<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended June 18, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________to___________________
Commission File Number 1-4455
DOLE FOOD COMPANY,INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
HAWAII 99-0035300
- ----------------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
31355 Oak Crest Drive
Westlake Village, California 91361
- --------------------------------------------------------------------------------
(Address of principal executive offices and zip code)
(818) 879-6600
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Shares Outstanding at July 15, 1994
- ----------------------- -----------------------------------
Common Stock, without 59,478,099
par value
<PAGE>
DOLE FOOD COMPANY, INC.
Index
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statement of Income -- quarters and
half years ended June 18, 1994 and June 19, 1993.... 3-4
Consolidated Balance Sheet -- June 18, 1994 and
January 1, 1994..................................... 5
Consolidated Statement of Cash Flow -- half years
ended June 18, 1994 and June 19, 1993............... 6
Notes to Consolidated Financial Statements.......... 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations....... 8-10
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security
Holders............................................. 11
Item 6. Exhibits and Reports on Form 8-K.................... 12-14
Signatures................................................... 15
</TABLE>
-2-
<PAGE>
PART I.
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DOLE FOOD COMPANY, INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(in 000s, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended
------------------------
June 18, June 19,
1994 1993
---------- ----------
<S> <C> <C>
Revenue $986,947 $863,653
Cost of products sold 819,353 704,346
-------- --------
Gross margin 167,594 159,307
Selling, marketing and administrative
expenses 103,348 88,483
-------- --------
Operating income 64,246 70,824
Interest expense (19,322) (17,093)
Interest income 2,644 3,117
Other expense - net (1,215) (5,392)
-------- --------
Income before income taxes 46,353 51,456
Income taxes (10,700) (11,800)
-------- --------
Net income $ 35,653 $ 39,656
======== ========
Earnings per common share $.60 $.66
======== ========
Average number of common shares outstanding 59,679 59,757
======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
-3-
<PAGE>
DOLE FOOD COMPANY, INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(in 000s, except per share amounts)
<TABLE>
<CAPTION>
Half Year Ended
------------------------
June 18, June 19,
1994 1993
---------- ----------
<S> <C> <C>
Revenue $1,805,729 $1,630,141
Cost of products sold 1,491,656 1,339,043
---------- ----------
Gross margin 314,073 291,098
Selling, marketing and administrative
expenses 194,689 165,435
---------- ----------
Operating income 119,384 125,663
Interest expense (37,485) (34,003)
Interest income 5,258 6,191
Gain on sale of 18% of common stock
of subsidiary - 30,853
Other expense - net (2,155) (8,090)
---------- ----------
Income before income taxes 85,002 120,614
Income taxes (19,600) (27,700)
---------- ----------
Net income $ 65,402 $ 92,914
========== ==========
Earnings per common share $1.10 $1.55
========== ==========
Average number of common shares outstanding 59,704 59,725
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
-4-
<PAGE>
DOLE FOOD COMPANY, INC.
CONSOLIDATED BALANCE SHEET
(in 000s)
<TABLE>
<CAPTION>
June 18, January 1,
1994 1994
(Unaudited) (Audited)
------------ -----------
<S> <C> <C>
Current assets
Cash and short-term investments $ 53,276 $ 37,497
Receivables - net 493,911 407,554
Inventories
Finished products 236,262 213,753
Raw materials and work in progress 100,002 160,635
Growing crop costs 36,127 38,509
Packing materials 63,644 69,843
Operating supplies and other 77,139 70,688
Real estate development inventory 115,585 105,900
Prepaid expenses 49,469 37,970
---------- ----------
Total current assets 1,225,415 1,142,349
Real estate developments 307,636 288,217
Investments 63,444 34,071
Property, plant and equipment - net 1,849,038 1,767,089
Long-term receivables - net 65,549 70,653
Other assets 97,528 85,540
---------- ----------
$3,608,610 $3,387,919
========== ==========
Current liabilities
Notes payable $ 76,351 $ 64,050
Current portion of long-term debt 14,829 14,612
Accounts payable and accrued liabilities 582,489 581,490
---------- ----------
Total current liabilities 673,669 660,152
Long-term debt 1,302,516 1,158,297
Deferred income taxes and other long-term
liabilities 448,589 430,014
Minority interests 80,746 87,342
Common shareholders' equity
Common stock 320,114 320,099
Additional paid-in capital 165,243 164,908
Retained earnings 650,080 596,573
Cumulative foreign currency translation
adjustment (32,347) (29,466)
---------- ----------
Total common shareholders' equity 1,103,090 1,052,114
---------- ----------
$3,608,610 $3,387,919
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
-5-
<PAGE>
DOLE FOOD COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOW
(Unaudited)
(in 000s)
<TABLE>
<CAPTION>
Half Year Ended
----------------------
June 18, June 19,
1994 1993
--------- ---------
<S> <C> <C>
Operating activities
Net income $ 65,402 $ 92,914
Adjustments to net income
Depreciation and amortization 64,018 56,312
Equity earnings, net of distributions (1,488) (1,431)
Gain on sale of subsidiary stock - (30,853)
Other 258 9,140
Change in operating assets and liabilities
Receivables - net (84,950) (21,171)
Inventories 35,982 41,021
Prepaid expenses (11,506) (15,101)
Real estate developments (29,581) (17,252)
Accounts payable and accrued liabilities 2,986 (18,585)
Other (13,179) 4,305
--------- ---------
Cash flow from operations 27,942 99,299
Investing activities
Capital additions (103,181) (89,526)
Purchase price of investments and
acquisitions (net of acquired cash) (56,968) (19,774)
Other 3,102 4,494
--------- ---------
Cash flow used by investing activities (157,047) (104,806)
Financing activities
Short-term borrowings (repayments) - net 13,266 (54,072)
Long-term borrowings (repayments) - net 143,163 (13,986)
Cash dividends paid (11,895) (11,890)
Net proceeds on sale of subsidiary common
stock - 73,595
Other 350 887
--------- ---------
Cash flow from (used by)
financing activities 144,884 (5,466)
--------- ---------
Increase (decrease) in cash and short-term
investments 15,779 (10,973)
Cash and short-term investments at beginning
of period 37,497 57,272
--------- ---------
Cash and short-term investments at end of period $ 53,276 $ 46,299
========= =========
Supplemental cash flow data
- ---------------------------
Cash paid during the half year for:
Interest $ 40,325 $ 33,509
Income taxes 3,526 10,059
</TABLE>
See Notes to Consolidated Financial Statements.
-6-
<PAGE>
DOLE FOOD COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of management, the accompanying unaudited consolidated
financial statements of Dole Food Company, Inc. (the "Company") include all
adjustments necessary to present fairly its financial position as of June
18, 1994, its results of operations for the quarter and half year then
ended, and cash flows for the half year then ended. Interim results are
subject to significant seasonal variations and are not necessarily
indicative of the results of operations for a full year.
2. During the first half of 1994 and 1993, the Company declared and paid
approximately $11.9 million of cash dividends on its common stock, which
represented the regular first and second quarterly dividends of 10 cents
per share.
3. Certain prior year amounts have been reclassified to conform to the 1994
presentation.
-7-
<PAGE>
DOLE FOOD COMPANY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash flow from operations was $28 million for the first half of 1994 compared to
$99 million for the first half of 1993. The decrease was largely due to higher
receivable levels as a result of increased sales.
Cash flow from financing activities was $145 million for the first half of 1994
compared to $5 million of cash flow used by financing activities for the same
period in 1993. Higher investing activities and lower cash flow from operations
increased the Company's external borrowings during the first half of 1994
compared to the first half of 1993. In addition, cash flow used by financing
activities during 1993 reflects the proceeds from the sale of 18% of the common
stock of Castle & Cooke Homes, Inc., the Company's residential real estate
development company. These proceeds were used to repay certain short-term and
long-term debt in 1993.
On May 10, 1994, the Company entered into a $1 billion revolving credit
agreement for a five-year term which replaced the previous $400 million credit
facility. At June 18, 1994, the Company had approximately $499 million of net
borrowings outstanding under the $1 billion credit facility and uncommitted
money market lines of $39 million.
In addition, Castle & Cooke Homes, Inc. had borrowings of $52 million under a
$135 million revolving credit facility which requires a series of reductions in
committed borrowing capacity as follows: $15 million on each of December 31,
1994, June 30, 1995 and December 31, 1995. The agreement terminates in March
1996.
Cash and short-term investments totaled approximately $53 million at June 18,
1994.
Capital expenditures for the first half of 1994 totaled approximately $103
million, of which $90 million was invested in the Company's food operations for
infrastructure, further development and modernization of new and existing
facilities, and progress payments on new vessels. The Company acquired three
commercial real estate properties in February 1994 and 35% of a produce
distribution company located in the United Kingdom in May 1994.
RESULTS OF OPERATIONS
- ---------------------
For the first half of 1994, the Company reported net income of $65.4 million or
$1.10 per share, compared to $61.9 million or $1.04 per share for the first half
of 1993 before a non-recurring first quarter pre-tax gain of approximately $31
million related to the sale of 18% of the common stock of Castle & Cooke Homes,
Inc. and a second quarter pre-tax gain of $9.4 million from the sale of the
Company's interest in the California and Hawaiian Sugar Company ("C&H gain").
Net income for the first half of 1993, including the above mentioned items, was
$92.9 million or $1.55 per share.
-8-
<PAGE>
DOLE FOOD COMPANY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
- ---------------------------------
Net income for the second quarter of 1994 was $35.7 million, or 60 cents per
share, compared to $32.4 million, or 54 cents per share, for the same quarter of
1993 excluding the C&H gain. Second quarter net income for 1993, including the
above gain, was $39.7 million, or 66 cents per share.
Revenues for the first half of 1994 and 1993 totaled $1.81 billion and $1.63
billion, respectively. The Company's second quarter 1994 revenue was $987
million, up 14% from $864 million for the comparable quarter of last year. The
increase in revenues is primarily attributable to higher fresh fruit sales and
the effects of acquisitions which occurred in 1993.
Consolidated gross margins as a percentage of revenue were comparable during the
first halves of 1994 and 1993, reflecting reduced operating expense levels for
certain food operations as a result of the Company's cost reduction efforts,
offset by lower margins from price pressures during the first half of 1994 for
certain food operations.
Operating income for the Company's food operations, net of corporate general and
administrative expenses, totaled $109.0 million for the first half of 1994
compared to $112.5 million in 1993. For the second quarter of 1994, operating
income from food operations, net of corporate general and administrative
expenses, totaled $58.5 million compared to $62.1 million in 1993. After
considering the C&H gain excluded from the 1993 earnings stated above, year-to-
date and second quarter operating income totaled $121.9 million and $71.5
million, respectively. Improved results for bananas were partially offset by
decreases in fresh vegetable prices, primarily lettuce and celery. In addition,
price pressures continued to negatively affect canned pineapple and concentrate
earnings. Selling, marketing and administrative expenses in the first half of
1994 were higher than the previous year due to new businesses acquired in 1993,
plus additional promotions for new products and marketing programs for the fresh
vegetable and packaged foods operations which more than offset savings achieved
through cost reduction measures. Price pressures are expected to persist on
canned pineapple and concentrate.
Operating income for Castle & Cooke Homes, Inc. totaled $21.2 million in the
first half of 1994, compared to $21.3 million for the same period of 1993.
Second quarter operating income totaled $11.5 million and $8.3 million for 1994
and 1993, respectively. The increase was primarily attributable to a change in
the overall sales mix which resulted in higher average sales prices and
operating income for the second quarter of 1994 compared to the second quarter
of 1993.
-9-
<PAGE>
DOLE FOOD COMPANY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
- ---------------------------------
The Lana'i resort operations achieved improved occupancy rates contributing to a
reduced operating loss before depreciation of $7.6 million for the first half of
1994 as compared to a $9.6 million loss for the same period in 1993. Operating
loss before depreciation was $4.2 million for the second quarter of 1994 and
$4.8 million for the comparable period of 1993. Depreciation expense was $8.4
million and $8.0 million for the first halves of 1994 and 1993, respectively.
Interest expense, net of interest income and capitalized interest, increased to
$32.2 million for the first half of 1994 from $27.8 million in 1993, as a result
of higher average borrowing levels and higher borrowing rates in 1994. The
higher weighted average borrowing rate in 1994 was primarily the result of
refinancing outstanding floating rate bank debt with public bonds during May and
July of 1993, issued at an average interest rate of approximately 7%. The
issuance of these bonds allowed the Company to extend its average debt maturity,
diversify its funding sources and reduce its exposure to higher interest rates
on variable rate debt.
-10-
<PAGE>
PART II. OTHER INFORMATION
DOLE FOOD COMPANY, INC.
Item 4. Submission of Matters to a Vote of Security Holders
Dole Food Company, Inc. held its Annual Meeting of Stockholders (the "Meeting")
on May 12, 1994, at which the Company's stockholders voted: (1) to elect the
nominated slate of seven directors, each to serve until the next meeting and
until his or her successor has been duly elected and qualified: Elaine L. Chao,
Mike Curb, David A. DeLorenzo, Richard M. Ferry, James F. Gary, Frank J. Hata
and David H. Murdock; (2) to approve the Company's Annual Incentive Plan for
executive officers; (3) to approve the Company's Long Term Incentive Plan for
executive officers; and (4) to elect Arthur Andersen & Co. as the Company's
independent public accountants and auditors for the 1994 fiscal year.
Holders of record of the Company's common stock as of March 25, 1994 were
entitled to vote at the Meeting. On March 25, 1994, there were 59,466,535
shares of common stock outstanding and entitled to vote and 52,125,367 of such
shares were represented at the Meeting. Each of the directors received at least
96.4% of the shares cast in favor of his or her election. The shares cast for
each director are as follows: Elaine L. Chao: 50,734,730 shares for and
1,390,637 shares withheld; Mike Curb: 51,031,049 shares for and 1,094,318 shares
withheld; David A. DeLorenzo: 50,247,576 shares for and 1,877,791 shares
withheld; Richard M. Ferry: 51,029,303 shares for and 1,096,064 shares withheld;
James F. Gary: 51,025,621 shares for and 1,099,746 shares withheld; Frank J.
Hata: 51,036,889 shares for and 1,088,478 shares withheld; and David H. Murdock:
51,012,039 shares for and 1,113,328 shares withheld. With respect to the Annual
Incentive Plan for executives, the shares cast were 49,076,253 shares for,
2,626,927 shares against, and 422,187 shares in abstention. With respect to the
Long Term Incentive Plan for executives, the shares cast were 49,332,425 shares
for, 2,359,978 shares against, and 432,964 shares in abstention. With respect
to the election of Arthur Andersen & Co. the shares cast were 51,834,549 shares
for, 177,919 shares against, and 112,899 shares in abstention.
-11-
<PAGE>
PART II. OTHER INFORMATION
DOLE FOOD COMPANY, INC.
Page
Number
------
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit
No.
-------
10.1 $1,000,000,000 Credit Agreement dated as of May 10,
1994 among the Company, Citicorp USA, Inc., as
Administrative Agent, and the financial institutions
which are Lenders thereunder.
10.2 Second Amendment, dated as of June 9, 1994, to
Revolving Credit Agreement dated as of February 26,
1993 by and between Castle & Cooke Homes, Inc.
(a Hawaii corporation), Castle & Cooke Homes Hawaii,
Inc., Castle & Cooke Kunia, Inc., Castle & Cooke
Homes, Inc. (a California corporation), Castle & Cooke
Sierra Vista, Inc. and Prairie Vista, Inc., as Borrowers,
and Bank of Hawaii, as Agent, the First National Bank of
Boston, as Mainland Co-Agent, and the financial
institutions which are Lenders thereunder.
11. Computations of earnings per common
share..................................................... 13-14
(b) No reports on Form 8-K were filed for the quarter ended June 18, 1994.
-12-
<PAGE>
EXHIBIT 11
DOLE FOOD COMPANY, INC.
Computations of Earnings per Common Share
(Unaudited)
(in 000s, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended
-------------------
June 18, June 19,
1994 1993
-------- --------
<S> <C> <C>
PRIMARY
Net income applicable to common shares........ $35,653 $39,656
======= =======
Average number of common shares outstanding
during the period 59,468 59,434
Add:
Shares issuable upon exercise of stock
options at average prices during the
period.................................. 211 323
------- -------
Total primary shares 59,679 59,757
======= =======
Primary earnings per common share $ .60 $ .66
======= =======
FULLY DILUTED
Net income applicable to common shares
and dilutive securities...................... $35,653 $39,656
======= =======
Average number of common shares outstanding
during the period 59,468 59,434
Add:
Shares issuable upon exercise of stock
options at higher of average prices
or end of period prices................. 211 364
------- -------
Total fully diluted shares 59,679 59,798
======= =======
Fully diluted earnings per common share $ .60 $ .66
======= =======
</TABLE>
-13-
<PAGE>
EXHIBIT 11
(Continued)
DOLE FOOD COMPANY, INC.
Computations of Earnings per Common Share
(Unaudited)
(in 000s, except per share amounts)
<TABLE>
<CAPTION>
Half Year Ended
-------------------
June 18, June 19,
1994 1993
-------- --------
<S> <C> <C>
PRIMARY
Net income applicable to common shares........ $65,402 $92,914
======= =======
Average number of common shares outstanding
during the period 59,466 59,426
Add:
Shares issuable upon exercise of stock
options at average prices during the
period.................................. 238 299
------- -------
Total primary shares 59,704 59,725
======= =======
Primary earnings per common share $ 1.10 $ 1.55
======= =======
FULLY DILUTED
Net income applicable to common shares
and dilutive securities...................... $65,402 $92,914
======= =======
Average number of common shares outstanding
during the period 59,466 59,426
Add:
Shares issuable upon exercise of stock
options at higher of average prices
or end of period prices................... 238 364
------- -------
Total fully diluted shares 59,704 59,790
======= =======
Fully diluted earnings per common share $ 1.10 $ 1.55
======= =======
</TABLE>
-14-
<PAGE>
SIGNATURES
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.
DOLE FOOD COMPANY, INC.
Registrant
August 1, 1994 By /s/ ALAN B. SELLERS
----------------------------
Alan B. Sellers
Executive Vice President -
Chief Financial Officer
By /s/ PATRICIA A. MCKAY
----------------------------
Patricia A. McKay
Vice President - Controller
-15-
<PAGE>
EXHIBIT 10.1
================================================================================
$1,000,000,000
CREDIT AGREEMENT
DATED AS OF MAY 10, 1994
AMONG
DOLE FOOD COMPANY, INC.,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
AND
CITICORP USA, INC.,
AS ADMINISTRATIVE AGENT
================================================================================
<PAGE>
DOLE FOOD COMPANY, INC.
CREDIT AGREEMENT
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1. DEFINITIONS............................................. 1
1.1 Certain Defined Terms................................... 1
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement............................ 13
1.3 Other Definitional Provisions........................... 14
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS.............. 14
2.1 Pro Rata Loans.......................................... 14
2.2 Bid Rate Loans.......................................... 15
2.3 Swing Line Loans........................................ 18
2.4 Disbursement of Funds................................... 21
2.5 Loan Accounts and Register.............................. 22
2.6 Interest on the Loans................................... 23
2.7 Fees.................................................... 28
2.8 Prepayments and Reductions in Commitments; General
Provisions Regarding Payments........................... 29
2.9 Use of Proceeds......................................... 31
2.10 Special Provisions Governing Eurodollar Rate Loans...... 31
2.11 Certain Tax Provisions.................................. 37
SECTION 3. CONDITIONS TO LOANS..................................... 39
3.1 Conditions to Initial Loans............................. 39
3.2 Additional Conditions................................... 40
SECTION 4. COMPANY'S REPRESENTATIONS AND WARRANTIES................ 41
4.1 Organization, Powers, Qualification, Good
Standing and Subsidiaries............................... 41
4.2 Authorization of Borrowing, etc......................... 41
4.3 Financial Condition..................................... 42
4.4 No Material Adverse Change.............................. 43
4.5 Litigation; Adverse Facts............................... 43
4.6 Payment of Taxes........................................ 43
4.7 Governmental Regulation................................. 43
4.8 Securities Activities................................... 44
4.9 Margin Stock............................................ 44
4.10 Employee Benefit Plans.................................. 44
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
4.11 Environmental Protection................................ 45
SECTION 5. COMPANY'S AFFIRMATIVE COVENANTS......................... 45
5.1 Financial Statements and Other Reports.................. 46
5.2 Corporate Existence, etc................................ 47
5.3 Payment of Taxes and Claims; Tax Consolidation.......... 48
5.4 Maintenance of Properties; Insurance.................... 48
5.5 Compliance with Laws, etc............................... 48
5.6 Hazardous Materials..................................... 48
5.7 Margin Stock............................................ 49
5.8 Inspection.............................................. 49
SECTION 6. COMPANY'S NEGATIVE COVENANTS............................ 49
6.1 Maximum Leverage Ratio.................................. 49
6.2 Minimum Fixed Charge Coverage Ratio..................... 50
6.3 Liens................................................... 50
6.4 Disposition of Assets................................... 51
SECTION 7. EVENTS OF DEFAULT....................................... 51
7.1 Failure to Make Payments When Due....................... 51
7.2 Default in Other Agreements............................. 51
7.3 Breach of Certain Covenants............................. 52
7.4 Breach of Warranty...................................... 52
7.5 Other Defaults Under Agreement.......................... 52
7.6 Involuntary Bankruptcy; Appointment of
Receiver, etc........................................... 52
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc...... 53
7.8 Judgments and Attachments............................... 53
7.9 Unfunded ERISA Liabilities.............................. 53
7.10 Change in Control....................................... 54
SECTION 8. AGENT................................................... 55
8.1 Appointment............................................. 55
8.2 Powers; General Immunity................................ 55
8.3 Representations and Warranties; No
Responsibility For Appraisal of Creditworthiness........ 57
8.4 Right to Indemnity...................................... 57
8.5 Registered Persons Treated as Owners.................... 57
8.6 Successor Agent......................................... 58
SECTION 9. MISCELLANEOUS........................................... 58
</TABLE>
(ii)
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
9.1 Securities Representation.............................. 58
9.2 Assignments and Participations in Loans................ 58
9.3 Expenses............................................... 61
9.4 Indemnity.............................................. 61
9.5 Ratable Sharing........................................ 63
9.6 Amendments and Waivers................................. 63
9.7 Notices................................................ 64
9.8 Survival of Representations and Warranties............. 64
9.9 Failure or Indulgence Not Waiver; Remedies
Cumulative............................................. 65
9.10 Entire Agreement....................................... 65
9.11 Severability........................................... 65
9.12 Obligations Several; Independent Nature of
Lenders' Rights........................................ 65
9.13 Headings............................................... 65
9.14 Applicable Law......................................... 66
9.15 Successors and Assigns................................. 66
9.16 Consent to Jurisdiction and Service of Process......... 66
9.17 Waiver of Jury Trial................................... 66
9.18 Confidentiality........................................ 67
9.19 Counterparts; Effectiveness............................ 67
Signature pages........................................ S-1
</TABLE>
(iii)
<PAGE>
EXHIBITS
I FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
II FORM OF COMPLIANCE CERTIFICATE
III FORM OF NOTICE OF PRO RATA BORROWING
IV FORM OF NOTICE OF BID RATE BORROWING
V FORM OF NOTICE OF SWING LINE BORROWING
VI FORM OF NOTICE OF CONVERSION/CONTINUATION
VII FORM OF OPINION OF O'MELVENY & MYERS
VIII FORM OF OPINION OF GOODSILL ANDERSON QUINN & STIFEL
(iv)
<PAGE>
DOLE FOOD COMPANY, INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of May 10, 1994 and entered into by
and among DOLE FOOD COMPANY, INC., a Hawaii corporation ("COMPANY"), THE
FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually
referred to herein as a "LENDER" and collectively as "LENDERS"), and CITICORP
USA, INC. ("CUSA"), as administrative agent for Lenders (in such capacity,
"AGENT").
R E C I T A L S
---------------
WHEREAS, Company desires that Lenders extend certain credit facilities
to Company for general corporate purposes; and
WHEREAS, Lenders desire to extend such credit facilities to Company on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders and Agent agree as
follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
---------------------
The following terms used in this Agreement shall have the following
meanings:
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination
Date, the rate obtained by dividing (i) the Eurodollar Rate for such Interest
Rate Determination Date by (ii) a percentage equal to 100% minus the arithmetic
average (rounded upward to the nearest 1/100 of one percent) of the actual rate
of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves) in respect of "Eurocurrency
liabilities" as defined in Regulation D (or any successor category of
liabilities under Regulation D) applicable to each Reference Bank on such
Interest Rate Determination Date.
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"AFFECTED LENDER" has the meaning assigned to that term in subsections
2.6G, 2.10 and 2.11A.
"AFFILIATE", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"AGENT" has the meaning assigned to that term in the introduction to
this Agreement and also means and includes any successor Agent appointed
pursuant to subsection 8.6.
"AGENT'S ACCOUNT" means Agent's account no. 36852248 (re: Dole Food
Company, Inc.) maintained at the office of Citibank, N.A. at 399 Park Avenue,
New York, New York 10043 (or such other account or address as Agent shall
specify in writing to Company and Lenders).
"AGREEMENT" means this Credit Agreement dated as of May 10, 1994,
together with all Schedules referred to herein and all Exhibits hereto, as it
may be amended, supplemented or otherwise modified from time to time.
"ASSIGNMENT AND ACCEPTANCE AGREEMENT" means an Assignment and
Acceptance Agreement entered into by a Lender and an Eligible Assignee, and
accepted by Agent, in substantially the form of Exhibit I annexed hereto.
---------
"AVAILABILITY" means as at any time of determination, an amount equal
to the Total Pro Rata Commitments at such time minus Total Utilization at such
-----
time.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, for any period, a fluctuating interest rate per
annum as shall be 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;
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(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 (A) 1/2 of one percent
per annum plus (B) the rate obtained by dividing (x) 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 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 (y) 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 actual reserve requirement
(including, without limitation, any marginal, emergency, supplemental,
special or other reserve requirement) for Citibank with respect to
liabilities consisting of or including (among other liabilities) three-month
Dollar non-personal time deposits in the United States, plus (C) the average
----
during such three-week period of the daily net 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 Dollar deposits in the United States; or
(c) 1/2 of one percent per annum above the Federal Funds Rate.
"BASE RATE LOANS" means Pro Rata Loans and Swing Line Loans bearing
interest at rates determined by reference to the Base Rate as provided in
subsection 2.6.
"BID RATE LOANS" means one or more of the Fixed Rate Bid Loans or the
Reference Rate Bid Loans made under the auction bidding procedure described in
subsection 2.2, or a combination thereof.
"BID RATE OFFER" has the meaning set forth in subsection 2.2A(ii).
"BUSINESS DAY" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of New York or the State of California
or is a day on which banking institutions located in either such state are
authorized or required by law or other governmental action to close, and (ii)
with respect to all notices, determinations, fundings and payments with respect
to Eurodollar Rate Loans, any day that is a Business Day described in clause (i)
above and that is also a day for trading by and between banks in Dollar deposits
in the New York City interbank Eurodollar market.
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<PAGE>
"CASH" means money, currency or a credit balance in a Deposit Account.
"C&C HOMES" means Castle & Cooke Homes, Inc., a Hawaii corporation, and
its Subsidiaries.
"CITIBANK" means Citibank, N.A.
"CLOSING DATE" means the later of (i) the date of execution and
delivery of this Agreement by Lenders, Agent and Company, and (ii) the date on
which all conditions set forth in subsection 3.1 hereof have been satisfied or
waived.
"COMMITMENT FEE" has the meaning set forth in subsection 2.7A.
"COMMITMENT TERMINATION DATE" means (i) the fifth anniversary of
Closing Date or (ii) such earlier date on which all of the Pro Rata Commitments
have been reduced to zero.
"COMPANY" has the meaning assigned to that term in the introduction to
this Agreement.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of Exhibit II annexed hereto.
----------
"CONSOLIDATED ADJUSTED OPERATING INCOME" means, for any period, the sum
of the amounts for such period of (i) the operating income (or loss) of Company
and its Subsidiaries, (ii) depreciation expense, (iii) amortization expense, and
(iv) other non-cash items, in each case determined on a consolidated basis for
Company and its Subsidiaries in conformity with GAAP and, in the case of clauses
(ii) through (iv), deducted in determining consolidated operating income.
"CONSOLIDATED NET DEBT" means, at any date of determination, the
remainder on such date of (i) the total debt of Company and its Subsidiaries on
a consolidated basis, as set forth on Company's consolidated balance sheet in
conformity with GAAP less (ii) the Cash and Short-Term Investments of Company
----
and its Subsidiaries on a consolidated basis calculated in conformity with GAAP.
"CONSOLIDATED NET INTEREST EXPENSE" means, for any period, the
remainder of (i) total interest expense, whether paid or accrued as liabilities,
of Company and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP less (ii) total interest income, whether paid or
----
accrued, received or receivable by Company and its Subsidiaries from any source
(other than (x) from any Subsidiary of Company or (y) in
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<PAGE>
the case of accrued but unpaid interest (i) from any debtor in a case under the
Bankruptcy Code or any similar law applicable to debtors located outside the
United States or (ii) that is more than 180 days past due regardless of the
source) for such period, determined on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED NET WORTH" means, as at any date of determination, the
sum of the capital stock and additional paid-in capital plus retained earnings
(or minus accumulated deficits) of Company and its Subsidiaries on a
consolidated basis determined in conformity with GAAP; provided that cumulative
--------
foreign currency translation adjustments reported from and after January 1, 1994
shall be excluded.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
of any (i) indenture, mortgage, deed of trust, credit agreement or note purchase
agreement or other agreement or instrument, in each case with respect to such
Person's indebtedness for borrowed money or (ii) material contract, undertaking,
agreement or other instrument not described in clause (i) of this definition to
which that Person is a party.
"CROSS DEFAULT" means the breach or default by Company or any of its
Subsidiaries with respect to any term of any evidence of indebtedness for
borrowed money of Company or any such Subsidiary in an amount exceeding
$25,000,000 in the aggregate or any loan agreement, mortgage, indenture or other
agreement relating to such indebtedness (the "DEFAULTED DEBT"), if the effect of
such breach or default is to permit (other than as a result of an immaterial
breach or default) the holder or holders of such indebtedness (or a trustee on
behalf of such holder or holders) to cause the Defaulted Debt to become or be
declared due and payable prior to its stated maturity or the stated maturity of
any underlying obligation, as the case may be; provided, however, that in the
-------- -------
event that the non-payment, breach or default of the Defaulted Debt described
herein is cured or waived by the holders of the Defaulted Debt or if such
Defaulted Debt is repaid in full (other than with the proceeds of Loans), such
non-payment, breach or default shall not constitute a Cross Default hereunder.
"CUSA" has the meaning assigned to that term in the introduction to
this Agreement.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization.
"DOLLARS" and the sign "$" mean the lawful money of the United States
of America.
"ELIGIBLE ASSIGNEE" means either (i) any Lender listed on the signature
pages of this Agreement or any Affiliate of any Lender provided such Affiliate
--------
is primarily engaged in the business of commercial lending or (ii) any other
financial institution that is approved by
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<PAGE>
Agent, which approval shall not be unreasonably withheld, and by Company in its
sole discretion; provided, however, that neither Company nor any Affiliate of
-------- -------
Company shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means an "employee benefit plan," as defined in
Section 3(3) of ERISA (other than a Multiemployer Plan), of which the Company or
any of its ERISA Affiliates is the "plan sponsor," as defined in Section
3(16)(B) of ERISA, or to which the Company or any of its ERISA Affiliates
contributes.
"ENVIRONMENTAL LAWS" means all federal, state and local environmental,
health or safety laws, ordinances, regulations, rules, statutes, orders and
decrees (including, but not limited to, those dealing with the use, generation,
treatment, storage, disposal or transportation of Hazardous Materials), as the
same may be in effect from time to time, and all foreign equivalents thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA AFFILIATE", as applied to any Person, means (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member.
"EURODOLLAR RATE" means, for any Interest Rate Determination Date with
respect to an Interest Period for Eurodollar Rate Loans, the arithmetic average
(rounded upward to the next highest 1/100 of 1%) of the rates per annum at which
deposits in Dollars in amounts comparable to the Eurodollar Rate Loan of each
Reference Bank (or an Affiliate of such Reference Bank) comprising part of such
Loans and with a maturity comparable to such Interest Period, are offered by
such Reference Bank to first class banks in the international interbank
Eurodollar market at 10:00 a.m. (New York City time) on such Interest Rate
Determination Date.
"EURODOLLAR RATE LOANS" means Pro Rata Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate, as provided in
subsection 2.6.
"EURODOLLAR RATE TAXES" has the meaning assigned to such term in
subsection 2.10D.
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"EVENT OF DEFAULT" means each of the events set forth in Section 7.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXISTING CREDIT AGREEMENT" means that certain Credit Agreement dated
as of November 15, 1993, among Company as Borrower, CUSA, as Agent, and the
Lenders described therein.
"FACILITY FEE" has the meaning set forth in subsection 2.7B.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day; provided
--------
that (i) if such day is not a Business Day, the Federal Funds Rate for such day
- ----
shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to Agent by three Federal funds brokers of
recognized standing.
"FISCAL QUARTER" means a fiscal quarter of Company and its
Subsidiaries.
"FISCAL YEAR" means the fiscal year of Company and its Subsidiaries.
"FIXED RATE BID LOAN" has the meaning set forth in subsection 2.2A(i).
"FOOD BUSINESS ASSETS" means the assets of Company and its Subsidiaries
constituting the food business of Company and its Subsidiaries.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof set
forth in subsection 1.2, generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the circumstances as of
the date of determination; provided that for purposes of the calculations made
--------
pursuant to subsections 2.6A (with respect to the determination of the
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<PAGE>
Leverage Ratio), 6.1 and 6.2 only, GAAP shall mean such principles as in effect
on January 1, 1994.
"HAZARDOUS MATERIALS" means any hazardous, toxic or dangerous wastes,
pollutants, materials or substances including, without limitation, friable
asbestos, PCBs, petroleum products and by-products, substances defined in or
listed as "hazardous materials," "hazardous substances" or "toxic substances" or
similarly identified in or pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as now or hereafter amended, 42 U.S.C.
(S) 9601, et seq. and 42 U.S.C. (S) 1101 et seq.; "hazardous materials"
-- --- -- ---
identified in or pursuant to the Hazardous Materials Transportation Act, as now
or hereafter amended, 49 U.S.C. (S) 1801, et seq.; "hazardous wastes" identified
-- ---
in or pursuant to the Resource Conservation and Recovery Act, as now or
hereafter amended, 42 U.S.C. (S) 6901, et seq.; any chemical substances or
-- ---
mixture regulated under the Toxic Substances Control Act of 1976, as now or
hereafter amended, 15 U.S.C. (S) 2601 et seq.; any "toxic pollutant" under the
-- ---
Clean Water Act, as now or hereafter amended, 33 U.S.C. (S) 1251 et seq.; any
-- ---
hazardous air pollutant under the Clear Air Act, as now or hereafter amended, 42
U.S.C. (S) 7401 et seq.; and any hazardous, toxic or dangerous material,
-- ---
substance or pollutant now or hereafter designated or regulated under any
Environmental Laws.
"INDEMNITEE" has the meaning assigned to that term in subsection 9.4.
"INTEREST PAYMENT DATE" has the meaning assigned to that term in
subsection 2.6C.
"INTEREST PERIOD" means any interest period applicable to a Pro Rata
Loan (other than a Base Rate Loan except as otherwise provided in subsection
2.10B) as determined pursuant to subsection 2.6B.
"INTEREST RATE DETERMINATION DATE" means each date for calculating the
Adjusted Eurodollar Rate for purposes of determining the interest rate in
respect of an Interest Period for a Pro Rata Loan that is a Eurodollar Rate
Loan. The Interest Rate Determination Date shall be the second Business Day
prior to the first day of such Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"LENDER" and "LENDERS" means the Swing Line Lender and the persons
identified as "Lenders" and listed on the signature pages of this Agreement,
together with their successors and permitted assigns pursuant to subsection 9.2.
"LEVERAGE RATIO" has the meaning set forth in subsection 2.6A.
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"LIEN" means any mortgage, pledge, lien, security interest or similar
encumbrance or any other type of preferential arrangement for the benefit of the
holders of indebtedness for borrowed money that has the practical effect of a
mortgage, pledge, lien or security interest.
"LOAN" or "LOANS" means one or more of the Pro Rata Loans, the Swing
Line Loans or the Bid Rate Loans, or a combination thereof.
"LOAN ACCOUNT" has the meaning set forth in subsection 2.5A.
"MARGIN STOCK" has the meaning assigned to that term in Regulation U or
Regulation G of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, operations, properties, assets or condition (financial or otherwise)
of Company and its Subsidiaries taken as a whole, or (ii) a material adverse
effect on the ability of Company to pay the Obligations in full when due under
this Agreement.
"MATERIAL SUBSIDIARY" means a Subsidiary of Company identified as a
"Material Subsidiary" on the most recent report on Form 10-K filed by Company
with the Securities and Exchange Commission.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined in
Section 3(37) of ERISA, to which Company or any of its ERISA Affiliates is
contributing, or ever has contributed, or to which Company or any of its ERISA
Affiliates has, or ever has had, an obligation to contribute; except that
Multiemployer Plan shall not include any plan to which neither the Company nor
any ERISA Affiliate is currently obligated to contribute and for which the full
amount of any withdrawal liability has been paid.
"NOTICE OF BID RATE BORROWING" means a notice substantially in the form
of Exhibit IV with respect to a proposed borrowing of a Bid Rate Loan.
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"NOTICE OF BORROWING" means a Notice of Pro Rata Borrowing, a Notice of
Swing Line Borrowing or a Notice of Bid Rate Borrowing, as the case may be.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in the
form of Exhibit VI with respect to a proposed conversion or continuation.
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"NOTICE OF PRO RATA BORROWING" means a notice substantially in the form
of Exhibit III with respect to a proposed borrowing of a Pro Rata Loan.
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"NOTICE OF SWING LINE BORROWING" means a notice substantially in the
form of Exhibit V with respect to a proposed borrowing of a Swing Line Loan.
"OBLIGATIONS" means all obligations of every nature of Company from
time to time owed to Agent, Lenders or any of them under this Agreement, whether
for principal, interest, fees, expenses, indemnification or other amounts due or
to become due.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate executed on behalf of such Person by a Responsible Officer of such
Person.
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor
thereto).
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims the
payment of which is not, at the time, required by subsection 5.3;
(ii) statutory Liens of landlords and depositary institutions and Liens
of carriers, warehousemen, mechanics and materialmen and other Liens imposed
by law incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been
made therefor;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, trade contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money);
(iv) any attachment or judgment Lien not constituting an Event of
Default under subsection 7.8;
(v) leases or subleases granted to others not interfering in any
material respect with the ordinary conduct of the business of Company or any
of its Subsidiaries;
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(vi) easements, rights-of-way, zoning and similar restrictions, minor
defects, encroachments or irregularities in title and other similar charges
or encumbrances not interfering in any material respect with the ordinary
conduct of the business of Company;
(vii) any interest or title of a lessor or sublessor under any lease
not prohibited by this Agreement (including any Lien granted by such lessor
or sublessor);
(viii) Liens arising from filing UCC financing statements relating
solely to leases not prohibited by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods; and
(x) other Liens incurred in the ordinary course of business of Company
and its Subsidiaries consistent with past practices as of the Closing Date
for obligations not constituting debt for borrowed money, which obligations
are not yet delinquent or are being contested in good faith and for which
adequate reserves have been provided by Company or the applicable
Subsidiary.
"PERSON" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, joint stock
companies, Joint Ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event which, after
notice or lapse of time or both, would constitute an Event of Default if that
condition or event were not cured or removed within any applicable grace or cure
period.
"PRO RATA COMMITMENT" has the meaning set forth in subsection 2.1A, and
"PRO RATA COMMITMENTS" means such Commitments of all Lenders in the aggregate.
"PRO RATA LOANS" means the Loans made pursuant to subsection 2.1A. Pro
Rata Loans may be Base Rate Loans and/or Eurodollar Rate Loans. Pro Rata Loans
do not include any Bid Rate Loans or Swing Line Loans.
"PRO RATA SHARE" means, with respect to a particular Lender, (i) prior
to the Commitment Termination Date, the percentage set forth under such Lender's
name on the applicable signature page hereof or set forth in the Applicable
Assignment and Acceptance Agreement, as the case may be, as such percentage may
be adjusted from time to time
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pursuant to subsection 9.2, and (ii) on and after the Commitment Termination
Date, a percentage equal to a fraction the numerator of which shall be the
aggregate principal amount outstanding of all Loans made by such Lender
hereunder and the denominator of which shall be the aggregate principal amount
outstanding of all Loans made by all Lenders hereunder.
"REFERENCE RATE BID LOAN" has the meaning set forth in subsection
2.2A(i).
"REFERENCE BANKS" means Citibank, Chemical Bank and The Chase Manhattan
Bank, N.A.
"REFUNDED SWING LINE LOANS" has the meaning set forth in subsection
2.3C.
"REGISTER" has the meaning assigned to that term in subsection 2.5B.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REQUISITE LENDERS" means Lenders having at least 51% of the Total Pro
Rata Commitments outstanding, or, if the Total Pro Rata Commitments have been
terminated, Lenders having at least 51% of the aggregate unpaid principal amount
of the Loans outstanding.
"RESPONSIBLE OFFICER" means, with respect to any Person, the Chief
Executive Officer, the Chief Financial Officer, an Executive Vice President, the
Treasurer or the Assistant Treasurer of such Person.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any profit-
sharing agreement or arrangement, options, warrants, bonds, debentures, notes,
or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"SHORT-TERM INVESTMENTS" means investments that are accounted for on
Company's consolidated balance sheet as "short-term investments" in conformity
with GAAP.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association, joint venture or other business entity of which more
than 50% of the total voting
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power of shares of stock or other ownership interests entitled (without regard
to the occurrence of any contingency) to vote in the election of the Person or
Persons (whether directors, managers, trustees or other Persons performing
similar functions) having the power to direct or cause the direction of the
management and policies thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"SWING LINE LOAN COMMITMENT" has the meaning set forth in subsection
2.3A.
"SWING LINE LENDER" means CUSA in its capacity as the holder of the
Swing Line Commitment and any entity that assumes CUSA's rights and obligations
with respect thereto pursuant to subsection 9.2.
"SWING LINE LOAN" means one or more of the Loans made by Swing Line
Lender pursuant to subsection 2.3A.
"TAXES" has the meaning assigned to such term in subsection 2.11A.
"TERMINATION EVENT" means (i) a "Reportable Event" described in Section
4043 of ERISA and the regulations issued thereunder (for which the 30 day notice
period has not been waived), (ii) the withdrawal of Company or any of its ERISA
Affiliates from a Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, (iii) the filing of a
notice of intent to terminate a Pension Plan (other than in a "standard
termination" as described in Section 4041(b) of ERISA) or the treatment of a
Pension Plan amendment as a termination under Section 4041 of ERISA, (iv) the
institution of proceedings to terminate a Pension Plan by the Pension Benefit
Guaranty Corporation, or (v) any other event or condition that would reasonably
be expected to constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan.
"TOTAL PRO RATA COMMITMENTS" has the meaning set forth for such term in
subsection 2.1B.
"TOTAL UTILIZATION" means, as at any time of determination, the sum of
(i) the aggregate principal amount of all Pro Rata Loans outstanding at such
time plus (ii) the aggregate principal amount of all Bid Rate Loans outstanding
----
at such time plus (iii) the aggregate principal amount of all Swing Line Loans
----
outstanding at such time; provided that Total Utilization shall be determined
--------
without duplication of Pro Rata Loans, the proceeds of which are used to refund
other Pro Rata Loans, Bid Rate Loans or Swing Line Loans.
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1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS UNDER
------------------------------------------------------------------------
AGREEMENT.
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Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by Company to Lenders pursuant to subsection 5.1 shall be prepared in
accordance with GAAP as in effect at the time of such preparation; provided that
--------
the calculations in the Compliance Certificate with respect to subsections 2.6A
(with regard to the determination of the Leverage Ratio), 6.1 and 6.2 shall be
prepared in accordance with GAAP as in effect at January 1, 1994.
1.3 OTHER DEFINITIONAL PROVISIONS.
-----------------------------
References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 PRO RATA LOANS.
--------------
A. PRO RATA LOANS. Each Lender hereby severally agrees to lend to Company
from time to time during the period from and including the Closing Date to but
excluding the Commitment Termination Date, Pro Rata Loans, in an aggregate
amount at any time outstanding not to exceed such Lender's Pro Rata Share of (i)
the Total Pro Rata Commitments then in effect minus (ii) the aggregate principal
-----
amount of Bid Rate Loans and Swing Line Loans then outstanding (excluding Swing
Line Loans and Bid Rate Loans to be repaid with the proceeds of Pro Rata Loans).
Each Lender's commitment to make Pro Rata Loans to Company pursuant to this
subsection 2.1A is herein called its "PRO RATA COMMITMENT." The initial amount
of the Pro Rata Commitment of each Lender is set forth below its name on the
appropriate signature page hereof. The amount of each Lender's Pro Rata
Commitment shall be reduced by its respective Pro Rata Share of the amount of
all reductions of the Total Pro Rata Commitments made through any date of
determination pursuant to subsection 2.8. The initial aggregate amount of all
Pro Rata Commitments is $1,000,000,000.
Each Lender's Pro Rata Commitment shall expire on the Commitment
Termination Date and all Pro Rata Loans and all other amounts owed hereunder
with respect to the Pro Rata Loans shall be paid in full by Company no later
than that date.
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Except as otherwise provided in this Agreement, amounts borrowed by
Company under this subsection 2.1A may be repaid and, to but excluding the
Commitment Termination Date, reborrowed. Pro Rata Loans made on any Funding
Date shall be in an aggregate minimum amount of $5,000,000 and integral
multiples of $1,000,000 in excess of that amount.
B. TOTAL PRO RATA COMMITMENTS; LIMITATIONS ON OUTSTANDING LOAN AMOUNTS.
The aggregate Pro Rata Commitments of all Lenders are herein collectively called
the "TOTAL PRO RATA COMMITMENTS". Anything in this Agreement to the contrary
notwithstanding, (i) in no event shall the aggregate principal amount of all Pro
Rata Loans from any Lender outstanding at any time exceed its Pro Rata
Commitment, and (ii) in no event shall the Total Utilization exceed the Total
Pro Rata Commitments.
C. NATURE OF LENDERS' OBLIGATIONS. Subject to subsection 2.10B, Pro Rata
Loans under this Agreement shall be made by Lenders simultaneously and
proportionately to their respective Pro Rata Shares, it being understood that no
Lender shall be responsible for any default by any other Lender in such other
Lender's obligation to make a Pro Rata Loan requested hereunder, nor shall the
Pro Rata Commitment of any Lender be increased or decreased as a result of a
default by any other Lender in such other Lender's obligation to make a Pro Rata
Loan requested hereunder.
D. BORROWING MECHANICS. Whenever Company desires to borrow Pro Rata Loans
under this subsection 2.1, it shall deliver to Agent a Notice of Pro Rata
Borrowing no later than 1:00 P.M. (New York City time) at least one (1) Business
Day in advance of the proposed Funding Date in the case of a Base Rate Loan and
no later than 1:00 P.M. (New York City time) at least three (3) Business Days in
advance of the proposed Funding Date in the case of a Eurodollar Rate Loan.
Each Notice of Pro Rata Borrowing shall specify: (i) the proposed Funding
Date (which shall be a Business Day); (ii) the amount and type of Loans
requested; (iii) whether such Pro Rata Loans shall be Base Rate Loans or
Eurodollar Rate Loans and, in the case of Eurodollar Rate Loans, the Interest
Period applicable thereto; and (iv) that the Total Utilization (after giving
effect to the proposed borrowing) does not exceed the Total Pro Rata Commitments
then in effect.
In lieu of delivering any Notice of Pro Rata Borrowing, Company may give
Agent telephonic notice of the proposed borrowing (and the other information
required by a Notice of Pro Rata Borrowing) by the required time under this
subsection 2.1; provided, however, that such notice shall be promptly confirmed
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in writing by delivery of a Notice of Pro Rata Borrowing to Agent on the same
date as the telephonic notice.
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Except as provided in subsection 2.10, a Notice of Pro Rata Borrowing (or
telephonic notice in lieu thereof) shall be irrevocable, and Company shall be
bound to make a borrowing in accordance therewith unless Company pays any
amounts required to be paid pursuant to subsection 2.10C to compensate Lenders.
2.2 BID RATE LOANS.
--------------
A. Each Lender severally agrees that Company may borrow Bid Rate Loans
under this subsection 2.2 from time to time on any Business Day during the
period from the date hereof until the date occurring two days prior to the
Commitment Termination Date in the manner set forth below; provided that,
--------
following the borrowing of each Bid Rate Loan, the Total Utilization shall not
exceed the Total Pro Rata Commitments then in effect.
(i) Company may request one or more Bid Rate Loans under this
subsection 2.2 by transmitting to Agent by telephone (promptly confirmed in
writing by telecopy on the same date) notice of a Bid Rate Loan or Loans (a
"Notice of Bid Rate Borrowing"), in substantially the form of Exhibit IV
hereto, specifying the date and aggregate amount of the proposed Bid Rate
Loan or Loans, the maturity date for repayment of such Bid Rate Loan or
Loans, the interest payment date or dates relating thereto, and any other
terms to be applicable to such Bid Rate Loan or Loans, not later than 1:00
P.M. (New York City time) (A) at least one Business Day prior to the date of
the proposed Bid Rate Loan, if Company shall specify in the Notice of Bid
Rate Borrowing that the rates of interest to be offered by the Lenders shall
be fixed rates per annum for such Bid Rate Loan (a "Fixed Rate Bid Loan")
and (B) at least four Business Days prior to the date of the proposed Bid
Rate Loan, if in the Notice of Bid Rate Borrowing Company shall instead
specify the reference rate, for example (and not limited to) the Eurodollar
Rate or the Federal Funds Rate, which is to be the basis to which the
Lenders will add or subtract a margin in determining the rate or rates of
interest to be offered by them for such Bid Rate Loan (a "Reference Rate Bid
Loan"); provided that no Notice of Bid Rate Borrowing may request that bids
--------
be made for Loans having more than three different maturities and, provided,
--------
further, that without the consent of Agent, Company may deliver a Notice of
-------
Bid Rate Borrowing no more often than every third Business Day. Company may
not select a maturity date for any Bid Rate Loan which occurs after the
second day prior to the Commitment Termination Date. Agent shall in turn
promptly (but in no event later than 3:00 P.M. (New York City time) on the
applicable date referred to in clause (A) or (B) above) notify each Lender
of each request for a Bid Rate Loan received by it from Company by sending
such Lender a copy of the related Notice of Bid Rate Borrowing.
(ii) Each Lender may, if in its sole discretion it elects to do so,
irrevocably offer (a "Bid Rate Offer") to make one or more Bid Rate Loans to
Company at a rate or rates of interest specified by such Lender, by
notifying Agent by telefacsimile
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<PAGE>
before 11:00 A.M. (New York City time), and Agent shall give prompt notice
thereof to Company by telefacsimile, (A) on the date of such proposed Bid
Rate Loan, in the case of a Notice of Bid Rate Borrowing with respect to a
Fixed Rate Bid Loan and (B) three Business Days before the date of such
proposed Bid Rate Loan, in the case of a Notice of Bid Rate Borrowing with
respect to a Reference Rate Bid Loan, of the minimum amount and maximum
amount of each Bid Rate Loan which such Lender would be willing to make
(which amounts may, subject to the proviso to the first sentence of this
subsection 2.2A, exceed such Lender's Pro Rata Commitment) and the rate or
rates of interest therefor; provided that if the Agent in its capacity as a
--------
Lender shall, in its sole discretion, elect to make any Bid Rate Offer, it
shall notify Company of such offer before 10:00 A.M. (New York City time) on
the date on which notice of such election is to be given to Agent by the
other Lenders.
(iii) Company shall, in turn, (A) before 1:00 P.M. (New York City
time) on the date of such proposed Bid Rate Loan, in the case of a Notice of
Bid Rate Borrowing with respect to a Fixed Rate Bid Loan and (B) before 1:00
P.M. (New York City time) three Business Days before the date of such
proposed Bid Rate Loan, in the case of a Notice of Bid Rate Borrowing with
respect to a Reference Rate Bid Loan, either
(x) cancel such proposed Bid Rate Loan by giving Agent notice to
that effect, or
(y) accept one or more of the Bid Rate Offers (which acceptance
shall be irrevocable) in its sole discretion, by giving notice to Agent
of the amount of each Bid Rate Loan (which amount shall be equal to or
greater than the minimum amount, and equal to or less than the maximum
amount, notified to Company by Agent on behalf of such Lender for such
Bid Rate Loan pursuant to paragraph (ii) above) to be made by each
Lender (provided that the aggregate amount of such Bid Rate Loans shall
not exceed the amount specified in the Notice of Bid Rate Borrowing
delivered by Company), and reject any remaining Bid Rate Offers by
giving Agent notice to that effect; provided that acceptance of Bid
--------
Rate Offers may only be made on the basis of ascending rates for Bid
Rate Loans of the same type and duration for up to the maximum amounts
offered by Lenders; and provided further that if Bid Rate Offers are
-------- -------
made by two or more Lenders for the same type of Bid Rate Loan for the
same duration and with the same rate of interest, in an aggregate
amount which is greater than the amount requested, such offers shall be
accepted on a pro rata basis based on the maximum amounts offered by
such Lenders at such rate of interest.
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<PAGE>
(iv) If Company notifies Agent that such proposed Bid Rate Loan is
cancelled pursuant to paragraph (iii)(x) above or if Company rejects any
offers made by Lenders pursuant to paragraph (iii)(y) above, Agent shall
give prompt notice thereof to the Lenders or affected Lenders, as the case
may be, and in the case of a cancellation, such Bid Rate Loan shall not be
made.
(v) If Company accepts one or more of the Bid Rate Offers, Agent shall
in turn promptly notify (A) each Lender that has made a Bid Rate Offer, of
the date and aggregate amount of such Bid Rate Loan and whether or not any
Bid Rate Offer or Bid Rate Offers made by such Lender have been accepted by
Company, and (B) each Lender that is to make a Bid Rate Loan, of the amount
of each Bid Rate Loan to be made by such Lender. Promptly after each
borrowing of Bid Rate Loans, Agent will notify each Lender of the
aggregate amount of such Bid Rate Loans, and the dates upon which such Bid
Rate Loans commenced and will terminate. Each Lender that is to make a Bid
Rate Loan shall make the proceeds of its Bid Rate Loan available to the
Company in accordance with and subject to the terms and conditions set forth
or referred to in subsection 2.4.
B. Each Bid Rate Loan shall be in an aggregate amount not less than
$1,000,000 or an integral multiple thereof.
C. Within the limits and on the conditions set forth in this subsection
2.2, Company may from time to time borrow under this subsection 2.2, repay or
prepay pursuant to subsection D. below, and reborrow under this subsection 2.2,
and more than one Bid Rate Loan may be made on a Business Day.
D. Company shall repay to each Lender that has made a Bid Rate Loan, on
the maturity date of such Bid Rate Loan (such maturity date being that specified
by Company for repayment of such Bid Rate Loan in the related Notice of Bid Rate
Borrowing pursuant to the terms hereof) the then unpaid principal amount of such
Bid Rate Loan pursuant to subsection 2.8B. Company shall have no right to
prepay any principal amount of any Bid Rate Loan except (i) such prepayments as
are on the terms specified by Company for such Bid Rate Loan in the related
Notice of Bid Rate Borrowing or (ii) with the consent of the Lender making such
Bid Rate Loan.
E. Pursuant to subsection 2.8B, Company shall pay interest to each Lender
that has made a Bid Rate Loan on the unpaid principal amount of such Bid Rate
Loan from the date of such Bid Rate Loan to the date the principal amount of
such Bid Rate Loan is repaid in full, at the rate of interest specified by the
Lender making such Bid Rate Loan in its Bid Rate Offer, payable on the interest
payment date or dates specified by Company for such Bid Rate Loan in the related
Notice of Bid Rate Borrowing; provided that any principal amount of any Bid Rate
--------
Loan which is not paid when due (whether at stated maturity, by acceleration or
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<PAGE>
otherwise) and any interest payment on Bid Rate Loans not paid hereunder when
due, in each case, shall bear interest from the date on which such amount is due
until such amount is paid in full, payable on demand, at a rate per annum equal
to 2% per annum above the Base Rate in effect from time to time.
2.3 SWING LINE LOANS.
----------------
A. Swing Line Lender hereby agrees, subject to the limitations set forth
below with respect to the maximum amount of Swing Line Loans permitted to be
outstanding from time to time and subject to the other terms and conditions
hereof, to make a portion of the Pro Rata Commitments available to Company from
time to time during the period from the Closing Date to but excluding the second
day prior to the Commitment Termination Date by making Swing Line Loans to
Company in an aggregate amount not exceeding the amount of the Swing Line Loan
Commitment to be used for the purposes identified in subsection 2.9,
notwithstanding the fact that such Swing Line Loans, when aggregated with Swing
Line Lender's outstanding Pro Rata Loans and Bid Rate Loans may exceed its Pro
Rata Commitment. Swing Line Lender's commitment to make Swing Line Loans to
Company pursuant to this subsection 2.3A is herein called its "SWING LINE LOAN
COMMITMENT", and the original amount of the Swing Line Loan Commitment is
$25,000,000 and may not be increased to an amount in excess of $25,000,000
without the consent of Requisite Lenders. Amounts borrowed under this subsection
2.3A shall be Base Rate Loans and may be repaid and reborrowed to but excluding
the second day prior to the Commitment Termination Date on which second day all
Swing Line Loans and all other amounts owed hereunder with respect to the Swing
Line Loans shall be paid in full by Company.
Anything contained in this Agreement to the contrary notwithstanding, the
Swing Line Loans and the Swing Line Loan Commitment shall be subject to the
following limitations in the amounts and during the periods indicated:
(a) in no event shall the Total Utilization at any time exceed the Pro
Rata Commitments then in effect; and
(b) any reduction of the Pro Rata Commitments made pursuant to
subsection 2.8A which reduces the aggregate Pro Rata Commitments to an
amount less than the then current amount of the Swing Line Loan Commitment
shall result in an automatic corresponding reduction of the Swing Line Loan
Commitment to the amount of the Pro Rata Commitments, as so reduced, without
any further action on the part of Swing Line Lender.
B. Whenever Company desires that Swing Line Lender make a Swing Line Loan
under subsection 2.3A, it shall deliver to Swing Line Lender a Notice of Swing
Line Borrowing no later than 1:00 P.M. (New York City time) on the proposed
Funding Date
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(which shall be a Business Day). The Notice of Swing Line Borrowing shall
specify (i) the proposed Funding Date, (ii) the amount of the Swing Line Loan
requested (which shall be no less than $1,000,000) and (iii) that the Total
Utilization (after giving effect to the proposed borrowing) does not exceed the
Total Pro Rata Commitments then in effect.
C. With respect to any Swing Line Loans which have not been voluntarily
prepaid by Company pursuant to subsection 2.8A, Swing Line Lender (i) may at any
time an Event of Default has occurred and is continuing in its sole and absolute
discretion, and (ii) shall on the last Business Day of each month deliver to
each Lender (with a copy to Company), no later than 2:00 P.M. (New York City
time) at least one Business Day in advance of the proposed Funding Date, a
notice (which shall be deemed to be a Notice of Pro Rata Borrowing given by
Company) requesting Lenders to make Pro Rata Loans that are Base Rate Loans on
such Funding Date in an aggregate amount equal to the amount of such Swing Line
Loans (the "REFUNDED SWING LINE LOANS") outstanding on the date such notice is
given which Swing Line Lender requests Lenders to prepay. Each Lender (other
than the Swing Line Lender) shall make the amount of its Pro Rata Loan available
to Agent by depositing the amount thereof in same day funds in Agent's Account
on the next Business Day. Anything contained in this Agreement to the contrary
notwithstanding, (i) the proceeds of such Pro Rata Loans made by Lenders other
than Swing Line Lender shall be immediately delivered to Swing Line Lender (and
not to Company) and applied to repay a corresponding portion of the Refunded
Swing Line Loans and (ii) on the day such Pro Rata Loans are made, Swing Line
Lender's Pro Rata Share of the Refunded Swing Line Loans shall be deemed to be
paid with the proceeds of a Pro Rata Loan made by Swing Line Lender and such
portion of the Swing Line Loans deemed to be so paid shall no longer be
outstanding as Swing Line Loans but shall be outstanding as Pro Rata Loans. If
any portion of any such amount paid (or deemed to be paid) to Swing Line Lender
should be recovered by or on behalf of Company from Swing Line Lender in
bankruptcy, by assignment for the benefit of creditors or otherwise, the loss of
the amount so recovered shall be ratably shared among all Lenders in the manner
contemplated by subsection 9.5.
If, as a result of any bankruptcy or similar proceeding with respect to
Company, Pro Rata Loans are not made pursuant to this subsection 2.3C in an
amount sufficient to repay any amounts owed to Swing Line Lender in respect of
any outstanding Swing Line Loans or if Swing Line Lender shall so request each
Lender for any reason, Swing Line Lender shall be deemed to have sold without
recourse or representation or warranty, and each Lender shall be deemed to have
purchased and hereby agrees to purchase, a participation in such outstanding
Swing Line Loans in an amount equal to its Pro Rata Share of the unpaid amount
together with accrued interest thereon. Upon one Business Day's notice from
Swing Line Lender, each Lender (other than Swing Line Lender) shall deliver to
Swing Line Lender an amount equal to its respective participation in same day
funds at Agent's Account. In the event any such Lender fails to make available
to Swing Line Lender the amount of such Lender's participation as provided in
this paragraph, Swing Line Lender shall be entitled to recover such
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<PAGE>
amount on demand from such Lender together with interest thereon at the Federal
Funds Rate for the first five days and thereafter at the Base Rate in effect
from time to time.
Anything contained herein to the contrary notwithstanding, the obligation of
each Lender (other than Swing Line Lender) to make Pro Rata Loans for the
purpose of repaying any Refunded Swing Line Loans pursuant to the second
preceding paragraph and each such Lender's obligation to purchase a
participation in any unpaid Swing Line Loans pursuant to the immediately
preceding paragraph shall be absolute and unconditional and shall not be
affected by any circumstance, including without limitation (a) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against Swing Line Lender, Company or any other Person for any reason
whatsoever; (b) the occurrence or continuance of an Event of Default or a
Potential Event of Default; (c) any adverse change in the business,
operations, properties, assets, or condition (financial or otherwise) of Company
or any of its Subsidiaries; (d) any breach of this Agreement by any party
hereto; or (e) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing; provided, however, that no Lender shall
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have any obligation to make a Pro Rata Loan for the purpose of repaying, or to
purchase any participation in, any Swing Line Loan to the extent such Swing Line
Loan increased the Total Utilization (after giving effect to the repayment of
any Loans with the proceeds of such Swing Line Loan) and was made even though
Swing Line Lender had actual knowledge that the conditions to making such Swing
Line Loan were not satisfied.
2.4 DISBURSEMENT OF FUNDS.
---------------------
Promptly after receipt of a Notice of Pro Rata Borrowing pursuant to
subsection 2.1 or subsection 2.3 (or telephonic notice in lieu thereof) and in
any event on the Business Day such notice is received, Agent shall notify each
Lender of the proposed borrowing. Each Lender shall make the amount of its Pro
Rata Loan available to Agent on the Funding Date in Dollars in same day funds by
deposit to Agent's Account not later than 1:00 p.m. (New York City time).
Except as set forth in subsection 2.3C, upon satisfaction or waiver of the
conditions precedent specified in Section 3 (including, without limitation,
subsection 3.2B, if applicable), Agent shall make the proceeds of such Pro Rata
Loans available to Company on such Funding Date by causing an amount of same day
funds equal to the proceeds of all such Loans received by Agent to be credited
to the account of Company at that office of Agent where Agent's Account is
located no later than 2:00 p.m. (New York City time) on such Funding Date. In
the case of Bid Rate Loans, upon satisfaction or waiver of the conditions
precedent specified in Section 3 (including, without limitation, subsection 3.2B
to the extent applicable), the applicable Lender shall make the proceeds of its
Bid Rate Loan available to Company on the Funding Date, by causing an amount of
same day funds equal to the proceeds of such Loan to be credited to the account
of Company at that Office of Agent where Agent's Account is located no later
than 2:00 p.m. (New York City time) on such Funding Date.
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The acceptance by Company of any proceeds of any Loan which results in an
increase in the Total Utilization shall be deemed to constitute a representation
to the Lenders that the conditions to funding set forth herein are satisfied on
and as of the applicable Funding Date.
Unless Agent shall have been notified by any Lender prior to the Funding
Date of any Pro Rata Loan that such Lender does not intend to make available to
Agent that Lender's Pro Rata Loan requested on such Funding Date, Agent may
assume that such Lender has made such amount available to Agent on such Funding
Date and Agent, in its sole discretion, may, but shall not be obligated to, make
available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Agent by that Lender on
the Funding Date, Agent shall be entitled to recover such corresponding amount
on demand from such Lender together with interest thereon, for each day from
such Funding Date until the date such amount is paid to Agent, which interest
shall accrue at the Federal Funds Rate for the first five days and thereafter at
the Base Rate in effect from time to time (beginning on and including the date
of such borrowing). If that Lender does not pay such corresponding amount
forthwith upon Agent's demand therefor, Agent shall promptly notify Company, and
Company shall immediately pay such corresponding amount to Agent together with
interest accrued thereon at the applicable rate for the Loan made on such
Funding Date. Nothing in this subsection 2.4 shall be deemed to relieve any
Lender from its obligation to fulfill its Commitment hereunder or to prejudice
any rights which Company may have against any Lender as a result of any default
by that Lender hereunder.
2.5 LOAN ACCOUNTS AND REGISTER.
--------------------------
A. LOAN ACCOUNTS. Each Lender shall maintain in accordance with its usual
practice an account or accounts (a "LOAN ACCOUNT") evidencing the indebtedness
of Company to such Lender for each Pro Rata Loan and Bid Rate Loan (and in the
case of Swing Line Lender, Swing Line Loan) made by it, including the amount of
principal and interest payable and paid to such Lender from time to time
hereunder. Failure to make any notation, or any error therein, in a Loan
Account shall not affect Company's Obligations to such Lender. Company agrees
that if, in the opinion of any Lender, a promissory note or other evidence of
debt is required or appropriate to reflect or enforce any Loans outstanding to
or to be made by such Lender, then Company shall promptly execute and deliver to
such Lender one or more promissory notes payable to such Lender to evidence the
Pro Rata Loans, Swing Line Loans and/or Bid Rate Loans outstanding to such
Lender under this Agreement from time to time. If any notes are issued
hereunder, Agent and Company may treat the payee of that note as the owner of
such note for all purposes until an Assignment and Acceptance Agreement shall
have been filed with Agent and recorded in the Register; provided, however, that
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the entries made in the Register shall be controlling in the event of a
conflict.
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B. REGISTER. Agent shall maintain at its address referred to in
subsection 9.7 hereof a register (the "REGISTER") in which it shall record the
names and addresses of Lenders, each Lender's Pro Rata Share of the Commitments,
the date and amount of each Pro Rata Loan made hereunder and the amount of any
payment received by Agent hereunder and each Lender's share thereof and, to the
extent Agent has received notice thereof from Company and the applicable Lender,
the date and amount of each Bid Rate Loan and each Swing Line Loan and the
amount of any payment thereon received by the applicable Lender. Failure to
make any such recordation, or any error therein, shall not affect Company's
Obligations.
C. PROMISE TO REPAY; ENTRIES BINDING. Company hereby agrees to pay when
due all Obligations hereunder. The entries made in the Register and each Loan
Account shall be conclusive and binding for all purposes, absent manifest error.
In case of a conflict between the entries made in the Register and the entries
made in any Loan Account, the entries made in the Register shall be controlling,
absent manifest error. Company, Agent and Lenders may treat each Person listed
as a Lender in the Register as the owner of the corresponding Loan listed
therein and as a Lender hereunder for all purposes of this Agreement unless and
until an Assignment and Acceptance Agreement shall have become effective in
accordance with subsection 9.2C; provided, however, that the entries made in the
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Register shall be controlling in the event of a conflict, absent manifest error.
Any request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is listed in the Register as a
Lender shall be conclusive and binding on any subsequent holder, transferee or
assignee of the corresponding Loan. The Register shall be available for
inspection by Company or any Lender at any reasonable time during Agent's normal
business hours upon reasonable prior notice.
2.6 INTEREST ON THE LOANS.
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A. RATES OF INTEREST.
1. PRO RATA LOANS. Each Pro Rata Loan shall bear interest on the
--------------
unpaid principal amount thereof from the date made through maturity (whether
by acceleration or otherwise) at a rate determined by reference to the Base
Rate or the Adjusted Eurodollar Rate, as the case may be. The applicable
basis for determining the rate of interest with respect to any Pro Rata Loan
shall be selected by Company initially at the time a Notice of Pro Rata
Borrowing is given with respect to such Pro Rata Loan. The basis for
determining the interest rate with respect to any Pro Rata Loan may be
changed from time to time pursuant to subsection 2.6D. If on any day a Pro
Rata Loan is outstanding with respect to which notice has not been delivered
to Agent in accordance with the terms of this Agreement specifying the
applicable basis for determining the rate of interest, then for that day
that Pro Rata Loan shall bear interest determined by reference to the Base
Rate.
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Except as set forth below, Pro Rata Loans shall bear interest
through maturity (whether by acceleration or otherwise) at the Base Rate in
effect from time to time or the Adjusted Eurodollar Rate for each Interest
Period therefor, as applicable, plus that margin per annum (the "APPLICABLE
MARGIN") which is set forth opposite the Base Rate or the Adjusted
Eurodollar Rate, as applicable on any date, below:
ADJUSTED EURODOLLAR RATE 0.400%
BASE RATE 0%
; provided that the Applicable Margin with respect to the Adjusted
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Eurodollar Rate shall be .275% from and after the date on which the Agent
receives a Compliance Certificate evidencing a ratio of Consolidated Net
Debt to Consolidated Net Worth (the "LEVERAGE RATIO") of .90 to 1.00 or less
until the earlier of (x) such date as Agent receives a Compliance
Certificate evidencing a Leverage Ratio in excess of .90 to 1.00 and (y)
such date on which Company is required to, but fails to, deliver a
Compliance Certificate pursuant to subsection 5.1C. Any change in the rate
of interest on any outstanding Eurodollar Rate Loans resulting from a change
in the Applicable Margin due to the operation of the foregoing proviso shall
become effective on the date such Compliance Certificate is received or is
required to be delivered, as the case may be.
2. BID RATE LOANS. Each Bid Rate Loan shall bear interest on the
--------------
unpaid principal amount thereof from the date made through maturity (whether
by acceleration or otherwise) at a rate determined pursuant to subsection
2.2.
3. SWING LINE LOANS. Subject to subsection 2.6E, each Swing Line Loan
----------------
shall bear interest on the unpaid principal amount thereof from the date
made through maturity (whether by acceleration or otherwise) at a rate equal
to the Base Rate.
B. INTEREST PERIODS. In connection with each Eurodollar Rate Loan,
Company, by giving notice as set forth in subsection 2.3 or 2.6D, shall elect an
interest period (each an "INTEREST PERIOD") to be applicable to such Loan, which
Interest Period shall be a period of 1, 2, 3 or 6 months; provided, that:
--------
(i) the Interest Period for any Loan shall commence on the Funding Date
in respect of such Loan, or on the date specified in the applicable Notice
of Conversion/Continuation;
(ii) in the case of immediately successive Interest Periods, each
successive Interest Period shall commence on the day on which the next
preceding Interest Period expires;
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<PAGE>
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next succeeding
Business Day; provided that, if any Interest Period would otherwise expire
--------
on a day that is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall expire
on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall, subject
to clause (v) of this subsection 2.6B, end on the last Business Day of a
calendar month;
(v) no Interest Period shall extend beyond the Commitment Termination
Date; and
(vi) in the event Company fails to specify an Interest Period for any
Eurodollar Rate Loan in the applicable Notice of Pro Rata Borrowing or
Notice of Conversion/Continuation, Company shall be deemed to have selected
an Interest Period of one month.
C. INTEREST PAYMENTS. Subject to subsection 2.6E, interest shall be
payable by Company on the Loans as follows:
1. interest on each Base Rate Loan shall be payable in arrears
(a) quarterly on the last Business Day of each December, March, June and
September, beginning June 30, 1994; and (b) at maturity (whether by
acceleration or otherwise);
2. interest on each Eurodollar Rate Loan shall be payable in arrears
(a) on the last day of each Interest Period applicable to such Loan and, in
the case of each Interest Period of longer than 3 months, throughout such
Interest Period on each day that occurs three (3) months from the first day
of such Interest Period; and (b) at maturity (whether by acceleration or
otherwise);
3. interest on each Bid Rate Loan shall be payable at maturity
(whether by acceleration or otherwise) and at such other times as is
specified by Company in the Notice of Bid Rate Borrowing with respect to
such Bid Rate Loan; and
4. interest on each Swing Line Loan shall be payable in arrears
(a) upon any payment of such Loan (whether paid by Company or paid with the
proceeds of Pro Rata Loans or participations therein) and (b) upon maturity
(whether by acceleration or otherwise).
25
<PAGE>
Each such date on which an interest payment is due hereunder with respect to a
Loan is herein referred to as an "INTEREST PAYMENT DATE" for such Loan.
D. CONVERSION OR CONTINUATION OF LOANS. Subject to the provisions of
subsection 2.10B, Company shall have the option (i) to convert at any time all
or any part of its outstanding Pro Rata Loans from Loans bearing interest at a
rate determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis, or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of that and all other Eurodollar Rate Loans having an Interest Period
ending on such date equal to $5,000,000 or integral multiples of $1,000,000 in
excess of that amount as Eurodollar Rate Loans; provided, that when Loans are
--------
converted into Eurodollar Rate Loans, such Eurodollar Rate Loans shall be in a
minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of
that amount.
Company shall deliver a Notice of Conversion/Continuation to Agent no
later than 12:00 noon (New York City time) at least one (1) Business Day in the
case of conversion to Base Rate Loans, and at least three (3) Business Days in
the case of conversion to or continuation as Eurodollar Rate Loans, in advance
of the proposed conversion/continuation date. A Notice of
Conversion/Continuation shall specify (i) the proposed conversion/continuation
date (which shall be a Business Day), (ii) the amount and type of the Loan to be
converted/continued, (iii) the nature of the proposed conversion/continuation
and (iv) the requested Interest Period, if any. In lieu of delivering the
above-described Notice of Conversion/Continuation, Company may give Agent
telephonic notice by the required time of any proposed conversion/continuation
(and the information required by a Notice of Conversion/Continuation) under this
subsection 2.6D; provided that such notice shall be promptly confirmed in
--------
writing by delivery of a Notice of Conversion/Continuation to Agent on or before
the proposed conversion/continuation date.
If for any reason a Eurodollar Rate Loan remains outstanding beyond the
expiration of the Interest Period therefor (including any
conversion/continuation periods with respect thereto), such Loan shall be
continued as a Base Rate Loan.
Agent shall not incur any liability to Company in acting upon any
telephonic notice referred to above that Agent believes in good faith to have
been given by a duly authorized officer or other person authorized to act on
behalf of Company or for otherwise acting in good faith under this subsection
2.6D, and upon conversion or continuation of the applicable basis for
determining the interest rate with respect to any Loans in accordance with this
Agreement pursuant to any such telephonic notice Company shall have effected a
conversion or continuation, as the case may be, hereunder.
Except as otherwise provided in subsection 2.10B, a Notice of
Conversion/Continuation (or telephonic notice in lieu thereof) shall be
irrevocable on and
26
<PAGE>
after the related Interest Rate Determination Date, and Company shall be bound
to effect a conversion or continuation in accordance therewith, unless Company
pays such amounts as required under subsection 2.10C to compensate Lenders.
E. POST MATURITY INTEREST. Any principal payments on Pro Rata Loans or
Swing Line Loans not paid when due, any interest payments on Pro Rata Loans or
Swing Line Loans owed hereunder not paid when due and any payments of fees and
other amounts owed hereunder not paid when due, in each case whether at stated
maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable by Company on demand at a rate (the "POST
MATURITY RATE") that is, in the case of such principal or interest payment, 2%
per annum in excess of the interest rate otherwise payable under this Agreement
with respect to such Loans and, in the case of such fees and other amounts, 2%
per annum in excess of the interest rate payable under this Agreement with
respect to Base Rate Loans.
F. COMPUTATION OF INTEREST. Interest on the Base Rate Loans shall be
computed on the basis of a 365 or 366-day year, as applicable, and interest on
all other Loans shall be computed on the basis of a 360-day year, in each case
for the actual number of days elapsed in the period during which it accrues. In
computing interest on any Loan (or any de facto loan from Swing Line Lender or
Agent to a Lender pursuant to subsection 2.3C or 2.4, respectively), the date of
the making of such Loan (or such de facto loan) or the first day of an Interest
Period applicable to such Loan or, with respect to a Loan being converted from
another Loan, the date of conversion of such Loan shall be included, and the
date of payment of such Loan (or such de facto loan) or the expiration date of
an Interest Period applicable to such Loan or, with respect to a Loan which will
be converted to another Loan, the date of conversion of such Loan shall be
excluded; provided that if a Loan is repaid on the same day on which it is made,
--------
one day's interest shall be paid on that Loan.
G. INCREASED CAPITAL. If after the date hereof any Lender determines that
either (i) any law, order or regulation regarding capital adequacy or any change
in the interpretation or administration of any such law, order or regulation by
any governmental authority charged with the interpretation or administration
thereof, or (ii) compliance with any guideline or request regarding capital
adequacy made by or issued from any such governmental authority has or would
have the effect of increasing the amount of capital required or expected to be
maintained by such Lender or any corporation controlling such Lender as a result
of or based upon the existence of such Lender's Pro Rata Commitment (or, in the
case of the Swing Line Lender, its Swing Line Commitment) and other commitments
of such type, then Company shall from time to time, within 15 Business Days
after written notice and demand by such Lender (each such Lender, an "AFFECTED
LENDER") (with a copy of such notice and demand to Agent), pay to such Lender
additional amounts sufficient to compensate such Lender or other corporation for
its increased costs attributable to such increase in capital in light of such
circumstances commencing on and after the ninetieth day following the date of
such demand
27
<PAGE>
to the extent that such Lender reasonably determines such increased costs to be
allocable to the existence of such Lender's Pro Rata Commitment (or, in the case
of the Swing Line Lender, its Swing Line Commitment). A certificate as to such
amounts providing reasonable detail to the Company regarding the manner in which
the amount of any payment requested by it pursuant to the provisions of this
subsection 2.6G has been determined, shall be submitted to Company and Agent by
such Lender. No Lender shall have the right to collect payments from Company
pursuant to this subsection 2.6G unless it is the policy of such Lender, at the
time of such collection, to collect similar payments from borrowers (if any) who
are similarly situated as Company, including, without limitation, with respect
to credit standing, in connection with credit facilities similar to those made
available pursuant to this Agreement, where the documents governing such credit
facilities establish the right of such Lender to collect such payments.
In the event Company receives a notice from an Affected Lender pursuant
to this subsection 2.6G, Company may, within 90 days after the date such notice
is given and so long as such notice shall not have been terminated by such
Affected Lender and no Event of Default shall have occurred and be continuing,
elect to terminate such Affected Lender as a party to this Agreement; provided,
--------
that concurrently with such termination, (i) Company shall pay to such Affected
Lender all interest and fees and other amounts (including without limitation
amounts owed under this subsection 2.6G) owed to such Affected Lender through
such date of termination and (ii) another financial institution that is an
Eligible Assignee shall purchase for cash the Loans of the Affected Lender and
shall have agreed to become a Lender for all purposes under this Agreement and
to assume all obligations of the Affected Lender to be terminated as of such
date pursuant to an Assignment and Acceptance Agreement that shall have become
effective pursuant to subsection 9.2B.
2.7 FEES.
----
A. COMMITMENT FEE. For the period commencing on the Closing Date to but
excluding the Commitment Termination Date, Company agrees to pay to Agent for
the benefit of each Lender a per annum fee (the "COMMITMENT FEE"), payable
quarterly in arrears on the last Business Day of each December, March, June and
September, commencing June 30, 1994, and on the Commitment Termination Date in
an amount equal to the product of (i) the average daily amount of such Lender's
Pro Rata Share of Availability during the period for which such payment is to be
made times (ii) with respect to each day during such period, a rate equal to
-----
0.05 percent per annum, calculated on the basis of a 360-day year and the actual
number of days in the applicable period.
B. FACILITY FEE. For the period commencing on the Closing Date to but
excluding the Commitment Termination Date, Company agrees to pay to Agent for
the benefit of each Lender a per annum fee (the "FACILITY FEE"), payable
quarterly in arrears on the last Business Day of each December, March, June and
September, commencing June 30, 1994, and on the
28
<PAGE>
Commitment Termination Date in an amount equal to the product of (i) the average
daily amount of such Lender's Pro Rata Commitment in effect (without regard to
the amount of Availability) during the period for which such payment is to be
made times (ii) a rate equal to 0.125 percent per annum, calculated on the basis
-----
of a 360-day year and the actual number of days in the applicable period.
C. FEES TO AGENT. Company agrees to pay to Agent such fees in the amounts
and at the times separately agreed upon between Company and Agent.
2.8 PREPAYMENTS AND REDUCTIONS IN COMMITMENTS; GENERAL PROVISIONS REGARDING
-----------------------------------------------------------------------
PAYMENTS.
--------
A. PREPAYMENTS AND REDUCTIONS IN COMMITMENTS.
(I) VOLUNTARY PREPAYMENTS. Company may, upon not less than five
---------------------
Business Days' prior written notice, at any time and from time to time
prepay any Pro Rata Loans on any Business Day in full or ratably in part
without penalty; provided, that prepayments of Pro Rata Loans in part shall
--------
be in an aggregate minimum principal amount of $5,000,000 and integral
multiples of $1,000,000 in excess of that amount. Company may not
voluntarily prepay any Bid Rate Loan except (i) with the consent of the
Lender making such Loan or (ii) on the basis specified by Company in the
Notice of Bid Rate Borrowing relating thereto. Company may prepay Swing
Line Loans at any time in full or in part without penalty.
(II) VOLUNTARY REDUCTIONS OF COMMITMENTS. Company may, upon not less
-----------------------------------
than three Business Days' prior written notice to Agent, at any time and
from time to time terminate in whole or permanently reduce in part, without
premium or penalty, the Total Pro Rata Commitments in an amount up to the
amount by which the Total Pro Rata Commitments exceed the Total Utilization
at the time of such proposed termination or reduction; provided that any
--------
such partial reduction of the Commitments shall be in an aggregate minimum
amount of $5,000,000 and integral multiples of $1,000,000 in excess of that
amount. Company's notice to Agent shall designate the date (which shall be
a Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Commitments
shall be effective on the date specified in Company's notice and shall
reduce the Pro Rata Commitment of each Lender proportionately to its Pro
Rata Share.
(III) PREPAYMENTS DUE TO REDUCTIONS OF COMMITMENTS. Company shall
--------------------------------------------
from time to time prepay the Pro Rata Loans to the extent necessary so that
the aggregate outstanding principal amount of the Loans shall not at any
time exceed the Total Pro Rata Commitments then in effect. Company shall
from time to time prepay
29
<PAGE>
the Swing Line Loans to the extent necessary so that the aggregate principal
amount thereof shall not at any time exceed the Total Pro Rata Commitments
then in effect.
(IV) GENERAL PROVISIONS REGARDING PREPAYMENTS. All prepayments shall
----------------------------------------
include payment of accrued interest on the principal amount being prepaid.
Any Eurodollar Rate Loan which is prepaid prior to the end of any Interest
Period applicable thereto shall be accompanied by payment of any amounts
required pursuant to subsection 2.10C, except as set forth in subsection
2.10B(i).
B. MANNER AND TIME OF PAYMENT. All payments by Company of principal,
interest, fees and other Obligations hereunder shall be made in Dollars in same
day funds, and delivered (i) in the case of any Swing Line Loan, subject to the
second paragraph of subsection 2.8C, to the Swing Line Lender on the date due at
the Agent's Account or at such other office of such Lender as may be designated
by such Lender to Company; and (ii) in all other cases, to Agent by deposit to
Agent's Account, not later than 3:00 p.m. (New York City time) on the date due
for the account of the applicable Lender or Lenders. Funds received after the
required time on the due date shall be deemed to have been paid by Company on
the next succeeding Business Day. Company and Swing Line Lender shall give
Agent prompt notice of each Swing Line Loan and any payment thereof.
C. APPORTIONMENT OF PAYMENTS. Subject to the second paragraph of this
subsection 2.8C, (i) aggregate principal and interest payments in respect of Pro
Rata Loans shall be apportioned among all outstanding Pro Rata Loans to which
such payments relate, first, as to interest ratably in accordance with the
-----
respective accrued and unpaid amounts of such interest, and second, as to
------
principal ratably in accordance with the respective outstanding amounts of such
principal, and (ii) all principal and interest payments in respect of any Bid
Rate Loans shall be apportioned ratably among Lenders making such Bid Rate Loans
in accordance with the respective outstanding principal amounts of, and the
respective interest rates applicable to, such Bid Rate Loans. Agent shall
promptly (and if practicable on the same Business Day as payments are received)
distribute to each Lender at its primary address set forth below its name on the
applicable signature page hereof (or set forth in Section 13 of the applicable
Assignment and Acceptance Agreement), or at such other address as any Lender may
request by notice to Agent in accordance with the terms of this Agreement, its
share of all such payments received by Agent on behalf of such Lender when
received by Agent. Notwithstanding the foregoing provisions of this subsection
2.8C, if, pursuant to the provisions of subsection 2.10B(ii) any Notice of Pro
Rata Borrowing or Notice of Conversion/Continuation is withdrawn as to any
Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its
Pro Rata Share of Eurodollar Rate Loans or if any Loan of an Affected Lender is
converted into a Base Rate Loan, Agent shall give effect thereto in apportioning
payments received thereafter.
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<PAGE>
ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY NOTWITHSTANDING,
UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT SPECIFIED
IN SECTION 7.1 OR AFTER THE ACCELERATION OF THE MATURITY OF THE LOANS AND THE
OTHER AMOUNTS REFERRED TO IN SECTION 7 OR TERMINATION OF THE PRO RATA
COMMITMENTS, ALL PAYMENTS RELATING TO THE LOANS AND THE OTHER OBLIGATIONS SHALL
BE MADE TO AGENT FOR THE ACCOUNT OF LENDERS AND ALL AMOUNTS RECEIVED BY AGENT
WHICH ARE TO BE APPLIED TO THE PAYMENT OF THE OBLIGATIONS SHALL BE DISTRIBUTED
FIRST TO SWING LINE LENDER TO THE EXTENT OF THE UNPAID PRINCIPAL OF, AND ACCRUED
- -----
INTEREST ON, SWING LINE LOANS AND SECOND TO LENDERS IN SUCH A MANNER THAT EACH
------
LENDER RECEIVES ITS PROPORTIONATE SHARE OF SUCH AMOUNTS BASED ON THE OUTSTANDING
PRINCIPAL AMOUNTS OF ALL LOANS THEN OUTSTANDING AND (SUBJECT TO THE LAST
SENTENCE OF THE FIRST PARAGRAPH OF THIS SUBSECTION 2.8C), THE AMOUNT OF ALL
OTHER OBLIGATIONS THEN PAYABLE.
D. PAYMENTS ON NON-BUSINESS DAYS. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, the
payment shall be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the payment of interest hereunder
or under any note issued hereunder and of the fees hereunder; provided, however,
-------- -------
that if the day on which payment relating to a Eurodollar Rate Loan is due is
not a Business Day but is a day of the month after which no further Business Day
occurs in that month, then the due date thereof shall be the next preceding
Business Day.
2.9 USE OF PROCEEDS.
---------------
A. LOANS. The proceeds of the Loans shall be used by Company for general
corporate purposes of Company, its Subsidiaries and its Affiliates, which for
purposes of this Agreement shall be deemed to include, by way of example but not
limitation, working capital, the repayment on the Closing Date of loans
outstanding under the Existing Credit Agreement, the payment of Pro Rata Loans,
Swing Line Loans and Bid Rate Loans, financing acquisitions, and payment of
dividends on, and repurchasing common stock of, the Company.
B. MARGIN REGULATIONS. No portion of the proceeds of any borrowing under
this Agreement shall be used by Company or any of its Subsidiaries in any manner
that might cause the borrowing or the application of such proceeds to violate
Regulation G, Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board or
to violate the Exchange Act, in each case as in effect on the date or dates of
such borrowing and such use of proceeds.
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<PAGE>
2.10 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
--------------------------------------------------
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to Eurodollar Rate Loans as to
the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as practicable
after 10:00 a.m. (New York City time) on each Interest Rate Determination Date
for a Eurodollar Rate Loan, Agent shall determine (which determination shall,
absent manifest error, be final, conclusive and binding upon all parties) the
interest rate that shall apply to the Eurodollar Rate Loans for which an
interest rate is then being determined for the applicable Interest Period and
shall promptly give notice thereof (in writing or by telephone confirmed in
writing) to Company and each applicable Lender; provided, that, subject to
--------
subsection 2.10B(i)(a) below, if one or more (but not all) Reference Banks fails
to timely provide to Agent the information with respect to such Reference Banks
required to make such determination, the applicable rate shall be determined on
the basis of the information provided by the Reference Banks timely providing
such information.
B. RATE NOT ASCERTAINABLE, INCREASED COSTS AND ILLEGALITY.
(i) In the event of a reasonable determination, which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto:
(a) by one or more Reference Banks on any Interest Rate
Determination Date for any Interest Period that, by reason of any
changes arising on or after the date of this Agreement affecting the
international interbank Eurodollar market or affecting the position of
such Reference Bank (or its applicable Eurodollar lending office) in
such market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
Adjusted Eurodollar Rate or such Reference Bank or Banks are not as a
matter of general practice offering to first class banks in the
international interbank Eurodollar market Dollar deposits with
maturities comparable to the Interest Period of, and in amounts
comparable to, the applicable Eurodollar Rate Loans; or
(b) by any Lender at any time, that such Lender has incurred or
shall incur increased costs or reductions in the amounts or in the rate
of return received or receivable hereunder with respect to any Loan in
an amount determined by such Lender to be material because of (x) any
change since the date of this Agreement in any applicable law,
governmental rule, regulation, guideline or order (or in the
interpretation or administration thereof and including the adoption of
any new law or governmental rule, regulation, guideline or order) (such
as, for example, but not limited to, a change in official
32
<PAGE>
reserve requirements, but in all events excluding such reserve and
other requirements with respect to Eurodollar Rate Loans that are
reflected in the definition of Adjusted Eurodollar Rate), or (y) in the
case of a Eurodollar Rate Loan, any other circumstances affecting such
Lender or the international interbank Eurodollar market or the position
of such Lender in such market; or
(c) by any Lender at any time, that the making or continuance of
any Loan has become unlawful as a result of compliance by such Lender
in good faith with any law, governmental rule, regulation, guideline or
order, or has become impracticable as a result of a contingency
occurring after the date of this Agreement which materially and
adversely affects the international interbank Eurodollar market;
then, and in any such event, such Reference Bank(s) or Lender (Reference
Bank or Lender, an "AFFECTED LENDER"), as applicable, on such date may give
notice (by telephone, confirmed in writing) to Company and to Agent of such
determination (which notice Agent shall promptly transmit to each of the
other Lenders). Thereafter, (x) in the case of clause (a) above, Eurodollar
Rate Loans shall no longer be available until such time as Agent notifies
Company and Lenders that the circumstances giving rise to such notice no
longer exist, and any Notice of Borrowing or Notice of
Conversion/Continuation given by Company with respect to such Eurodollar
Rate Loans which have not yet been made, converted or continued shall be
deemed rescinded by Company, (y) in the case of clause (b) above, Company
shall pay to such Affected Lender, within 15 Business Days of written demand
therefor together with a statement showing the basis for the calculation
thereof, such additional amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Affected
Lender in its discretion shall reasonably determine) as shall be required to
compensate such Affected Lender for such increased costs or reductions in
amounts receivable hereunder incurred or suffered by such Affected Lender at
any time commencing on and after the ninetieth day following the date of its
written notice pursuant to this subsection 2.10B; provided, however, that
-------- -------
the Affected Lender shall not have the right to collect payments from
Company pursuant to this subsection 2.10B unless it is the policy of such
Affected Lender, at the time of such collection, to collect similar payments
from borrowers (if any) who are similarly situated as Company, including,
without limitation, with respect to credit standing, in connection with
credit facilities similar to those made available pursuant to this
Agreement, where the documents governing such credit facilities establish
the right of such Lender to collect such payments. Thereafter, Company may
convert each outstanding Eurodollar Rate Loan then outstanding of such
Affected Lender, upon at least three (3) Business Days' notice to Agent and
such Affected Lender, into a Base Rate Loan (provided Company shall not be
--------
required to pay any amounts under subsection 2.10C as a result thereof),
which new Loan shall, notwithstanding any provision in this Agreement to
33
<PAGE>
the contrary, have the same Interest Period as the Eurodollar Rate Loan
converted, and with respect to Eurodollar Rate Loans to be made on or after
the date of such notice, from and after the date which is three (3) Business
Days after Agent and such Affected Lender receive notice from Company of its
election to so require, such Lender shall make a Loan, as part of any
requested borrowing of Eurodollar Rate Loans, as a Base Rate Loan, which
Base Rate Loan shall, for all purposes, have the same Interest Period as the
Eurodollar Rate Loans made by other Lenders on such Funding Date, and (z) in
the case of clause (c) above, Company shall take one of the actions
specified in subsection 2.10B(ii) as promptly as possible and, in any event,
within the time period required by law.
In the event Company receives a notice from an Affected Lender pursuant
to this subsection 2.10B, Company may, within 90 days after the date such
notice is given and so long as such notice shall not have been terminated by
such Affected Lender and no Event of Default shall have occurred and be
continuing, elect to terminate such Affected Lender as a party to this
Agreement; provided, that concurrently with such termination, (i) Company
--------
shall pay to such Affected Lender all interest and fees and other amounts
(including without limitation amounts owed under this subsection 2.10B) owed
to such Affected Lender through such date of termination and (ii) another
financial institution that is an Eligible Assignee shall purchase for cash
the Loans of the Affected Lender and shall have agreed to become a Lender
for all purposes under this Agreement and to assume all obligations of the
Affected Lender to be terminated as of such date pursuant to an Assignment
and Acceptance Agreement that shall have become effective pursuant to
subsection 9.2B.
(ii) Upon the giving of notice by an Affected Lender referred to in
subsection 2.10B(i)(c), Company's right to request of such Affected Lender
and such Lender's obligation to make Eurodollar Rate Loans shall be
immediately suspended to the extent specified in such Affected Lender's
notice, and (a) with respect to Eurodollar Rate Loans to be made on or after
the date of such notice, such Lender shall make a Loan, as part of any
requested borrowing of Eurodollar Rate Loans, as a Base Rate Loan, which
Base Rate Loan shall, for all purposes, have the same Interest Period as the
Eurodollar Rate Loans made by other Lenders on such Funding Date, and (b)
with respect to Eurodollar Rate Loans then outstanding, Company shall, upon
at least 3 Business Days' notice to Agent and the Affected Lender (unless a
shorter time period is required by law, in which case such notice shall be
given within the time period required by law), convert each such Loan into a
Base Rate Loan, which new Loan shall, notwithstanding any provision in this
Agreement to the contrary, have the same Interest Period as the Eurodollar
Rate Loan so converted; provided, that in each case: (i) each Lender agrees
--------
(to the extent consistent with internal policies) to designate a different
applicable lending office for Eurodollar Rate Loans if such designation
would avoid the illegality described in subsection 2.10B(i)(c), but only so
34
<PAGE>
long as such designation would not result in any additional costs, expenses
or risks to such Lender that are not reimbursed by Company pursuant hereto
and would not, in the judgment of such Lender, affect any certification
delivered by it pursuant to subsection 2.11 hereof or be otherwise
disadvantageous to such Lender, and Company hereby agrees to pay all
reasonable expenses incurred by any Lender in utilizing another lending
office of such Lender pursuant to this clause (i); and (ii) in the event
that such Affected Lender determines at any time following its giving of
such notice that such Affected Lender may lawfully make Eurodollar Rate
Loans of any type referred to in such notice, such Affected Lender shall
promptly give notice (by telephone confirmed in writing) to Agent and
Company (which notice Agent shall promptly transmit to each Lender) of that
determination, whereupon Company's right to request of such Lender and such
Lender's obligation to make Eurodollar Rate Loans of such type shall be
restored.
C. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST PERIODS.
Company shall compensate each Lender within 10 Business Days following receipt
of a reasonable written request by that Lender (which request shall set forth
the basis for requesting such amounts), for all reasonable losses, expenses and
liabilities (including, without limitation, any interest paid by that Lender to
lenders of funds borrowed by it to make or carry its Eurodollar Rate Loans and
any loss, expense or liability sustained by that Lender in connection with the
liquidation or re-employment of such funds) which that Lender may sustain: (i)
if for any reason (other than a default by that Lender) a borrowing of any
Eurodollar Rate Loan does not occur on a date specified therefor in the
applicable Notice of Borrowing (or any telephonic request therefor), or a
conversion to or continuation of any Eurodollar Rate Loan does not occur on a
date specified therefor in a Notice of Conversion/Continuation or a telephonic
request for conversion or continuation, (ii) if any prepayment or conversion of
any of its Eurodollar Rate Loans occurs on a date that is not the last day of an
Interest Period applicable to that Loan, except as set forth in subsection
2.10B(i), (iii) if any prepayment of any of its Eurodollar Rate Loans is not
made on any date specified in a notice of prepayment given by Company, or (iv)
as a consequence of any other default by Company in the repayment of its
Eurodollar Rate Loans when required by the terms of this Agreement.
D. EURODOLLAR RATE TAXES. Company agrees that:
1. Promptly upon notice from any Lender to Company, Company will pay,
prior to the date on which penalties attach thereto, all present and future
income, stamp and other taxes, levies or costs and charges whatsoever
imposed, assessed, levied or collected on or in respect of a Loan solely as
a result of the interest rate being determined by reference to the Adjusted
Eurodollar Rate and/or the provisions of this Agreement relating to the
Adjusted Eurodollar Rate and/or the recording, registration, notarization or
other formalization of any thereof and/or any payments of principal,
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<PAGE>
interest or other amounts made on or in respect of a Loan when the interest
rate is determined by reference to the Adjusted Eurodollar Rate (all such
taxes, levies, costs and charges being herein collectively called
"EURODOLLAR RATE TAXES"); provided, that Eurodollar Rate Taxes shall not
--------
include taxes imposed on or measured by the overall income of that Lender
(whether gross or net income) or franchise taxes by the United States of
America or any political subdivision or taxing authority thereof or therein,
or taxes on or measured by the overall income of any foreign branch,
operation or subsidiary of that Lender (whether gross or net income) or
franchise taxes by any foreign country or subdivision thereof in which that
branch, operation or subsidiary is organized, resident or doing business or
any withholding taxes the subject of subsection 2.11 hereof imposed by the
United States with respect to payment of interest. Company shall also pay
such additional amounts equal to increases in taxes payable by that Lender
described in the foregoing provision which increases are attributable to
payments made by Company described in the immediately preceding sentence or
this sentence. Promptly after the date on which payment of any such
Eurodollar Rate Tax is due pursuant to applicable law, Company will, at the
request of that Lender, furnish to that Lender evidence, in form and
substance satisfactory to that Lender, that Company has met its obligations
under this subsection 2.10D1; and
2. Company will indemnify each Lender against, and reimburse each
Lender within 10 Business Days of a demand for, any Eurodollar Rate Taxes,
as determined by that Lender in its good faith discretion. Each Lender
shall provide Company with information reasonably indicating the basis for
such Eurodollar Rate Taxes and with appropriate receipts for any payments or
reimbursements made by Company pursuant to this subsection 2.10D2.
Notwithstanding the foregoing, no Lender shall have the right to collect
Eurodollar Rate Taxes from the Company pursuant to this subsection 2.10D2
unless it is the policy of such Lender, at the time of such collection, to
collect Eurodollar Rate Taxes from borrowers (if any) who are similarly
situated as Company, including, without limitation, with respect to credit
standing, in connection with credit facilities similar to those made
available pursuant to this Agreement, where the documents governing such
credit facilities establish the right of such Lender to collect Eurodollar
Rate Taxes.
E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender; provided, that no such
--------
Lender shall be entitled to receive any greater amount under subsection 2.10B,
subsection 2.10D, subsection 2.11 or subsection 2.6G as a result of the transfer
of any such Loan than such Lender would be entitled to immediately prior thereto
unless (i) such transfer occurred at a time when circumstances giving rise to
the claim for such greater amount did not exist and were not reasonably
foreseeable by such
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<PAGE>
Lender, or (ii) such claim would have arisen even if such transfer had not
occurred, or (iii) such transfer was made to avoid illegality of the type
described in subsection 2.10B(i)(c).
F. AFFECTED LENDER'S OBLIGATION TO MITIGATE. Each Lender agrees that, as
promptly as practicable after it becomes aware of (i) the occurrence of an event
or the existence of a condition described in subsection 2.10B(i)(b) that would
cause such Lender to make a determination of the nature described therein or
(ii) the imposition, assessment, or collection of any Eurodollar Rate Taxes (as
defined in subsection 2.10D1) on or in respect of any Eurodollar Rate Loan, such
Lender will, to the extent not inconsistent with such Lender's internal policies
and without undue administrative burden, use reasonable efforts to make, fund or
maintain the affected Eurodollar Rate Loan through another lending office of
such Lender if, as a result thereof, the additional monies that would otherwise
be required to be paid in respect of such Loans pursuant to subsection 2.10B(i)
or the Eurodollar Rate Taxes or other amounts that would otherwise be required
to be paid in respect of such Loans pursuant to subsection 2.10D would be
materially reduced or the illegality or other adverse circumstances that would
otherwise require conversion or prepayment of such Loans pursuant to subsection
2.10B would cease to exist and if, as determined by such Lender in its
reasonable discretion, the making, funding, or maintaining of such Loans through
such other lending office would not result in any additional costs, expenses or
risks to such Lender that are not reimbursed by Company pursuant hereto and
would not affect any certifications delivered by it pursuant to subsection 2.11
hereof and would not be otherwise disadvantageous to such Lender. Company hereby
agrees to pay all reasonable expenses incurred by Lender in utilizing another
lending office of Lender pursuant to this subsection 2.10F with respect to Loans
to Company.
G. COMPANY'S RIGHT TO REMOVE AFFECTED LENDER. In the event Company
receives a notice from an Affected Lender pursuant to clause (b) of subsection
2.10B(i) or subsections 2.10D1 or 2.10D2 or is required to withhold or deduct
any Taxes pursuant to subsection 2.11, Company may, within 30 days after the
date such notice is given and so long as such notice shall not have been
terminated by such Affected Lender with respect to subsection 2.10B(i) or 2.10D1
or the date on which such withholding obligation arises under subsection 2.11A
and no Event of Default shall have occurred and be continuing, elect to
terminate such Affected Lender as a party to this Agreement; provided, that
--------
concurrently with such termination, (i) Company shall pay to such Affected
Lender all interest and fees and other amounts (including without limitation
amounts owed under this subsection 2.10 or subsection 2.11) then due and owing
to such Affected Lender through such date of termination, and (ii) another
financial institution that is an Eligible Assignee shall purchase for cash the
Loans of the Affected Lender and shall have agreed to become a Lender for all
purposes under this Agreement and to assume all obligations (including all
outstanding Loans) of the Affected Lender to be terminated as of such date,
pursuant to an Assignment and Acceptance Agreement that shall have become
effective pursuant to subsection 9.2B.
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2.11 CERTAIN TAX PROVISIONS.
----------------------
A. Any and all payments or reimbursements made under this Agreement shall
be made free and clear of, and without deduction or withholding for, any and all
taxes, levies, imposts, deductions, charges or withholdings now or hereafter
imposed, levied or assessed, and all liabilities with respect thereto, excluding
---------
taxes imposed on the overall income (whether gross or net) of a Lender or Agent
by the jurisdiction in which such Lender or Agent is organized, resident or
doing business or any political subdivision or taxing authority therein (all
such non-excluded taxes, levies, imposts, deductions, charges or withholdings
and liabilities being herein referred to as "TAXES"), except as set forth in the
following paragraph.
If Company is required by applicable law to withhold or deduct any
amounts with respect to Taxes, then Company shall promptly pay to the applicable
authority the amount so required to be withheld or deducted, forward to Agent an
official receipt or other documentation reasonably satisfactory to Agent
evidencing such payment (which Agent shall forward to the applicable Lender),
and pay to Agent for the account of the relevant Lender or Agent such additional
amount as is necessary to ensure that the net amount actually received by each
Lender and Agent equals the sum it would have received had no such deductions or
withholdings been made. Company shall indemnify and hold harmless each Lender
and Agent against, and reimburse each Lender and Agent for all Taxes within 15
days after written demand therefor. Notwithstanding the foregoing, Company
shall not be obligated to reimburse, or to pay any increased amount to, any
Lender or Agent with respect to any United States withholding taxes if such
Lender or Agent is not entitled on the date on which this Agreement becomes
effective (or in the case of a Lender which becomes a party hereto after such
date, on the date on which the relevant Assignment and Acceptance Agreement
becomes effective) to receive all amounts due hereunder without withholding or
deduction for or on account of Taxes imposed by the United States. If Company
is required to withhold or deduct any Taxes, or to reimburse a Lender or Agent
for any such Taxes, the applicable Lender shall be an "AFFECTED LENDER" and
Company shall have the rights set forth in subsection 2.10G to replace such
Lender.
B. Each Lender (including Agent, if applicable) organized under the laws
of a jurisdiction other than the United States or any subdivision thereof shall
provide to Company, with a copy to Agent, within 15 days after the Closing Date
(or, with respect to any Lender becoming a party to this Agreement subsequent to
the Closing Date, concurrently with the delivery of the relevant Assignment and
Acceptance Agreement) two United States Internal Revenue Service Forms 4224 or
Forms 1001, as applicable (or successor forms) properly completed and claiming a
complete exemption from withholding or deduction for on or account of Taxes
imposed by the United States. Each such Lender further agrees to deliver to
Company, with a copy to Agent, on or before the date such form expires or after
the occurrence of any event requiring a change in the most recent form delivered
by it any amendments or supplements or additional forms as may be reasonably
requested by Company
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<PAGE>
or Agent evidencing such exemption unless an event (including any changes after
the date hereof in any applicable treaty, law or regulation) has occurred prior
to the date on which such documentation is to be delivered and such Lender
notifies Company and Agent that it is not entitled to receive payments without
deduction or withholding on account of Taxes imposed by the United States.
SECTION 3. CONDITIONS TO LOANS
The obligations of Lenders to make Loans hereunder are subject to the
satisfaction of the following conditions.
3.1 CONDITIONS TO INITIAL LOANS.
---------------------------
The obligations of the Lenders to make the initial Loans hereunder are, in
addition to the conditions precedent specified in subsection 3.2, subject to
prior or concurrent satisfaction of the following conditions:
A. COMPANY DOCUMENTS. On or before the Closing Date, Company shall
deliver or cause to be delivered to Lenders (or to Agent for Lenders with
sufficient originally executed copies, where appropriate, for each Lender) the
following, each, unless otherwise noted, dated the Closing Date and in form and
substance satisfactory to the Agent:
(i) Certified copies of its Certificate of Incorporation, together with
a good standing certificate from its jurisdiction of incorporation, each to
be dated a recent date prior to the Closing Date;
(ii) Copies of its Bylaws, certified as of the Closing Date by its
corporate secretary or an assistant secretary;
(iii) Resolutions of its Board of Directors approving and authorizing
the execution, delivery and performance of this Agreement and approving and
authorizing the loans and transactions contemplated by this Agreement,
certified as of the Closing Date by its corporate secretary or an assistant
secretary as being in full force and effect without modification or
amendment;
(iv) Signature and incumbency certificates of its officers executing
this Agreement and the other documents to be furnished hereunder on or prior
to the Closing Date;
(v) Executed originals of this Agreement; and
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<PAGE>
(vi) Such other documents as Agent may reasonably request.
B. OPINIONS OF COUNSEL. Agent shall have received originally executed
copies of favorable written opinions of O'Melveny & Myers and Goodsill Anderson
Quinn & Stifel, counsel and local counsel for Company, in form and substance
reasonably satisfactory to Agent and its counsel, each dated as of the Closing
Date and setting forth substantially the matters in the opinions designated in
Exhibit VII and Exhibit VIII, respectively, annexed hereto.
- ----------- ------------
C. TERMINATION OF EXISTING CREDIT AGREEMENT. The Agent shall have
received evidence, in form and substance satisfactory to it, that the Existing
Credit Agreement has been terminated on or before the Closing Date, and all
outstanding loans made to the Company pursuant thereto have been repaid on or
before the Closing Date.
D. NO MATERIAL ADVERSE CHANGE. There shall have occurred no material
adverse change in the business of the Company and its Subsidiaries, taken as a
whole, since January 1, 1994.
E. ABSENCE OF LITIGATION. There shall exist no action, suit,
investigation, litigation or proceeding, pending or threatened, in any court or
before any arbitrator or governmental instrumentality that purports to enjoin,
restrain or prohibit, or adversely affect the validity of, this Agreement.
3.2 ADDITIONAL CONDITIONS.
---------------------
The obligations of the Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. To the extent required by subsection 2.1, 2.2 or 2.3, Agent (or, in the
case of a Swing Line Loan made under subsection 2.3, Swing Line Lender) shall
have received, before any Funding Date, an originally executed Notice of
Borrowing (or a telecopy or facsimile thereof), in accordance with the
requirements of such subsection, signed by a Responsible Officer of Company,
which Responsible Officer shall have delivered to Agent on or prior to such date
evidence of authorization to request Loans on behalf of Company.
B. As of that Funding Date, unless the Total Utilization will not be
increased as a result of such borrowing:
(i) The representations and warranties contained herein shall be true,
correct and complete in all material respects on and as of that Funding Date
(immediately prior to, and after giving effect to such funding) to the same
extent as though made on and as of that date, except to the extent such
representations and
40
<PAGE>
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete in
all material respects on and as of such earlier date;
(ii) No Event of Default, Cross Default or Potential Event of Default
shall have occurred and be continuing or would result from the Loans to be
made on that Funding Date;
(iii) Company shall have performed in all material respects all
agreements and satisfied all conditions which this Agreement provides shall
be performed or satisfied by it on or before that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it on that Funding Date; and
(v) The making of the Loans requested on such Funding Date shall not
violate any law including, without limitation, Regulation G, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System.
SECTION 4. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans hereunder, Company represents and warrants to each Lender that the
following statements are true, correct and complete:
4.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING AND SUBSIDIARIES.
-------------------------------------------------------------------
A. ORGANIZATION AND POWERS. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Hawaii and
Company has all requisite corporate power and authority to own and operate its
properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into this Agreement, and to carry out the transactions
contemplated hereby. Each of the Material Subsidiaries of the Company is duly
organized, validly existing and in good standing in the respective jurisdiction
of incorporation of such Subsidiary.
B. QUALIFICATION. Company and each of its Material Subsidiaries is
qualified to do business wherever necessary to carry out its business and
operations, except in jurisdictions in which the failure to be so qualified
would not have a Material Adverse Effect.
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<PAGE>
4.2 AUTHORIZATION OF BORROWING, ETC.
--------------------------------
A. AUTHORIZATION OF BORROWING. The execution, delivery and performance of
this Agreement, the payment and performance of all Obligations, and the consum-
mation of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Company.
B. NO CONFLICT. The execution, delivery and performance by Company of
this Agreement, the payment and performance of the Obligations, and the
consummation of the borrowing, repayment and other payment transactions
contemplated hereby do not and will not (i) violate the Certificate of
Incorporation or Bylaws of Company, (ii) violate any order, judgment or decree
of any court or other agency of government binding on Company or any of
Company's property or assets, (iii) assuming the Lenders' actions are consistent
with the representation made in subsection 9.1, violate any provision of law
applicable to Company, (iv) conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any Contractual
Obligation of Company pursuant to which Company or any of its properties or
assets are bound, (v) result in or require the creation or imposition of any
Lien upon any material properties or assets of Company, or (vi) require any
approval or consent of stockholders, or require any approval or consent of any
Person under any Contractual Obligation, of Company, except with respect to this
clause (vi) for such approvals or consents as have been obtained on or before
the Closing Date, copies of which have been provided to Lenders on or before the
Closing Date.
C. GOVERNMENTAL CONSENTS. Assuming the Lenders' actions are consistent
with the representation made in subsection 9.1, the execution, delivery and
performance by Company of this Agreement, the payment and performance of the
Obligations by the Company, and the consummation of the borrowing, repayment and
other payment transactions contemplated hereby do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body, except for making a periodic report to the Securities and Exchange
Commission with respect to the execution hereof and material modifications or
amendments, if any, hereto and making filings on Form CQ-1 with the Federal
Reserve Bank of New York.
D. BINDING OBLIGATION. This Agreement has been duly executed and
delivered by Company and is the legally valid and binding obligation of Company,
enforceable against Company in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
4.3 FINANCIAL CONDITION.
-------------------
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The consolidated balance sheet of Company at January 1, 1994 and the related
consolidated statements of income and cash flows for the Fiscal Year ended as of
said date, which have been examined by Arthur Andersen & Co., who delivered an
unqualified opinion with respect thereto, were prepared in conformity with GAAP.
All such financial statements fairly present the consolidated financial position
of Company and its Subsidiaries as at the date thereof and the consolidated
results of operations and cash flows of Company and its Subsidiaries for the
period covered thereby.
4.4 NO MATERIAL ADVERSE CHANGE.
--------------------------
Since January 1, 1994 there has been no material adverse change in the
financial condition, operations or business of Company and its Subsidiaries,
taken as a whole.
4.5 LITIGATION; ADVERSE FACTS.
-------------------------
There is no action, suit, proceeding, arbitration (whether or not
purportedly on behalf of Company or any of its Subsidiaries), or, to the
knowledge of Company, governmental investigation, at law or in equity or before
or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, pending or, to the
knowledge of Company, threatened with respect to any domestic action, suit,
proceeding, governmental investigation or arbitration, or pending for more than
30 days or, to the knowledge of Company, threatened with respect to any foreign
action, suit, proceeding, governmental investigation or arbitration against or
affecting Company or any of its Subsidiaries or any material property of Company
or any of its Subsidiaries that would reasonably be expected to result in a
Material Adverse Effect.
4.6 PAYMENT OF TAXES.
----------------
Except to the extent permitted by subsection 5.3, all tax returns and
reports of Company and its Subsidiaries required to be filed by any of them have
been timely filed in compliance with all applicable laws, regulations, rules and
procedures, except where the failure to so timely file or comply with applicable
laws, regulations, rules and procedures has not had and would not reasonably be
expected to have a Material Adverse Effect. All material taxes, assessments,
fees and other governmental charges upon Company and its Subsidiaries and upon
their respective properties, assets, income, businesses and franchises which are
due and payable have been paid when due and payable except for those that are
being contested in good faith and for which adequate reserves have been provided
by Company or the applicable Subsidiary with respect to which the failure to pay
would not reasonably be expected to have a Material Adverse Effect.
4.7 GOVERNMENTAL REGULATION.
-----------------------
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Company is not subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act or the
Investment Company Act of 1940, each as amended, or under any other federal or
state statute or regulation limiting its ability to incur debt for money
borrowed.
4.8 SECURITIES ACTIVITIES.
---------------------
Company is not engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
any Margin Stock.
4.9 MARGIN STOCK.
------------
Company has not used any portion of the proceeds of the Loans in violation
of subsection 2.9B hereof. Following application of the proceeds of each Loan,
not more than 25 percent of the value of the assets (either of Company only or
of Company and its Subsidiaries on a consolidated basis) subject to the
provisions of subsection 6.3 or 6.4 or subject to any restriction on encumbrance
or disposition contained in any agreement or instrument, between Company and any
Lender or any Affiliate of any Lender, relating to debt and within the scope of
subsection 7.2, will be Margin Stock.
4.10 EMPLOYEE BENEFIT PLANS.
----------------------
A. Company and its ERISA Affiliates are in compliance in all respects with
all applicable provisions of ERISA with respect to all Pension Plans and all
Multiemployer Plans, the noncompliance with which would reasonably be expected
to have a Material Adverse Effect.
B. No Termination Event has occurred or is reasonably expected to occur
with respect to any Pension Plan that would result in an aggregate liability for
Company, its ERISA Affiliates, or any of Company's Subsidiaries and their
respective ERISA Affiliates in excess of $25,000,000.
C. As of the most recent valuation date for any Pension Plan, the excess
of the present value (determined on the basis of reasonable assumptions employed
by the independent actuary for such Pension Plan) of the benefit liabilities (as
defined in Section 4001(a)(16) of ERISA) over the fair market value of the
assets of such Pension Plan, when added to such excess for all other such
Pension Plans, does not exceed $100,000,000.
D. Neither Company nor any ERISA Affiliate of Company has engaged in a
non-exempt "prohibited transaction," as defined in Section 4975 of the Internal
Revenue Code or ERISA in connection with any Pension Plan, under which the
aggregate liability of the Company and its ERISA Affiliates exceeds $25,000,000.
44
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E. There are no claims (other than routine claims for benefits), actions
or lawsuits asserted against, and neither Company nor any ERISA Affiliate of
Company has knowledge of any threatened litigation or claims against any Pension
Plan or against any fiduciary of such Pension Plan with respect to the operation
of such Pension Plan, which, if adversely determined, would have a Material
Adverse Effect.
F. Company does not maintain any welfare benefit plan within the meaning
of Section 3(1) of ERISA which provides for continuing benefits for any
participant or beneficiary after termination of employment, except as may be
required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, other than any such plans that (i) are reserved for in the financial
statements of the Company or ERISA Affiliates, or (ii) would not reasonably be
expected to have a Material Adverse Effect.
G. Neither Company nor any of its ERISA Affiliates has incurred or
reasonably expects to incur withdrawal liability to any Multiemployer Plan in
excess of $25,000,000.
4.11 ENVIRONMENTAL PROTECTION.
------------------------
Each of Company and its Subsidiaries is and has been in compliance with all
Environmental Laws, whether in connection with the ownership, use, maintenance
or operation of any owned or leased property or the conduct of any business
thereon or otherwise, except for any non-compliance which would not reasonably
be expected to have a Material Adverse Effect. Neither Company, any of its
Subsidiaries nor, to the knowledge of Company, any third person at any time
occupying any property owned or leased by Company or any of its Subsidiaries,
has at any time used, generated, disposed of, stored or transported to or from,
any Hazardous Materials on, under or at such property, except in compliance with
all applicable Environmental Laws other than any non-compliance which would not
reasonably be expected to have a Material Adverse Effect. To the knowledge of
Company, no Person has at any time released or threatened the release of any
Hazardous Materials in any form, quantity or concentration on, under or at any
property owned or leased by Company or its Subsidiaries in a manner which would
reasonably be expected to have a Material Adverse Effect.
SECTION 5. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Pro Rata
Commitments or the Swing Line Commitment hereunder shall remain in effect and
until payment in full of all of the Loans and other Obligations, unless
Requisite Lenders shall otherwise give prior written consent, Company shall
perform, and, to the extent applicable, shall cause each of its Subsidiaries to
perform all covenants in this Section 5.
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5.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
--------------------------------------
Company will prepare consolidated financial statements in conformity with
GAAP. Company will deliver to Agent (with sufficient copies for each Lender
except with respect to subsection 5.1G):
A. as soon as practicable and in any event within 50 days after the end of
each of the first three Fiscal Quarters of each Fiscal Year, a copy of Company's
quarterly report on Form 10-Q setting forth, in comparative form, the
corresponding figures for the corresponding Fiscal Quarter of the previous
Fiscal Year, all in reasonable detail and certified by a Responsible Officer of
Company as fairly presenting the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their operations for
the periods indicated, subject to changes resulting from audit and normal year-
end adjustment;
B. as soon as practicable and in any event within 95 days after the end of
each Fiscal Year, a copy of Company's annual report on Form 10-K setting forth
in comparative form the consolidated figures for the previous Fiscal Year, all
in reasonable detail and accompanied by a report on the financial information
contained in the annual report on Form 10-K of Arthur Andersen & Co. or other
independent certified public accountants of recognized national standing
selected by Company, which report shall state that such consolidated financial
statements present fairly the financial position of Company and its Subsidiaries
as at the dates indicated and the results of their operations and cash flow for
the periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except as otherwise stated therein) and that the examination by
such accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards;
C. together with each delivery of the reports of Company and its
Subsidiaries pursuant to subsections 5.1A and 5.1B above, a Compliance
Certificate for the Fiscal Quarter or Fiscal Year, as applicable, executed by a
Responsible Officer of Company (1) stating that the signer does not have
knowledge of the existence as at the date of the Compliance Certificate, of any
condition or event that constitutes an Event of Default, Cross Default or
Potential Event of Default or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action Company
has taken, is taking and proposes to take with respect thereto, and (2)
demonstrating in reasonable detail compliance at the end of such accounting
periods with the restrictions contained in subsections 6.1 and 6.2 (as set forth
in Exhibit II);
----------
D. promptly upon (and in any event within 5 Business Days after) any
Responsible Officer of Company obtaining knowledge of any condition or event
that constitutes an Event of Default, Cross Default or Potential Event of
Default under this Agreement, an Officer's
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Certificate specifying the nature and period of existence of any such condition
or event and what action Company has taken, is taking or proposes to take with
respect thereto;
E. promptly upon (and in any event within 5 Business Days after) any
Responsible Officer of Company obtaining knowledge of the institution of any
action, suit, proceeding, governmental investigation or arbitration against or
affecting Company that has not previously been disclosed by Company to Lenders
and that would reasonably be expected to have a Material Adverse Effect, Company
shall promptly give notice thereof to Lenders and provide such other information
as may be reasonably available to it to enable Lenders and their counsel to
evaluate such matters;
F. promptly upon (and in any event within 5 Business Days after) any
Responsible Officer of Company obtaining knowledge of the occurrence of any
Termination Event in connection with any Pension Plan or any trust created
thereunder, for which the amount involved exceeds $25,000,000, a written notice
specifying the nature thereof, what action Company has taken, is taking or
proposes to take with respect thereto, and, when known, any action taken by the
Internal Revenue Service or the PBGC with respect thereto;
G. promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent or made available
generally by Company to its security holders or by any Subsidiary of Company
subject to the reporting requirements of the Exchange Act to its security
holders other than Company or another Subsidiary, of all regular and periodic
reports and all registration statements and prospectuses, if any, filed by
Company or any of its Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any governmental authority succeeding to
any of its functions; and
H. with reasonable promptness, such other information with respect to
compliance by Company with the terms of this Agreement as from time to time may
be reasonably requested by Agent acting at the direction of Requisite Lenders.
5.2 CORPORATE EXISTENCE, ETC.
-------------------------
Company will, and will cause each of its Subsidiaries to, at all times
maintain its fundamental business (including, without limitation, the
fundamental businesses described under the caption "Business-Food" in Company's
Annual Report on Form 10-K for the Fiscal Year ended January 1, 1994) and
preserve and keep in full force and effect its corporate or partnership
existence and all rights, franchises and licenses material to its business;
provided, however, that Company shall not be required to maintain the corporate
- -------- -------
or partnership existence or rights and franchises of any Subsidiary of Company
if the failure to do so would not reasonably be expected to have a Material
Adverse Effect.
5.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
----------------------------------------------
47
<PAGE>
A. Company will, and will cause each of its Subsidiaries to, pay all
taxes, assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien upon
any of its material properties or assets prior to the time when any penalty or
fine shall be incurred with respect thereto; provided that no such tax,
--------
assessment, charge or claim need be paid if (i) being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor or (ii) the failure to do so
would not reasonably be expected to have a Material Adverse Effect.
B. Company will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than Company or any of its Subsidiaries).
5.4 MAINTENANCE OF PROPERTIES; INSURANCE.
------------------------------------
Company will, and will cause each of its Subsidiaries to, maintain or cause
to be maintained in good repair, working order and condition, ordinary wear and
tear excepted, all material properties used or useful in the business of Company
and its Subsidiaries from time to time, and from time to time will make or cause
to be made all appropriate repairs, renewals and replacements thereof, except
where the failure to do so would not reasonably be expected to have a Material
Adverse Effect. Company will maintain or cause to be maintained insurance with
respect to its properties and business and the properties and businesses of its
Subsidiaries no less protective in any material respect than that carried in
accordance with Company's past practices or that is prudent given the nature of
the business of Company and its Subsidiaries.
5.5 COMPLIANCE WITH LAWS, ETC.
--------------------------
Company shall, and shall cause each of its Subsidiaries to, comply with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, other than those with which the failure to comply would
not have a Material Adverse Effect or those that are being contested in good
faith and for which appropriate reserves, if any, as may be required by GAAP
have been taken.
5.6 HAZARDOUS MATERIALS.
-------------------
In addition to and without limiting the generality of subsection 5.5,
Company shall, and shall cause each of its Subsidiaries and its and their
respective owned or leased properties
48
<PAGE>
to, and shall cause its and their respective employees, agents, contractors,
subcontractors and any other Person occupying such property to, comply with all
Environmental Laws, except for any non-compliance which would not reasonably be
expected to have a Material Adverse Effect. Neither Company nor its Subsidiaries
shall release or threaten to release any Hazardous Material in any form,
quantity or concentration, on, under or at such property in a manner which would
reasonably be expected to have a Material Adverse Effect.
5.7 MARGIN STOCK.
------------
Company agrees to use the proceeds of the Loans in accordance with
subsection 2.9 hereof. Company will, following application of the proceeds of
each Loan, cause Margin Stock to be less than 25 percent of the value of the
assets (either of Company only or of Company and its Subsidiaries on a
consolidated basis) subject to subsection 6.3 or 6.4 or any restriction on
encumbrance or disposition contained in any agreement or instrument, between
Company and any Lender or any Affiliate of any Lender, relating to debt and
within the scope of subsection 7.2.
5.8 INSPECTION.
----------
Company will permit and arrange for authorized representatives designated by
any Lender to visit, upon reasonable notice and during regular business hours as
often as may be reasonably requested, any of the properties of Company or its
Subsidiaries. All expenses of the Lender associated with any such visitation
shall be borne by the Lender conducting the same.
SECTION 6. COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Pro Rata
Commitments or the Swing Line Commitment hereunder shall remain in effect and
until payment in full of all of the Loans and other Obligations, unless
Requisite Lenders shall otherwise give prior written consent, Company shall
perform, and, to the extent applicable, shall cause each of its Subsidiaries to
perform all covenants in this Section 6.
6.1 MAXIMUM LEVERAGE RATIO.
----------------------
Company shall not permit the ratio of (i) Consolidated Net Debt to (ii)
Consolidated Net Worth, as of the last day of any Fiscal Quarter of Company, to
exceed 2.0 to 1.0.
6.2 MINIMUM FIXED CHARGE COVERAGE RATIO.
-----------------------------------
49
<PAGE>
Company shall not permit the ratio of (i) Consolidated Adjusted Operating
Income to (ii) Consolidated Net Interest Expense on the last day of any Fiscal
Quarter for the four consecutive Fiscal Quarters then ended to be less than 2.75
to 1.0.
6.3 LIENS.
-----
Company will not create or suffer to exist, and will not permit any of its
Subsidiaries to create or suffer to exist, any Lien on any of its properties now
owned or hereafter acquired, or assign, or permit any of such Subsidiaries to
assign, any accounts or other right to receive income, without making effective
provision, and Company hereby covenants that in any such case it will make or
cause to be made effective provision, whereby the Obligations of Company
pursuant to this Agreement shall be directly secured by such Lien or assignment
equally and ratably upon the same properties with any and all other Indebtedness
and other obligations thereby secured; provided, however, that the following
-------- -------
Liens shall be permitted and shall not be subject to the foregoing provisions of
this subsection 6.3:
(i) Permitted Encumbrances;
(ii) Liens upon or in real property (whether in the form of land,
improvements or fixtures or any interest therein) held by Company or any of
its Subsidiaries on the Closing Date; provided that (a) the aggregate
principal amount of the debt secured by such Liens on such property shall
not exceed 100% of the higher of the cost of such property or the then fair
value thereof, (b) any such debt shall not otherwise be prohibited by the
terms of this Agreement, and (c) to the extent such Liens secure debt
incurred solely for the purpose of financing the construction or improvement
of any such property to be subject to such Liens, such Liens are imposed
within 180 days from the date of the applicable completion of construction
or improvement thereof by Company or any of its Subsidiaries;
(iii) Liens upon or in real property (whether in the form of land,
improvements or fixtures or any interest therein) acquired after the Closing
Date by Company or any of its Subsidiaries in the ordinary course of
business to secure the purchase price of such property or to secure debt
incurred solely for the purpose of financing the acquisition, construction
or improvement of any such property to be subject to such Liens if such
Liens are imposed on such property within 180 days from the date of the
applicable acquisition or completion of construction or improvement thereof
by Company or any of its Subsidiaries, or Liens existing on any such
property at the time of acquisition, provided that (a) the aggregate
principal amount of the debt secured by such Liens on such property at the
time of acquisition, construction or improvement of such property shall not
exceed 100% of the cost of such property, construction or improvement or of
the then fair value thereof, whichever shall be
50
<PAGE>
higher, and (b) any such debt shall not otherwise be prohibited by the terms of
this Agreement;
(iv) Liens on or assignments of receivables of any kind (and property
securing or otherwise supporting payment of such receivables) in connection with
one or more agreements for limited recourse sales by Company or any or all of
its Subsidiaries for cash of such receivables (and such property) or interests
therein; and
(v) other Liens securing debt in an aggregate principal amount not to exceed
at any one time outstanding 10% of the consolidated total assets of the Company
and its Subsidiaries, determined in accordance with GAAP.
6.4 DISPOSITION OF ASSETS.
---------------------
Company shall not, and shall not permit its Subsidiaries to, sell or
otherwise dispose of all or any substantial part (as herein defined) of the Food
Business Assets, other than sales of inventory made in the ordinary course of
business. For purposes of this subsection 6.4, a "substantial part" of the Food
Business Assets means a part which either (y) has an aggregate book value (for
purposes of the consolidated balance sheet of the Company and its Subsidiaries,
determined in accordance with GAAP) equal to 25% or more of the aggregate book
value of the Food Business Assets or (z) generates 25% or more of the gross
income generated by the Food Business Assets, determined in accordance with
GAAP.
SECTION 7. EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT") shall
occur and be continuing:
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
---------------------------------
Failure by Company to pay any installment of principal of any Loan when due,
whether at stated maturity, by acceleration, by notice of prepayment or
otherwise; or failure by Company to pay any interest on any Loan or any fee or
any other amount due under this Agreement within five days after the date due;
or
7.2 DEFAULT IN OTHER AGREEMENTS.
---------------------------
Failure of Company or any of its Subsidiaries to pay when due any principal
of or interest on any indebtedness for borrowed money of Company or any such
Subsidiary in an amount exceeding $25,000,000 in the aggregate (the "REFERENCED
DEBT") beyond the end of any grace period provided therefor; or the breach or
default by Company or any of its
51
<PAGE>
Subsidiaries with respect to any other term of any evidence of the Referenced
Debt or any loan agreement, mortgage, indenture or other agreement relating to
such Referenced Debt, if the effect of such breach or default is to cause the
Referenced Debt to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may
be; provided, however, that in the event that the non-payment or acceleration of
-------- -------
the maturity of the Referenced Debt described in this subsection 7.2 is cured or
waived by the holders of the Referenced Debt or if such Referenced Debt is
repaid in full (other than with the proceeds of Loans), such non-payment or
acceleration shall not constitute an Event of Default hereunder; or
7.3 BREACH OF CERTAIN COVENANTS.
---------------------------
Failure of Company to perform or comply with any term or condition
contained in subsections 5.1D, 6.1, 6.2, 6.3 or 6.4 of this Agreement; or
7.4 BREACH OF WARRANTY.
------------------
Any representation or warranty made or deemed made by Company in or pursuant
to this Agreement or in any certificate at any time given by Company in writing
pursuant hereto or in connection herewith shall be false in any material respect
on the date as of which made or deemed made; or
7.5 OTHER DEFAULTS UNDER AGREEMENT.
------------------------------
Company shall default in the performance of or compliance with any term
contained in this Agreement, other than any such term referred to in any other
subsection of this Section 7, and such default shall not have been remedied or
waived within 30 days after receipt by Company of written notice from Agent of
such default; or
7.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
-----------------------------------------------------
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Company or any of its Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree,
or any other similar relief granted under any applicable federal or state law,
order or similar relief described in this clause (i) is not stayed; or (ii) an
involuntary case shall be commenced against Company or any of its Subsidiaries
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect; or a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over Company or any of its Subsidiaries or over all or a substantial part
of their respective properties, shall have been entered; or there shall have
occurred the
52
<PAGE>
involuntary appointment of an interim receiver, trustee or other custodian of
Company or any of its Subsidiaries for all or a substantial part of their
respective properties; or a warrant of attachment, execution or similar process
shall have been issued against any substantial part of the property of Company
or any of its Subsidiaries and any such event described in this clause (ii)
shall continue for 60 days unless dismissed, bonded or discharged; provided,
--------
that with respect to Subsidiaries of Company (other than Material Subsidiaries)
the foregoing shall constitute an Event of Default only if such occurrence would
have a Material Adverse Effect; or
7.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
---------------------------------------------------
(i) Company or any of its Subsidiaries shall have an order for relief
entered with respect to it or commence a voluntary case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now
or hereafter in effect, or shall consent to the entry of an order for relief
in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or Company or any of its Subsidiaries
shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of their respective
properties; or Company or any of its Subsidiaries shall make any assignment
for the benefit of creditors; or (ii) Company or any of its Subsidiaries
shall admit in writing its inability to pay its debts generally as such
debts become due; or the Board of Directors of Company or any of its
Subsidiaries (or any committee thereof) shall adopt any resolution or
otherwise authorize any action to approve any of the actions referred to in
clause (i) above or this clause (ii); provided that with respect to
--------
Subsidiaries of Company (other than Material Subsidiaries) the foregoing
shall constitute an Event of Default only if such occurrence would have a
Material Adverse Effect; or
7.8 JUDGMENTS AND ATTACHMENTS.
-------------------------
Any money judgment, writ or warrant of attachment or similar process
involving in any individual case an amount in excess of $100,000,000 or in
the aggregate an amount in excess of $300,000,000 that are individually or
in the aggregate not adequately covered by insurance shall be entered or
filed against Company or any of its Material Subsidiaries, or against any of
their respective assets, and shall remain undischarged, unvacated, unbonded
or unstayed for a period of 35 consecutive days; or
7.9 UNFUNDED ERISA LIABILITIES.
--------------------------
(i) Any Pension Plan shall be terminated within the meaning of Title IV of
ERISA; (ii) a trustee shall be appointed by an appropriate United States
district court to administer any Pension Plan; (iii) the PBGC (or any successor
thereto) shall institute proceedings to terminate any Pension Plan or to appoint
a trustee to administer any Pension Plan; (iv) Company or any of its ERISA
Affiliates shall withdraw (under Section 4063 of ERISA)
53
<PAGE>
from a Pension Plan; or (v) Company or its ERISA Affiliates shall engage in any
transactions which could result in the assessment of direct or indirect
liability to Company under Section 409 or 502 of ERISA or Section 4975 of the
Internal Revenue Code, if as of the date thereof or any subsequent date, the sum
of each of Company's and its ERISA Affiliates' various liabilities (such
liabilities to include, without limitation, any liability to the PBGC or to any
other party under Sections 4062, 4063 or 4064 of ERISA or any other provision of
law and to be calculated after giving effect to the tax consequences thereof)
resulting from or otherwise associated with such events listed in subclauses
(i)-(v) above exceeds $25,000,000; or there exists, as of any valuation date for
a Pension Plan, an excess of the present value (determined on the basis of
reasonable assumptions employed by the independent actuary for such Pension
Plan) of benefit liabilities (as defined in Section 4001(a)(16) of ERISA) the
fair market value of the assets of such Pension Plan, when added to such excess
for all other such Pension Plans, which exceeds $100,000,000; or Company or any
of its ERISA Affiliates shall incur withdrawal liability to Multiemployer Plans
which, in the aggregate, exceeds $100,000,000; or
7.10 CHANGE IN CONTROL.
-----------------
Any Person (including any "Group" as defined in Section 13d-5 of the
Exchange Act) other than David H. Murdock or an Affiliate of David H. Murdock
(including the estate of David H. Murdock) shall obtain ownership or control of
more than 50% of the voting power of the stock of Company entitled to vote in
the election of members of the board of directors of Company;
THEN (i) upon the occurrence of any Event of Default described in subsection
7.6 or 7.7, in each case with respect to Company, each of (a) the unpaid
principal amount of and accrued interest on the Loans and (b) all other
Obligations shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by Company, and the obligation of each Lender to make
any Loan shall thereupon terminate, and (ii) upon the occurrence and during the
continuation of any other Event of Default, Agent shall, at the direction or
with the consent of Requisite Lenders, by written notice to Company, declare all
or any portion of the amounts described in clauses (a) and (b) above to be, and
the same shall forthwith become, immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by Company, and the obligation of each Lender to make
any Loan shall thereupon terminate.
Notwithstanding anything contained in the preceding paragraph, if at any
time within 60 days after an acceleration of the Loans pursuant to such
paragraph, Company shall pay all arrears of interest and all payments on account
of principal which shall have become due otherwise than as a result of such
acceleration (with interest on principal and on overdue interest, fees and other
amounts, at the rates specified in this Agreement) and all Events of
54
<PAGE>
Default (other than non-payment of the principal of and accrued interest on the
Loans, in each case which is due and payable solely by virtue of acceleration)
shall be remedied or waived, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or impair any right consequent thereon.
SECTION 8. AGENT
8.1 APPOINTMENT.
-----------
CUSA is hereby appointed Agent hereunder and each Lender hereby authorizes
Agent to act as its agent in accordance with the terms of this Agreement. Agent
agrees to act upon the express conditions contained in this Agreement.
8.2 POWERS; GENERAL IMMUNITY.
------------------------
A. DUTIES SPECIFIED. Each Lender irrevocably authorizes Agent to take such
action on such Lender's behalf and to exercise such powers hereunder and under
any of the instruments and agreements referred to herein as are specifically
delegated to Agent by the terms hereof and thereof, together with such powers as
are reasonably incidental thereto. Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement or any of the
instruments and agreements referred to herein and it may perform such duties by
or through its agents or employees. Agent shall not have, by reason of this
Agreement or any of the instruments and agreements referred to herein, a
fiduciary relationship in respect of any Lender; and nothing in this Agreement
or any of the instruments and agreements referred to herein, expressed or
implied, is intended to or shall be so construed as to impose upon Agent any
obligations in respect of this Agreement or any of the instruments and
agreements referred to herein except as expressly set forth herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. Agent shall not be responsible to
any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any of the
instruments and agreements referred to herein or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statement or in any financial or other statements, instruments, reports
or certificates or any other documents furnished or made by Agent to Lenders or
by or on behalf of Company to Agent or any Lender in connection herewith and the
transactions contemplated hereby or for the financial condition or business
affairs of Company or any other Person liable for the payment of any
Obligations, nor shall Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or in any of the instruments or
agreements referred to herein or as to the use of the proceeds of the Loans or
as to the existence or possible existence of any
55
<PAGE>
Event of Default. Anything contained in this Agreement to the contrary
notwithstanding, Agent shall not have any liability arising from confirmations
of the amount of outstanding Loans.
C. EXCULPATORY PROVISIONS. Neither Agent nor any of its officers, directors,
employees or agents shall be liable to Lenders for any action taken or omitted
by Agent under or in connection herewith or any of the instruments or agreements
referred to herein except to the extent caused by Agent's gross negligence or
willful misconduct. If Agent shall request instructions from Lenders with
respect to any act or action (including the failure to take an action) in
connection with this Agreement or any of the instruments or agreements referred
to herein, Agent shall be entitled to refrain from such act or taking such
action unless and until Agent shall have received instructions from Requisite
Lenders. Without prejudice to the generality of the foregoing, (i) Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against Agent as a result of Agent acting or
(where so instructed) refraining from acting under this Agreement or any of the
other instruments or agreements referred to herein in accordance with the
instructions of Requisite Lenders. Agent shall be entitled to refrain from
exercising any power, discretion or authority vested in it under this Agreement
or any of the other instruments or agreements referred to herein unless and
until it has obtained the instructions of Requisite Lenders.
D. AGENT ENTITLED TO ACT AS LENDER. The agency hereby created shall in no
way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, Agent in its individual capacity as a Lender hereunder. With
respect to its Loans and Pro Rata Commitment (and, in the case of Swing Line
Lender, its Swing Line Commitment), Agent shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Agent in its individual capacity. Agent and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of banking, trust, financial advisory or other business with Company or any
of its Affiliates as if it were not performing the duties specified herein, and
may accept fees and other consideration from Company for services in connection
with this Agreement and otherwise without having to account for the same to
Lenders.
8.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
------------------------------------------------------------------
CREDITWORTHINESS.
----------------
56
<PAGE>
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Company and its
Subsidiaries in connection with the making of the Loans hereunder and that it
has made and shall continue to make its own appraisal of the creditworthiness of
Company. Agent shall not have any duty or responsibility, either initially or
on a continuing basis, to make any such investigation or any such appraisal on
behalf of Lenders or to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before the making of
the Loans or at any time or times thereafter, and Agent shall not have any
responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.
8.4 RIGHT TO INDEMNITY.
------------------
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify Agent, to the extent that Agent shall not have been reimbursed by
Company, for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including, without
limitation, reasonable counsel fees and disbursements) or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against Agent in performing its duties hereunder or otherwise in its capacity as
Agent in any way relating to or arising out of this Agreement or the instruments
and agreements referred to herein; provided 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
Agent's gross negligence or willful misconduct. If any indemnity furnished to
Agent for any purpose shall, in the opinion of Agent, be insufficient or become
impaired, Agent may call for additional indemnity and cease, or not commence, to
do the acts indemnified against until such additional indemnity is furnished.
8.5 REGISTERED PERSONS TREATED AS OWNERS.
------------------------------------
Agent may deem and treat the Persons listed as Lenders in the Register as
the owners of the corresponding Loans listed therein for all purposes hereof
unless and until an Assignment and Acceptance Agreement effecting the assignment
or transfer thereof shall have been accepted by Agent and recorded in the
Register as provided in subsection 9.2. Any request, authority or consent of
any Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and binding
on any subsequent holder, transferee or assignee of the corresponding Loan.
8.6 SUCCESSOR AGENT.
---------------
Agent may resign at any time by giving 30 days' prior written notice thereof
to Lenders and Company, and Agent may be removed at any time with or without
cause by an instrument or concurrent instruments in writing delivered to Company
and Agent and signed by Requisite Lenders. Upon any such notice of resignation
or any such removal, Requisite
57
<PAGE>
Lenders shall have the right, upon five Business Days' notice to Company, to
appoint a successor Agent; provided, that no such successor Agent may be
--------
appointed without the prior consent of Company, in its sole discretion;
provided, further, that in the event that no successor Agent has been so
- -------- -------
appointed on or before the third Business Day prior to the effective date of
Agent's resignation or removal, the resigning or removed Agent may appoint a
successor Agent. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Agent and the retiring or removed Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring or removed
Agent's resignation or removal hereunder as Agent, the provisions of this
Section 8 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement. Any reference to "Citibank"
or "CUSA" in Sections 1 and 2 hereof (other than in the definition "Swing Line
Lender") shall, after CUSA's resignation or removal as Agent, be deemed to be
references to the successor Agent from time to time hereunder acting in its
individual capacity as a financial institution.
SECTION 9. MISCELLANEOUS
9.1 SECURITIES REPRESENTATION.
-------------------------
Each Lender hereby represents that it is a commercial lender or financial
institution which makes loans in the ordinary course of its business and that it
will make any Loan for its own account in the ordinary course of its commercial
banking or lending business and not with a view to or for sale in connection
with a distribution of any Loan or any evidence of indebtedness issued by
Company hereunder except in compliance with any applicable securities laws;
provided, however, that, subject to subsection 9.2, the disposition of any Loan
- -------- -------
or evidence of indebtedness hereunder held by that Lender shall at all times be
within its exclusive control.
9.2 ASSIGNMENTS AND PARTICIPATIONS IN LOANS.
---------------------------------------
A. ASSIGNMENTS. Notwithstanding the provisions of subsection 9.1, each
Lender shall have the right at any time to assign to an Eligible Assignee all or
a part of its rights and obligations under this Agreement and its Pro Rata
Commitment; provided, however, that (i) each such assignment shall be of a
-------- -------
constant, and not a varying, percentage of all of the assigning Lender's rights
and obligations under its Pro Rata Commitment and this Agreement except that,
unless specifically provided in the Assignment and Acceptance Agreement, the
rights and obligations with respect to the assigning Lender's outstanding Bid
Rate Loans shall not be assigned; (ii) each such assignment shall be in a
minimum amount of $15,000,000, unless such assignment is to a Lender or any
Affiliate of a Lender or unless the assigning Lender is assigning its entire Pro
Rata Commitment; provided that Swing Line Lender may
--------
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<PAGE>
not assign its Swing Line Commitment except to one of its Affiliates primarily
engaged in commercial lending; and (iii) all such assignments shall be effected
by the execution of an Assignment and Acceptance Agreement by the assigning
Lender and the assignee Lender. Notwithstanding any other provision to the
contrary contained in this Agreement, any Lender may at any time, without the
consent of Agent or Company, assign all or any portion of its rights under this
Agreement and any notes which may be issued hereunder to a Federal Reserve Bank.
Each Lender shall give Company and Agent prompt written notice of any assignment
to an Affiliate of such Lender, any other Lender or a Federal Reserve Bank.
B. EFFECTIVENESS OF ASSIGNMENT. Subject to satisfaction of each of the
foregoing conditions in subsection 9.2A, and delivery to Agent of the Assignment
and Acceptance Agreement and a processing and recordation fee of $2,500 by the
assignor, the Assignment and Acceptance Agreement shall become effective on the
later to occur of (x) the effective date specified in the applicable Assignment
and Acceptance Agreement, and (y) except with respect to assignments to any
Lender or any of its Affiliates to the extent such Affiliate constitutes an
Eligible Assignee, the date on which Agent and Company have consented to,
accepted and recorded the Assignment and Acceptance Agreement. Within five
Business Days after Agent's receipt of an Assignment and Acceptance Agreement
executed by an Eligible Assignee and the processing and recordation fee, Agent
shall, if the Assignment and Acceptance Agreement is otherwise in compliance
with this Agreement, record the information required in the Register and give a
copy of the Assignment and Acceptance Agreement to Company. Upon such
effectiveness, the assignee Lender shall be a Lender hereunder and, to the
extent set forth in the Assignment and Acceptance Agreement, have the rights and
obligations of a Lender hereunder and the assigning Lender shall, to the extent
that its rights and obligations have been so assigned, relinquish its rights and
be released from its obligations under this Agreement.
C. ASSIGNMENT AND ACCEPTANCE AGREEMENT. By executing and delivering an
Assignment and Acceptance Agreement, the assigning Lender thereunder and the
assignee thereunder (as applicable) shall be deemed to confirm to and agree with
each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Company or any of its
Subsidiaries or the performance or observance by Company or any of its
Subsidiaries of any of their respective obligations under this Agreement or any
other instrument or document furnished pursuant hereto or thereto; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the most recent financial
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statements delivered pursuant to subsection 5.1 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 Agreement; (iv) such
assignee has made, and will continue to make, independently and without reliance
upon Agent, such assigning Lender or any other Lender, and based on such
documents and information as it deemed or deems appropriate at the time, its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee appoints and authorizes Agent to take such action as agent, on its
behalf and to exercise such powers under this Agreement as are delegated to
Agent, by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vi) such assignee agrees that it will perform in
accordance with their terms all the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
D. PARTICIPATIONS. Notwithstanding the provisions of subsection 9.1, each
Lender may sell participations in any part of any Loan or Loans or the Pro Rata
Commitments or any other interest herein to any Person; provided, however, that
-------- -------
(i) such Lender shall remain responsible for its total obligations and Pro Rata
Commitments under this Agreement; (ii) Company and Agent shall continue to deal
solely with such Lender in connection with such Lender's rights and obligations
under this Agreement; (iii) except as hereinafter provided, no participant shall
have any rights under this Agreement or any other document delivered in
connection herewith (a participant's rights against any such selling Lender in
respect of its participation to be those set forth in the agreement executed by
such Lender in favor of such participant relating thereto); and (iv) no Lender
shall sell any such participation under which the participant would have any
right to (or any right to require such Lender to) take or omit to take any
action or approve any amendment or waiver relating to this Agreement except to
the extent any such action, omission, amendment or waiver would (a) extend the
final maturity date or the date for the payment of any interest due in respect
of a Loan due to such Lender or any fees due to such Lender under this
Agreement, (b) reduce the amount of any installment of principal or interest due
to such Lender in respect of any Loan, or (c) reduce the interest rates
applicable to the Loans or the fees due to such Lender under this Agreement.
Company agrees that all such information disclosed with respect to such
participants is confidential and shall be held in confidence. Notwithstanding
the foregoing, in no event shall Company be obligated to pay a greater amount of
compensation pursuant to subsections 2.6G, 2.10 or 2.11 to any participant than
the Company would otherwise have been obligated to pay to the Lender selling
such participation.
E. ADDITIONAL PROVISIONS GOVERNING ASSIGNMENTS AND PARTICIPATIONS.
Company hereby agrees that any Lender may furnish any information concerning
Company in the possession of any Lender from time to time to assignees and
participants (including prospective assignees and participants), provided, that
--------
each such assignee, prospective assignee, participant and prospective
participant shall agree in writing to be bound by the provisions of subsection
9.18. In the event of any assignment hereunder, the assigning Lender's Pro Rata
Commitment shall be modified to reflect the Pro Rata Commitment of such
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assignee. No Lender shall, as between Company and that Lender, be relieved of
any of its obligations hereunder as a result of any granting of participations
in all or any part of the Loans, or Pro Rata Commitment of that Lender or other
Obligations owed to such Lender. Each Lender shall, as between Company and that
Lender, be relieved of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation, in accordance with subsection 9.2, of all
or any part of the Loans or Pro Rata Commitment of that Lender or other
Obligations owed to such Lender to the extent of the obligations assigned.
9.3 EXPENSES.
--------
Except to the extent otherwise specifically set forth herein or agreed to by
Agent and Company, prior to the occurrence and except during the continuance of
an Event of Default, the expenses of Agent and each Lender in connection with
this Agreement shall be borne by Agent or such Lender, as the case may be.
After the occurrence and during the continuance of an Event of Default, the
Company agrees to pay promptly all reasonable costs and expenses, including
reasonable attorneys' fees (provided, that Company shall not be required to pay
--------
attorneys' fees for more than one counsel for Agent and Lenders) and costs of
settlement, incurred by Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from Company hereunder by reason of such Event of
Default or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
9.4 INDEMNITY.
---------
A. In addition to the payment of expenses pursuant to subsection 9.3,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend, indemnify, pay and hold harmless Agent and Lenders,
and the officers, directors, employees, agents, advisors and affiliates of Agent
and Lenders (collectively called the "INDEMNITEES") from and against any and all
claims, damages, losses, liabilities and expenses (including without limitation
the reasonable fees and disbursements of one counsel representing all such
Indemnitees, and additional counsel to the extent provided in subsection 9.4B),
in connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto (collectively,
"INDEMNIFIED LIABILITIES" and individually an "INDEMNIFIED LIABILITY") that may
be incurred by, or asserted or awarded against any such Indemnitee, 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, relating to or in connection with this Agreement, whether or not
such investigation, litigation or proceeding is brought by the Company, its
shareholders or creditors or an Indemnitee, and whether or not an Indemnitee is
otherwise a party thereto, except that no Indemnitee shall be entitled to be
indemnified hereunder (i) to the extent that such claim, damage, loss, liability
or expense is found in a final judgment rendered by a court of competent
jurisdiction to have resulted from
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such Indemnitee's gross negligence or willful misconduct or from a breach
of such Indemnitee's obligations pursuant to subsection 9.18 or its
confidentiality letter theretofore delivered to the Company, or (ii) with
respect to any litigation brought by the Company seeking judgment against such
Indemnitee for any wrongful act or omission of such Indemnitee if a final
judgment by a court of competent jurisdiction is rendered in the Company's favor
against such Indemnitee. If any claim regarding any Indemnified Liability
("CLAIM") is asserted against any Indemnitee, such Indemnitee shall promptly
notify Company, but the failure to do so shall not affect Company's obligations
under this subsection 9.4 unless such failure materially prejudices Company's
right to defend or participate in the contest of such Claim, as hereinafter
provided in this subsection 9.4. Neither Company nor any Indemnitee shall
settle any Indemnified Liability with respect to any Indemnitee without the
consent of Company and that Indemnitee, which consent shall not be unreasonably
withheld.
B. The Indemnitees shall be entitled to legal representation at Company's
expense by one legal counsel selected by the Indemnitees, as a group, as
provided in subsection 9.4A and, in addition, Company will pay the reasonable
costs and expenses of one additional legal counsel selected by an Indemnitee if
legal counsel for such Indemnitee determines in good faith that joint
representation of such Indemnitee along with other Indemnitees would or could
reasonably be expected to result in a conflict of interest under laws or ethical
principles applicable to such counsel. The scope of representation of any
additional counsel pursuant to this subsection 9.4B shall be to the extent
reasonably necessary to avoid such conflict of interest.
C. Nothing in this subsection 9.4 shall limit the right, which is
absolute, of any Indemnitee to at any time retain at its own expense separate
counsel to represent and defend such Indemnitee in connection with any
Indemnified Liabilities. In such event Company shall have the right to
participate, at Company's expense and through independent counsel, in the
contest.
D. To the extent that the undertaking to defend, indemnify, pay and hold
harmless set forth in this subsection 9.4 may be unenforceable because it is
violative of any law or public policy, Company shall contribute the maximum
portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any
of them.
9.5 RATABLE SHARING.
---------------
Lenders hereby agree among themselves that (except as otherwise specifically
provided with respect to Swing Line Loans) if any of them shall, whether by
voluntary payment, by realization upon security, through the exercise of any
right of set-off or banker's lien, by counterclaim or cross action or by the
enforcement of any right hereunder or
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otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, fees and other amounts then due and
owing to that Lender hereunder (collectively, the "AGGREGATE AMOUNTS DUE" to
such Lender) which is greater than the proportion received by any other Lender
in respect of the Aggregate Amounts Due to such other Lender, then the Lender
receiving such proportionately greater payment shall (i) notify Agent and each
other Lender of the receipt of such payment and (ii) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the other
Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by
all Lenders in proportion to the Aggregate Amounts Due to them; provided that if
--------
all or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of Company or otherwise, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
9.6 AMENDMENTS AND WAIVERS.
----------------------
No amendment, modification, termination or waiver of any provision of this
Agreement or consent to any departure by Company therefrom, shall in any event
be effective without the written concurrence of Requisite Lenders; provided that
--------
any such amendment, modification, termination, waiver or consent which:
increases the amount of any of the Pro Rata Commitments or reduces the principal
amount of any of the Loans or accrued interest thereon; changes any Lender's Pro
Rata Share; changes the definition of "Requisite Lenders"; changes any provision
of this Agreement which, by its terms, expressly requires the approval or
concurrence of all Lenders; postpones the scheduled final maturity date of any
Loans; decreases the interest rate borne by the Pro Rata Loans or the amount of
any fees payable hereunder; increases the maximum duration of Interest Periods
permitted hereunder; or changes the provisions contained in this subsection 9.6
shall be effective only if evidenced by a writing signed by or on behalf of all
Lenders. In addition, no amendment, modification, termination or waiver of any
provision of Section 8 or of any other provision of this Agreement which affects
the rights or obligations of Agent or
which, by its terms, expressly requires the approval or concurrence of Agent
shall be effective without the written concurrence of Agent. No amendment,
modification or waiver of any provision of this Agreement relating to Swing Line
Loans or the Swing Line Commitment shall be effective without the written
concurrence of Swing Line Lender. Agent may, but shall have no obligation to,
with the concurrence of any Lender, execute amendments, modifications, waivers
or consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Company in any case shall entitle Company to
any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination,
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waiver or consent effected in accordance with this subsection 9.6 shall be
binding upon each Lender at the time outstanding, each future Lender and, if
signed by Company, on Company.
9.7 NOTICES.
-------
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile, or four Business Days
after depositing it in the United States mail, registered or certified, with
postage prepaid and properly addressed; provided that notices to Agent shall not
--------
be effective until received. For the purposes hereof, the address and
telefacsimile number of each party hereto shall be as set forth under such
party's name on the signature pages hereof or (i) as to Company and Agent, such
other address or telefacsimile number as shall be designated by such Person in a
written notice delivered to the other parties hereto and (ii) as to each other
party, such other address or telefacsimile number as shall be designated by such
party in a written notice delivered to Agent.
Neither Agent nor any Lender shall incur any liability to Company or any
other Lender in acting upon any telephonic notice referred to in subsections
2.1, 2.2 or 2.3 which Agent or such Lender believes in good faith to have been
given by a duly authorized officer or other person authorized to borrow on
behalf of Company or for otherwise acting in good faith with respect to any
Notice of Borrowing, and upon the funding of a Loan by any Lender in accordance
with this Agreement pursuant to any telephonic notice, Company shall have
effected a Loan hereunder.
9.8 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
------------------------------------------
All representations, warranties and agreements made herein shall survive the
execution and delivery of this Agreement and the making of the Loans hereunder.
9.9 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
-----------------------------------------------------
No failure or delay on the part of Agent or any Lender in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
9.10 ENTIRE AGREEMENT.
----------------
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This Agreement comprises the complete and integrated agreement of the
parties on the subject matter hereof and supersede all prior agreements, written
or oral, on the subject matter hereof.
9.11 SEVERABILITY.
------------
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
9.12 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
----------------------------------------------------------
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Pro Rata Commitment of any other Lender
hereunder. Nothing contained herein, and no action taken by Lenders pursuant
hereto, shall be deemed to constitute Lenders as a partnership, an association,
a joint venture or any other kind of entity. The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt, and each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.
9.13 HEADINGS.
--------
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
9.14 APPLICABLE LAW.
--------------
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.
9.15 SUCCESSORS AND ASSIGNS.
----------------------
This Agreement shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
the successors and assigns of Lenders (it being understood that Lenders' rights
of assignment are subject to subsection 9.2). Neither Company's rights or
obligations hereunder nor any interest therein may be assigned or delegated by
Company without the prior written consent of all Lenders.
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9.16 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
----------------------------------------------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OBLIGATION MAY BE BROUGHT IN ANY CALIFORNIA STATE OR
FEDERAL COURT SITTING IN THE CITY OF LOS ANGELES, AND BY EXECUTION AND DELIVERY
OF THIS AGREEMENT COMPANY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT OR SUCH OBLIGATION. COMPANY CONSENTS TO THE SERVICE OF ANY AND ALL
PROCESS IN ANY SUCH PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO
COMPANY AT ITS ADDRESS SPECIFIED IN SUBSECTION 9.7.
9.17 WAIVER OF JURY TRIAL.
--------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES ITS RESPECTIVE RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED.
The scope of this waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter of
this transaction, including without limitation contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this waiver in their
related future dealings. Each party hereto further warrants and represents that
it has reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
9.18 CONFIDENTIALITY.
---------------
Each Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement in accordance with such Lender's customary
procedures for
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handling confidential information of this nature and in accordance with safe and
sound banking practices, it being understood and agreed by Company that a Lender
may make disclosures (i) to any Affiliate of such Lender provided that such
--------
Affiliate shall be bound by this subsection 9.18, (ii) reasonably required by
any bona fide assignee, transferee or participant in connection with the
contemplated assignment or transfer by such Lender of its Pro Rata Commitment or
any of its Loans or any participation therein (provided that such actual or
--------
prospective transferee, assignee or participant shall agree in writing to be
bound by this subsection 9.18 in advance of its receipt) or (iii) as required by
any governmental agency or representative thereof or pursuant to legal process;
provided that, unless specifically prohibited by applicable law or court order,
- --------
each Lender shall notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information. All information disclosed by Company shall be presumed
confidential other than Company's public filings and press releases and other
matters generally available publicly.
9.19 COUNTERPARTS; EFFECTIVENESS.
---------------------------
This Agreement and any amendments, waivers, consents or supplements hereto
or in connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Agent of written or telephonic notification of such execution and authorization
of delivery thereof. Delivery of a telecopied signature page shall be as
effective as delivery of an originally executed signature page.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
DOLE FOOD COMPANY, INC.,
a Hawaii corporation
By: ____________________________
Title: Treasurer
Notice Address:
Dole Food Company, Inc.
31355 Oak Crest Drive
Westlake Village, CA 91361
Attention: Michael S. Karsner
Telephone: (818) 879-6732
Telefacsimile: (818) 879-6636
AGENT:
CITICORP USA, INC.,
as Administrative Agent
By: ____________________________
Title: Vice President
Notice Address:
Citicorp USA, Inc.
c/o Citicorp North America, Inc.
725 South Figueroa Street, 5th Floor
Los Angeles, CA 90017
Attention: Deborah Ironson
Telephone: (213) 239-1424
Telefacsimile: (213) 623-3592
S-1
<PAGE>
LENDERS:
CITICORP USA, INC., as Lender
By: ____________________________
Title: Vice President
Notice Address:
Citicorp USA, Inc.
c/o Citicorp North America, Inc.
725 South Figueroa Street, 5th Floor
Los Angeles, CA 90017
Attention: Deborah Ironson
Telephone: (213) 239-1424
Telefacsimile: (213) 623-3592
With a copy of any Notice of Borrowing or Notice of
Conversion/Continuation to:
Ed Volwinkel
Telefacsimile: (718) 248-4844
Total Pro Rata Commitment: $80,000,000
Total Pro Rata Share: 8.0%
S-2
<PAGE>
BANK BRUSSELS LAMBERT, NEW YORK BRANCH, as Lender
By: __________________________
Title:
By: __________________________
Title:
Notice Address:
Bank Brussels Lambert, New York Branch
630 Fifth Avenue
New York, New York 10111
Attn.: Joyce Thunnissen
Telephone: (212) 632-5317
Telecopy: (212) 333-5786
Total Pro Rata Commitment: $25,000,000
Total Pro Rata Share: 2.5%
S-3
<PAGE>
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Co-Arranger and as Lender
By: _____________________
Title:
Notice Address:
Bank of America National Trust
and Savings Association
Unit #5618
555 South Flower Street
Los Angeles, California 90071
Attention: Robert Troutman
Telephone: (213) 228-3866
Telecopy: (213) 228-2756
Total Pro Rata Commitment: $55,000,000
Total Pro Rata Share: 5.5%
S-4
<PAGE>
THE BANK OF NOVA SCOTIA, as Lender
By: ____________________________
Title:
Notice Address:
The Bank of Nova Scotia
101 California Street
48th Floor
San Francisco, California 94111
Attention: Maarten Van Otterloo
Telephone: (415) 986-1100
Telecopy: (415) 397-0791
Total Pro Rata Commitment: $25,000,000
Total Pro Rata Share: 2.5%
S-5
<PAGE>
BANKERS TRUST COMPANY, as Lead Manager
and Lender
By: ____________________________
Title:
Notice Address (with respect to Notices of Borrowing and
Notices of Continuation/Conversion only):
Bankers Trust Company
280 Park Avenue
New York, New York 10017
Attention: Ms. Mary Zadroga
Telephone: (212) 250-2500
Telecopy: (212) 850-3919
with a copy to:
Bankers Trust Company
300 South Grand Avenue, 41st Floor
Los Angeles, California 90071
Attention: Ms. Kate W. Cook
Telephone: (213) 620-8248
Telecopy: (213) 620-8141
Total Pro Rata Commitment: $40,000,000
Total Pro Rata Share: 4.0%
S-6
<PAGE>
THE CHASE MANHATTAN BANK, N.A.,
as Co-Arranger and Lender
By: ____________________________
Title:
Notice Address:
The Chase Manhattan Bank, N.A.
One Chase Plaza
Fifth Floor
New York, New York 10081
Attention: Thomas T. Daniels
Telephone: (212) 552-1711
Telecopy: (212) 552-0196
Total Pro Rata Commitment: $55,000,000
Total Pro Rata Share: 5.5%
S-7
<PAGE>
CHEMICAL BANK, as Co-Arranger and Lender
By: ____________________________
Title:
Notice Address:
Chemical Bank
270 Park Avenue, 9th Floor
New York, New York 10017
Attention: Ted Swimmer
Telephone: (212) 270-5720
Telecopy: (212) 270-2625
Total Pro Rata Commitment: $55,000,000
Total Pro Rata Share: 5.5%
S-8
<PAGE>
CIBC INC., as Lead Manager and Lender
By: ____________________________
Title:
Notice Address:
CIBC Inc.
300 South Grand Avenue
Suite 2700
Los Angeles, California 90071
Attention: Paul J. Chakmak
Telephone: (213) 617-6226
Telecopy: (213) 346-0157
Total Pro Rata Commitment: $40,000,000
Total Pro Rata Share: 4.0%
S-9
<PAGE>
COMMERZBANK AKTIENGESELLSCHAFT,
LOS ANGELES BRANCH, as Lead Manager
and Lender
By: ____________________________
Title:
By: ____________________________
Title:
Notice Address:
Commerzbank Aktiengesellschaft,
Los Angeles Branch
660 South Figueroa Street
Suite 1450
Los Angeles, California 90017
Attention: Hans-Joachim Lang
Telephone: (213) 623-8223
Telecopy: (213) 623-0039
Total Pro Rata Commitment: $40,000,000
Total Pro Rata Share: 4.0%
S-10
<PAGE>
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK, B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH,
as Lead Manager and Lender
By: ____________________________
Title:
Notice Address:
Rabobank Nederland
245 Park Avenue
New York, New York 10167
Attention: Credit Department
Telephone: (212) 916-7994
Telecopy: (212) 818-0233
with a copy to:
Rabobank Nederland
3 Embarcadero Ctr. #930
San Francisco, California 94111
Attention: Bradford F. Scott
Telephone: (415) 986-4258
Telecopy: (415) 986-5349
Total Pro Rata Commitment: $40,000,000
Total Pro Rata Share: 4.0%
S-11
<PAGE>
CREDIT SUISSE, as Lender
By: ____________________________
Title:
By: ____________________________
Title:
Notice Address:
Credit Suisse
633 West Fifth Street, 64th Floor
Los Angeles, California 90071
Attention: Stephen M. Flynn
Telephone: (213) 955-8215
Telecopy: (213) 955-8245
With a copy (by telecopy) of each Notice of Borrowing
and Notice of Conversion/Continuation to:
Rita Asa
Credit Suisse
633 West Fifth Street, 64th Floor
Los Angeles, California 90071
Telephone: (213) 955-8284
Telecopy: (213) 955-8245
Total Pro Rata Commitment: $25,000,000
Total Pro Rata Share: 2.5%
S-12
<PAGE>
THE DAI-ICHI KANGYO BANK, LIMITED,
LOS ANGELES AGENCY, as Lender
By: ____________________________
Title:
Notice Address:
The Dai-Ichi Kangyo Bank, Limited,
Los Angeles Agency
555 W. 5th Street, 5th Floor
Los Angeles, California 90013
Attn.: William Murray
Telephone: (213) 243-4763
Telecopy: (213) 624-5258
Total Pro Rata Commitment: $25,000,000
Total Pro Rata Share: 2.5%
S-13
<PAGE>
THE FIRST NATIONAL BANK
OF BOSTON, as Lead Manager and Lender
By: ____________________________
Title:
Notice Address:
The First National Bank of Boston
100 Federal Street, 01-08-01
Boston, Massachusetts 02110
Attention: Alicia Szendiuch
Telephone: (617) 434-4797
Telecopy: (617) 434-1955
Total Pro Rata Commitment: $40,000,000
Total Pro Rata Share: 4.0%
S-14
<PAGE>
FIRST INTERSTATE BANK
OF CALIFORNIA, as Lender
By: ____________________________
Title:
Notice Address:
First Interstate Bank of California
US Banking Division
707 Wilshire Boulevard,
Mail Sort W16-13
Los Angeles, California 90017
Attention: Gregory Brown
Telephone: (213) 614-3084
Telecopy: (213) 614-2569
Total Pro Rata Commitment: $25,000,000
Total Pro Rata Share: 2.5%
S-15
<PAGE>
THE FIRST NATIONAL BANK
OF CHICAGO, as Lender
By: ____________________________
Title:
Notice Address:
The First National Bank of Chicago
777 South Figueroa Street,
Fourth Floor
Los Angeles, California 90017
Attention: Anthony B. Mathews
Telephone: (213) 683-4957
Telecopy: (213) 683-4999
with a copy to:
The First National Bank of Chicago
One First National Plaza
10th Floor, Suite 0634
Chicago, Illinois 60670
Attention: Marilyn Fisher
Telephone:
Telecopy:
Total Pro Rata Commitment: $25,000,000
Total Pro Rata Share: 2.5%
S-16
<PAGE>
THE FUJI BANK, LIMITED,
LOS ANGELES AGENCY, as Lead Manager
and Lender
By: ____________________________
Title:
Notice Address:
The Fuji Bank, Limited,
Los Angeles Agency
333 South Grand Avenue, 25th Floor
Los Angeles, California 90071
Attention: Gavin P. Feinberg
Telephone: (213) 253-4104
Telecopy: (213) 253-4198
Total Pro Rata Commitment: $40,000,000
Total Pro Rata Share: 4.0%
S-17
<PAGE>
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, LOS ANGELES AGENCY, as Lead
Manager and Lender
By: ____________________________
Title:
Notice Address:
The Industrial Bank of Japan, Limited,
Los Angeles Agency
350 South Grand Avenue
Suite 1500
Los Angeles, California 90071
Attention (for credit issues):
Steven Savoldelli
Telephone: (213) 893-6421
Telecopy: (213) 488-9840
Attention (for loan administration):
Jane Chang/Jeanie Song
Telephone: (213) 628-7241
Telecopy: (213) 688-7486
Total Pro Rata Commitment: $40,000,000
Total Pro Rata Share: 4.0%
S-18
<PAGE>
ISTITUTO BANCARIO SAN PAOLO
DI TORINO SPA, as Lead Manager
and Lender
By: ____________________________
Title:
By: ____________________________
Title:
Notice Address:
Istituto Bancario San Paolo
di Torino SpA
444 South Flower Street, Suite 4550
Los Angeles, California 90071
Attention: Donald W. Brown
Telephone: (213) 489-3100
Telecopy: (213) 622-2514
Total Pro Rata Commitment: $40,000,000
Total Pro Rata Share: 4.0%
S-19
<PAGE>
KREDIETBANK, NV, as Lender
By: ____________________________
Title:
By: ____________________________
Title:
Notice Address:
Kredietbank, NV
c/o Kredietbank Los Angeles
Representative Office
550 South Hope Street
Suite 1775
Los Angeles, California 90071
Attention: Patrick Daems
Telephone: (213) 620-0299
Telecopy: (213) 687-3885
Total Pro Rata Commitment: $25,000,000
Total Pro Rata Share: 2.5%
S-20
<PAGE>
LONG-TERM CREDIT BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY, as Lead Manager
and Lender
By: ____________________________
Title:
Notice Address:
Long-Term Credit Bank of Japan,
Ltd., Los Angeles Agency
444 South Flower Street
Suite 3700
Los Angeles, California 90071
Attention: Michael Yurkas
Telephone: (213) 689-6321
Telecopy: (213) 626-1067
Total Pro Rata Commitment: $40,000,000
Total Pro Rata Share: 4.0%
S-21
<PAGE>
MELLON BANK, N.A., as Lender
By: ____________________________
Title:
Notice Address:
Mellon Bank, N.A.
300 South Grand Avenue
Suite 3800
Los Angeles, California 90071
Attention: Mack Clapp
Telephone: (213) 680-7351
Telecopy: (213) 626-3745
Total Pro Rata Commitment: $25,000,000
Total Pro Rata Share: 2.5%
S-22
<PAGE>
NATIONSBANK OF TEXAS, N.A., as Co-Arranger
and Lender
By: ____________________________
Title:
Notice Address:
NationsBank of Texas, N.A.
444 South Flower Street, Suite 1500
Los Angeles, California 90071
Attention: J. Blake Seaton,
Vice President
Telephone: (213) 236-4904
Telecopy: (213) 624-5815
Total Pro Rata Commitment: $55,000,000
Total Pro Rata Share: 5.5%
S-23
<PAGE>
SOCIETE GENERALE, as Lead Manager
and Lender
By: ____________________________
Title:
Notice Address:
Societe Generale
2029 Century Park East
Suite 2900
Los Angeles, California 90067
Attention: J. Staley Stewart
Telephone: (310) 788-7103
Telecopy: (310) 551-1537
Total Pro Rata Commitment: $40,000,000
Total Pro Rata Share: 4.0%
S-24
<PAGE>
STANDARD CHARTERED BANK, as Lender
By: ____________________________
Title:
Notice Address:
Standard Chartered Bank
707 Wilshire Boulevard, W14-19
Los Angeles, California 90017
Attention: Rita Raychaudhuri
Telephone: (213) 614-2105
Telecopy: (213) 614-3430/4714
Total Pro Rata Commitment: $25,000,000
Total Pro Rata Share: 2.5%
S-25
<PAGE>
TORONTO DOMINION BANK (TEXAS), INCORPORATED, as Lender
By: ____________________________
Title: Vice President
Notice Address:
The Toronto-Dominion Bank
909 Fannin Street
Suite 1700
Houston, Texas 77010
Attention: John R. Geresi
Telephone: (713) 653-8200
Telecopy: (713) 951-9921
Total Pro Rata Commitment: $25,000,000
Total Pro Rata Share: 2.5%
S-26
<PAGE>
UNION BANK, as Lender
By: ____________________________
Title:
Notice Address:
Union Bank
445 S. Figueroa
Los Angeles, California 90071
Attention: Helen Y. Rhee
Telephone: (213) 236-6601
Telecopy: (213) 236-6701
Total Pro Rata Commitment: $25,000,000
Total Pro Rata Share: 2.5%
S-27
<PAGE>
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK AND CAYMAN ISLANDS BRANCHES,
as Lender
By: ____________________________
Title:
By: ____________________________
Title:
Notice Address:
Westdeutsche Landesbank Girozentrale
New York Branch
1211 Avenue of the Americas
New York, New York 10036
Attn: Loan Administration
Telephone: (212) 852-6000
Telecopy: (212) 852-6300
with a copy to:
Westdeutsche Landesbank Girozentrale
Los Angeles Representative Office
633 West Fifth Street
Suite 6750
Los Angeles, California 90071
Attn.: R.J. Cruz
Telephone: (213) 623-1613
Telecopy: (213) 623-4706
Total Pro Rata Commitment: $25,000,000
Total Pro Rata Share: 2.5%
S-28
<PAGE>
EXHIBIT 10.2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECOND AMENDMENT
TO
REVOLVING CREDIT AGREEMENT
BY AND AMONG
CASTLE & COOKE HOMES, INC.
(A HAWAII CORPORATION),
CASTLE & COOKE HOMES HAWAII, INC.
(FORMERLY CASTLE & COOKE RESIDENTIAL, INC.)
CASTLE & COOKE KUNIA, INC.,
CASTLE & COOKE HOMES, INC.
(A CALIFORNIA CORPORATION),
CASTLE & COOKE SIERRA VISTA, INC.,
AND PRAIRIE VISTA, INC.
AS BORROWERS
AND
THE FINANCIAL INSTITUTIONS LISTED
ON THE SIGNATURE PAGES HEREOF
AS LENDERS
AND
BANK OF HAWAII
AS AGENT
AND
THE FIRST NATIONAL BANK OF BOSTON
AS MAINLAND CO-AGENT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated as of June 9, 1994
<PAGE>
EXECUTION COPY
SECOND AMENDMENT
TO REVOLVING CREDIT AGREEMENT
THIS SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT (the "Second Amendment"),
dated as of June 9, 1994, by and among
Castle & Cooke Homes, Inc. (a Hawaii corporation), acting in its capacity as
a Borrower and as the Representative Borrower; Castle & Cooke Homes Hawaii,
Inc. (formerly Castle & Cooke Residential, Inc.); Castle & Cooke Kunia, Inc.;
Castle & Cooke Homes, Inc. (a California corporation); Castle & Cooke Sierra
Vista, Inc.; and Prairie Vista, Inc. (each, a "Borrower" and collectively,
the "Borrowers"); and
Bank of America National Trust and Savings Association, Bank of Hawaii, CIBC
Inc., First Hawaiian Bank, The First National Bank of Boston and Wells Fargo
Bank, N.A. (for purposes of this Second Amendment and for purposes of the
Credit Agreement, as so amended, from and after the Effective Date: each, a
"Lender" and collectively, the "Lenders"); and
Kredietbank, N.V. and Societe Generale (the "Terminating Lenders"); and
Bank of Hawaii, in its capacity as agent for the Lenders (in such capacity,
the "Agent"); and in its capacity as the Interim Lender under the Swing Loan
Credit Facility (as defined below) (in such capacity, the "Interim Lender");
and in its capacity as the Issuing Bank (as defined below) (in such capacity,
the "Issuing Bank"), and
The First National Bank of Boston, in its capacity as Mainland Co-Agent (the
"Mainland Co-Agent"),
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS the Borrowers; and Bank of America National Trust and Savings
Association, Bank of Hawaii, CIBC Inc., First Hawaiian Bank, The First National
Bank of Boston, Kredietbank, N.V., and Societe Generale (for purposes of this
Second Amendment: each, an "Original Lender" and collectively, the "Original
Lenders"); and the Agent are parties to that certain Revolving Credit Agreement
dated as of February 26, 1993, as amended pursuant to that certain First
Amendment dated as of July 9, 1993 (the "First Amendment") (as amended, the
"Credit Agreement"); and
<PAGE>
WHEREAS all of the Borrowers have requested the Lenders, the Terminating
Lenders and the Agent to amend the Credit Agreement for the purpose of (i)
increasing the aggregate Commitment of the Lenders from $100,000,000 to
$135,000,000; and (ii) activating the Active Tranche to $135,000,000; and (iii)
modifying the Scheduled Commitment Reductions; and (iv) modifying the inventory
limitations set forth in the Credit Agreement; and (v) increasing the amounts
allowed for additional Investments, with provision for certain property
acquisitions, purchase agreements for mortgages to be insured under the mortgage
insurance program of the Federal Housing Administration, and purchase money
financing on bulk lot sales; and (vi) permitting the Borrower to incur up to
$10,000,000 of permitted indebtedness in the form of non-recourse purchase money
financing in connection with the purchase of properties; and (vii) increasing
the amount of sales that constitute an Extraordinary Sale; and (viii) enabling
the Borrowers to make short-term borrowings from time to time in amounts less
than the minimum amount of each Borrowing, through the establishment and
implementation of the Swing Loan Credit Facility, as described below; and (ix)
providing for the issuance of letters of credit for the account of the
Borrowers; and (x) eliminating the California/Arizona Sublimit; and
WHEREAS the parties have agreed that Wells Fargo Bank, N.A. ("Wells
Fargo") be named as a Lender under the terms of the Credit Agreement; and that
Kredietbank, N.V. and Societe Generale, after repayment of each of their
respective Loans, discontinue their participation as Lenders under the Credit
Agreement; and that the Proportionate Share of each of the Lenders be adjusted
to the allocations set forth herein; and
WHEREAS the Lenders, the Terminating Lenders and the Agent are willing
to amend the Credit Agreement for such purposes, upon the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the parties hereto agree as follows:
Section 1. Definitions. All terms used herein shall have the same
-----------
meaning as in the Credit Agreement unless otherwise defined herein. All
references to the Credit Agreement shall mean the Credit Agreement as hereby
amended. Additionally, the following term shall have the following meaning:
-2-
<PAGE>
"Effective Date" means, for purposes of this Second Amendment, June 14, 1994
or such other date as the parties may agree to.
"Interim Proportionate Share" means, in respect of each Lender and each
Terminating Lender at any point in time during the interim period beginning the
Effective Date and ending on the earlier of (i) the date of repayment in full of
each of the Terminating Loans (as defined below), and (ii) the date of the
purchase of such Terminating Loans by the Lenders as described in paragraph
2(i)(E) below (the "Interim Repayment Period"), the proportion, expressed as a
percentage, that the aggregate outstanding Terminating Loans, Continuing LIBOR
Loans and Loans of such Lender or Terminating Lender bears to the aggregate of
all Terminating Loans, Continuing LIBOR Loans and Loans of all Lenders and
Terminating Lenders outstanding at such time.
Section 2. Amendatory Provisions. From and after the Effective Date,
---------------------
the Credit Agreement is hereby amended as follows:
(a) Parties.
-------
(i) Additional Lender; Repayment of Existing Loans.
----------------------------------------------
(A) For all purposes under the Credit Agreement and the Loan
Documents, Wells Fargo hereby becomes, and from and after the Effective
Date shall be deemed to be, a "Lender" as defined in the Credit
Agreement. Wells Fargo hereby unconditionally (i) accepts and receives
all of the rights of a Lender set forth in the Credit Agreement and the
Loan Documents, and (ii) assumes and agrees to perform all of the
liabilities and obligations of a Lender thereunder, and (iii) adopts,
confirms and ratifies, as to itself, all of the terms and conditions set
forth in the Credit Agreement and the Loan Documents. All references to a
"Lender" or "Lenders" under the Credit Agreement, as amended by this
Second Amendment, shall include Wells Fargo to the same extent as if it
were originally a Lender under the Credit Agreement.
(B) On the Effective Date, each LIBOR Loan of the Terminating
Lenders, and each Base Rate Loan, outstanding on the Business Day
immediately preceding the Effective Date (a "Terminating Loan"), together
with accrued interest thereon and applicable Breakage
-3-
<PAGE>
Costs, if any, shall be repaid to the Original Lender thereof.
(C) On the Principal Payment Date thereof, each LIBOR Loan, other
than a Terminating Loan, outstanding on the Effective Date (a "Continuing
LIBOR Loan"), together with accrued and unpaid interest thereon, shall be
repaid to the Original Lender thereof.
(D) Each Base Rate Loan and each LIBOR Loan made on or after the
Effective Date shall be made by and repaid to the Lenders in accordance
with their respective Commitments as set forth in this Second Amendment.
(E) In the event of the occurrence of an Event of Default on or after
the Effective Date and while any Terminating Loan remains outstanding,
each of the Terminating Lenders hereby agrees to sell, assign, transfer
and convey to the Lenders, to each Lender in such Lender's Proportionate
Share, all of its right, title and interest in and to its respective
Terminating Loans, together with all accrued interest thereon and other
amounts then due with respect thereto, and each Lender hereby agrees to
purchase, for a purchase price equal to its Proportionate Share of 100%
of the principal amount thereof plus all accrued and unpaid interest
thereon and all other amounts due to the Assignors with respect thereto,
without recourse to the Terminating Lenders, its Proportionate Share of
such Terminating Loans; provided, however, that the sum of each Lender's
-------- -------
obligation under this paragraph (E) plus the amount of such Lender's
Continuing LIBOR Loans and Loans, shall not exceed such Lender's
Commitment; and provided, further, that the Borrowers agree to pay all
-------- -------
applicable Breakage Costs. In such case, each Terminating Lender agrees
to execute appropriate assignment and transfer documents, and represent
and warrant solely as to unencumbered ownership and rights of transfer,
in order properly to effect such purchase and grant full title and
interest to the Lenders in respect of such Terminating Loans.
(F) During the Interim Repayment Period: (i) each of the Lenders and
each of the Terminating Lenders shall be deemed to hold, for all purposes
under the Credit Agreement except for the purchase obligation of the
Lenders set forth in paragraph (E) above and the
-4-
<PAGE>
new Commitments set forth in Section 2(c) below, a pro rata share of all
of the Terminating Loans, Continuing LIBOR Loans and Loans outstanding
equal to its Interim Proportionate Share, and (ii) all other references
in the Credit Agreement to "Proportionate Share" shall mean, as to each
Lender or Terminating Lender, its Interim Proportionate Share.
(ii) Termination as to Certain Lenders. From and after the Effective Date,
----------------------------------
the Terminating Lenders shall have no remaining Commitment, and the obligation
of the Borrowers to pay a Commitment Fee or a Facility Fee to the Terminating
Lenders under the Credit Agreement shall cease. From and after (A) the date of
repayment of the Terminating Loans by the Borrowers directly to the Terminating
Lenders in accordance with paragraph 2(a)(i)(B) above, or, (B) if the
Terminating Loans are not repaid by the Borrowers directly to the Terminating
Lenders in accordance with paragraph 2(a)(i)(B) above, the date of the purchase
of the Terminating Loans by the Lenders as described in paragraph 2(a)(i)(E)
above, each of the Terminating Lenders shall have no other right or obligation
under the Credit Agreement and shall not be considered to be a party thereto
except to the extent of any rights or obligations that survive repayment of the
Loans to a Lender in accordance with the terms of the Credit Agreement.
(iii) Acknowledgement of Name Change. The Lenders acknowledge a change of
------------------------------
name of one of the Borrowers, from "Castle & Cooke Residential, Inc." to "Castle
& Cooke Homes Hawaii, Inc."
(iv) Mainland Co-Agent. The Mainland Co-Agent, in its capacity as such, shall
-----------------
have no duties or obligations to any of the Lenders or any of the Borrowers
under the Credit Agreement.
(b) Definitions. The definition of "Inventory Item" is deleted. The
-----------
following new definitions are added to the Credit Agreement:
"'FHA Anticipation Loan' means a loan made by a mortgage company or other
financial institution to finance the purchase of one or more residential units
in a Real Estate Development in expectation of a grant of approval for such Real
Estate Development, or any portion thereof, by the Federal Housing
Administration (the "FHA") under applicable FHA regulations."
-5-
<PAGE>
"'FHA Anticipation Loan Purchase Agreement' means a financing
arrangement pursuant to which a mortgage company or other financial
institution agrees to make FHA Anticipation Loans to purchasers of one or
more units in a Real Estate Development, based on the agreement of the
Borrowers to purchase such FHA Anticipation Loans if for any reason such
loans do not qualify for FHA insurance coverage due to (i) the failure of
such residential units to receive FHA approval or (ii) default by the
purchaser while such approval is pending."
"'Letter of Credit' has the meaning set forth in Section 2.7 of this
Credit Agreement."
"'Letter of Credit Application' means, at any time, a letter of credit
application substantially in the form of the Issuing Bank's standard letter
of credit application in use at such time if accepted by the Representative
Borrower, or such other form as may be agreed to by the Issuing Bank and the
Representative Borrower."
"'Standing Inventory' means substantially completed and unsold homes,
excluding models, as determined under the reporting methods used by the
Borrowers in accordance with generally accepted accounting principles."
"'Swing Loan' means a loan from the Interim Lender under the Swing Loan
Credit Facility."
"'Swing Loan Credit Facility' means a credit facility to be granted by
the Interim Lender to the Borrowers in accordance with the provisions of
Section 2.6."
"'Unsold Homes in Production' means homes under construction, excluding
models, as determined under the reporting methods used by the Borrowers in
accordance with generally accepted accounting principles."
"'Unsold Lots in Production' means lots that are either completed or
under construction."
Base Rate Margin. The definition of "Base Rate Margin" is amended to
----------------
read in its entirety as follows:
"'Base Rate Margin' means one-fourth of one percent (1/4%) per annum."
-6-
<PAGE>
Extraordinary Sale. The definition of "Extraordinary Sale" is amended
------------------
to read in its entirety as follows:
"'Extraordinary Sale' means the sale or transfer by one or more
Borrowers in any single transaction or a series of related transactions
during any one-year period, except for sales of single lots and
improvements thereon to individual consumers and sales of 150 or fewer
improved lots to merchant builders, (a) of real property assets in the
same Real Estate Development in which the aggregate sales price exceeds
$5,000,000, or (b) of real property assets in which the aggregate sales
price exceeds $15,000,000. Any such sale or transfer between or among
any of the Borrowers and their Subsidiaries shall not constitute an
Extraordinary Sale."
LIBOR Margin. The definition of "LIBOR Margin" is amended to read in
------------
its entirety as follows:
"'LIBOR Margin' means two percent (2%) per annum."
Loan. The definition of "Loan" is amended to read in its entirety as
----
follows:
"'Loan' means a Base Rate Loan, a LIBOR Loan, a Swing Loan, and an
outstanding Letter of Credit."
Proportionate Share. The definition of "Proportionate Share" is amended
-------------------
to read in its entirety as follows:
"'Proportionate Share' means, in respect of each Lender at any point in
time, the proportion that the aggregate outstanding Loans disbursed by
such Lender to the Borrowers under this Agreement bears to the aggregate
of all Loans of all Lenders outstanding at such time, or, if no Loans
are outstanding at such time, the proportion that the Commitment of such
Lender bears to the aggregate of all Commitments of all of the Lenders."
Real Estate Development. The definition of "Real Estate Development" is
-----------------------
amended to read in its entirety as follows:
"'Real Estate Development' means a real estate project (including
one or more multi-family apartment complexes held for investment), the
costs of which are
-7-
<PAGE>
capitalized under generally accepted accounting principles including,
but not limited to: costs for land, site preparation, construction of
buildings, off-site and on-site improvements and common area facilities
and amenities; Capitalized Interest; capitalized pre-acquisition costs,
including but not limited to, fees for legal services, appraisals,
engineering and environmental studies and market and feasibility studies
and unimproved land held for development."
Real Estate Indebtedness. The definition of "Real Estate Indebtedness"
------------------------
is amended to read in its entirety as follows:
"Real Estate Indebtedness" means, at any time, the aggregate
outstanding principal amount of all of the Loans and all Intercompany
Indebtedness of the Borrowers, including accrued and unpaid expenses,
incurred to finance the acquisition or development of Real Estate
Developments."
(c) Adjusted Commitments. From and after the Effective Date, the entire
--------------------
Commitment of each Lender is activated to form part of the Active Tranche (there
being no remaining Inactive Tranche) and is adjusted to the amount set forth
opposite its name below:
Lender: Commitment:
- ------ ----------
Bank of America NT&SA: $ 22,950,000
Bank of Hawaii: $ 27,000,000
CIBC Inc.: $ 12,150,000
First Hawaiian Bank: $ 22,950,000
The First National Bank of
Boston: $ 27,000,000
Kredietbank, N.V.: $ 0
Societe Generale: $ 0
Wells Fargo: $ 22,950,000
Total Commitments: $135,000,000
Thereafter, all references in the Credit Agreement to the "Inactive Tranche"
shall be without effect.
(d) California/Arizona Sublimit; Royal Kunia Loans. All references to the
----------------------------------------------
California/Arizona Sublimit are
-8-
<PAGE>
henceforth without effect. Accordingly: (i) the provisions of clause (d) of the
proviso of Section 2.1 shall not apply to the application of proceeds of each
Borrowing; and (ii) in each Notice of Borrowing, the Representative Borrower
shall not be required to designate whether such Borrowing will fall within the
California/Arizona Sublimit; and (iii) the requirement for unanimity among
Lenders set forth in clause 11.1(b) with respect to any increase in the
California/Arizona Sublimit is deleted. Clause (c) of the proviso of Section 2.1
is amended to read in its entirety as follows: ". . . (c) the aggregate amount
of all Royal Kunia Loans outstanding at any one time shall not exceed the amount
of $100,000,000; and . . ."
(e) Mandatory Commitment Reductions. Section 3.1(a) is amended to read in its
-------------------------------
entirety as follows:
"Section 3.1. Mandatory Commitment Reductions.
-------------------------------
(a) Scheduled Commitment Reductions--Active Tranche. The Active Tranche
-----------------------------------------------
of the Commitment of each Lender shall be reduced on each of the
following Commitment Reduction Dates by an amount equal to such Lender's
Proportionate Share of the "Scheduled Commitment Reduction" set forth
below opposite such Commitment Reduction Date:
<TABLE>
<CAPTION>
Commitment Scheduled
Reduction Commitment
Date: Reduction:
------------------ ---------------------------
<S> <C>
December 31, 1994: $15,000,000
June 30, 1995: $15,000,000
December 31, 1995: $15,000,000
Termination Date: All outstanding amounts
and remaining Commitments."
</TABLE>
(f) Inventory Control. Section 8.2(k) of the Credit Agreement is amended to
-----------------
read in its entirety as follows:
"(k) hold at any one time:
(i) more than $35,000,000 in the aggregate, measured by cost, of
Unsold Lots in Production in the California and Arizona Regions; and
-9-
<PAGE>
(ii) more than (1) twenty Unsold Homes in Production per tract, in
not more than ten tracts, in Bakersfield, California; and (2) 250 Unsold
Homes in Production in Milliani, Hawaii; and (3) 125 Unsold Homes in
Production in the Royal Kunia Phase I Property; and (4) sixty Unsold
Homes in Production in Wailuna, Hawaii; and
(iii) Standing Inventory consisting of more than (1) the greater of
75 homes and $15,000,000, measured by cost, in Bakersfield, California;
and (2) the greater of 200 homes and $75,000,000, measured by cost, in
the Region of Hawaii."
(g) A new Section 2.6 is added to the Credit Agreement, as follows:
"Section 2.6 Swing Loan Credit Facility. (a) From time to time
--------------------------
throughout the Term of this Credit Agreement, but no more than five
times per calendar month, at the request of the Representative Borrower,
upon the terms and conditions set forth in this Section 2.6 and upon
satisfaction of the conditions precedent set forth in Section 6.2, the
Interim Lender agrees to make one or more Swing Loans to the Borrowers
in an aggregate principal amount outstanding at any one time of up to
Four Million Dollars ($4,000,000). Each Swing Loan shall be in the
amount of One Hundred Thousand Dollars ($100,000) or integral multiples
thereof. Each Swing Loan shall be made available to the Representative
Borrower upon receipt by the Interim Lender of a Notice of Borrowing
specifying (i) that a Swing Loan is requested, (ii) the principal amount
of such Swing Loan, (iii) the account into which the proceeds thereof
are to be deposited, and (iv) the amount of such Swing Loan that will
constitute a Royal Kunia Loan. Each Swing Loan shall be evidenced by an
entry in the grid on a Promissory Note substantially in the form of
Exhibit A-2. The Interim Lender shall record the principal amount of
each Swing Loan, and all payments made in respect of the principal
amount thereof, on the grid attached to and made a part of such Note;
provided, however, that the failure of the Interim Lender to record such
-------- -------
information shall not relieve the Borrowers of their joint and several
obligations to the Interim Lender hereunder or under such Note or
otherwise affect payments of principal by the Borrowers.
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<PAGE>
(b) The aggregate principal amount of all Swing Loans outstanding,
when added to the amount of all of the outstanding Loans of the Interim
Lender (in its capacity as a Lender) shall not exceed the Commitment of
the Interim Lender (in its capacity as a Lender), nor shall such
principal amount, when added to the amount of all other Loans
outstanding, exceed the aggregate Commitments of all of the Lenders.
Upon the disbursement of each Swing Loan and thereafter so long as such
Swing Loan remains outstanding, the Commitment of each Lender shall be
reduced, for all purposes other than for the calculation of Commitment
Fees, by an amount equal to such Lender's Proportionate Share of such
Swing Loan. Each Swing Loan shall bear interest at an annual rate equal
to the Base Rate, and shall be repaid (or converted, as described below)
not later than thirty days after the disbursement date thereof. Within
the limits set forth in this Section 2.6 and in accordance with the
terms of this Agreement, the Borrowers may borrow under this Section
2.6, repay and prepay as permitted herein, and re-borrow under this
Section 2.6, throughout the Term of this Agreement.
(c) At any time when an Event of Default has occurred and is
continuing, the Interim Lender may, by delivery of a Notice of Borrowing
to the Agent given not later than 9:00 A.M. (Honolulu time) at least one
Business Day before the Disbursement Date thereof, call for repayment of
all outstanding Swing Loans by requesting that a Borrowing be made for
such purpose. Such Notice of Borrowing shall be substantially in the
form of Exhibit B-3 hereto, specifying therein (i) the requested date of
such Borrowing, (ii) the requested aggregate amount of such Borrowing,
and (iii) that such Borrowing will be made for the purpose of repaying
Swing Loans. In such case, each Lender shall, before 9:00 A.M.
(Honolulu Time), on the Disbursement Date of such Borrowing, make
available to the Agent at its address referred to on Schedule 1, for the
account of its Applicable Lending Office, in same day funds, such
Lender's Proportionate Share of such Borrowing, whereupon the Agent
shall utilize the proceeds of such Borrowing to repay such Swing Loans
to the Interim Lender. If any portion of any such repayment is
recovered by or on behalf of the Borrowers from the Interim Lender in
bankruptcy, by assignment for the benefit of creditors or otherwise, the
loss of the
-11-
<PAGE>
amount so recovered shall be ratably shared among all
Lenders in the manner contemplated by this Agreement. The provision of
this paragraph allowing for disbursement of a Borrowing under the
circumstances described therein supersedes the requirement set forth in
Section 2.1 that each Borrowing be in an amount of not less than Two
Million Dollars.
(d) If any Borrower files for relief under any bankruptcy law or
any law for the relief of debtors, or an Event of Default has occurred
and is continuing, or otherwise at any time if the Interim Lender
requests, each Lender shall irrevocably purchase, without recourse or
warranty, an undivided participation interest equal to, and for a
purchase price equal to, such Lender's Proportionate Share of the sum of
the principal amount of, plus all accrued and unpaid interest on, each
Swing Loan outstanding on the date of such Notice.
(e) The obligation of each Lender to disburse its Proportionate
Share of any Borrowing under Section 2.6(c), or to purchase a
participation in any Swing Loan pursuant to Section 2.6(d), is subject
to the conditions that at the time of disbursement of such Swing Loans:
(i) the aggregate outstanding principal amount of all Swing Loans and
all Loans, plus such Swing Loan, did not exceed the aggregate of all of
the Lenders' Commitments then in effect, and (ii) the Interim Lender
believed in good faith that the conditions precedent to making such
Swing Loan had been satisfied or waived by Majority Lenders. Subject to
satisfaction of such conditions, each Lender's obligation to participate
in a Borrowing pursuant to Section 2.6(c) or purchase a participation in
accordance with Section 2.6(d) shall be absolute and unconditional and
shall not be affected by any circumstance, including, without
limitation, (A) any setoff, counterclaim, recoupment, defense or other
claim, or (B) the occurrence or continuance of an Event of Default, or
(C) any adverse change in the condition (financial or otherwise) of any
of the Borrowers, or (D) any breach of this Agreement by the Borrowers
or any other Lender, or (E) the acceleration or the maturity of any
Loans or the termination of the Commitments after the making of any
Swing Loan, or (F) any other circumstance or event whatsoever."
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<PAGE>
(h) A new Exhibit A-2 is added to the Credit Agreement in the form of Exhibit
A to this Second Amendment.
(i) A new Exhibit B-3 is added to the Credit Agreement in the form of Exhibit
B to this Second Amendment.
(j) A new Exhibit B-4 is added to the Credit Agreement in the form of Exhibit
C to this Second Amendment.
(k) A new Section 2.7 is added to the Credit Agreement, as follows:
"Section 2.7 Letter of Credit Facility.
-------------------------
(a) Issuance of Letters of Credit. From time to time throughout
-----------------------------
the Term of this Credit Agreement, at the request of the Representative
Borrower and upon the terms and conditions set forth in this Section
2.7, and upon satisfaction of the conditions precedent set forth in
Section 6.2 (except a Letter of Credit Application shall be substituted
for a Notice of Borrowing) the Issuing Bank agrees to issue, for the
account of one or more of the Borrowers (an 'Account Party'), one or
more Standby Letters of Credit (each, a 'Letter of Credit') in an
aggregate face amount of up to Ten Million Dollars ($10,000,000)
outstanding at any one time. Each Letter of Credit shall be subject to
the Uniform Customs and Practice for Documentary Credits (International
Chamber of Commerce Publication no. 500), shall be issued in accordance
with instructions given by the Representative Borrower in a Letter of
Credit Application and shall specify (i) the name of one or more
beneficiaries to be designated in such Letter of Credit (each, a
'Beneficiary'), (ii) the amount of such Letter of Credit, (iii) the
documents required for a Drawing thereunder, (iv) the expiry date
thereof, and (v) the amount of such Letter of Credit that will
constitute, upon drawing, a Royal Kunia Loan.
(b) Utilization of Credit. The issuance of a Letter of Credit by
---------------------
the Issuing Bank shall constitute a utilization of credit under this
Credit Agreement. Upon the issuance of each Letter of Credit and
thereafter so long as such Letter of Credit remains outstanding and
uncanceled or undrawn, the Commitment of each Lender shall be reduced,
for all purposes, by an amount equal to such Lender's Proportionate
Share of
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<PAGE>
the amount of such Letter of Credit. The aggregate principal
amount of all Letters of Credit outstanding, when added to the amount of
all of the outstanding Loans of the Issuing Bank (in its capacity as a
Lender) shall not exceed the Commitment of the Issuing Bank (in its
capacity as a Lender), nor shall such principal amount, when added to
the amount of all other Loans outstanding, exceed the aggregate
Commitments of all of the Lenders. No Letter of Credit shall expire
later than thirty days before the last Commitment Reduction Date. The
issuance of a Letter of Credit by the Issuing Bank shall constitute an
irrevocable and unconditional commitment on the part of each Lender to
disburse funds in connection with a drawing thereunder and a related
Borrowing, or to reimburse the Issuing Bank for such Lender's
Proportionate Share of such drawing, in accordance with Section 2.7(d).
(c) Drawings. In determining whether to honor any request for
--------
a drawing under any Letter of Credit by the Beneficiary thereof (a
'Drawing'), the Issuing Bank shall be responsible only to determine that
the documents and certificates required to be delivered under such
Letter of Credit have been delivered and that they comply on their face
with the requirements of such Letter of Credit.
(d) Reimbursement of Drawings.
-------------------------
(i) From the Representative Borrower. If the Issuing Bank
--------------------------------
determines to honor a request for a Drawing, the Issuing Bank shall
immediately notify the Representative Borrower. The Representative
Borrower shall reimburse the Issuing Bank on the date on which such
Drawing is honored in an amount, in same day funds, equal to the amount
of such Drawing; provided, however, that such reimbursement may be made
as described in Section 2.7(d)(ii) below. The Representative Borrower
and each Borrower hereby authorize the Issuing Bank to charge the
account or accounts of the Account Party with the Issuing Bank in order
to cause timely payment to be made to the Issuing Bank of all amounts
due under this Section 2.7(d).
(ii) From the Borrowers after Disbursement of a Borrowing.
----------------------------------------------------
If the Representative Borrower fails for any reason to reimburse the
Issuing Bank as provided in subsection 2.7(d)(i) above, then
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<PAGE>
reimbursement shall be made to the Issuing Bank in the form of a
Borrowing to the Borrowers. The Issuing Bank shall immediately give
Notice to the Agent in the form of Exhibit B-4. The Agent shall
thereafter give each Lender, within one Business Day, Notice regarding
such drawing and related Borrowing, by facsimile, telex or cable, of the
date of such Drawing and the proposed Disbursement Date for such
Borrowing, the applicable interest rate and such Lender's Proportionate
Share of such Borrowing. Each Lender shall, before 9:00 A.M. (Honolulu
Time), on the Disbursement Date of such Borrowing, make available for
the account of its Applicable Lending Office to the Agent at its address
referred to on Schedule 1, in same day funds, such Lender's
Proportionate Share of such Borrowing, whereupon the Agent shall
transfer the amount of such Borrowing to the Issuing Bank, for the
account of the Borrowers, in reimbursement for the amount of such
Drawing. The provisions of this paragraph allowing for disbursement of
a Borrowing under the circumstances described herein supersedes the
requirement set forth in Section 2.1 that each Borrowing be in an amount
of not less than Two Million Dollars.
(e) The obligation of each Lender to disburse its Proportionate
Share of any Borrowing under Section 2.7(d)(ii) in respect of a Drawing
shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (A) any setoff,
counterclaim, recoupment, defense or other claim, or (B) the occurrence
or continuance of an Event of Default, or (C) any adverse change in the
condition (financial or otherwise) of any of the Borrowers, or (D) any
breach of this Agreement by the Borrowers or any other Lender, or (E)
the acceleration of the maturity of any Loans or the termination of the
Commitments after the issuance of such Letter of Credit, or (F) any
other circumstance or event whatsoever.
(f) Interest on Drawings. If the Representative Borrower fails to
--------------------
reimburse the Issuing Bank with respect to any Drawing on the date
thereof, the Representative Borrower agrees to pay to the Issuing Bank
interest on the amount of such Drawing from and including the date of
such Drawing to but excluding the date that actual reimbursement in full
is received by the Issuing Bank, at a rate equal to the sum of the
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<PAGE>
Base Rate plus the Base Rate Margin, calculated on the basis of a 360-
day year and actual days elapsed, provided, however, that no interest
-------- -------
shall be due on any Drawing for which the Representative Borrower
reimburses prior to 1:00 P.M. (Honolulu time) on the date of such
Drawing, and provided further, however, that nothing in this Section
-------- ------- -------
2.7(f) shall be deemed to relieve the Representative Borrower from its
obligation to reimburse the Issuing Bank for each Drawing on the date
thereof.
(l) Apportionment of Investments. Section 8.1(s) is amended to
----------------------------
delete the period at the end and substitute "; and" therefor, and a new
Section 8.1(u) is added to the Credit Agreement, as follows:
"(u) maintain their aggregate development costs incurred in
respect of certain Real Estate Developments in the Hawaii, California
and Arizona Regions, on a consolidated basis, within the following
limits:
(i) within the Hawaii Region, total development costs in
the Royal Kunia Phase I Property of not more than $100,000,000; and
(ii) outside the Hawaii Region, total development costs
in Real Estate Developments of not more than the greater of (A)
$160,000,000, or (B) 40% of the aggregate development costs incurred by
the Borrowers in respect of all Real Estate Developments; and
(iii) within the California Region, total assets
(exclusive of cash and accounts receivable) in Bakersfield, California,
of not more than $150,000,000."
(m) Section 8.2(a) is amended to read in its entirety as follows:
"(a) create, incur, assume or suffer to exist any Lien (except
any Lien which is inchoate, or arises by operation of law in the
ordinary course of business for sums not yet delinquent, or is being
contested in good faith), preferential arrangement, or encumbrance of
any kind on, or pledge of any of their respective properties or assets,
real or personal, tangible or intangible, whether now owned or hereafter
acquired, or
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<PAGE>
assign any right to receive income, in each case to secure any debt
or obligation of the Borrowers or any other Person other than (i)
the Liens in existence on the date of the execution and delivery of
this Agreement that are disclosed in Schedule 3 hereto, (ii)
mechanics' and materialmen's Liens being diligently contested in
good faith, and (iii) a Lien on the Hawaii Kai property (as
described below) granted to secure the payment of the purchase
price thereof, and (iv) Liens created pursuant to, or otherwise
expressly permitted under, this Agreement or any of the other Loan
Documents;"
(n) Section 8.2(b) is amended to read in its entirety as follows:
"(b) create or suffer to exist any indebtedness (contingent or
otherwise) other than the following: (i) Intercompany Indebtedness
up to a maximum of $5,000,000 outstanding at any one time, (ii)
taxes, assessments and governmental charges or levies which are
inchoate or are being contested in good faith and for which
adequate reserves, if required in accordance with generally
accepted accounting principles, have been set aside, (iii) accounts
payable, accrued liabilities, corporate taxes, bonds and other
current liabilities incurred in the ordinary course of business,
but not for money borrowed, and none of which are overdue in excess
of the applicable grace period (if any) related thereto, (iv)
indebtedness in an amount up to $10,000,000 in the aggregate
outstanding at any time, incurred by one or more of the Borrowers
to finance the purchase by such Borrower(s) of land (or the capital
stock of a corporation, or a partnership interest in a partnership)
in connection with any New Real Estate Project, secured by a
purchase money mortgage on a non-recourse basis by the property so
purchased, (v) indebtedness in an amount of up to $20,000,000,
secured on a nonrecourse basis, incurred in connection with the
acquisition of the Hawaii Kai property (as described below), and
(vi) indebtedness for Loans incurred under this Agreement;"
(o) Section 8.2(c) is amended to read in its entirety as follows:
"(c) make or commit to make directly or indirectly any advance,
loan, extension of credit or
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<PAGE>
capital contribution to, or purchase or otherwise acquire any
stock, bonds, notes, debentures or other securities of, or acquire
by purchase or otherwise all or substantially all the business or
assets, or stock, partnership interests or other evidence of
beneficial ownership of, or make any other investment in, any
Person or business project or enterprise (any such transaction
being herein called an "Investment") except as permitted under
Section 8.2(b) and except for the following:
(i) Investments consisting of short-term readily
marketable United States government securities or certificates of
deposit, or savings accounts, with any Lender or any commercial
bank organized under the laws of the United States of America,
Canada, or any state or province of either thereof or the District
of Columbia, each having a senior debt rating from Moody's
Investors Service, Inc. of at least A-3;
(ii) Investments in existence on the Closing Date and
disclosed on Schedule 4 hereto;
(iii) Investments in any of the Borrowers or any
Subsidiary or, to the extent permitted under Section 6.3(b), loans
to Kunia Residential Partners under the terms of the Royal Kunia
Partnership Agreement; and
(iv) additional Investments (including without
limitation loans extended to purchasers in seller-financed
transactions) of no more, except as provided in clause (v) below,
than $500,000 in any single transaction and $5,000,000 in the
aggregate outstanding at any one time, in any Person that is not a
Borrower; and
(v) notwithstanding the limitation set forth in clause
(iv) above, Investments in the form of one or more loans extended
to purchasers of land in seller-financed land sale transactions, in
an amount (A) not more than $6,375,000 in any one transaction and
$12,750,000 in the aggregate outstanding at any one time, and (B)
in any case not more than 85% of the purchase price; and
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<PAGE>
(vi) FHA Anticipation Loans in an amount of up to
$15,000,000 in the aggregate outstanding at any one time, under the
terms of one or more FHA Anticipation Loan Purchase Agreements; and
(vii) Investments permitted under Section 8.4."
(p) A new Section 8.4 is added, which shall read in its entirety
as follows:
"Section 8.4. New Real Estate Projects. The Borrowers jointly
------------------------
and severally agree that so long as any Note or any other obligations of
the Borrowers under the Loan Documents shall remain unpaid or any Lender
shall have any Commitment hereunder, the Borrowers and their
Subsidiaries will not, without the prior written consent of Majority
Lenders:
(i) incur expenses or make Investments of more than
$30,000,000 in the aggregate in connection with the development or
proposed development of New Real Estate Projects, net of income received
from such New Real Estate Projects, or
(ii) incur expenses or make Investments of more than
$15,000,000 in the aggregate in connection with the development or
proposed development of New Real Estate Projects in California or
Arizona, net of income received from such New Real Estate Projects, or
(iii) incur expenses or make Investments of more than
$3,000,000 in the aggregate in connection with the development or
proposed development of New Real Estate Projects outside the Regions of
Hawaii, California and Arizona, net of income received from such New
Real Estate Projects, or
(iv) incur pre-acquisition expenditures of more than
$3,000,000 in the aggregate in connection with the development or
proposed development of New Real Estate Projects, net of income received
from such New Real Estate Projects, or
(v) purchase any land that is not the subject of a tentative
or final approved subdivision map or is otherwise lacking necessary
governmental approvals for development; provided, however, that such
-------- -------
land may be
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<PAGE>
purchased as part of a permitted purchase of a larger parcel of
property, in which case the portion of the purchase price allocated
to such land shall not exceed $3,000,000.
In conjunction with any Investment relating to any New Real
Estate Project, the Borrowers shall submit to the Agent, in a
sufficient number of copies for all Lenders, (A) a copy of all
purchase contracts relating to such New Real Estate Project, and
(B) a pro forma budget for such New Real Estate Project, and (C)
--- -----
supporting market information."
(q) Partial Release of Royal Kunia Mortgage I and Royal Kunia
---------------------------------------------------------
Mortgage II. Notwithstanding the requirement for unanimity set forth in
-----------
clause 11.1(i) of the Credit Agreement, each of the Lenders hereby
authorizes the Agent to grant a partial release under the Royal Kunia
Mortgage I and under the Royal Kunia Mortgage II from time to time, under
the following circumstances: upon receipt of a request from the
Representative Borrower seeking a partial release under the Royal Kunia
Mortgage I and under the Royal Kunia Mortgage II for the purpose of
granting a required easement or permitting the sale of single lots,
multiple lots or bulk parcels, the Agent shall notify the Lenders of such
request and deliver to each Lender, upon request, a copy of applicable
documentation provided by the Representative Borrower. The consent of
each Lender shall be deemed granted on the tenth Business Day after
receipt of such Notice if such Lender has not objected to the granting of
such release prior thereto.
(r) Schedule 2. Subject to fulfillment of the conditions
----------
precedent set forth in Section 5(b), the following Real Estate
Development (the "Hawaii Kai Real Estate Development") is added to
Schedule 2 under the heading "Hawaii":
Kemper - Hawaii Kai, consisting of two fully entitled parcels: Kaluanui
1 (Area: 22.925 Acres) and Kaluanui 2 & 3 (Area: 13.859 acres),
including roadway, water, sewer, and utility connections available at
property line.
(s) Error Correction. The following amendments are made for the
----------------
purpose of correcting errors in the Credit Agreement and the First
Amendment:
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<PAGE>
(i) The reference to "Section 6.3(c)" in Section 8.2(c)(iii) is
amended to refer to "Section 6.3(b)."
(ii) Section 2(c) of the First Amendment, providing for the addition
of a new paragraph "(s)" to Section 8.1 of the Credit Agreement, is
amended to redesignate such new paragraph as paragraph "(t)" of Section
8.1 of the Credit Agreement.
Section 3. Fees.
----
(a) Amendment Fee. The Borrowers agree to pay to the Lenders an
-------------
amendment fee in the aggregate amount of Two Hundred Sixty Thousand Dollars
($260,000), such amount to be distributed to the Lenders in proportion to their
respective Commitments (the "Amendment Fee"). The Lenders acknowledge that no
additional Origination Fee shall be due under Section 4.1(b) of the Credit
Agreement in connection with the Activation described in this Second Amendment.
(b) Letter of Credit Fees. The Borrowers agree to pay a fee in
---------------------
connection with each Letter of Credit, as follows:
(i) to the Issuing Bank, (A) an issuance fee in an amount equal to one-
fourth of one percent (1/4%) per annum, calculated on the basis of the amount
of the obligation of the Issuing Bank from time to time under such Letter of
Credit, from the date of issuance of such Letter of Credit to and including
the date of expiry, cancellation or final Drawing, whichever occurs first,
payable semi-annually in advance (but subject to adjustment for reductions in
the amount of the obligation of the Issuing Bank thereunder as a result of
drawings or expirations), plus (B) reimbursement in full of all costs and
out-of-pocket expenses (including reasonable attorneys' fees and allocated
costs of in-house counsel) incurred by the Issuing Bank in connection with
any transaction involving the issuance of a Letter of Credit; and
(ii) to the Lenders, a Letter of Credit Fee in an amount equal to two
percent (2%) per annum, calculated on the basis of the amount of the
obligation of the Issuing Bank from time to time under such Letter of Credit,
from the date of issuance of such Letter of Credit to and including the date
of expiry, cancellation or final Drawing, whichever occurs first, payable
semi-annually in advance to the Agent for the account of the Lenders (but
subject to adjustment for reductions in the amount of the obligation of the
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<PAGE>
Issuing Bank under such Letter of Credit as a result of drawings or
expirations), such amount to be distributed to the Lenders in proportion to
their respective Commitments.
Section 4. Representations and Warranties. Each Borrower hereby severally
------------------------------
represents and warrants to the Agent and the Lenders as follows:
(a) Authority. It has all necessary power and authority, and has taken
---------
all action necessary, to make this Second Amendment, the Credit Agreement, and
all other Loan Documents, the valid and enforceable obligations they purport to
be.
(b) No Legal Obstacle to Credit Agreement. Except where any failure of
-------------------------------------
any of the following has not had or could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect: (i) Neither the
execution of this Second Amendment, the making by such Borrower of any
Borrowings under the Credit Agreement, nor the performance of the Credit
Agreement by such Borrower has constituted or resulted in, or will constitute or
result in, (A) a breach of the provisions of any contract to which such Borrower
is a party, or (B) the violation of any law, judgment, decree or governmental
order, rule or regulation applicable to such Borrower, or (C) the creation under
any agreement or instrument of any security interest, lien, charge, or
encumbrance upon any of the assets of such Borrower; and (ii) no approval or
authorization of any governmental authority is required to permit the execution,
delivery or performance by such Borrower of this Second Amendment, the Credit
Agreement, or the transactions contemplated hereby or thereby, or the making of
any Borrowing by such Borrower under the Credit Agreement.
(c) Representations and Warranties. The representations and warranties
------------------------------
set forth in Article VII of the Credit Agreement are true and correct in all
respects on and as of the date hereof as though made on and as of the date
hereof.
(d) Default. No Default or Event of Default under the Credit Agreement
-------
has occurred and is continuing.
Section 5. Mainland Co-Agent; Indemnification . The Lenders agree to
-----------------------------------
indemnify the Mainland Co-Agent (to the extent not reimbursed by the Borrowers
in accordance with the terms of the Credit Agreement), ratably according to
their respective Proportionate Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
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<PAGE>
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against the Mainland Co-Agent in any
way relating to or arising out of the Credit Agreement or any action taken or
omitted by the Mainland Co-Agent under the Credit Agreement; 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 the Mainland Co-Agent's gross negligence or willful
misconduct.
Section 6. Conditions, Effectiveness. (a) The effectiveness of this Second
-------------------------
Amendment and the obligation of each of the Lenders to make any Borrowings
pursuant to the Credit Agreement shall be subject to the fulfillment of the
following conditions:
(i) As of the date of this Second Amendment, the Borrowers shall be in
full compliance with their agreements herein and therein contained; and
(ii) Not later than the date of this Second Amendment the Agent shall
have received, for the account of each Lender, such Lender's Amendment Fee;
and
(iii) At least one Domestic Business Day before the Effective Date, the
Agent shall have received each of the following, in form and substance
satisfactory to the Agent:
(A) counterparts of this Agreement duly executed by each of the
Borrowers and by each of the Lenders and the Terminating Lenders; and
(B) a Note for each Lender in the amount of such Lender's
Commitment, duly issued in favor of such Lender on behalf of all of the
Borrowers by the Representative Borrower, in its capacity as
attorney-in-fact for each of the Borrowers (such Note to be delivered as
a replacement Note, against return of an existing Note, in favor of each
of the Lenders other than Wells Fargo); and
(C) a copy of a resolution of the Board of Directors of each of the
Borrowers, approving and authorizing the execution, delivery and
performance of this Second Amendment and each of the replacement Notes
and approving and authorizing the transactions contemplated in the
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<PAGE>
Credit Agreement as amended hereby, in form and substance satisfactory
to the Agent, certified by its corporate secretary or an assistant
secretary as being in full force and effect without modification or
amendment; and
(D) such other evidence with respect to the Borrowers or any other
person as any Lender may reasonably request to establish the
consummation of the transactions contemplated hereby, the taking of all
corporate proceedings in connection with this Second Amendment and the
Credit Agreement, and the compliance with the conditions set forth
herein.
(b) The effectiveness of the addition of the Hawaii Kai Real Estate
Development to Schedule 2, as set forth in Section 2(s) above, is subject to the
condition subsequent that the Agent shall receive the following documents not
later than ten Business Days after the closing on the purchase of the Hawaii Kai
property:
(i) a copy of the executed purchase contract evidencing the purchase of
the Hawaii Kai property for a purchase price not to exceed Thirty Million
Dollars, and
(ii) evidence that the Hawaii Kai has received appropriate entitlements
allowing the construction of approximately 480 dwelling units; and
(iii) confirmation, from appropriate governmental agencies, that such
dwelling units will not be subject to price ceilings imposed by law; and
(iv) evidence that utilities are readily available to the Hawaii Kai
property.
(c) Terminating Loans; Notes. Upon receipt of payment in full of each of the
------------------------
Terminating Loans, each Terminating Lender shall deliver to the Agent, for
delivery to the Representative Borrower, the Note originally issued to such
Terminating Lender. If the Terminating Loans are not repaid by the Borrowers
directly to the Terminating Lenders as provided in paragraph 2(a)(i)(B) above
and the Lenders purchase the Terminating Loans in accordance with paragraph
2(a)(i)(E) above, then each Terminating Lender shall deliver its Note to the
Agent for the ratable account of the Lenders.
Section 7. Miscellaneous.
-------------
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<PAGE>
(a) Effectiveness of the Agreement. The parties hereto expressly
------------------------------
reaffirm that the Credit Agreement remains in full force and effect and, except
as specifically amended hereby, unchanged.
(b) Waivers. This Second Amendment is specific in time and in intent
-------
and does not constitute, nor should it be construed as, a waiver of any other
right, power or privilege under the Credit Agreement or under any agreement,
contract, indenture, document or instrument mentioned in the Credit Agreement;
nor does it preclude other or further exercise of any such right, power or
privilege or the exercise of any other right, power or privilege; nor shall any
waiver of any right, power, privilege or default hereunder, or under any
agreement, contract, indenture, document or instrument mentioned in the Credit
Agreement, constitute a waiver of any other default of the same or of any other
term or provision.
(c) Counterparts. This Second Amendment may be executed in any number
------------
of counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument. This Second Amendment shall become
effective as of the date first written above only when the Borrowers, the Agent,
the Lenders and the Terminating Lenders shall have signed a copy hereof, whether
the same or counterparts, and the same shall have been delivered to the Agent.
(d) Governing Law. This Second Amendment and any instrument or
-------------
agreement required hereunder shall be governed by and construed under the laws
of the State of Hawaii.
(e) Expenses. The Borrowers agree to pay to the Agent on demand all
--------
reasonable costs and expenses, including fees and disbursements of counsel,
incurred by the Agent in connection with the preparation, execution and delivery
of this Second Amendment and any other documents to be delivered hereunder or in
connection with this Second Amendment.
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<PAGE>
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
BORROWERS:
- ---------
CASTLE & COOKE HOMES, INC. CASTLE & COOKE KUNIA, INC.
(a Hawaii corporation)
By:_________________________ By:_________________________
Name:_______________________ Name:_______________________
Title:______________________ Title:______________________
By:_________________________ By:_________________________
Name:_______________________ Name:_______________________
Title:______________________ Title:______________________
CASTLE & COOKE HOMES HAWAII, CASTLE & COOKE SIERRA VISTA, INC.
INC. (a Hawaii corporation)
By:_________________________ By:_________________________
Name:_______________________ Name:_______________________
Title:______________________ Title:______________________
By:_________________________ By:_________________________
Name:_______________________ Name:_______________________
Title:______________________ Title:______________________
CASTLE & COOKE HOMES, INC. PRAIRIE VISTA, INC.
(a California corporation)
By:_________________________ By:_________________________
Name:_______________________ Name:_______________________
Title:______________________ Title:______________________
By:_________________________ By:_________________________
Name:_______________________ Name:_______________________
Title:______________________ Title:______________________
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<PAGE>
LENDERS: TERMINATING LENDERS:
- ------- -------------------
BANK OF AMERICA NATIONAL KREDIETBANK, N.V.
TRUST AND SAVINGS ASSOCIATION
By:_________________________ By:_________________________
Name:_______________________ Name:_______________________
Title:______________________ Title:______________________
BANK OF HAWAII SOCIETE GENERALE
By:_________________________ By:_________________________
Name:_______________________ Name:_______________________
Title:______________________ Title:______________________
CIBC INC.
AGENT:
By:_________________________ -----
Name:_______________________
Title:______________________ BANK OF HAWAII
FIRST HAWAIIAN BANK By:_________________________
Name:_______________________
By:_________________________ Title:______________________
Name:_______________________
Title:______________________ ISSUING BANK:
------------
THE FIRST NATIONAL BANK OF BOSTON
BANK OF HAWAII
By:_________________________
Name:_______________________ By:_________________________
Title:______________________ Name:_______________________
Title:______________________
WELLS FARGO BANK, N.A.
By:_________________________ INTERIM LENDER:
Name:_______________________ --------------
Title:______________________
BANK OF HAWAII
By:_________________________
Name:_______________________
Title:______________________
MAINLAND CO-AGENT:
-----------------
THE FIRST NATIONAL BANK OF BOSTON
By:_________________________
Name:_______________________
Title:______________________
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<PAGE>
EXECUTION COPY
EXHIBIT A TO SECOND AMENDMENT
EXHIBIT A-2
REVOLVING CREDIT NOTE
(Grid Form)
$______________ June 9, 1994
Honolulu, Hawaii
FOR VALUE RECEIVED, the undersigned (collectively, the "Borrowers")
jointly and severally hereby promise to pay to the order of __________________
(the "Interim Lender") the principal amount of each Swing Loan (as defined in
the Credit Agreement described below) made by the Interim Lender to the
Borrowers pursuant to the Revolving Credit Agreement dated as of February 26,
1993 (the "Credit Agreement") between the Borrowers, the Interim Lender, the
other Lenders parties thereto and Bank of Hawaii as Agent (as amended in
accordance with (i) that certain First Amendment dated as of July 9, 1993, and
(ii) that certain Second Amendment dated as of June 9, 1994), in the amounts and
on the dates specified in the Credit Agreement.
This Revolving Credit Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. All capitalized terms used
herein have the respective meanings ascribed to them in the Credit Agreement, as
amended, unless otherwise defined herein.
The Borrowers jointly and severally promise to pay interest on the
unpaid principal amount of each Swing Loan from the date of such Swing Loan
until such principal amount is paid in full, at such interest rates, and payable
at such times, as are specified in the Credit Agreement, as amended.
Both principal and interest are payable in lawful money of the United
States of America, in same day funds, for the account of the Interim Lender, to
BANK OF HAWAII, as Agent, Commercial Real Estate Loan Division, Division #367,
111 South King Street, Honolulu, Hawaii 96813, attention: Administrative
Officer. Each Swing Loan made by the Interim Lender on account of the principal
hereof shall be recorded by the Interim Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto as Appendix I, which is part of
this Note; provided, however, that no failure by the Interim Lender to
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<PAGE>
make any such endorsement shall relieve the Borrowers of their obligations
hereunder.
The Credit Agreement, as amended, among other things, (i) provides for
the making of Swing Loans by the Interim Lender to the Borrowers from time to
time in an aggregate amount not to exceed at any one time the U.S. dollar amount
first above written, the indebtedness of the Borrowers resulting from each such
Swing Loan being evidenced by this Note, (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events,
and (iii) contains provisions for prepayments on account of principal hereof
upon the terms and conditions therein specified.
Without limiting any provision of the Credit Agreement, as amended, the
Borrowers jointly and severally promise to pay all attorney's fees and expenses
(including the allocated cost of in-house legal services) as shall be incurred
to induce or compel the payment of this Note or the Loan Documents or any
portion of the indebtedness evidenced hereby or thereby, or incurred thereunder,
whether or not suit shall be brought hereon or thereon.
Except as otherwise provided herein or in the Credit Agreement, as
amended, the Borrowers and all others who may become liable for any part of the
obligations of the Borrowers under the Loan Documents severally waive
presentment, protest, demand and notice of protest, demand, dishonor and non-
payment of this Note and the other Loan Documents and consent to any number of
renewals or extensions of the time of payment hereof and thereof and to any
release by the Interim Lender of parties obligated hereunder or thereunder or
forbearance in the enforcement hereof or thereof.
This Note shall be governed by and construed in accordance with the law
of the State of Hawaii.
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