion in
paragraph 1 above is subject to (i) the effect of general principles of equity
<PAGE> 95
SIDLEY & AUSTIN CHICAGO
To: The Lenders and Arrangers party to the Credit Agreement referred to
below and Citibank, N.A., as Administrative Agent for such Lenders
and the Institutions listed on Annex A Hereto
Re: Borden, Inc.
August 30, 1994
Page 3
(regardless of whether considered in a proceeding in equity or at law) and (ii)
limitations on enforceability under certain circumstances of provisions
indemnifying a party against liability for its own wrongful or negligent acts
imposed by public policy relating thereto. Such principles applied by a court
might include a requirement that a creditor act reasonably and in good faith.
(b) Our opinions expressed above are limited to the law of
the State of New York and the Federal laws of the United States of America and
we do not express any opinion herein concerning any other Law. Without limiting
the generality of the foregoing, we express no opinion as to (i) the effect of
any law of any jurisdiction other than the State of New York wherein any Lender
may be located or wherein enforcement of the Loan Documents may be sought or
(ii) the effect of compliance or noncompliance of any party to any of the Loan
Documents, other than the Borrower, with any state or federal laws or
regulations applicable to any such party because of such party's legal or
regulatory status or the nature of such party's business or authority to
conduct business in any jurisdiction.
We are admitted to practice in the State of New York and express no
opinion as to the laws of any jurisdiction other than the laws of the State of
New York and the Federal laws of the United States of America. This opinion is
solely for your benefit and may not be relied on or quoted by any person
without our prior written consent. We hereby consent to the reliance on this
opinion by an Eligible Assignee, PROVIDED, that our agreement to permit such
reliance shall not be construed as a reissuance of this opinion letter or an
extension of its effective date beyond the date hereof. We are aware that
Shearman & Sterling will rely upon this opinion letter in rendering their
opinion letter furnished pursuant to Section 3.01(e) (xiii) of the Credit
Agreement and hereby consent to such reliance.
This opinion speaks as of the date hereof and we assume no obligation
to supplement the foregoing opinion if any applicable laws change after the
date hereof or if we become aware of any facts which might change such opinion
after the date hereof.
Very truly yours,
/s/ Sidley C. Austin
------------------------
<PAGE> 96
ANNEX A
-------
Citibank, N.A.
Credit Suisse
ABN Amro Bank N.V.
New York Branch
CIBC Inc.
Nationsbank of North Carolina, N.A.
National Westminster Bank PLC
New York Branch
National Westminster Bank PLC
Nassau Branch
The Bank of New York
The Bank of Nova Scotia
The Bank of Tokyo Trust Company
The Chase Manhattan Bank, N.A.
The First National Bank of Chicago
The Fuji Bank, Limited
Union Bank of Switzerland, New York Branch
Wachovia Bank of Georgia, N.A.
<PAGE> 97
Exhibit D-2
August 30, 1994
To the Lenders and Arrangers party to the
Amended and Restated Credit Agreement referred to
below and Citibank, N.A. as Administrative
Agent for such Lenders
Borden, Inc.
------------
Ladies and Gentlemen:
I am Senior Vice President, Chief Administrative Officer and General
Counsel of Borden, Inc. (the "Borrower"). This opinion is furnished to you
pursuant to Section 3.01(e)(xii) of the Amended and Restated Credit Agreement
dated as of August 16, 1994 (the "AMENDED AND RESTATED CREDIT AGREEMENT") among
the Borrower and each of you. Terms defined in the Amended and Restated Credit
Agreement are used herein as therein defined.
I have acted, either directly or indirectly through my staff, as
General Counsel to the Borrower in connection with the preparation, execution
and delivery of, and the initial Borrowing made under, the Amended and Restated
Credit Agreement. In that connection, we have examined counterparts of each of
the Loan Documents, executed by each of the parties thereto, and the other
documents furnished by the Borrower pursuant to Article III of the Amended and
Restated Credit Agreement.
We have also examined such originals, or copies certified to our
satisfaction, of the indentures, loan or credit agreements, leases,
guarantees, mortgages, security agreements, bonds, notes and other agreements
or instruments, and orders, writs, judgments, injunctions, decrees,
determinations and awards, of which we have knowledge (after due investigation)
that affect or purport to affect the obligations of the Borrower or any of its
Subsidiaries under such documents or the right of the Borrower or any of its
Subsidiaries to borrow money, to guarantee the obligations of other Persons, to
create Liens on its property or to consummate the transactions contemplated by
the Loan Documents.
In addition, we have examined the originals, or copies certified to
our satisfaction, of such other corporate records of the Borrower, certificates
of public officials and of officers of the Borrower and agreements, instruments
and other documents as we have deemed necessary as a basis for the opinions
expressed below. As to questions of fact material to such opinions, we have,
when relevant facts were not independently established by us, relied upon
certificates of public officials.
<PAGE> 98
In our examination of the documents referred to above, we have
assumed (i) the due execution and delivery, pursuant to due authorization, of
each of the documents referred to above by all parties thereto other than the
Borrower, (ii) the authenticity of all such documents submitted to us as
originals and (iii) the conformity to originals of all such documents submitted
to us as copies.
Based upon the foregoing and upon such investigation as I have deemed
necessary, I am of the following opinion:
1. The Borrower (a) is a corporation duly organized, validly
existing and in good standing under the laws of New Jersey, (b) 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 to be licensed is not reasonably likely to have a Material Adverse
Effect and (c) 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.
2. The execution, delivery and performance by the Borrower of the
Loan Documents and the consummation of the transactions contemplated thereby
are within the Borrower's corporate powers, have been duly authorized by all
necessary corporate action, and do not (a) contravene the Borrower's Restated
Certificate of Incorporation or Bylaws, (b) violate any law (including, without
limitation, the Securities Exchange Act of 1934 and the Racketeer Influenced
and Corrupt Organizations Chapter of the Organized Crime Control Act of 1970),
rule, regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System) or any order, writ, judgment,
injunction, decree, determination or award binding on or affecting the
Borrower, (c) conflict with or result in the breach of, or constitute a default
under, any agreement or instrument binding on or affecting the Borrower or (d)
result in or require the creation or imposition of any Lien upon or with
respect to any of the properties of the Borrower or any of its Subsidiaries.
3. Each of the Loan Documents has been duly executed and delivered
by the Borrower. Each of the Loan Documents is the legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms.
4. There is no action, suit, investigation, litigation or proceeding
affecting the Borrower or any of its Subsidiaries, including any Environmental
Action, pending or, to my best knowledge, threatened before any court,
governmental agency or arbitrator that (a) would be reasonably likely to have a
Material Adverse Effect or (b) purports to affect the legality, validity or
enforceability of the Loan Documents or the consummation of the transactions
contemplated thereby.
The opinions set forth above are subject to the following
qualifications:
(a) My opinion in paragraph 3 above is subject to the effect of
general principles
<PAGE> 99
of equity, including (without limitation) concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether considered
in a proceeding in equity or at law).
(b) My opinion in paragraph 3 above is also subject to the effect of
any applicable bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar law
affecting creditors' rights generally.
I am qualified to practice law in the states of Massachusetts and
Ohio and the opinions expressed above are limited to the law of the States of
Ohio and New Jersey and the Federal law of the United States, and no opinion is
expressed herein concerning any other law. Insofar as the opinions expressed
in paragraphs 2 and 3 above relate to matters that are governed by the laws of
the State of New York, I have relied on the opinion letter of Sidley & Austin,
New York Counsel to Borrower, a copy of which is attached.
I am aware that Shearman & Sterling will rely upon this opinion
letter in rendering their opinion letter furnished pursuant to Section 3.01 of
the Amended and Restated Credit Agreement. I expressly permit reliance upon
the opinions set forth herein by an Eligible Assignee, provided that any
agreement to permit such reliance shall not be construed as a reissuance of
this opinion letter or any extension of its effective date beyond the date
hereof. This opinion is solely for the benefit of the foregoing parties and
may not be relied on or quoted by any other person without my consent.
This opinion speaks as of the date hereof and I assume no obligation
to supplement the foregoing opinion if any applicable laws change after the
date hereof or if I become aware of any facts which might change such opinion
after the date hereof.
Very truly yours,
/s/ Allan L. Miller
---------------------------
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