SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to .
Commission File Number 1-644-2
COLGATE-PALMOLIVE COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 13-1815595
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
300 PARK AVENUE, NEW YORK, NEW YORK 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 212-310-2000
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
$4.25 Preferred Stock, without New York Stock Exchange
par value, cumulative dividend
Common Stock, $1.00 par value New York Stock Exchange
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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
At February 28, 1995 the aggregate market value of stock held by
non-affiliates was $9,325 million. There were 144,579,030 shares of Common
Stock outstanding as of February 28, 1995.
DOCUMENTS INCORPORATED BY REFERENCE:
Documents Form 10-K Reference
Portions of Proxy Statement for the
1995 Annual Meeting Part III, Items 10 through 13
Total number of sequentially numbered pages in this filing, including
exhibits thereto: .
The exhibit index begins on page 38.
<PAGE>
PART I
ITEM 1. BUSINESS
(a) General Development of the Business
Colgate-Palmolive Company (the "Company") is a corporation which was
organized under the laws of the State of Delaware in 1923. The Company
manufactures and markets a wide variety of products throughout the world for
use by consumers. For recent business developments, refer to the information
set forth under the captions "Results of Operations" and "Liquidity and
Capital Resources" in Part II, Item 7 of this report.
(b) Financial Information About Industry Segments
For information about industry segments refer to the information set forth
under the caption "Results of Operations" in Part II, Item 7 of this report.
(c) Narrative Description of the Business
For information regarding description of the business refer to the caption
"Scope of Business" on page 5; "Average number of employees" appearing under
"Historical Financial Summary" on page 36; and "Research and development"
expenses appearing in Note 11 to the Consolidated Financial Statements on
page 27 of this report.
The Company's products are generally marketed by a sales force employed by
each individual subsidiary or business unit. In some instances outside
jobbers and brokers are used. Most raw materials used worldwide are purchased
from others, are available from several sources and are generally available
in adequate supply. Products and commodities such as tallow and essential
oils are subject to wide price variations. No one of the Company's raw
materials represents a significant portion of total material requirements.
Trademarks are considered to be of material importance to the Company's
business; consequently the practice is followed of seeking trademark
protection by all available means. Although the Company owns a number of
patents, no one patent is considered significant to the business taken as a
whole.
The Company has programs for the operation and design of its facilities which
meet or exceed applicable environmental rules and regulations. Compliance
with such rules and regulations has not significantly affected the Company's
capital expenditures, earnings or competitive position. Capital expenditures
for environmental control facilities totaled $11.6 million in 1994 and are
budgeted at $17.6 million for 1995. For future years, expenditures are
expected to be in the same range.
(d) Financial Information About Foreign and Domestic Operations and Export Sales
For information concerning geographic area financial data refer to the
information set forth under the caption "Results of Operations" in Part II,
Item 7 of this report.
ITEM 2. PROPERTIES
The Company owns and leases a total of 301 manufacturing, distribution,
research and office facilities worldwide. Corporate headquarters is housed in
leased facilities at 300 Park Avenue, New York, New York.
In the United States, the Company operates 66 facilities, of which 26 are
owned. Major U.S. manufacturing and warehousing facilities used by the Oral,
Personal and Household Care segment are located in Kansas City, Kansas;
Morristown, New Jersey; Jeffersonville, Indiana; and Cambridge, Ohio. The
Company is transforming its former facilities in Jersey City, New Jersey into
a mixed-use complex with the assistance of developers and other investors.
The Specialty Marketing segment has major facilities in Bowling Green,
Kentucky; Topeka, Kansas; and Richmond, Indiana. Research facilities are
located throughout the world with the research center for Oral, Personal and
Household Care products located in Piscataway, New Jersey.
Overseas, the Company operates 235 facilities, of which 89 are owned, in over
60 countries. Major overseas facilities used by the Oral, Personal and
Household Care segment are located in Australia, Brazil, Canada, China,
Colombia, France, Germany, Italy, Mexico, Thailand, the United Kingdom and
elsewhere throughout the world. In some areas outside the United States,
products are either manufactured by independent contractors under Company
specifications or are imported from the United States or elsewhere.
All facilities operated by the Company are, in general, well maintained and
adequate for the purpose for which they are intended. The Company conducts
continuing reviews of its facilities with the view to modernization and cost
reduction.
ITEM 3. LEGAL PROCEEDINGS
On April 5, 1994, Region V of the United States Environmental Protection
Agency (the "Region") issued to a Company plant in Jeffersonville, Indiana a
Findings of Violations and Order for Compliance under Section 309
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(a) of the Clean Water Act (the "Order"). The Order, based in part on
information supplied by the plant, stated that the plant, at certain times in
late 1993 and early 1994, had discharged waste water containing substances in
excess of amounts permitted by its National Pollutant Discharge Elimination
System Permit (the "Permit"). The Order requires that the plant submit
certain information and take certain actions to provide the Region with
assurance that the plant will comply with the Permit. The plant is complying
with the Order.
EPA Region V and the Company have entered into a settlement of an
administrative complaint filed separately by EPA under Section 309 (g) of the
Clean Water Act on or about September 30, 1994. In connection with the
settlement, the Company has paid an administrative civil penalty in the
amount of $110,000. The settlement has been executed by the Acting Director
of the Water Office at Region V and has been formally adopted as an order of
the EPA Regional Administrator.
On June 13, 1994, the Jeffersonville plant also received from Atlantic States
Legal Foundation, Inc., a public interest group, a notice of its intention to
bring a related citizen's suit under Section 505(b) of the Federal Water
Pollution Control Act (the "Act"). The Company intends to respond to this
notice in accordance with the Act.
For additional information regarding legal matters see Note 13 to the
Consolidated Financial Statements included on page 29 of this report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following is a list of executive officers as of March 23, 1995:
<TABLE>
<CAPTION>
Date First
Elected
Name Age Officer Present Title
<S> <C> <C> <C>
Reuben Mark 56 1974 Chairman of the Board and Chief Executive
Officer
William S. Shanahan 54 1983 President and Chief Operating Officer
Robert M. Agate 59 1985 Senior Executive Vice President and Chief
Financial Officer
William G. Cooling 50 1981 Chief of Operations, Specialty Marketing and
International Business Development
Craig B. Tate 49 1989 Chief Technological Officer
Silas M. Ford 57 1983 Executive Vice President
Office of the Chairman
Andrew D. Hendry 47 1991 Senior Vice President
General Counsel and Secretary
Douglas M. Reid 60 1990 Senior Vice President
Global Human Resources
John E. Steel 65 1991 Senior Vice President
Global Marketing and Sales
Edgar J. Field 55 1991 President
International Business Development
Lois D. Juliber 46 1991 President
Colgate-USA/Canada/Puerto Rico
Stephen A. Lister 53 1994 President
Colgate-Asia Pacific
David A. Metzler 52 1991 President
Colgate-Europe
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Michael J. Tangney 50 1993 President
Colgate-Latin America
Robert C. Wheeler 53 1991 President
Hill's Pet Nutrition, Inc.
Steven R. Belasco 48 1991 Vice President
Taxation
Brian J. Heidtke 54 1986 Vice President
Finance and Corporate Treasurer
Peter D. McLeod 54 1984 Vice President
Manufacturing Engineering Technology
Stephen C. Patrick 45 1990 Vice President
Corporate Controller
Donald A. Schindel 61 1995 Vice President
Corporate Development
John H. Tietjen 52 1995 Vice President
Global Business Development
Michael S. Roskothen 58 1993 President
Global Oral Care
Thomas G. Davies 54 1995 Vice President
Global Business Development Fabric Care
Barrie M. Spelling 51 1994 Vice President
Global Business Development
Household Surface Care
</TABLE>
Each of the executive officers listed above has served the registrant or its
subsidiaries in various executive capacities for the past five years, except
Douglas M. Reid and Andrew D. Hendry. Douglas M. Reid served as Senior Vice
President and Senior Staff Officer at Xerox prior to joining the Company in
1990. Andrew D. Hendry was Vice President, General Counsel for UNISYS prior
to joining the Company in 1991.
The Company By-Laws, paragraph 38, states: The officers of the corporation
shall hold office until their respective successors are chosen and qualified
in their stead, or until they have resigned, retired or been removed in the
manner hereinafter provided. Any officer elected or appointed by the Board of
Directors may be removed at any time by the affirmative vote of a majority of
the whole Board of Directors.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
SHAREHOLDER MATTERS
Refer to the information regarding the market for the Company's Common Stock
and the quarterly market price information appearing under "Market and
Dividend Information" in Note 15 on page 31; the information under "Common
Stock" in Note 5 to the Consolidated Financial Statements on page 21; and the
"Number of shareholders of record" and "Cash dividends declared per common
share" under the caption "Historical Financial Summary" on page 36 of this
report.
ITEM 6. SELECTED FINANCIAL DATA
Refer to the information set forth under the caption "Historical Financial
Summary" on page 36 of this report.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Scope of Business
The Company manufactures and markets a wide variety of products in the U.S.
and around the world in two distinct business segments: Oral, Personal and
Household Care, and Specialty Marketing. Oral, Personal and Household Care
products include toothpastes, oral rinses and toothbrushes, bar and liquid
soaps, shampoos, conditioners, deodorants and antiperspirants, baby and shave
products, laundry and dishwashing detergents, fabric softeners, cleansers and
cleaners, bleaches, and other similar items. Specialty Marketing products
include pet nutrition products and products previously sold by Princess House
and VCA. Principal global trademarks and trade names include Colgate,
Palmolive, Mennen, Ajax, Soupline/Suavitel, Fab, Science Diet and
Prescription Diet in addition to various regional tradenames.
The Company's principal classes of products accounted for the following
percentages of worldwide sales for the past three years:
1994 1993 1992
Oral Care ............................ 26% 25% 23%
Personal Care ........................ 24% 24% 23%
Household Surface Care ............... 17% 17% 18%
Fabric Care .......................... 18% 19% 20%
Pet Nutrition ........................ 11% 11% 10%
Company products are marketed under highly competitive conditions. Products
similar to those produced and sold by the Company are available from
competitors in the U.S. and overseas. Product quality, brand recognition and
acceptance, and marketing capability largely determine success in the
Company's business segments.
As shown in the geographic area and industry segment data that follow, more
than half of the Company's net sales, operating profit and identifiable
assets are attributable to overseas operations. Transfers between geographic
areas are not significant.
Results of Operations (Dollars in Millions Except Per Share Amounts)
1994 1993 1992
Worldwide Net Sales by Business Segment
Oral, Personal and Household Care ......... $6,735.8 $6,306.4 $6,230.7
Specialty Marketing ....................... 852.1 834.9 776.5
Total Net Sales .......................... $7,587.9 $7,141.3 $7,007.2
Segment Net Sales by Geographic Region
North America
Oral, Personal and Household Care ......... $1,623.1 $1,762.5 $1,839.0
Specialty Marketing ....................... 776.9 774.8 725.1
Total North America ...................... 2,400.0 2,537.3 2,564.1
Europe
Oral, Personal and Household Care ......... 1,968.2 1,843.6 2,117.0
Specialty Marketing ....................... 75.2 60.1 51.4
Total Europe ............................. 2,043.4 1,903.7 2,168.4
Latin America* ............................. 1,736.5 1,525.8 1,315.2
Asia and Africa* ........................... 1,408.0 1,174.5 959.5
Total Net Sales .......................... $7,587.9 $7,141.3 $7,007.2
* Amounts in Latin America and Asia/Africa relate to the Oral, Personal and
Household Care segment only. Sales of Specialty Marketing products to these
regions are primarily exported to local distributors and therefore are
included in North American results in all years to conform to the
current-year presentation.
Net Sales
Worldwide net sales in 1994 increased 6% to $7,587.9 from $7,141.3 in 1993.
Excluding the sales of non-core businesses disposed of during 1994, sales
increased 8% on volume growth of 7% reflecting the Company's increas-
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ing global strength and worldwide brand presence. Sales in the Oral, Personal
and Household Care segment were $6,735.8, up 7% from $6,306.4 in 1993. Sales
in the Asia/Africa Region continued a trend of strong growth, posting a 20%
overall increase led by Malaysia, Hong Kong, India and South Africa.
Australia and New Zealand showed volume improvements and also benefited from
favorable currency translation that increased overall sales. Among the
technologically advanced products contributing to 17% volume gains in this
region are Colgate Total toothpaste, Palmolive Nouriche shampoo and Ajax Gel
2-in-1 bleach/cleaner. The 1994 results include the impact of the July 1993
consolidation of the Company's Indian operation. Sales in Europe were up 7%
on 6% volume growth, including 4% from acquisitions. Sales growth in Europe
was led by France, Italy, Greece, the United Kingdom, Spain and Eastern
Europe. Sales in Latin America were up 14% overall on 11% volume growth, with
notable growth in Mexico, Brazil, Colombia and Central America. Colgate Total
toothpaste, Colgate Precision/Total toothbrushes and the expansion of Mennen
deodorants all contributed to the region's growth.
North America was negatively impacted by trade downstocking of inventory and
disinflationary pricing as sales were down 8% on volume declines of 4%. Sales
growth in the Specialty Marketing segment was led by Hill's Pet Nutrition,
which posted sales increases of 16% for the year on 14% volume growth,
reflecting continued strength in the domestic market and further
international expansion. Sales and volume growth were supported by the
introduction of Hill's new Prescription Diet formula for improving oral
health in dogs and Prescription Diet HealthBlend preventive care. Overall
Specialty Marketing reported sales were up slightly versus the prior year as
a result of the second-quarter 1994 sale of Princess House and VCA, two
non-core businesses.
The Company's overall sales in 1993 increased 2% over 1992 and would have
reflected a 7% overall growth excluding the impact of foreign currency
declines. Volume increased 5% during the year, including 1% resulting from
increased ownership of the Indian operation to majority control. Sales in the
Oral, Personal and Household Care segment were mixed. Asia/Africa and Latin
America reported strong increases throughout the regions, while Europe was
down 13%, due to currency declines and difficult economic conditions in
Western Europe, and North America experienced the effects of disinflationary
pricing as sales were down 4% from 1992. Sales for the Specialty Marketing
segment were up 8%, reflecting continued growth in pet foods in both domestic
and international markets, up 11% versus 1992, offset by declines in sales at
non-core businesses.
Gross Profit
Gross profit margin in 1994 improved to 48.4% from 47.8% in 1993 and 47.1% in
1992. The continuing improvement in gross profit reflects the Company's
strategy to shift product mix to higher margin oral care, personal care and
pet nutrition product categories, reduce overhead and improve manufacturing
efficiency by focusing investments on high-return capital projects.
Improvement in the profitability of sales enables the Company to generate
more cash from operations to reinvest in its existing businesses in the form
of research and development, advertising to launch new products, growing
geographically, investing in strategic acquisitions within its core
businesses, and paying dividends.
Selling, General and Administrative Expenses
Selling, general and administrative expenses as a percent of sales was 35% in
1994 versus 34% in 1993 and 36% in 1992. The 1994 and 1993 expenditures
reflect the continued reduction of the Company's overhead expenses, while
providing higher advertising and product promotion spending, which increased
in 1994 in absolute dollar amounts and as a percentage of sales, while also
increasing spending in research and development. These expenditures support
current business growth levels and are investments to maintain the Company's
competitive advantage in introducing new and improved products in its
strategic core businesses.
Other Expense and Income
Other expense and income consists principally of amortization of goodwill and
other intangible assets, minority interest in earnings of
less-than-100%-owned consolidated subsidiaries, earnings from equity
investments and income effects from the 1994 disposition of non-core
businesses and other asset sales. Amortization expense increased in each of
the three years ended 1994 due to higher levels of intangible assets stemming
from the Company's recent acquisitions, most notably Cibaca in India and S.C.
Johnson Wax in Europe, which affected 1994 expense and Mennen, which impacted
expense recognition in 1993 for a full year and in 1992 from the date of
acquisition. The decrease in equity earnings and increase in minority
interest that occurred in 1993 and continues into 1994 primarily results from
increased ownership in the Company's Indian operation to majority control.
Loss on disposition of non-core businesses and gains on sale of miscellaneous
assets make up the remainder of other expense and income in 1994.
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Earnings Before Interest and Taxes
Earnings before interest and taxes (EBIT) increased 9% in 1994 to $966.6
compared with $883.0 in the prior year. EBIT for the Oral, Personal and
Household Care segment was up 9%, with strong gains across all of the
Company's developing markets and mixed results in the developed world. Lower
returns were experienced in the developed world due principally to a 21%
decline in North America as a result of trade downstocking and increased
spending on advertising and research and development to position that region
for future growth. EBIT for Europe increased 19%, primarily reflecting both
sales growth and higher gross profit margins. Asia/Africa and Latin America
both showed significant improvement: EBIT was up 20% for each on an already
healthy base business. Specialty Marketing also contributed to the overall
EBIT growth led by a 10% improvement at Hill's Pet Nutrition, which increased
EBIT while investing in developing markets to expand its international reach.
1994 1993 1992
Worldwide Earnings by Business Segment
Oral, Personal and Household Care ......... $809.6 $740.6 $665.0
Specialty Marketing ....................... 162.0 147.8 131.1
Total Segment Earnings ................... $971.6 $888.4 $796.1
Segment Earnings By Geographic Region
North America
Oral, Personal and Household Care ......... $148.3 $187.0 $198.1
Specialty Marketing ....................... 158.0 143.0 126.0
Total North America ...................... 306.3 330.0 324.1
Europe
Oral, Personal and Household Care ......... 198.4 167.0 184.2
Specialty Marketing ....................... 4.0 4.8 5.1
Total Europe ............................. 202.4 171.8 189.3
Latin America* ............................. 298.4 249.6 191.6
Asia and Africa* ........................... 164.5 137.0 91.1
Total Segment Earnings ................... 971.6 888.4 796.1
Unallocated Expense, Net ................... (5.0) (5.4) (18.2)
Earnings Before Interest and Taxes ......... 966.6 883.0 777.9
Interest Expense, Net ...................... (86.7) (46.8) (50.0)
Income Before Income Taxes ................. $879.9 $836.2 $727.9
* Amounts in Latin America and Asia/Africa relate to the Oral, Personal and
Household Care segment only. Sales of Specialty Marketing products to these
regions are primarily exported to local distributors, and earnings are
included in North American results in all years to conform to the
current-year presentation.
EBIT increased 14% to $883.0 in 1993 compared with $777.9 in 1992. The Oral,
Personal and Household Care segment reported 11% growth to $740.6, with gains
in the developing regions offsetting declines in the developed regions, which
were impacted by difficult business climates. Within this group, North
America EBIT decreased 6% to $187.0 compared with the prior year primarily
due to lower selling prices. EBIT in Europe decreased 9% due to the negative
impact of foreign currency translation and difficult economic conditions. In
Latin America, EBIT improved 30% to $249.6 in 1993 versus the prior year
while Asia/Africa increased 50%, including the consolidation of India.
Overall, the higher margin product mix and reduced selling, general and
administrative expenses allowed for increased investment in advertising,
product promotion, and research and development, as well as the achievement
of a higher level of EBIT. In the Specialty Marketing segment, EBIT was
$147.8 in 1993 compared with $131.1 in 1992. The improvement results
principally from higher domestic unit volume growth and expanded
international distribution at Hill's Pet Nutrition, particularly in Europe
and exports to Japan.
Net Interest Expense
Interest expense, net of interest income, was $86.7 in 1994 compared with
$46.8 in 1993 and $50.0 in 1992. The increase in net interest expense in 1994
versus the prior two years results from higher debt for the full year,
incurred primarily to finance share repurchases and acquisitions, and
slightly higher effective interest rates in 1994.
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Income Taxes
The effective tax rate on income for 1994 was 34.1% versus 34.5% in 1993 and
1992. The increase in the U.S. statutory tax rate in 1993 was in part offset
by statutory rate reductions in several overseas jurisdictions. Global tax
savings strategies benefited the effective rate in 1994, 1993 and 1992.
Net Income
Net income was $580.2 in 1994 or $3.82 per share on a primary basis compared
with $189.9 or $1.08 per share in 1993. Included in 1993 net income and per
share amounts is the cumulative one-time impact on prior years of adopting
new mandated accounting standards effective January 1, 1993 for income taxes,
other postretirement benefits and postemployment benefits. Excluding the
changes in accounting in 1993 and the one-time charge for the sale of a
non-core business in 1994, income increased 7% to $585.4 while primary
earnings per share increased 14% to $3.86.
Return on sales was 8% in 1994, consistent with the percentage return in 1993
(excluding the impact of accounting changes), reflecting the Company's
continuing shift to higher margin categories and focus on cost containment,
while providing increased investments aimed at future growth.
Subsequent Event
On January 10, 1995 the Company acquired the worldwide Kolynos oral care
business from American Home Products Corporation for $1,040.0 in cash. The
acquisition was structured as a multinational acquisition of assets and
stock, financed with the proceeds of commercial bank borrowings, and will be
accounted for as a purchase.
The Kolynos business is a multinational oral care business that is engaged in
the production and sale of toothpaste, toothbrushes, dental floss and oral
rinses operating primarily in South America. Kolynos adds significant
strength to the Company's existing South American operations by providing a
strong regional brand to complement the existing Colgate brand equity. The
acquisition is subject to review by antitrust regulatory authorities in
Brazil and Colombia.
Liquidity and Capital Resources
Net cash provided by operations increased 17% to $829.4 in 1994 compared with
$710.4 in 1993 and $542.7 in 1992. The improvement in cash generated by
operating activities to 11% of sales in 1994 from 10% of sales in 1993
reflects the Company's improving profitability and continued management
emphasis on working capital. Cash generated from operations was used to
finance acquisitions, repurchase shares and fund an increased dividend level.
The Company has additional sources of liquidity available in the form of
lines of credit maintained with various banks. Such lines of credit amounted
to $1,439.8 at December 31, 1994. The Company also has the ability to issue
commercial paper at favorable interest rates to meet short-term liquidity
needs. These borrowings carry a Standard & Poor's rating of A1 and a Moody's
rating of P1.
1994 1993 1992
Identifiable Assets
North America
Oral, Personal and Household Care ...... $2,416.0 $2,420.3 $2,263.3
Specialty Marketing .................... 473.9 446.4 420.4
Total North America ................... 2,889.9 2,866.7 2,683.7
Europe
Oral, Personal and Household Care ...... 1,293.8 1,169.3 1,290.2
Specialty Marketing .................... 35.7 27.8 23.5
Total Europe .......................... 1,329.5 1,197.1 1,313.7
Latin America* .......................... 845.2 804.4 679.4
Asia/Africa* ............................ 889.0 692.7 464.3
5,953.6 5,560.9 5,141.1
Corporate Assets ........................ 188.8 200.3 293.0
Total Assets ............................ $6,142.4 $5,761.2 $5,434.1
* Amounts in Latin America and Asia/Africa relate to the Oral, Personal and
Household Care segment only. Certain amounts have been reclassified to conform
to the current-year presentation.
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During the third quarter of 1994, the remaining outstanding principal ($32.0)
of the 9.625% debentures due July 15, 2017 was retired. Also during the third
quarter, the Company obtained a $50.0 7.25% term loan. During the second
quarter, the Company entered into credit agreements totaling $750.0 replacing
credit agreements then in place. In May 1994, the Company filed a shelf
registration for $500.0 of debt securities. During the second quarter, $208.0
of medium-term notes were issued under this registration. In connection with
the acquisition of Kolynos, the Company borrowed approximately $1,100.0 from
commercial banks in January 1995. As a result of the increase in debt to
finance this acquisition, both Moody's and Standard and Poor's debt rating
agencies reviewed and reaffirmed the Company's debt ratings.
During the third quarter of 1993, the Company participated in the formation
of a business that purchases receivables, including Company receivables.
Outside institutions invested $60.0 in this entity, in 1993 and an additional
$15.2 in 1994. The Company consolidates this entity and the amounts invested
by the outside institutions are classified as a minority interest. During the
1993 first quarter, the Company repaid outstanding debt totaling $85.7, which
included $50.0 of 8.9% Swiss franc notes due in 1993. During the third
quarter of 1993, the Company redeemed $79.0 of its 9.625% debentures due
2017.
During 1992, the Company increased the amount available under its shelf
registration from $150.0 to $400.0. In the fourth quarter of 1993, $230.0 of
medium-term notes were issued under this registration in addition to $169.2
issued in the fourth quarter of 1992. These notes are rated A1/A+ by Moody's
and Standard & Poor's, respectively.
1994 1993 1992
Capital Expenditures
Oral, Personal and Household Care ......... $343.1 $341.1 $292.3
Specialty Marketing ....................... 57.7 23.2 26.2
Total Capital Expenditures ............... $400.8 $364.3 $318.5
Depreciation and Amortization
Oral, Personal and Household Care ......... $213.0 $188.7 $173.3
Specialty Marketing ....................... 22.1 20.9 19.2
Total Depreciation and Amortization ...... $235.1 $209.6 $192.5
Certain amounts have been reclassified to conform to the current-year
presentation.
Capital expenditures in 1994 were $400.8 (5.3% of sales) compared with $364.3
(5.1% of sales) in 1993 and $318.5 (4.5% of sales) in 1992. The increase in
1994 spending was focused primarily on projects that yield high aftertax
returns, thereby reducing the Company's cost structure. Capital expenditures
for 1995 are expected to continue at the current rate of approximately 5% of
sales.
Other investing activities in 1994, 1993 and 1992 included strategic
acquisitions and equity investments worldwide. During 1994, the Company
acquired the Cibaca toothbrush and toothpaste business in India, the NSOA
laundry soap business in Senegal and several other regional brands across the
Oral, Personal and Household Care segment. In October 1993, the Company
acquired the liquid hand and body soap brands of S.C. Johnson Wax in Europe,
the South Pacific and other international locations. Also in 1993, the
Company acquired the Cristasol glass cleaner business in Spain, increased
ownership of its Indian operation to majority control and made other
investments. The aggregate purchase price of all 1994 and 1993 acquisitions
was $149.8 and $222.5, respectively.
Acquisitions totaled $718.4 in 1992 and included businesses in the personal
care, household care, fabric care, and oral care categories, the most
significant being the Mennen Company acquired for an aggregate purchase price
of approximately $670.0. The purchase price was paid with 11.6 million
unregistered shares of the Company's common stock and $127.0 in cash.
Goodwill and other intangible assets increased as a result of these
acquisitions.
During 1994, the Company repurchased common shares in the open market and
private transactions to provide for employee benefit plans and to maintain
its targeted capital structure. Aggregate repurchases for the year
approximated 6.9 million shares with a total purchase price of $411.1. During
1993, 12.6 million shares were acquired with a total purchase price of
$698.1.
The ratio of debt to total capitalization (defined as the ratio of debt to
debt plus equity) increased to 52% during 1994 from 48% in 1993 and 30% in
1992. As a result of the Kolynos acquisition in January 1995, the proforma
ratio of debt to total capitalization increased to 63%. The lower ratio of
debt to total capitalization in 1992 reflects
9
<PAGE>
the issuance of shares in connection with the acquisition of The Mennen
Company. The return on average shareholders' equity before accounting
changes, increased to 31% in 1994 from 24% in 1993.
Dividend payments were $255.6 in 1994 ($246.9 aftertax), up from $240.8
($231.4 aftertax) in 1993, reflecting a 14% increase in the common dividend
effective in the third quarter of 1994 partially offset by fewer shares
outstanding. Common dividend payments increased to $1.54 per share in 1994
from $1.34 per share in 1993. The Series B Preference Stock dividends were
declared and paid at the stated rate of $4.88 per share. The increase in
dividend payments in 1993 over 1992 reflects a 16% increase in the common
dividend effective in the third quarter of 1993.
The Company utilizes interest rate agreements and foreign exchange contracts
to manage interest rate and foreign currency exposures. The principal
objective of such contracts is to moderate rather than attempt to eliminate
fluctuations in interest rate and foreign currency movements. The Company, as
a matter of policy, does not speculate in financial markets and therefore
does not hold these contracts for trading purposes. The Company utilizes what
it considers straightforward instruments, such as forward foreign exchange
contracts and non-leveraged interest rate swaps, to accomplish its
objectives.
The Company primarily uses interest rate swap agreements to effectively
convert a portion of its floating rate debt to fixed rate debt in order to
manage interest rate exposures in a manner consistent with achieving a
targeted fixed to variable interest rate ratio. Those interest rate
instruments that do not qualify as hedge instruments for accounting purposes
are marked to market and carried on the balance sheet at fair value. As of
December 31, 1994 and 1993, the Company had agreements outstanding with an
aggregate notional amount of $222.0 and $347.0, respectively, with maturities
through 2001.
The Company uses forward exchange contracts principally to hedge foreign
currency exposures associated with its net investment in foreign operations
and intercompany loans. This hedging minimizes the impact of foreign exchange
rate movements on the Company's financial position. The terms of these
contracts are rarely longer than three years.
As of December 31, 1994 and 1993, the Company had approximately $390.7 and
$439.0, respectively, of outstanding foreign exchange contracts in which
foreign currencies were purchased, and approximately $6.9 in which foreign
currencies were sold as of December 31, 1994. At December 31, 1994 and 1993,
approximately 20% of outstanding foreign exchange contracts served to hedge
net investments in foreign subsidiaries, 60% hedged intercompany loans, 10%
hedged third-party firm commitments, and the remaining 10% hedged certain
transactions that are anticipated to settle in accordance with their
identified terms. The Company makes net settlements for foreign exchange
contracts at maturity, based on rates agreed to at inception of the
contracts.
Gains and losses from contracts that hedge the Company's investments in its
foreign subsidiaries are shown in the cumulative translation adjustment
account included in shareholder's equity. Gains and losses from contracts
that hedge firm commitments (including intercompany loans) are recorded in
the balance sheets as a component of the related receivable or payable.
The contracts that hedge anticipated sales and purchases do not qualify as
hedges for accounting purposes. Accordingly, the related gains and losses are
calculated using the current forward foreign exchange rates and are recorded
in the statements of income as other expense, net.
Internally generated cash flows appear to be adequate to support currently
planned business operations, acquisitions and capital expenditures.
Significant acquisitions, including the acquisition of Kolynos discussed
previously, require external financing.
The Company is a party to various superfund and other environmental matters
and is contingently liable with respect to lawsuits, taxes and other matters
arising out of the normal course of business. Management proactively reviews
and manages its exposure to and the impact of environmental matters. While it
is possible that the Company's cash flows and results of operations in
particular quarterly or annual periods could be affected by the one-time
impacts of the resolution of such contingencies, it is the opinion of
management that the ultimate disposition of these matters, to the extent not
previously provided for, will not have a material impact on the Company's
financial condition or ongoing cash flows and results of operations.
Outlook
Looking forward into 1995, the Company is well positioned for strong growth
in developing markets, particularly South America as a result of the Kolynos
acquisition in early 1995. Economic uncertainty in Mexico could impact
overall results from that country, as previously anticipated growth will be
tempered in at least the near term
10
<PAGE>
until the peso currency is stabilized. Several new products including
Palmolive Dishwashing Liquid and Antibacterial Hand Soap, Irish Spring
Waterfall Clean soap and Murphy's Kitchen Care cleaning products were
introduced into the North American market in late 1994. Growth is also
anticipated due to new product introductions in Colgate-International
operations and in Hill's. Overall, the global economic situation for 1995 is
not expected to be materially different from that experienced in 1994, and
the Company expects its positive momentum to continue. Historically, the
consumer products industry has been less susceptible to changes in economic
growth than many other industries, and therefore the Company constantly
evaluates projects which will focus operations on opportunities for enhanced
growth potential. Over the long term, Colgate's continued focus on its
consumer products business and the strength of its global brand names, its
broad international presence in both developed and developing markets, and
its strong capital base all position the Company to take advantage of growth
opportunities and to continue to increase profitability and shareholder
value.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See the "Index to Financial Statements" which is located on page 14 of this
report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding directors and executive officers of the registrant set
forth in the Proxy Statement for the 1995 Annual Meeting is incorporated
herein by reference, as is the text in Part I of this report under the
capiton "Executive Officers of the Registrant."
ITEM 11. EXECUTIVE COMPENSATION
The information set forth in the Proxy Statement for the 1995 Annual Meeting
is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security ownership of management set forth in the Proxy Statement for the
1995 Annual Meeting is incorporated herein by reference.
(b) There are no arrangements known to the registrant that may at a
subsequent date result in a change in control of the registrant.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set forth in the Proxy Statement for the 1995 Annual Meeting
is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements and Financial Statement Schedules
See the "Index to Financial Statements" which is located on page 14 of this
report.
(b) Exhibits. See the exhibit index which begins on page 38.
(c) Reports on Form 8-K. None.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
COLGATE-PALMOLIVE COMPANY
(Registrant)
Date March 23, 1995
By /s/ Reuben Mark
Reuben Mark
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
(a) Principal Executive Officer
/s/ Reuben Mark
Reuben Mark
Chairman of the Board
and Chief Executive Officer
Date March 23, 1995
(b) Principal Financial Officer
/s/Robert M. Agate
Robert M. Agate
Senior Executive Vice President
and Chief Financial Officer
Date March 23, 1995
(c) Principal Accounting Officer
/s/ Stephen C. Patrick
Stephen C. Patrick
Vice President
Corporate Controller
Date March 23, 1995
(d) Directors:
Vernon R. Alden, Jill K. Conway,
Ronald E. Ferguson, Ellen M. Hancock,
David W. Johnson, John P. Kendall,
Delano E. Lewis, Reuben Mark,
Howard B. Wentz, Jr.
Date March 23, 1995
By /s/Andrew D. Hendry
Andrew D. Hendry
as Attorney-in-Fact
12
<PAGE>
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-K
FINANCIAL STATEMENTS
For The Year Ended December 31, 1994
COLGATE-PALMOLIVE COMPANY
NEW YORK, NEW YORK 10022
13
<PAGE>
COLGATE-PALMOLIVE COMPANY
Index to Financial Statements
<TABLE>
<CAPTION>
Page
<S> <C>
Financial Statements
Consolidated Statements of Income for the years ended December 31, 1994, 1993 and 1992 ... 15
Consolidated Balance Sheets at December 31, 1994 and 1993 ................................ 16
Consolidated Statements of Retained Earnings and Changes in Capital Accounts for the years
ended December 31, 1994, 1993 and 1992 ................................................. 17
Consolidated Statements of Cash Flows for the years ended December 31, 1994, 1993 and 1992 18
Notes to Consolidated Financial Statements ............................................... 19-31
Financial Statement Schedules for the years ended December 31, 1994, 1993 and 1992:
II Valuation and Qualifying Accounts .................................................... 32-34
Report of Independent Public Accountants ................................................. 35
Selected Financial Data
Historical Financial Summary ............................................................. 36
</TABLE>
All other financial statements and schedules not listed have been omitted
since the required information is included in the financial statements or the
notes thereto or is not applicable or required.
14
<PAGE>
Consolidated Statements of Income
Dollars in Millions Except Per Share Amounts
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Net sales ......................................................................... $7,587.9 $7,141.3 $7,007.2
Cost of sales ..................................................................... 3,913.3 3,729.9 3,708.4
Gross profit .................................................................... 3,674.6 3,411.4 3,298.8
Selling, general and administrative expenses ...................................... 2,625.2 2,457.1 2,500.2
Other expense, net ................................................................ 82.8 71.3 20.7
Interest expense, net of interest income of $34.2, $22.7, and $28.1,
respectively .................................................................... 86.7 46.8 50.0
Income before income taxes ........................................................ 879.9 836.2 727.9
Provision for income taxes ........................................................ 299.7 288.1 250.9
Income before changes in accounting ............................................... 580.2 548.1 477.0
Cumulative effect on prior years of accounting changes ............................ -- (358.2) --
Net income ...................................................................... $ 580.2 $ 189.9 $ 477.0
Earnings per common share, primary:
Income before changes in accounting .............................................. $ 3.82 $ 3.38 $ 2.92
Cumulative effect on prior years of accounting changes ........................... -- (2.30) --
Net income per share ............................................................ $ 3.82 $ 1.08 $ 2.92
Earnings per common share, assuming full dilution:
Income before changes in accounting .............................................. $ 3.56 $ 3.15 $ 2.74
Cumulative effect on prior years of accounting changes ........................... -- (2.10) --
Net income per share ............................................................ $ 3.56 $ 1.05 $ 2.74
</TABLE>
See Notes to Consolidated Financial Statements.
15
<PAGE>
Consolidated Balance Sheets
Dollars in Millions Except Per Share Amounts
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents ............................................ $ 169.9 $ 144.1
Marketable securities ................................................ 47.6 67.1
Receivables (less allowances, of $23.1 and $24.9, respectively) ...... 1,049.6 988.3
Inventories .......................................................... 713.9 678.0
Other current assets ................................................. 196.7 192.9
Total current assets ................................................ 2,177.7 2,070.4
Property, plant and equipment, net .................................... 1,988.1 1,766.3
Goodwill and other intangibles, net ................................... 1,671.8 1,589.0
Other assets .......................................................... 304.8 335.5
$ 6,142.4 $ 5,761.2
Liabilities and Shareholders' Equity
Current Liabilities
Notes and loans payable .............................................. $ 181.9 $ 169.4
Current portion of long-term debt .................................... 26.0 15.5
Accounts payable ..................................................... 694.9 599.3
Accrued income taxes ................................................. 85.1 59.4
Other accruals ....................................................... 541.3 550.4
Total current liabilities ........................................... 1,529.2 1,394.0
Long-term debt ........................................................ 1,751.5 1,532.4
Deferred income taxes ................................................. 295.4 266.2
Other liabilities ..................................................... 743.4 693.6
Shareholders' Equity
Preferred stock ...................................................... 408.4 414.3
Common stock, $1 par value (500,000,000 shares authorized, 183,213,295
shares issued) ..................................................... 183.2 183.2
Additional paid-in capital ........................................... 1,020.4 1,000.9
Retained earnings .................................................... 2,496.7 2,163.4
Cumulative translation adjustments ................................... (439.3) (372.9)
3,669.4 3,388.9
Unearned compensation ................................................ (384.1) (389.9)
Treasury stock, at cost .............................................. (1,462.4) (1,124.0)
Total shareholders' equity .......................................... 1,822.9 1,875.0
$ 6,142.4 $ 5,761.2
</TABLE>
See Notes to Consolidated Financial Statements.
16
<PAGE>
Consolidated Statements of Retained Earnings
Dollars in Millions
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Balance, January 1 ......................................... $2,163.4 $2,204.9 $1,928.6
Add:
Net income ................................................ 580.2 189.9 477.0
2,743.6 2,394.8 2,405.6
Deduct:
Dividends declared:
Series B Convertible Preference Stock, net of income taxes 21.1 21.1 20.2
Preferred stock .......................................... .5 .5 .5
Common stock ............................................. 225.3 209.8 180.0
246.9 231.4 200.7
Balance, December 31 ....................................... $2,496.7 $2,163.4 $2,204.9
</TABLE>
Consolidated Statements of Changes in Capital Accounts
Dollars in Millions
<TABLE>
<CAPTION>
Additional
Common Stock Paid-In Treasury Stock
Shares Amount Capital Shares Amount
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1992 ................................ 147,343,336 $ 171.5 $ 411.4 24,215,296 $ 447.7
Shares issued in connection with acquisition ............ 11,648,693 11.7 532.4 -- --
Shares issued for stock options ...................... 2,441,044 -- 9.5 (2,441,044) (46.6)
Treasury stock acquired .............................. (976,983) -- -- 976,983 54.0
Other ................................................ (215,686) -- 32.0 221,656 12.2
Balance, December 31, 1992 .............................. 160,240,404 183.2 985.3 22,972,891 467.3
Shares issued for stock options ...................... 1,408,105 -- 9.6 (1,408,105) (34.7)
Treasury stock acquired .............................. (12,610,423) -- -- 12,610,423 698.1
Other ................................................ 218,517 -- 6.0 (218,517) (6.7)
Balance, December 31, 1993 .............................. 149,256,603 183.2 1,000.9 33,956,692 1,124.0
Shares issued for stock options ...................... 1,803,574 -- 1.6 (1,803,574) (63.4)
Treasury stock acquired .............................. (6,923,325) -- -- 6,923,325 411.1
Other ................................................ 267,385 -- 17.9 (267,385) (9.3)
Balance, December 31, 1994 .............................. 144,404,237 $ 183.2 $1,020.4 38,809,058 $1,462.4
</TABLE>
See Notes to Consolidated Financial Statements.
17
<PAGE>
Consolidated Statements of Cash Flows
Dollars in Millions
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Operating Activities
Net Income ..................................................................... $ 580.2 $ 189.9 $ 477.0
Adjustments to reconcile net income to net cash
provided by operations:
Cumulative effect on prior years of accounting changes ....................... -- 358.2 --
Restructured operations, net ................................................. (39.1) (77.0) (92.0)
Depreciation and amortization ................................................ 235.1 209.6 192.5
Deferred income taxes and other, net ......................................... 64.7 53.6 (25.8)
Cash effects of changes in:
Receivables ................................................................. (50.1) (103.6) (38.0)
Inventories ................................................................. (44.5) 31.7 28.4
Other current assets ........................................................ (7.8) (4.6) 10.6
Payables and accruals ....................................................... 90.9 52.6 (10.0)
Net cash provided by operations ............................................ 829.4 710.4 542.7
Investing Activities
Capital expenditures ........................................................... (400.8) (364.3) (318.5)
Payment for acquisitions, net of cash acquired ................................. (146.4) (171.2) (170.1)
Sale of marketable securities and other investments ............................ 58.4 33.8 79.9
Investments in less-than-majority-owned companies and other .................... (1.9) (12.5) (6.6)
Other, net ..................................................................... 33.0 61.7 17.4
Net cash used for investing activities ..................................... (457.7) (452.5) (397.9)
Financing Activities
Principal payments on debt ..................................................... (88.3) (200.8) (250.1)
Proceeds from issuance of debt, net ............................................ 316.4 782.1 262.6
Proceeds from outside investors ................................................ 15.2 60.0 --
Dividends paid ................................................................. (246.9) (231.4) (200.7)
Purchase of common stock ....................................................... (357.9) (657.2) (20.5)
Proceeds from exercise of stock options and other, net ......................... 18.5 21.8 22.6
Net cash used for financing activities ..................................... (343.0) (225.5) (186.1)
Effect of exchange rate changes on cash and cash equivalents .................... (2.9) (6.2) (9.3)
Net increase (decrease) in cash and cash equivalents ............................ 25.8 26.2 (50.6)
Cash and cash equivalents at beginning of year .................................. 144.1 117.9 168.5
Cash and cash equivalents at end of year ........................................ $ 169.9 $ 144.1 $ 117.9
Supplemental Cash Flow Information:
Income taxes paid ............................................................... $ 261.1 $ 216.4 $ 178.1
Interest paid ................................................................... $ 96.9 $ 59.1 $ 68.7
Non-cash consideration in payment for acquisitions .............................. $ 8.0 $ 36.3 $ 859.8
ESOP debt, guaranteed by the Company ............................................ $ (4.0) $ (3.4) $ (3.0)
</TABLE>
See Notes to Consolidated Financial Statements.
18
<PAGE>
Notes to Consolidated Financial Statements
Dollars in Millions Except Per Share Amounts
1. Summary of Significant Accounting Policies
Principles of Consolidation
The Consolidated Financial Statements include the accounts of
Colgate-Palmolive Company and its majority-owned subsidiaries. Intercompany
transactions and balances have been eliminated. Investments in companies in
which the Company's interest is between 20% and 50% are accounted for using
the equity method. The Company's share of the net income from such
investments is recorded as equity earnings and is classified as other
expense, net in the Consolidated Statements of Income.
Revenue Recognition
Sales are recorded at the time products are shipped to trade customers. Net
sales reflect units shipped at selling list prices reduced by trade promotion
allowances.
Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three
months or less when purchased to be cash equivalents for purposes of the
Consolidated Balance Sheets and the Consolidated Statements of Cash Flows.
Investments in short-term securities that do not meet the definition of cash
equivalents are classified as marketable securities in the Consolidated
Balance Sheets. Marketable securities are reported at cost, which equals
market.
Inventories
Inventories are valued at the lower of cost or market. The last-in, first-out
(LIFO) method is used to value substantially all inventories in the U.S. as
well as in certain overseas locations. The remaining inventories are valued
using the first-in, first-out (FIFO) method.
Property, Plant and Equipment
Land, buildings, and machinery and equipment are stated at cost. Depreciation
is provided, primarily using the straight-line method, over estimated useful
lives ranging from 3 to 40 years.
Goodwill and Other Intangibles
Goodwill represents the excess of purchase price over the fair value of
identifiable tangible and intangible net assets of businesses acquired.
Goodwill and other intangibles are amortized on a straight-line basis over
periods not exceeding 40 years. The recoverability of carrying values of
intangible assets is evaluated on a recurring basis. The primary indicators
of recoverability are current or forecasted profitability of a related
acquired business. For the three-year period ended December 31, 1994, there
were no adjustments to the carrying values of intangible assets resulting
from these evaluations.
Income Taxes
For 1994 and 1993, deferred taxes are recognized for the expected future tax
consequences of temporary differences between the amounts carried for
financial reporting and tax purposes. Provision is made currently for taxes
payable on remittances of overseas earnings; no provision is made for taxes
on overseas retained earnings that are deemed to be permanently reinvested.
Postretirement and Postemployment Benefits
Effective January 1, 1993, the cost of postretirement health care and other
benefits is actuarially determined and accrued over the service period of
covered employees.
Translation of Overseas Currencies
The assets and liabilities of subsidiaries, other than those operating in
highly inflationary environments, are translated into U.S. dollars at
year-end exchange rates, with resulting translation gains and losses
accumulated in a separate component of shareholders' equity. Income and
expense items are converted into U.S. dollars at average rates of exchange
prevailing during the year.
19
<PAGE>
For subsidiaries operating in highly inflationary environments, inventories
and property, plant and equipment are translated at the rate of exchange on
the date the assets were acquired, while other assets and liabilities are
translated at year-end exchange rates. Translation adjustments for these
operations are included in net income.
Geographic Areas and Industry Segments
The financial and descriptive information on the Company's geographic area
and industry segment data, appearing in the tables contained in Item 7 of
this report, is an integral part of these financial statements.
2. Acquisitions
During 1994, the Company acquired the Cibaca toothpaste and toothbrush
business in India, the NSOA laundry soap business in Senegal, Nevex
non-chlorine bleach in Venezuela, and Na Pancha laundry soap in Peru as well
as several other regional brands in the Oral, Personal and Household Care
segment. The aggregate purchase price of all 1994 acquisitions was $149.8.
In October 1993, the Company acquired the liquid hand and body soap brands of
S.C. Johnson Wax in Europe, the South Pacific and other international
locations. During that year, the Company also acquired the Cristasol glass
cleaner business in Spain, increased ownership of its Indian operation to
majority control and made other investments. The aggregate purchase price of
all 1993 acquisitions was $222.5.
In March 1992, the Company acquired The Mennen Company ("Mennen") for an
aggregate purchase price of $670.0, paid with 11.6 million unregistered
shares of the Company's common stock and $127.0 in cash. The acquisition
included Mennen's personal care products business as well as non-core
businesses that were sold in August 1992. The results of operations of Mennen
have been included in the Consolidated Financial Statements since March 27,
1992.
During 1992, the Company also acquired the remaining interest in Viset, an
Italian manufacturer of consumer products, and established significant
ownership positions in joint ventures in China and Eastern Europe. The
aggregate purchase price of all 1992 acquisitions was $718.4.
All of these acquisitions have been accounted for as purchases, and,
accordingly, the purchase prices were allocated to the net tangible and
intangible assets acquired based on estimated fair values at the dates of the
respective acquisitions. The results of operations have been included in the
Consolidated Financial Statements since the respective acquisition dates. The
inclusion of pro forma financial data for these acquisitions prior to the
dates of acquisition would not have materially affected reported results.
3. Long-Term Debt and Credit Facilities
Long-term debt consists of the following at December 31:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
ESOP serial notes, guaranteed by the Company, due from 2001 through 2009 at
interest rates ranging from 8.2% to 8.9% ..................................................... $ 394.6 $ 398.6
Medium-term notes due from 1995 through 2003 at interest rates ranging from
5.5% to 7.2% ................................................................................. 397.5 397.2
Medium-term notes due from 1997 through 2004 at interest rates ranging from
6.7% to 7.6% ................................................................................. 207.1 --
Commercial paper at interest rates ranging from 5.57% to 6.12% ................................. 609.8 586.1
9.98% debentures due 2017 ...................................................................... -- 32.0
12.43% Canadian dollar notes due 2030 .......................................................... 57.9 67.6
7.25% term loan due 1999 ....................................................................... 50.0 --
Other .......................................................................................... 60.6 66.4
1,777.5 1,547.9
Less: current portion of long-term debt ........................................................ 26.0 15.5
$1,751.5 $1,532.4
</TABLE>
Other debt consists of capitalized leases and individual fixed and floating
rate issues of less than $30.0 with various maturities. Scheduled maturities
of debt outstanding at December 31, 1994, exclusive of capitalized lease
obligations, are as follows: 1995-$23.4; 1996-$34.0; 1997-$104.4; 1998-$58.1,
and 1999-$158.0. Commercial paper is classified as long-term debt in
accordance with the Company's intent and ability to refinance such
obligations on a long-term basis.
20
<PAGE>
At December 31, 1994, the Company had unused credit facilities amounting to
$1,439.8. Commitment fees related to credit facilities are not material. The
weighted average interest rate on short-term borrowings as of December 31,
1994 and 1993 was 7.9% and 6.6%, respectively.
4. Leases
At December 31, 1994, future minimum rental payments under capital and
operating leases were as follows:
Capital Operating
Year Ending December 31,
1995 $3.0 $ 63.2
1996 2.8 52.9
1997 1.7 40.1
1998 .9 34.5
1999 .4 31.8
Later years .7 56.5
Total minimum lease payments 9.5 279.0
Less: minimum sublease rental income -- 24.7
Net minimum lease payments 9.5 $254.3
Less: interest and executory costs 1.2
Present value of net minimum lease payments $8.3
Rent expense for all operating leases totaled $83.4 in 1994, $91.5 in 1993
and $80.3 in 1992.
5. Capital Stock and Stock Option Plans
Preferred Stock
Preferred Stock consists of 250,000 authorized shares without par value. It
is issuable in series, of which one series of 125,000 shares, designated
$4.25 Preferred Stock, with a stated and redeemable value of $100 per share,
has been issued and is outstanding. Dividends on the $4.25 Preferred Stock
are cumulative. Under the provisions of the Certificate of Incorporation, the
Preferred Stock is subject to redemption only at the option of the Company.
Preference Stock
In 1988, the Company's Certificate of Incorporation was amended to authorize
the issuance of a new class of preferred stock consisting of 50,000,000
shares of Preference Stock, without par value. The Preference Stock, which is
convertible into two shares of common stock, ranks junior to all series of
the Preferred Stock with respect to the payment of dividends and the
distribution of assets of the Company. At December 31, 1994 and 1993,
6,091,375 and 6,181,480 shares of Preference Stock, respectively, were
outstanding and issued to the Company's ESOP.
Common Stock
In March 1992, the Company issued 11,648,693 unregistered shares of its
common stock in connection with acquiring Mennen. Certain registration rights
were granted for a portion of the shares issued in connection with the
transaction.
In October 1988, the Board of Directors authorized the redemption of the then
outstanding common stock purchase rights for a total of $6.9. A new rights
plan was adopted, and stockholders received a distribution of one Preference
Share Purchase Right ("Right") for each outstanding share of the Company's
common stock. Each Right entitles stockholders to buy one two-hundredth
interest in a share of a new series of preference stock at an exercise price
of $87.50. Each interest is designed to make it the economic equivalent of
one share of common stock. A Right is exercisable only if a person or group
acquires 20% or more of the Company's common stock or announces a tender
offer, the consummation of which would result in ownership by a person or
group of 20% or more of the common stock.
If the Company is acquired in a merger or other business combination
transaction, each Right will entitle its holder to purchase, at the Right's
then current exercise price, a number of the acquiring company's common
shares
21
<PAGE>
having a market value at that time of twice the Right's exercise price. In
addition, if a person or group acquires 30% or more of the Company's
outstanding common stock, otherwise than pursuant to a cash tender offer for
all shares in which such person or group increases its stake from below 20%
to 80% or more of the outstanding shares, each Right will entitle its holder
(other than such person or members of such group) to purchase, at the Right's
then current exercise price, a number of shares of the Company's common stock
having a market value of twice the Right's exercise price. Further, at any
time after a person or group acquires 30% or more (but less than 50%) of the
Company's outstanding common stock, the Board of Directors may, at its
option, exchange part or all of the Rights (other than Rights held by the
acquiring person or group) for shares of the Company's common stock on a
one-for-one basis.
Prior to the acquisition by a person or group of beneficial ownership of 20%
or more of the Company's common stock, each Right is redeemable at the option
of the Board of Directors at a price of $.005.
The Board of Directors is also authorized to reduce the 20% and 30%
thresholds referred to above to not less than 15%. The new Rights will expire
on October 24, 1998. There were 144,404,237 Preference Share Purchase Rights
outstanding at December 31, 1994 and 149,256,603 at December 31, 1993.
At December 31, 1994 and 1993, 596,478 and 507,855 shares, respectively, were
held for distribution under the Executive Incentive Compensation Plan, which
provides for cash and common stock awards for officers and other executives
of the Company and its major subsidiaries. The cost of these shares totaled
$29.8 at December 31, 1994 and $22.7 at December 31, 1993.
Stock Option Plans
The Company's 1987 Stock Option Plan provides for the issuance of
non-qualified stock options to officers and key employees. The non-qualified
stock options permit optionees to acquire common stock of the Company upon
payments of cash or stock.
Options are granted at prices not less than the fair market value on the date
of grant. At December 31, 1994, 4,287,890 shares were available for future
grants. The Company's 1977 Stock Option Plan terminated during 1987, except
as to options granted.
During 1992, an Accelerated Ownership feature was added to the 1987 Stock
Option Plan. The Accelerated Ownership feature provides for the grant of new
options when previously owned shares of Company stock are used to exercise
existing options. The number of new options granted under this feature is
equal to the number of shares of previously owned Company stock used to
exercise the original options and to pay the related required U.S. income
tax. The new options are granted at a price equal to the fair market value on
the date of the new grant and have the same expiration date as the original
options exercised.
Stock option plan activity is summarized below:
1994 1993
Options outstanding, January 1 ............. 9,626,394 8,204,191
Granted .................................... 2,528,109 2,925,639
Exercised .................................. (1,803,574) (1,408,105)
Canceled or expired ........................ (89,521) (95,331)
Options outstanding, December 31 ........... 10,261,408 9,626,394
Options exercisable at December 31 ......... 6,402,658 5,381,106
Option price range at exercise ............. $11.88 to $57.94 $10.03 to $56.31
Option price range at December 31 .......... $13.28 to $99.79 $11.88 to $99.79
6. Employee Stock Ownership Plan
In 1989, the Company expanded its employee stock ownership plan (ESOP)
through the introduction of a leveraged ESOP covering employees who have met
certain eligibility requirements. The ESOP issued $410.0 of long- term notes
due through 2009 bearing an average interest rate of 8.6%. The long-term
notes, which are guaranteed by the Company, are recorded on the accompanying
Consolidated Balance Sheets. The ESOP used the proceeds of the notes to
purchase 6.3 million shares of Series B Convertible Preference Stock from the
Company. The Stock has a minimum redemption price of $65 per share and pays
semi-annual dividends equal to the higher of $2.44 or the current dividend
paid on two common shares for the comparable six-month period. Each share may
be converted by the Trustee into two shares of common stock.
22
<PAGE>
Dividends on these preferred shares, as well as common shares also held by
the ESOP, are paid to the ESOP trust and, together with Company
contributions, are used by the ESOP to repay principal and interest on the
outstanding notes. Preferred shares are released for allocation to
participants based upon the ratio of the current year's debt service to the
sum of total principal and interest payments over the life of the loan. At
December 31, 1994, 1,017,757 shares were allocated to participant accounts.
Dividends on these preferred shares are deductible for income tax purposes
and, accordingly, are reflected net of their tax benefit in the Consolidated
Statements of Retained Earnings.
Annual expense related to the leveraged ESOP, determined as interest incurred
on the notes, less dividends received on the shares held by the ESOP, plus
the higher of either principal repayments on the notes or the cost of shares
allocated, was $8.0 in 1994, $7.9 in 1993 and $8.1 in 1992. Similarly,
unearned compensation, shown as a reduction in shareholders' equity, is
reduced by the higher of principal payments or the cost of shares allocated.
Interest incurred on the ESOP's notes amounted to $34.2 in 1994, $34.5 in
1993 and $35.1 in 1992. The Company paid dividends on the stock held by the
ESOP of $32.3 in 1994, $32.7 in 1993 and $32.8 in 1992. Company contributions
to the ESOP were $5.7 in 1994 and 1993, and $5.6 in 1992.
7. Retirement Plans and Other Postretirement Benefits
Retirement Plans
The Company, its U.S. subsidiaries and a majority of its overseas
subsidiaries maintain pension plans covering substantially all of their
employees. Most plans provide pension benefits that are based primarily on
years of service and employees' career earnings. In the Company's principal
U.S. plans, funds are contributed to trustees as necessary to provide for
current service and for any unfunded projected benefit obligation over a
reasonable period. To the extent these requirements are exceeded by plan
assets, a contribution may not be made in a particular year. Plan assets
consist principally of common stocks, deposit administration contracts with
insurance companies, investments in real estate funds and U.S. Government
obligations.
Net periodic pension expense of the plans includes the following components:
<TABLE>
<CAPTION>
1994 1993 1992
U.S. Overseas U.S. Overseas U.S. Overseas
<S> <C> <C> <C> <C> <C> <C>
Service cost--benefits earned during the period ............. $ 23.1 $17.9 $ 18.7 $ 12.3 $ 17.9 $ 12.4
Interest cost on projected benefit obligation ............... 63.1 15.3 64.2 15.4 62.0 16.7
Actual return on plan assets ................................ (3.1) (2.2) (95.2) (15.2) (87.6) (12.0)
Net amortization and deferral ............................... (69.1) (7.0) 19.5 7.1 9.6 2.7
Net pension expense ......................................... $ 14.0 $24.0 $ 7.2 $ 19.6 $ 1.9 $ 19.8
</TABLE>
23
<PAGE>
The following table sets forth the funded status of the plans at December 31:
<TABLE>
<CAPTION>
1994 1993
U.S Overseas U.S. Overseas
<S> <C> <C> <C> <C>
Plan assets at fair value ................................................... $739.2 $ 137.3 $ 809.2 $ 126.6
Actuarial present value of benefit obligations:
Vested obligation .......................................................... 676.6 189.4 744.6 170.1
Nonvested obligation ....................................................... 52.0 21.5 54.5 19.0
Accumulated benefit obligation .............................................. 728.6 210.9 799.1 189.1
Additional benefits related to assumed future
compensation levels ....................................................... 43.6 30.4 112.8 38.5
Projected benefit obligation ................................................ 772.2 241.3 911.9 227.6
Plan assets (less than) projected benefit obligation ........................ (33.0) (104.0) (102.7) (101.0)
Deferral of net actuarial changes and other, net ............................ 96.7 (3.3) 182.2 11.6
Unrecognized prior service cost ............................................. 21.9 3.3 26.8 2.0
Unrecognized transition asset ............................................... (36.2) (4.3) (45.6) (4.9)
Additional liability ........................................................ -- (.7) (6.2) (1.2)
Prepaid (accrued) pension cost recognized in the
Consolidated Balance Sheets ............................................... $ 49.4 $(109.0) $ 54.5 $ (93.5)
</TABLE>
The actuarial assumptions used to determine the projected benefit obligations
of the plans were as follows:
<TABLE>
<CAPTION>
Overseas
U.S. (weighted average)
1994 1993 1992 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
Settlement rates ..... 8.75% 7.25% 8.25% 8.38% 7.83% 9.13%
Long-term rates of
compensation
increase ........... 5.75% 5.75% 6.00% 5.53% 5.30% 6.45%
Long-term rates of
return on plan
assets ............. 9.25% 9.25% 9.75% 10.88% 10.32% 11.10%
</TABLE>
When remeasuring the pension obligation, the Company reassesses each
actuarial assumption. In accordance with generally accepted accounting
principles, the settlement rate assumption is pegged to long-term bond rates
to reflect the cost to satisfy the pension obligation currently, and the
other assumptions reflect the long-term outlook of rates of compensation
increases and return on assets.
Other Postretirement and Postemployment Benefits
The Company and certain of its subsidiaries provide health care and life
insurance benefits for retired employees to the extent not provided by
government-sponsored plans.
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" (SFAS 106). SFAS 106 requires the Company to
change its method of accounting for its postretirement life and health care
benefits provided to retirees from the "pay-as-you-go" basis to accruing such
costs over the working lives of the employees. The Company elected to
recognize this change in accounting on the immediate recognition basis and
utilizes a portion of its leveraged ESOP, in the form of future retiree
contributions, to reduce its obligation to provide these postretirement
benefits. Postretirement benefits currently are not funded. The Company also
adopted SFAS 112, "Employers' Accounting for Postemployment Benefits." SFAS
112 requires accrual accounting for the estimated cost of benefits provided
to former or inactive employees after employment but before retirement.
The cumulative effect on prior years of adopting SFAS 106 and 112 as of
January 1, 1993 resulted in a pretax charge during 1993 of $195.7 ($129.2
aftertax or $.83 per share), of which $189.5 related to SFAS 106 and $6.2
related to SFAS 112. This non-cash charge represented the accumulated benefit
obligation net of related accruals previously recorded by the Company as of
January 1, 1993.
24
<PAGE>
Postretirement benefits expense included the following components:
1994 1993
Service cost-benefits earned during the period ........... $ 2.2 $ 3.7
Annual ESOP allocation ................................... (5.7) (6.2)
Interest cost on accumulated postretirement benefit
obligation ............................................. 14.2 16.4
Amortization of unrecognized net (gain) .................. (.1) --
Net postretirement expense ............................. $10.6 $13.9
The cash cost to the Company for postretirement benefits in 1992, excluding
acquisitions, approximated $11.2.
The actuarial present value of postretirement benefit obligations included in
Other liabilities in the Consolidated Balance Sheets was comprised of the
following components, at December 31:
1994 1993
Retirees ............................................... $144.9 $155.2
Active participants eligible for retirement ............ 2.9 11.3
Other active participants .............................. 17.0 25.1
Accumulated postretirement benefit obligation .......... 164.8 191.6
Unrecognized net gain .................................. 38.5 14.2
Accrued postretirement benefit liability ............... $203.3 $205.8
The principal actuarial assumptions used in the measurement of the
accumulated benefit obligation were as follows:
1994 1993
Discount rate ........................................ 8.75% 7.25%
Current medical cost trend rate ...................... 10.00% 10.00%
Ultimate medical cost trend rate ..................... 6.25% 5.00%
Medical cost trend rate decreases ratably to
ultimate in year ................................... 2001 2001
ESOP growth rate ..................................... 10.00% 10.00%
When remeasuring the accumulated benefit obligation, the Company reassesses
each actuarial assumption.
The cost of these postretirement medical benefits is dependent upon a number
of factors, the most significant of which is the rate at which medical costs
increase in the future. The effect of a 1% increase in the assumed medical
cost trend rate would increase the accumulated postretirement benefit
obligation by approximately $17.3; annual expense would not be materially
affected.
8. Income Taxes
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109). The
one-time non-cash charge for the recalculation of income taxes was $229.0
($1.47 per share), which was recorded in the 1993 Statement of Income,
primarily as a result of the 1992 acquisition of Mennen.
The provision for income taxes on income before changes in accounting
consists of the following for the years ended December 31:
1994 1993 1992
United States .................. $ 43.3 $ 75.9 $ 70.3
Overseas ....................... 256.4 212.2 180.6
$299.7 $288.1 $250.9
25
<PAGE>
Differences between accounting for financial statement purposes and
accounting for tax purposes result in taxes currently payable (lower) higher
than the total provision for income taxes as follows:
1994 1993 1992
Excess of tax over book depreciation ....... $(32.8) $(18.7) $(18.0)
Net restructuring (spending) accrual ....... (19.0) (24.2) (22.0)
Other, net ................................. 5.6 (13.8) (9.4)
$(46.2) $(56.7) $(49.4)
The components of income before income taxes are as follows for the three
years ended December 31:
1994 1993 1992
United States .................. $181.8 $256.9 $247.6
Overseas ....................... 698.1 579.3 480.3
$879.9 $836.2 $727.9
The difference between the statutory United States federal income tax rate
and the Company's global effective tax rate as reflected in the Consolidated
Statements of Income is as follows:
% of Income Before Tax 1994 1993 1992
Tax at U.S. statutory rate ........................ 35.0% 35.0% 34.0%
State income taxes, net of federal benefit ........ .6 .7 1.0
Earnings taxed at other than U.S. statutory rate .. (.3) (.2) .3
Other, net ........................................ (1.2) (1.0) (.8)
Effective tax rate ................................ 34.1% 34.5% 34.5%
In addition, tax benefits of $16.0 in 1994 and $15.8 in 1993 were recorded
directly through equity.
The components of deferred taxes at December 31:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Deferred Taxes--Current:
Accrued liabilities, not deductible until paid .................................. $ 68.6 $ 74.9
Other, net ...................................................................... 8.1 16.2
Total deferred taxes current ................................................... 76.7 91.1
Deferred Taxes--Long-term:
Intangible assets, not amortized for tax purposes ............................... (196.6) (213.6)
Property, plant and equipment, principally due to differences in depreciation ... (208.0) (165.7)
Postretirement and postemployment benefits, past service cost ................... 71.1 73.5
Restructuring ................................................................... 14.1 33.3
Tax loss and tax credit carryforwards ........................................... 81.5 63.3
Other, net ...................................................................... (25.1) (28.7)
Valuation allowance ............................................................. (32.4) (28.3)
Total deferred taxes long-term ................................................. (295.4) (266.2)
Net deferred taxes (liabilities) .............................................. $(218.7) $(175.1)
</TABLE>
The major component of the 1994 and 1993 valuation allowance relates to the
uncertainty of realizing certain foreign deferred tax assets.
26
<PAGE>
9. Foreign Currency Translation
Cumulative translation adjustments, which represent the effect of translating
assets and liabilities of the Company's non-U.S. entities, except those in
highly inflationary economies, were as follows:
1994 1993 1992
Balance, January 1 ......................... $(372.9) $(308.5) $(216.9)
Effect of balance sheet translations ....... (66.4) (64.4) (91.6)
Balance, December 31 ....................... $(439.3) $(372.9) $(308.5)
Foreign currency charges, resulting from the translation of balance sheets of
subsidiaries operating in highly inflationary environments and from foreign
currency transactions, were not material in 1994, 1993 and 1992.
10. Earnings Per Share
Primary earnings per share are determined by dividing net income, after
deducting preferred stock dividends net of related tax benefits ($21.6 net in
1994 and 1993, and $20.7 net in 1992), by the weighted average number of
common shares outstanding (146.2 million in 1994, 155.9 million in 1993 and
156.5 million in 1992).
Fully diluted earnings per common share are calculated assuming the
conversion of all potentially dilutive securities, including convertible
preferred stock and outstanding options, unless the effect of such conversion
is antidilutive. This calculation also assumes, if applicable, reduction of
available income by pro forma ESOP replacement funding, net of income taxes.
11. Other Income Statement Information
Other expense (income) consists of the following for the years ended December
31:
1994 1993 1992
Amortization of intangibles .............. $ 56.3 $51.2 $ 47.7
Earnings from equity investments ......... (1.3) (7.4) (21.7)
Minority interest ........................ 37.8 27.5 2.1
Other .................................... (10.0) -- (7.4)
$ 82.8 $71.3 $ 20.7
The following is a comparative summary of certain expense information for the
years ended December 31:
1994 1993 1992
Interest incurred .................... $130.6 $ 81.3 $ 86.5
Interest capitalized ................. 9.7 11.8 8.4
Interest expense ..................... $120.9 $ 69.5 $ 78.1
Research and development ............. $147.1 $139.9 $125.8
Maintenance and repairs .............. $110.1 $107.8 $108.2
Media advertising costs .............. $543.2 $508.3 $516.6
12. Balance Sheet Information
Supplemental balance sheet information is as follows:
Inventories 1994 1993
Raw materials and supplies ................... $280.3 $250.0
Work-in-process .............................. 38.4 28.7
Finished goods ............................... 395.2 399.3
$713.9 $678.0
Inventories valued under LIFO amounted to $163.6 at December 31, 1994 and
$170.8 at December 31, 1993. The excess of current cost over LIFO cost at the
end of each year was $39.6 and $23.1, respectively. In 1994 and 1993, certain
inventory quantities were reduced, which resulted in liquidations of LIFO
inventory quantities. The effect was to increase income by $2.8 and $1.7 in
1994 and 1993, respectively.
27
<PAGE>
Property, Plant and Equipment, Net 1994 1993
Land ............................................. $ 94.9 $ 82.6
Buildings ........................................ 549.3 491.3
Machinery and equipment .......................... 2,459.2 2,246.3
3,103.4 2,820.2
Accumulated depreciation ......................... (1,115.3) (1,053.9)
$ 1,988.1 $ 1,766.3
Goodwill and Other Intangible Assets, Net 1994 1993
Goodwill and other intangibles ................... $ 1,879.4 $ 1,740.2
Accumulated amortization ......................... (207.6) (151.2)
$ 1,671.8 $ 1,589.0
Other Accruals 1994 1993
Accrued payroll and employee benefits ............ $ 233.0 $ 223.8
Accrued advertising .............................. 105.4 121.0
Accrued interest ................................. 38.6 19.3
Accrued taxes, other than income taxes ........... 42.4 35.9
Other ............................................ 121.9 150.4
$ 541.3 $ 550.4
Fair Value of Financial Instruments
In assessing the fair value of financial instruments at December 31, 1994 and
1993, the Company has used available market information and other valuation
methodologies. Some judgment is necessarily required in interpreting market
data to develop the estimates of fair value, and, accordingly, the estimates
are not necessarily indicative of the amounts that the Company could realize
in a current market exchange.
The estimated fair value of the Company's financial instruments at December
31, are summarized as follows:
<TABLE>
<CAPTION>
1994 1993
Carrying Fair Carrying Fair
Amount Amount Amount Value
<S> <C> <C> <C> <C>
Assets:
Cash and cash equivalents ................................. $ 169.9 $ 169.9 $ 144.1 $ 144.1
Marketable securities ..................................... 47.6 47.6 67.1 67.1
Long-term investments ..................................... 58.8 58.6 61.0 60.5
Liabilities:
Notes and loans payable ................................... (181.9) (181.9) (169.4) (169.4)
Long-term debt, including current portion ................. (1,777.5) (1,760.1) (1,547.9) (1,689.7)
Other liabilities:
Foreign exchange contracts ............................... (11.0) (10.2) 6.7 4.7
Interest rate instruments ................................ (14.2) (10.8) -- 6.3
Equity:
Foreign exchange contracts--
hedge investment in subsidiaries ........................ (4.0) (3.4) 1.0 1.7
</TABLE>
Financial Instruments and Rate Risk Management
The Company utilizes interest rate agreements and foreign exchange contracts
to manage interest rate and foreign currency exposures. The principal
objective of such contracts is to moderate rather than attempt to eliminate
fluctuations in interest rate and foreign currency movements. The Company, as
a matter of policy, does not speculate in financial markets and therefore
does not hold these contracts for trading purposes. The Company utilizes what
it considers straightforward instruments, such as forward foreign exchange
contracts and non-leveraged interest rate swaps, to accomplish its
objectives.
28
<PAGE>
The Company primarily uses interest rate swap agreements to effectively
convert a portion of its floating rate debt to fixed rate debt in order to
manage interest rate exposures in a manner consistent with achieving a
targeted fixed to variable interest rate ratio. The net effective cash
payment of these instruments combined with the related interest payments on
the debt that they hedge are accounted for as interest expense. Those
interest rate instruments that do not qualify as hedge instruments for
accounting purposes are marked to market and carried on the balance sheet at
fair value. As of December 31, 1994 and 1993, the Company had agreements
outstanding with an aggregate notional amount of $222.0 and $347.0,
respectively, with maturities through 2001.
The Company uses forward exchange contracts principally to hedge foreign
currency exposures associated with its net investment in foreign operations
and intercompany loans. This hedging minimizes the impact of foreign exchange
rate movements on the Company's financial position. The terms of these
contracts are rarely longer than three years.
As of December 31, 1994 and 1993, the Company had approximately $390.7 and
$439.0, respectively, of outstanding foreign exchange contracts in which
foreign currencies were purchased, and approximately $6.9 in which foreign
currencies were sold as of December 31, 1994. At December 31, 1994 and 1993,
approximately 20% of outstanding foreign exchange contracts served to hedge
net investments in foreign subsidiaries, 60% hedged intercompany loans, 10%
hedged third-party firm commitments, and the remaining 10% hedged certain
transactions that are anticipated to settle in accordance with their
identified terms. The Company makes net settlements for foreign exchange
contracts at maturity, based on rates agreed to at inception of the
contracts.
Gains and losses from contracts that hedge the Company's investments in its
foreign subsidiaries are shown in the cumulative translation adjustments
account included in shareholders' equity. Gains and losses from contracts
that hedge firm commitments (including intercompany loans) are recorded in
the balance sheets as a component of the related receivable or payable.
The contracts that hedge anticipated sales and purchases do not qualify as
hedges for accounting purposes. Accordingly, the related gains and losses are
calculated using the current forward foreign exchange rates and are recorded
in the statements of income as other expense, net. These contracts mature in
less than one year.
The Company is exposed to credit loss in the event of nonperformance by
counterparties on interest rate agreements and foreign exchange contracts;
however, nonperformance by these counterparties is considered remote as it is
the Company's policy to contract only with counterparties that have a
long-term debt rating of A or higher. The amount of any such exposure is
generally the unrealized gain on such contracts, which at December 31, 1994
was not significant.
Effective January 1, 1994 the Company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities," which addresses the accounting and reporting for
investments in equity securities that have readily determinable fair values
and for all investments in debt securities. The effect of adoption had no
impact on results of operations or cash flows and was not material to
financial condition.
13. Commitments and Contingent Liabilities
The Company has various contractual commitments to purchase raw materials,
products and services totaling $184.9 that expire through 1998.
The Company is a party to various superfund and other environmental matters
and is contingently liable with respect to lawsuits, taxes and other matters
arising out of the normal course of business. Management proactively reviews
and manages its exposure to, and the impact of, environmental matters. While
it is possible that the Company's cash flows and results of operations in
particular quarterly or annual periods could be affected by the one-time
impacts of the resolution of such contingencies, it is the opinion of
management that the ultimate disposition of these matters, to the extent not
previously provided for, will not have a material impact on the Company's
financial condition or ongoing cash flows and results of operations.
As discussed in Note 16, the acquisition of Kolynos is subject to review by
antitrust regulatory authorities in Brazil and Colombia. While it is not yet
possible to definitively determine whether or not approval will be obtained,
management believes the acquisition, or some variation thereof, will
eventually be approved.
29
<PAGE>
14. Quarterly Financial Data (Unaudited)
Dollars in Millions Except Per Share Amounts
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C>
1994
Net sales ............................................. $1,770.0 $1,891.1 $1,930.7 $1,996.1
Gross profit .......................................... 862.1 902.7 951.8 958.0
Net income ............................................ 149.6 142.5 151.0 137.1
Earnings per common share:
Primary .............................................. .98 .93 1.00 .91
Assuming full dilution ............................... .91 .87 .93 .85
1993
Net sales ............................................. $1,702.7 $1,775.1 $1,823.1 $1,840.4
Gross profit .......................................... 814.8 851.2 870.1 875.3
Income before changes in accounting ................... 140.8 142.4 142.8 122.1
Net (loss) ((1)) income ............................... (217.4) 142.4 142.8 122.1
Earnings per common share before changes in accounting:
Primary .............................................. .85 .86 .89 .78
Assuming full dilution ............................... .79 .81 .82 .73
(Loss) earnings per common share:((2))
Primary .............................................. (1.39) .86 .89 .78
Assuming full dilution ............................... (1.25) .81 .82 .73
</TABLE>
(1) Reflects a first-quarter 1993 charge for changes in accounting for Other
Postretirement Benefits, Postemployment Benefits and Income Taxes of $358.2.
(2) The sum of the quarterly earnings per share amounts in 1993 was not equal
to the full year because the computations of the weighted average number of
shares outstanding and the potential impact of dilutive securities for each
quarter and for the full year were made independently.
30
<PAGE>
15. Market and Dividend Information
The Company's common stock and $4.25 Preferred Stock are listed on the New
York Stock Exchange. The trading symbol for the common stock is CL. Dividends
on the common stock have been paid every year since 1895, and the amount of
dividends paid per share has increased for 32 consecutive years.
Market Price
<TABLE>
<CAPTION>
Common Stock $4.25 Preferred Stock
1994 1993 1994 1993
Quarter Ended High Low High Low High Low High Low
<S> <C> <C> <C> <C> <C> <C> <C> <C>
March 31 ................... $ 65.38 $ 55.63 $ 67.25 $ 54.25 $ 76.00 $ 72.00 $ 75.50 $ 63.50
June 30 .................... 59.50 51.25 66.38 52.63 73.00 68.00 77.00 73.00
September 30 ............... 58.63 49.50 59.00 46.75 70.50 67.00 77.50 73.50
December 31 ................ 64.75 57.00 62.75 52.50 68.50 62.50 76.50 72.00
Closing Price .............. $ 63.38 $ 62.38 $ 64.00 $ 73.50
</TABLE>
Dividends Paid Per Share
<TABLE>
<CAPTION>
Quarter Ended 1994 1993 1994 1993
<S> <C> <C> <C> <C>
March 31 ................... $ .36 $ .31 $1.0625 $1.0625
June 30 .................... .36 .31 1.0625 1.0625
September 30 ............... .41 .36 1.0625 1.0625
December 31 ................ .41 .36 1.0625 1.0625
Total .................... $ 1.54 $ 1.34 $ 4.25 $ 4.25
</TABLE>
16. Subsequent Event--Purchase of Kolynos Oral Care Business
On January 10, 1995, the Company acquired the worldwide Kolynos oral care
business ("Kolynos") from American Home Products Corporation for $1,040.0 in
cash. Kolynos is a multinational oral care business operating primarily in
South America and having a presence in Greece, Taiwan and Hungary. The
acquired assets of the Kolynos business, located principally in Argentina,
Brazil, Colombia, Ecuador, Peru and Uruguay, include trademarks and other
intellectual property, accounts receivable, inventories, and property, plant
and equipment that is utilized in the production of toothpaste, toothbrushes,
dental floss and oral rinses.
The transaction was structured as a multinational acquisition of assets and
stock and will be accounted for under the purchase method of accounting, with
the results of operations of Kolynos included with the results of the Company
from January 10, 1995. The acquisition will be reviewed by antitrust
regulatory authorities in Brazil and Colombia. The financing used to acquire
the Kolynos business was provided by commercial banks.
The net book value of Kolynos's assets was approximately $50.0. The Company
is currently evaluating the business in order to determine the fair value of
assets acquired, including intangibles and goodwill.
The Company expects the acquisition to have a first-year (unaudited) dilutive
effect of less than 5% on total Company earnings. Although the Company
intends to operate Kolynos in Brazil as a separate operation, there are
certain other benefits that are anticipated to be realized from the
implementation of the Company's integration plans. The Company believes that
future growth opportunities, as well as the benefits of such integration
plans when fully implemented, will reduce and eventually more than offset any
dilutive impact on earnings per share.
31
<PAGE>
COLGATE-PALMOLIVE COMPANY
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
For the Year Ended December 31, 1994
(Dollars in Millions)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Balance at Charged to Balance
Beginning Costs and at End
Description of Period Expenses Other Deductions of Period
<S> <C> <C> <C> <C> <C>
$5.6(1)
.6(3)
Allowance for doubtful accounts .............................. $ 24.9 $ 4.4 $ -- $6.2 $ 23.1
Accumulated amortization of goodwill and other intangibles ... $151.2 $56.4 $ -- $-- $207.6
Valuation allowance for deferred tax assets .................. $ 28.3 $ 4.1(2) $ -- $-- $ 32.4
</TABLE>
NOTES:
(1) Uncollectible accounts written off and cash discounts allowed.
(2) Allowance for tax loss and tax credit carryforward benefits which more
likely than not will not be utilized in the future.
(3) Other adjustments.
32
<PAGE>
COLGATE-PALMOLIVE COMPANY
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
For the Year Ended December 31, 1993
(Dollars in Millions)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Balance at Charged to Balance
Beginning Costs and at End
Description of Period Expenses Other Deductions of Period
<S> <C> <C> <C> <C> <C>
$ 1.2(1)
9.1(2)
.2(4)
Allowance for doubtful accounts ............................ $ 21.8 $13.6 $-- $10.5 $ 24.9
Accumulated amortization of goodwill and other intangibles . $100.0 $51.2 $-- $-- $151.2
Valuation allowance for deferred tax assets ................ $ -- $22.0(3) $6.3(3) $-- $ 28.3
</TABLE>
NOTES:
(1) Adjustments arising from translation of reserve balances at year-end
exchange rates.
(2) Uncollectible accounts written off and cash discounts allowed.
(3) Allowance for tax loss and tax credit carryforward benefits which more
likely than not will not be utilized in the future. The $22.0 charged to
costs and expenses was included in the 1993 one-time charge for the adoption
of SFAS 109, "Accounting for Income Taxes."
(4) Other adjustments.
33
<PAGE>
COLGATE-PALMOLIVE COMPANY
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
For the Year Ended December 31, 1992
(Dollars in Millions)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Balance at Charged to Balance
Beginning Costs and at End
Description of Period Expenses Other Deductions of Period
<S> <C> <C> <C> <C> <C>
$ 2.0(2)
10.6(3)
.9(4)
Allowance for doubtful accounts ............................ $21.5 $12.3 $ 1.5(1) $ 13.5 $ 21.8
Accumulated amortization of goodwill and other intangibles . $53.3 $47.7 $(1.0)(4) $-- $100.0
</TABLE>
NOTES:
(1) Balances of acquired companies.
(2) Adjustments arising from translation of reserve balances at year-end
exchange rates.
(3) Uncollectible accounts written off and cash discounts allowed.
(4) Other adjustments.
34
<PAGE>
Report of Independent Public Accountants
To the Board of Directors and Shareholders of Colgate-Palmolive Company:
We have audited the accompanying consolidated balance sheets of
Colgate-Palmolive Company (a Delaware corporation) and subsidiaries as of
December 31, 1994 and 1993, and the related consolidated statements of
income, retained earnings, changes in capital accounts and cash flows for
each of the three years in the period ended December 31, 1994. These
financial statements and the schedule referred to below are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Colgate-Palmolive Company
and subsidiaries as of December 31, 1994 and 1993, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1994, in conformity with generally accepted accounting
principles.
As discussed in the accompanying notes to the consolidated financial
statements, in 1993, the Company adopted three new accounting standards
promulgated by the Financial Accounting Standards Board, changing its methods
of accounting for income taxes, postretirement benefits other than pensions,
and postemployment benefits.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to
financial statements is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. The schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required
to be set forth therein in relation to the basic financial statements taken
as a whole.
/s/ ARTHUR ANDERSEN LLP
New York, New York
February 1, 1995
35
<PAGE>
COLGATE-PALMOLIVE COMPANY
Historical Financial Summary (1)
Dollars in Millions Except Per Share Amounts
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operations
Net sales .............. 7,587.9 7,141.3 7,007.2 6,060.3 5,691.3 5,038.8 4,734.3 4,365.7 3,768.7 3,488.5
Results of operations:
Net income ............ 580.2(2) 189.9(3) 477.0 124.9(4) 321.0 280.0 152.7(5) .9(7) 114.8 122.5
Per share, primary .... 3.82(2) 1.08(3) 2.92 .77(4) 2.28 1.98 1.11(5) .01(7) .81 .78
Per share, assuming
full dilution ........ 3.56(2) 1.05(3) 2.74 .75(4) 2.12 1.90 1.10(5) .01(7) .81 .77
Depreciation and
amortization expense . 235.1 209.6 192.5 146.2 126.2 97.0 82.0 70.1 60.3 49.7
Financial Position
Working capital ........ 648.5 676.4 635.6 596.0 516.0 907.5 710.9 439.5 428.7 518.0
Ratio of current assets
to current liabilities 1.4 1.5 1.5 1.5 1.4 1.9 1.7 1.3 1.4 1.5
Property, plant and
equipment, net ....... 1,988.1 1,766.3 1,596.8 1,394.9 1,362.4 1,105.4 1,021.6 1,201.8 1,113.7 978.3
Capital expenditures ... 400.8 364.3 318.5 260.7 296.8 210.0 238.7 285.8 220.9 208.6
Total assets ........... 6,142.4 5,761.2 5,434.1 4,510.6 4,157.9 3,536.5 3,217.6 3,227.7 2,845.9 2,814.0
Long-term debt ......... 1,751.5 1,532.4 946.5 850.8 1,068.4 1,059.5 674.3 694.1 522.0 529.3
Shareholders' equity ... 1,822.9 1,875.0 2,619.8 1,866.3 1,363.6 1,123.2 1,150.6 941.1 979.9 907.0
Share and Other
Book value per common
share ................ 16.96 12.40 16.21 12.54 10.12 8.39 8.24 6.77 6.91 6.33
Cash dividends declared
per common share ..... 1.54 1.34 1.15 1.02 .90 .78 .55(6) .695 .68 .66
Cash dividends paid per
common share ......... 1.54 1.34 1.15 1.02 .90 .78 .74 .695 .68 .65
Closing price .......... 63.38 62.38 55.75 48.88 36.88 31.75 23.50 19.63 20.44 16.38
Number of common shares
outstanding (in
millions) ............ 144.4 149.3 160.2 147.3 133.2 132.2 138.1 137.2 140.1 141.3
Number of shareholders
of record:
$4.25 Preferred ....... 400 450 470 460 500 500 550 600 600 700
Common ................ 44,100 40,300 36,800 34,100 32,000 32,400 33,200 33,900 35,900 39,600
Average number of
employees ............ 32,800 28,000 28,800 24,900 24,800 24,100 24,700 37,400 37,900 40,600
</TABLE>
(1) All share and per share amounts have been restated to reflect the 1991
two-for-one stock split.
(2) Income in 1994 includes a one-time charge of $5.2 for the sale of
non-core business, Princess House.
(3) Income in 1993 includes a one-time impact of adopting new mandated
accounting standards, effective in the first quarter of 1993, of $358.2
($2.30 per share on a primary basis or $2.10 on a fully diluted basis).
(4) Income in 1991 includes a net provision for restructured operations of
$243.0 ($1.80 per share on a primary basis or $1.75 per share on a fully
diluted basis).
(5) Income in 1988 includes Hill's service agreement renegotiation net charge
of $42.0 ($.30 per share on both a primary and fully diluted basis).
(6) Due to timing differences, 1988 includes three dividend declarations
while all other years include four dividend declarations.
(7) Income in 1987 includes a net provision for restructured operations of
$144.8 ($1.06 per share on a primary basis or $1.05 per share on a fully
diluted basis).
36
<PAGE>
COLGATE-PALMOLIVE COMPANY
EXHIBITS TO FORM 10-K
YEAR ENDED DECEMBER 31, 1994
Commission File No. 1-644-2
37
<PAGE>
COLGATE-PALMOLIVE COMPANY
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
<S> <C>
3-A Restated Certificate of Incorporation, as amended. (Registrant hereby incorporates by
reference Exhibit 1 to its Form 8-K dated October 17, 1991, File No. 1-644-2.)
3-B By-laws. (Registrant hereby incorporates by reference Exhibit 3-B to Amendment No. 1 to its
Quarterly Report on Form 10-Q for the quarter ended September 30, 1994, File No. 1-644-2.)
4-A Rights agreement dated as of October 13, 1988 between registrant and Morgan Shareholder
Services Trust Company. (Registrant hereby incorporates by reference Exhibit I to its Form
8-A dated October 21, 1988, File No. 1-644-2.)
4-B a) Other instruments defining the rights of security holders, including indentures.*
b) Colgate-Palmolive Company Employee Stock Ownership Trust Note Agreement dated as of June 1,
1989. (Registrant hereby incorporates by reference Exhibit 4-B (b) to its Annual Report on
Form 10-K for the year ended December 31, 1989, File No. 1-644-2.)
10-A Colgate-Palmolive Company 1977 Stock Option Plan, as amended. (Registrant hereby
incorporates by reference Exhibit 10-A to its Annual Report on Form 10-K for the year ended
December 31, 1986, File No. 1-644-2.)
10-B a) Colgate-Palmolive Company Executive Incentive Compensation Plan, as amended. 40-44
b) Colgate-Palmolive Company Executive Incentive Compensation Plan Trust. (Registrant hereby
incorporates by reference Exhibit 10-B (b) to its Annual Report on Form 10-K for the year
ended December 31, 1987, File No. 1-644-2.)
10-C a) Colgate-Palmolive Company Supplemental Salaried Employees Retirement Plan (Registrant hereby
incorporates by reference Exhibit 10-E (Plan only) to its Annual Report on Form 10-K for the
year ended December 31, 1984, File No. 1-644-2.)
b) Colgate-Palmolive Company Supplemental Spouse's Benefit Trust. (Registrant hereby
incorporates by reference Exhibit 10-C (b) to its Annual Report on Form 10-K for the year
ended December 31, 1987, File No. 1-644-2.)
10-D Lease dated August 15, 1978 between Harold Uris, d/b/a Uris Holding Company, and
Colgate-Palmolive Company. (Registrant hereby incorporates by reference Exhibit 2(b) to its
Annual Report on Form 10-K for the year ended December 31, 1978, File No. 1-644-2.)
10-E a) Colgate-Palmolive Company Executive Severance Plan. (Registrant hereby incorporates by
reference Exhibit 10-E (a) to its Annual Report on Form 10-K for the year ended December 31,
1989, File No. 1-644-2.)
b) Colgate-Palmolive Company Executive Severance Plan Trust. (Registrant hereby incorporates by
reference Exhibit 10-E (b) to its Annual Report on Form 10-K for the year ended December 31,
1987, File No. 1-644-2.)
10-F Colgate-Palmolive Company Pension Plan for Outside Directors. (Registrant hereby
incorporates by reference Exhibit 10-F to its Annual Report on Form 10-K for the year ended
December 31, 1988, File No. 1-644-2.)
10-G Colgate-Palmolive Company Stock Purchase Plan for Non-Employee Directors. (Registrant hereby
incorporates by reference Exhibit 10-G to its Annual Report on Form 10-K for the year ended
December 31, 1988, File No. 1-644-2.)
10-H Colgate-Palmolive Company Restated and Amended Deferred Compensation Plan for Non-Employee
Directors. (Registrant hereby incorporates by reference Exhibit 10-H to its Annual Report on
Form 10-K for the year ended December 31, 1991, File No. 1-644-2.)
10-I Career Achievement Plan. (Registrant hereby incorporates by reference Exhibit 10-I to its
Annual Report on Form 10-K for the year ended December 31, 1986, File No. 1-644-2.)
38
<PAGE>
10-J Colgate-Palmolive Company 1987 Stock Option Plan, as amended. (Registrant hereby
incorporates by reference Exhibit 10-J to its Annual Report on Form 10-K for the year ended
December 31, 1992, File No. 1-644-2.)
10-K Colgate-Palmolive Company Stock Compensation Plan for Non-Employee Directors, as amended.
(Registrant hereby incorporates by reference Exhibit A to its Proxy Statement dated March
30, 1990, File No. 1-644-2.)
10-L Stock incentive agreement between Colgate-Palmolive Company and Reuben Mark, Chairman and
Chief Executive Officer, dated January 13, 1993, pursuant to the Colgate-Palmolive Company
1987 Stock Option Plan, as amended. (Registrant hereby incorporates by reference Exhibit
10-N to its Annual Report on Form 10-K for the year ended December 31, 1993, File No.
1-644-2.)
10-M Purchase Agreement among American Home Products Corporation, Colgate-Palmolive Company and
KAC Corp. dated as of January 9, 1995. (Registrant hereby incorporates by reference Exhibit
2 to its Current Report on Form 8-K dated January 10, 1995, File No. 1-644-2.)
10-N U.S, $500,000,000 Five Year Credit Agreement dated as of April 8, 1994. (Registrant hereby
incorporates by reference Exhibit 10-O to its Quarterly Report on Form 10-Q for the quarter
ended June 30, 1994, File No. 1-644-2.)
10-O U.S. $250,000,000 364 Day Credit Agreement dated as of April 8, 1994. (Registrant hereby
incorporates by reference Exhibit 10-P to its Quarterly Report on Form 10-Q for the quarter
ended June 30, 1994, File No. 1-644-2.)
10-P U.S. $400,000,000 Credit Agreement dated as of January 8, 1995.
10-Q U.S. $770,000,000 Five Year Credit Agreement dated as of January 8, 1995.
10-R U.S. $330,000,000 364 Day Credit Agreement dated as of January 8, 1995.
11 Statement re Computation of Earnings Per Common Share. 45-46
12 Statement re Computation of Ratio of Earnings to Fixed Charges. 47
21 Subsidiaries of the Registrant. 48-49
23 Consent of Independent Public Accountants. 50
24 Powers of Attorney. 51-59
27 Financial Data Schedule.
</TABLE>
* Registrant hereby undertakes upon request to furnish the Commission with a
copy of any instrument with respect to long-term debt where the total amount
of securities authorized thereunder does not exceed 10% of the total assets
of the registrant and its subsidiaries on a consolidated basis.
The exhibits indicated above which are not included with the Form 10-K are
available upon request and payment of a reasonable fee approximating the
registrant's cost of providing and mailing the exhibits. Inquiries should be
directed to:
Colgate-Palmolive Company
Office of the Secretary (10-K Exhibits)
300 Park Avenue
New York, New York 10022-7499
39
COLGATE-PALMOLIVE COMPANY
EXECUTIVE INCENTIVE COMPENSATION PLAN
As approved by the Stockholders April 25, 1962 and amended by the Board of
Directors through March 17, 1994.
Section 1. Purpose of the Plan. The purpose of the Plan is to provide an
incentive for executives and other key personnel who are in a position to
contribute materially to the success of the Company; to reward accomplishment on
their part; and to aid in attracting and holding executives of the caliber
necessary for the continued growth and profitability of the Company.
Section 2. Stock Subject to Plan. Subject to adjustment as provided herein, the
total number of shares of common stock available for grant under the Plan during
any given calendar year shall be four tenths percent (.4%) of the total number
of shares of common stock outstanding as of the first day of each such year
beginning after December 31, 1993 for which the Plan is in effect; provided that
any shares available for grant in a particular calendar year which are not, in
fact, granted in such year shall be added to the shares available for grant in
any subsequent calendar year.
Section 3. Awards. Awards pursuant to the Plan may be made to the persons who
served as officers of the Company during the year for which such awards are
made, and to other employees who served the Company during such period in
executive capacities or in key administrative or technical positions.
Subject to Section 7, the form and amount of each award to a Designated
Executive (as defined below) or any other officer of the Company shall be
determined by and in the discretion of at least two members of the Personnel and
Organization Committee (the "Committee"), each of whom shall be a Disinterested
Person (as defined below). The form and amount of each award to an employee who
is not a Designated Executive or an officer of the Company shall be determined
by the Chief Executive Officer of the Company with the approval of the Committee
and in accordance with such regulations as may be prescribed from time to time
by the Committee.
For the purposes of the Plan:
(1) "Company" means Colgate-Palmolive Company, a Delaware corporation, together
with, when the context requires, its directly or indirectly owned subsidiaries.
(2) "Designated Executives" shall mean the Chairman and Chief Executive Officer
of the Company and each officer, executive or other key employee designated in
writing by the Committee prior to the commencement of the measurement period
applicable to any award under the Plan.
(3) "Disinterested Person" shall mean a member of the Board of Directors of the
Company who qualifies as a disinterested person as defined in Rule 16b-3(c)(2),
as promulgated by the Securities and Exchange Commission or any successor agency
(the "Commission") under the Securities Exchange Act of 1934, as amended from
time to time, and any successor thereto (the "Exchange Act"), or any successor
definition adopted by the Commission, and also qualifies as an "outside
director" for purposes of Section 162 (m) of the Internal Revenue Code of 1986,
as amended from time to time, and any successor thereto (the "Code").
<PAGE>
Awards shall be made as soon as practicable after the close of the year for
which they are made or during the year (subject to Section 7), at the
Committee's discretion. They may be made payable in cash, in common stock of the
Company, or partly in cash and partly in common stock of the Company, and may be
made payable in whole or in part at the time the award is made or on a deferred
basis in each case as determined by the Committee at the time the award is made.
Deferred awards payable in common stock of the Company may take the form of
"restricted stock", the vesting of which may be subject to such terms and
conditions as the Committee may from time to time determine. The Committee may
condition the grant and vesting of an award, whether payable in cash, common
stock of the Company or otherwise, upon the attainment of specified performance
goals relating to the participant or the Company or subsidiary, division or
department of the Company for or within which the participant is primarily
employed, or upon such other factors or criteria as the Committee shall
determine, which goals may be different for each award recipient. Awards of cash
and common stock of the Company under the Plan for Designated Executives who may
be "covered employees" within the meaning of Section 162 (m) of the Code shall
be subject to preestablished performance goals in accordance with Section 7
hereof. Except as so limited, any or all deferred awards shall be made payable
in one or more installments over a period of not more than fifteen years, as
determined by the Committee when the awards are made. Subject to the same
limitations, the Committee may at any time accelerate or defer the time of
payment of the deferred balance of any award or awards made under the Plan.
If a participant dies, the balance of the award to him which remains unpaid at
the time of his death shall be paid to his personal representatives in the same
manner as if the participant were living.
In the event of a Change of Control of the Company, then notwithstanding any
provision of this Plan to the contrary, the Company, upon the direction of the
Committee, shall have the right to purchase from the trustee all the deferred
shares of Company common stock held in trust for cash for a period of thirty
days beginning on the first business day following a Change of Control of the
Company; provided, however, that the Company shall not have the right to
purchase deferred shares held for the account of any participant subject to
Section 16 of the Exchange Act, without such participant's consent, if such
purchase would cause the participant to incur liability under Section 16 of the
Exchange Act. Such purchases shall be at fair market value on the date of the
purchase, which shall be computed by taking the mean between the high and low
prices for such date on the composite tape. The trustee shall hold such cash for
the accounts of Plan participants and shall pay such amounts to participants as
directed by the Committee in accordance with the Plan.
A "Change of Control" shall be deemed to have occurred upon the occurrence of
any of the following events, unless and except to the extent otherwise
determined by the Committee prior to the occurrence of such event (i) the
acquisition by a third person, including a "group" as defined in Section 13(d)
(3) of the Act, of shares of the Company having 20% or more of the total number
of votes that may be cast for the election of directors of the Company, (ii)
shareholder approval of a transaction for the acquisition of the Company, or
substantially all of its assets, by another business entity or for a merger,
reorganization, consolidation or other business combination to which the Company
is a party, (iii) a change during any period of 24 months or less in the
composition of a majority of the Board of Directors where such change has not
been approved by a majority of the Board as constituted immediately prior to the
commencement of such period or (iv) any other event determined by the Committee
to be a Change of Control for purposes of the Plan.
<PAGE>
Section 4. Dividend Equivalents. On each December 31 which is after the date of
a deferred award in stock but prior to the date of termination of the
participant's employment, and on the date of termination, the Company shall
credit to the award shares of common stock of the Company of an aggregate value
(to be determined as provided in Section 6) equal to the amount of dividends
which the participant would have received since the date of the award or of the
last previous credit to the award pursuant to this Section, whichever is later,
if the number of shares payable in respect of the award had been registered in
the name of the participant on each of the record dates for payment of any such
dividends. The shares so credited to an award shall thereafter be included in
and deemed a part of such award for the purpose of computing any future credit
to the award pursuant to this Section 4.
On each date after termination of the participant's employment on which a
dividend on the common stock of the Company shall be paid, the record date for
which is after the date of a deferred award in stock and prior to the date of
registration in the name of the participant of all the shares so payable in
respect of such award, the Company shall pay to the participant with respect to
any shares then payable in respect of the award, an amount in cash equal to the
dividends which the participant would have received if such shares had been
registered in his name on the record date for such dividends.
If a dividend on the common stock of the Company is made payable in property
other than cash or common stock of the Company, the dividend equivalent with
respect thereto shall be based on the fair market value of such property, as
determined by the Committee in its discretion.
Section 5. Administration of the Plan. Full power to interpret, construe and
administer the Plan shall, except as otherwise provided in the Plan, be vested
in the Committee, which may adopt, alter, amend or revoke regulations for such
purpose. The Board of Directors shall have the right to modify the Plan from
time to time but no such modification shall, without prior approval of the
stockholders, materially increase the amount available for awards, materially
increase the benefits accruing to participants hereunder, materially modify the
requirements regarding eligibility for participation in the Plan, or, without
the consent of the participant affected, impair any award made prior to the
effective date of the modification. Without limiting the generality of the
foregoing, the Board of Directors, subject to the foregoing limitations, may
amend or rescind any provision of the Plan and the Committee, subject to the
foregoing limitations, may change the number of installments in which awards are
payable, accelerate or defer the payment of installments, modify the conditions
under which installments may be paid or modify the Plan to the extent that it
determines that the provisions of Section 7, in whole or in part, are no longer
required to preserve the deductibility of the payments thereunder under then
applicable laws, rules, regulations and interpretations.
Section 6. General Provisions. Awards under the Plan shall constitute general
obligations of the Company in accordance with the terms of the Plan and no
recipient of an award shall be entitled to have his award satisfied out of any
particular assets of the Company or out of any particular shares of treasury
stock of the Company. No participant shall be deemed to be a stockholder with
respect to any shares included in an award, prior to the registration of said
shares in his name on the stock books of the Company.
Notwithstanding the foregoing, upon the direction of the Committee, the Company
may by agreement with one or more trustees to be selected by the Committee,
create a trust to receive and hold so many, as the Committee shall determine
from time to time, of deferred awards made to
<PAGE>
participants under the Plan and dividend equivalents credited thereon and to
make payments of such awards to participants in accordance with the
terms of the Plan. In the event the Committee elects to create such a
trust, the Committee shall transfer and pay over to the trustee so
many, as the Committee shall determine from time to time, of the
deferred awards (whether in cash or common stock of the Company) and
dividend equivalents presently held by the Company for the account of
participants and deferred awards and dividend equivalents hereafter
made under the terms of the Plan. The trustee will hold all such
deferred awards and dividend equivalents thereon in accordance with the
terms of the trust agreement which shall contain such terms and
conditions (not inconsistent with the Plan) as the Committee may deem
advisable; provided, however, that the trust agreement shall require
that (i) the trustee is to make all distributions to participants in
accordance with the terms of the Plan; (ii) all trust assets shall
remain subject to the claims of the judgment creditors of the Company;
and (iii) no trust assets will be returned to the Company (except to
satisfy the claims of judgment creditors) until all distributions due
to participants under the Plan have been paid or provided for.
Shares of common stock which are awarded or credited to awards shall be shares
reacquired by the Company for this purpose and shall be valued for the purpose
of the award or credit, as the case may be, at the average cost per share
(including brokerage) of all shares awarded or credited at the same time.
Adjustments shall be made in cash for any fractional shares which would
otherwise be included in the award or credit.
The amount of cash and the number of shares to be included in each installment
payable on a deferred basis shall be determined immediately prior to payment of
the first installment on such basis by dividing the amount of cash and the
number of shares which are payable on such basis by the number of installments
in which the award is payable. In the event that the number of shares is not
equally divisible by the number of installments, the number of shares to be
included in each installment other than the last shall be the number which, when
multiplied by the number of installments, most nearly equals but does not exceed
the total number of shares payable, and the last installment shall consist of
the total number of shares minus all shares to be made payable prior thereto.
Subject to Section 7, if at any time after the date of an award in stock but
prior to payment in full of all shares included in the award, there shall be a
split-up, combination or reclassification of the shares of common stock of the
Company, or payment of a dividend on the common stock of the Company in shares
of common stock of the Company, or a consolidation, merger or sale of
substantially all of the assets of the Company, the Committee shall make such
change in the number and class of shares thereafter payable in respect of such
award as shall, in the judgment of the Committee, appropriately reflect the
effect of such split-up, combination, reclassification, stock dividend,
consolidation, merger or sale of assets.
Any taxes which are required to be withheld from payments shall be deducted and
withheld by the Company. In the case of awards of common stock of the Company,
the Committee may allow the participant to irrevocably elect to pay such
withholding (up to the maximum marginal tax rate applicable to the award) (i) by
cash or check, (ii) from any cash award then payable to the participant, (iii)
using previously-owned shares of Company common stock or (iv) from the shares of
Company common stock then payable to the participant. In the case of
participants subject to Section 16(b) of the Exchange Act, such elections (i)
may not be made within six months from the date of grant of the award, except in
the event of death, disability, retirement or other termination of
<PAGE>
employment of the participant, (ii) may be made either (a) during the period
beginning on the third business day following the date of release of a
summary statement of the Company's annual or quarterly sales and
earnings and ending on the twelfth business day following such date of
release or (b) by making an irrevocable election at least six months
prior to the effective date of such election and (iii) may be
disapproved by the Committee.
For the purposes of the Plan, retirement of a participant on January 1 of any
year shall be deemed to have taken place as of December 31 of the preceding
year.
Nothing contained in the Plan shall be deemed to limit or restrict the right of
the Company and its subsidiaries to compensate any of their employees in whole
or in part under separate commission or bonus plans or arrangements.
No right under the Plan shall be subject to anticipation, sale, assignment,
pledge, encumbrance or charge without the consent of the Committee. If any
participant shall be adjudicated a bankrupt or attempt to anticipate, sell,
assign, pledge or encumber any right hereunder without such consent, the
Committee in its discretion may terminate all rights of such participant and may
hold or apply the unpaid balance of the award, or any part thereof, for the
benefit of his legal representatives, spouse, children, or other dependents, or
any of them, in such manner and in such proportions as the Committee may deem
proper. Payment of any award assigned with the consent of the Committee shall,
in the event of the death of the assignor, be paid as specified in such
assignment which shall take precedence over the mode of payment specified in the
fourth paragraph of Section 3.
Section 7. Procedures for Certain Designated Executives. Annual and Long-Term
Incentive Awards of cash and common stock under the Plan for Designated
Executives who may be "Covered Employees" within the meaning of Section 162 (m)
of the Code shall be subject to preestablished performance objectives as set
forth herein. Notwithstanding Section 6 hereof, the Committee shall not have
discretion to modify the terms of awards to such Designated Executives except as
specifically set forth in this Section 7. It is intended that all payments
hereunder to Designated Executives who are Covered Employees will meet the
requirements of 162 (m) and the regulations thereunder and will not be
disallowed thereunder.
(a) Annual Incentive Awards. (i) Annual Target Amount. No later than ninety (90)
days after the commencement of the calendar year to which the goal relates, the
Committee shall establish target amounts for annual awards ("Annual Target
Amounts") for such of the Designated Executives who may be "covered employees",
payment of which shall be conditioned upon satisfaction of specific performance
objectives for such calendar year established by the Committee in writing at the
time of establishment of the Annual Target Amount. After the close of the
calendar year, the Committee shall grant an award (the "Annual Incentive Award")
based upon a percentage or multiple of the pre-established Annual Target Amount.
The Annual Target Amount will be established in writing by the Committee and
will either be a fixed amount or an amount determined pursuant to a formula. The
extent to which the Annual Incentive Award will be payable will be based upon
the degree of achievement of predetermined specific performance objectives over
the calendar year; provided, however, that the Committee may, in its sole
discretion, reduce the amount which would otherwise be payable (under which
circumstances the participant will not have the right to receive the full Annual
Incentive Award even if the annual performance objectives are met).
<PAGE>
(ii) Annual Performance Objectives. The performance objectives ("Annual
Performance Objectives") established in writing by the Committee at the time the
Annual Target Amount is established will be comprised of specified annual levels
of one or more of the following performance measures: earnings per share, sales,
net profit after tax, gross profit, operating profit, unit volume, return on
equity, change in working capital, return on capital or shareholder return.
(iii) Payment of Annual Incentive Awards. At the time the Annual Target Amount
is established, the Committee shall prescribe a formula to determine the
percentage of the Annual Target Amount which may be payable based upon the
degree of attainment of the Annual Performance Objectives, which shall be
determined as of the last day of the calendar year. Prior to payment of any
Annual Incentive Awards, the Committee must certify the degree of attainment of
the applicable Annual Performance Objectives. Payments shall be made in cash or
shares in accordance with the prescribed formula in amounts ranging from 0% to
200% of the Annual Target Amount.
(iv) Maximum Payable. The maximum amount payable to such Designated Executives
for a given calendar year as an Annual Incentive Award is $2,000,000 in cash.
The maximum amount will be adjusted annually to reflect increases in the
Consumer Price Index-U published by the Bureau of Labor Statistics for each
twelve month period commencing January 1.
(b) Long-Term Incentive Awards. (i) Long-Term Target Amount. No later than
ninety (90) days after the commencement of a measurement period the Committee
shall establish target amounts for long-term awards (the "Long-Term Target
Amount") to such of the Designated Executives who may be "covered employees",
payment of which shall be conditioned upon satisfaction of specific performance
objectives measured over a period of greater than one year established by the
Committee in writing at the time of establishment of the Long-Term Target
Amount. After the expiration of the applicable measurement period, the Committee
shall grant to each Designated Executive an award (the "Long-Term Incentive
Award") based upon a percentage or multiple of the Long Term Target Amount. The
Long-Term Target Amount will be established in writing by the Committee and will
either be a fixed amount or an amount determined pursuant to a formula. The
Long-Term Target Amount may be denominated either in terms of a target dollar
amount or a specified target number of shares of common stock of the Company and
may be payable in cash or common stock of the Company regardless of the
denomination of the Long-Term Target Amount. The extent, if any, to which a
Long-Term Incentive Award will be payable will be based upon the degree of
achievement of predetermined performance objectives over a specified measurement
period; provided, however, that the Committee may, in its sole discretion,
reduce the amount which would otherwise be payable upon expiration of the
measurement period (under which circumstances the participant will not have the
right to receive the full amount of such Long-Term Incentive Award even if the
long-term performance objectives are met).
(ii) Measurement Period. The measurement period will be a period of three
calendar years, unless a longer or shorter period is otherwise selected and
established in writing by the Committee at the time any Long-Term Target Amount
is established (the period so specified being hereinafter referred to as the
"Measurement Period").
(iii) Long-Term Performance Objectives. The performance objectives for any
Measurement Period ("Long-Term Performance Objectives") established in writing
by the Committee at the time the Long-Term Target Amount is established will be
comprised of specified levels of one or more of the following performance
measures: earnings per share, sales, net profit after tax, gross profit,
operating profit, unit volume, return on equity, change in working capital,
return on capital or shareholder return.
<PAGE>
(iv) Payment of a Long-Term Incentive Award. At the time the Long-Term Target
Amount is established, the Committee shall prescribe a formula to determine the
percentage of the Long-Term Target Amount which may be payable based upon the
degree of attainment of the Long-Term Performance Objectives which shall be
determined as of the last day of the Measurement Period. Prior to payment of any
Long-Term Incentive Awards, the Committee must certify the degree of attainment
of the applicable Long-Term Performance Objectives. Payments of Long-Term
Incentive Awards shall be made in accordance with the prescribed formula in
amounts ranging from 0% to 175% of the Long-Term Target Amount. To the extent a
Long-Term Target Amount is denominated in shares, after such Long-Term Target
Amount is established and prior to the payment of the applicable Long-Term
Incentive Award, the amount of shares payable to a Designated Executive will be
adjusted to reflect a change in corporate capitalization such as a stock split
or a corporate transaction such as a merger, spin-off or corporate split-up,
reorganization, consolidation or partial or complete liquidation.
(v) Maximum Payable. The maximum amount payable to a Designated Executive for a
given Measurement Period as a Long-Term Incentive Award is 50,000 shares of
common stock of the Company. The maximum will be adjusted to reflect a change in
corporate capitalization such as a stock split-up or a corporate transaction
such as a merger or sale of stock or assets, reorganization, consolidation or
partial or complete liquidation.
Section 8. Effective Date. The Plan shall be effective for the year 1962 and
for each year thereafter until terminated by the Board of Directors.
EXECUTION COPY
U.S. $400,000,000
Dated as of January 8, 1995
Among
COLGATE-PALMOLIVE COMPANY
as Borrower
and
THE BANKS NAMED HEREIN
as Banks
and
CITIBANK, N.A.
as Agent
<PAGE>
T A B L E O F C O N T E N T S
Section Page
<TABLE>
<CAPTION>
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
<S> <C> <C>
1.01. Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . . . 1
1.02. Computation of Time Periods. . . . . . . . . . . . . . . . . . . . 14
1.03. Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
2.01. The A Advances . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.02. Making the A Advances. . . . . . . . . . . . . . . . . . . . . . . 15
2.03. The B Advances . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.04. Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.05. Reduction of the Commitments . . . . . . . . . . . . . . . . . . . 21
2.06. Repayment of A Advances. . . . . . . . . . . . . . . . . . . . . . 21
2.07. Interest on A Advances . . . . . . . . . . . . . . . . . . . . . . 22
2.08. Additional Interest on Eurodollar Rate Advances. . . . . . . . . . 23
2.09. Interest Rate Determination. . . . . . . . . . . . . . . . . . . . 23
2.10. Prepayments of A Advances. . . . . . . . . . . . . . . . . . . . . 24
2.11. Increased Costs, Etc . . . . . . . . . . . . . . . . . . . . . . . 24
2.12. Payments and Computations. . . . . . . . . . . . . . . . . . . . . 26
2.13. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.14. Sharing of Payments, Etc . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE III
CONDITIONS OF LENDING
3.01. Condition Precedent to Initial Advances. . . . . . . . . . . . . . 30
3.02. Conditions Precedent to Each A Borrowing . . . . . . . . . . . . . 31
3.03. Conditions Precedent to Each B Borrowing . . . . . . . . . . . . . 32
3.04. Determinations Under Section 3.01. . . . . . . . . . . . . . . . . 33
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrower . . . . . . . . . . 33
ARTICLE V
COVENANTS OF THE BORROWER
5.01. Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . . 36
5.02. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE VII
THE AGENT
7.01. Authorization and Action . . . . . . . . . . . . . . . . . . . . . 45
7.02. Agent's Reliance, Etc. . . . . . . . . . . . . . . . . . . . . . . 45
7.03. Citibank and Affiliates. . . . . . . . . . . . . . . . . . . . . . 45
7.04. Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . . 46
7.05. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.06. Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.02. Notices, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.03. No Waiver; Remedies. . . . . . . . . . . . . . . . . . . . . . . . 48
8.04. Costs, Expenses, Etc.. . . . . . . . . . . . . . . . . . . . . . . 48
8.05. Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.06. Binding Effect; Assignment by Borrower . . . . . . . . . . . . . . 50
8.07. Assignments and Participations . . . . . . . . . . . . . . . . . . 50
8.08. Change of Control. . . . . . . . . . . . . . . . . . . . . . . . . 53
8.09. Mitigation of Adverse Circumstances. . . . . . . . . . . . . . . . 54
8.10. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.11. [Intentionally omitted.] . . . . . . . . . . . . . . . . . . . . . 54
8.12. Execution in Counterparts. . . . . . . . . . . . . . . . . . . . . 54
8.13 Jurisdiction, Etc . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.14. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . 55
</TABLE>
<PAGE>
Exhibit A-1 - Form of A Note
Exhibit A-2 - Form of B Note
Exhibit B-1 - Notice of A Borrowing
Exhibit B-2 - Notice of B Borrowing
Exhibit C - Assignment and Acceptance
Exhibit D - Form of Opinion of Counsel for the Borrower
Exhibit E - Form of Opinion of Counsel to the Agent
Exhibit F - Form of Guaranty
Schedule I - List of Applicable Lending Offices
Schedule 4.01(f) - Disclosed Litigation
<PAGE>
CREDIT AGREEMENT
Dated as of January 8, 1995
COLGATE-PALMOLIVE COMPANY, a Delaware corporation (the
"Borrower"), the banks (the "Banks") listed on the signature pages hereof and
Citibank, N.A., as agent (the "Agent") for the Lenders (as herein defined),
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"A Advance" means an advance by a Lender to the Borrower as part of
an A Borrowing and refers to an Adjusted CD Rate Advance, a Base Rate
Advance or a Eurodollar Rate Advance, each of which shall be a "Type" of
A Advance.
"A Borrowing" means a borrowing consisting of simultaneous A
Advances of the same Type and having the same Interest Period made by
each of the Lenders pursuant to Section 2.01.
"A Note" means a promissory note of the Borrower payable to the
order of any Lender, in substantially the form of Exhibit A-1 hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the A Advances made by such Lender.
"Adjusted CD Rate" means, for any Interest Period for each Adjusted
CD Rate Advance comprising part of the same A Borrowing, an interest rate
per annum equal to the sum (rounded upward to the nearest whole multiple
of 1/100 of 1% per annum, if such sum is not such a multiple) of:
(a) the rate per annum obtained by dividing (i) the rate of
interest equal to the consensus bid rate determined by the
Reference Bank for the bid rates per annum, at 9:00 A.M. (New York
City time) (or as soon thereafter as practicable) one Business Day
before the first day of such Interest Period, of New York
certificate of deposit dealers of recognized standing selected by
the Reference Bank for the purchase at face value of certificates
of deposit of the Reference Bank in an amount substantially equal
to the Reference Bank's Adjusted CD Rate Advance comprising part of
such A Borrowing and with a maturity equal to such Interest Period,
by (ii) a percentage equal to 100% minus the Adjusted CD Rate
Reserve Percentage (as defined below) for such Interest Period,
plus
(b) the Assessment Rate (as defined below) for such
Interest Period.
The "Adjusted CD Rate Reserve Percentage" for the Interest Period for
each Adjusted CD Rate Advance comprising part of the same A Borrowing
means the reserve percentage applicable one Business Day before the first
day of such Interest Period under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any successor)
for determining the maximum reserve requirement (including, but not
limited to, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with deposits exceeding one billion dollars with respect to
liabilities consisting of or including (among other liabilities) U.S.
dollar nonpersonal time deposits in the United States with a maturity
equal to such Interest Period. The "Assessment Rate" for the Interest
Period for each Adjusted CD Rate Advance comprising part of the same A
Borrowing means the annual assessment rate estimated by the Reference
Bank one Business Day before the first day of such Interest Period for
determining the then current annual assessment payable by the Reference
Bank to the Federal Deposit Insurance Corporation (or any successor) for
insuring U.S. dollar deposits of the Reference Bank in the United States.
The Adjusted CD Rate for the Interest Period for each Adjusted CD Rate
Advance comprising part of the same A Borrowing shall be determined by
the Agent on the basis of applicable rates furnished to and received by
the Agent from the Reference Bank one Business Day before the first day
of such Interest Period, subject, however, to the provisions of Section
2.09.
"Adjusted CD Rate Advance" means an A Advance which bears interest
as provided in Section 2.07(b).
"Advance" means an A Advance or a B Advance.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
"Agent's Account" means the account of the Agent maintained by the
Agent at Citibank, N.A. with its office at 1 Court Square, 7th Floor,
Long Island City, New York 11120, Account No. 3685 2248, Attention:
John Makrinos.
"Applicable Lending Office" means, with respect to each Lender,
such Lender's Domestic Lending Office in the case of a Base Rate Advance,
such Lender's CD Lending Office in the case of an Adjusted CD Rate
Advance, and such Lender's Eurodollar Lending Office in the case of a
Eurodollar Rate Advance and, in the case of a B Advance, the office of
such Lender notified by such Lender to the Borrower as its Applicable
Lending Office with respect to such B Advance.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Borrower
and the Agent, in substantially the form of Exhibit C hereto.
"B Advance" means an advance by a Lender to the Borrower as part of
a B Borrowing resulting from the auction bidding procedure described in
Section 2.03.
"B Borrowing" means a borrowing consisting of simultaneous B
Advances from each of the Lenders whose offer to make one or more B
Advances as part of such borrowing has been accepted by the Borrower
under the auction bidding procedure described in Section 2.03.
"B Note" means a promissory note of the Borrower payable to the
order of any Lender, in substantially the form of Exhibit A-2 hereto,
evidencing the indebtedness of the Borrower to such Lender resulting from
a B Advance made by such Lender.
"B Reduction" has the meaning specified in Section 2.01.
"Base Rate" means 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 the Reference
Bank in New York, New York, from time to time, as its base or prime
rate;
(b) 1/4 of one percent per annum above 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 any such date is not
a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by the Reference
Bank 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 the average of the quotations for such rates received by
the Reference Bank from three New York certificate of deposit
dealers of recognized standing selected by it, in either case
adjusted to the nearest 1/4 of one percent or, if there is no
nearest 1/4 of one percent, to the next higher 1/4 of one percent;
and
(c) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means an A Advance which bears interest as
provided in Section 2.07(a).
"Borrowing" means an A Borrowing or a B Borrowing.
"Borrowing Subsidiary" has the meaning specified in Section
8.06(b).
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings
are carried on in the London interbank market.
"CD Lending Office" means, with respect to any Lender, the office
of such Lender specified as its "CD Lending Office" opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Lender as such Lender may
from time to time specify to the Borrower.
"Change of Control" has the meaning specified in Section 8.08(b).
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued
thereunder.
"Commitment" has the meaning specified in Section 2.01.
"Consolidated Net Tangible Assets" means, at any time, the excess
of (a) all assets which appear on the most recent consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries prepared in
accordance with generally accepted accounting principles, after deducting
therefrom the sum of:
(i) the book amount appearing on such consolidated balance
sheet of good will, trademarks, trademark rights, trade names,
trade name rights, copyrights, patents, patent rights, licenses,
unamortized debt discount and expense and other like intangibles;
(ii) any write-up in the book value of any asset resulting
from a revaluation thereof subsequent to December 31, 1993, except
write-ups of assets located outside of the United States of America
pursuant to applicable law or custom;
(iii) all reserves, including reserves for deferred taxes,
depreciation, obsolescence, depletion, insurance and inventory
valuation, but excluding contingency reserves not allocated for any
particular purpose and not deducted from assets;
(iv) the amount, if any, at which any shares of capital stock
of the Borrower appear on the asset side of such consolidated
balance sheet; and
(v) the amount of the minority interest, if any, in the
shares of stock and surplus of any Consolidated Subsidiary;
over (b) all current liabilities of the Borrower and its Consolidated
Subsidiaries on a consolidated basis.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would, in accordance with generally accepted
accounting principles, be included with those of the Borrower in its
consolidated financial statements as of such date.
"Debt" means (i) indebtedness for borrowed money, (ii) obligations
evidenced by bonds, debentures, notes or other similar instruments, (iii)
obligations to pay the deferred purchase price of property or services
(other than accounts payable in the ordinary course of business), (iv)
obligations as lessee under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as
capital leases, and (v) obligations under direct or indirect guaranties
in respect of, and obligations (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds referred
to in clauses (i) through (iv) above.
"Disclosed Litigation" has the meaning specified in Section
4.01(f).
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender, or such other office of such Lender
as such Lender may from time to time specify to the Borrower.
"Domestic Subsidiary" means any Subsidiary a majority of the
business of which is conducted within the United States of America, or a
majority of the properties and assets of which are located within the
United States of America, except (i) any Subsidiary substantially all of
the assets of which consist of the securities of Subsidiaries which are
not Domestic Subsidiaries, (ii) any Subsidiary which is an FSC as defined
in Section 922 of the Code and (iii) any Subsidiary for any period during
which an election under Section 936 of the Code applies to such
Subsidiary.
"Environmental Action" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of
non-compliance or violation, investigation, proceeding, consent order or
consent agreement relating in any way to any Environmental Law,
Environmental Permit or Hazardous Materials or arising from alleged
injury or threat of injury to the environment including, without
limitation, (a) by any governmental or regulatory authority for
enforcement, cleanup, removal, response, remedial or other actions or
damages and (b) by any governmental or regulatory authority or any third
party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment, decree
or judicial or agency interpretation, policy or guidance relating to the
environment or Hazardous Materials and applicable to the Borrower or its
Subsidiaries or any property owned or operated by the Borrower or its
Subsidiaries under the laws of the jurisdiction where the Borrower or
such Subsidiary or property is located.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the Borrower's controlled group, or under common
control with the Borrower, within the meaning of Section 414 of the
Internal Revenue Code.
"ERISA Event" means (a) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC; (b) the provision by the administrator of any Plan of
a notice of intent to terminate such Plan, pursuant to Section 4041(a)(2)
of ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (c) the cessation of operations
at a facility of the Borrower or any of its ERISA Affiliates in the
circumstances described in Section 4062(e) of ERISA; (d) the withdrawal
by the Borrower or any of its ERISA Affiliates from a Multiple Employer
Plan during a plan year for which it was a substantial employer, as
defined in Section 4001(a)(2) of ERISA; (e) the failure by the Borrower
or any of its ERISA Affiliates to make a payment to a Plan if the
conditions for imposition of a lien under Section 302(f)(1) of ERISA are
satisfied; (f) the adoption of an amendment to a Plan requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA; or
(g) the institution by the PBGC of proceedings to terminate a Plan,
pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that could constitute
grounds for the termination of, or the appointment of a trustee to
administer, a Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender (or, if no such office is
specified, its Domestic Lending Office), or such other office of such
Lender as such Lender may from time to time specify to the Borrower and
the Agent.
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum at which deposits in
U.S. dollars are offered by the principal office of the Reference Bank in
London, England to prime banks in the London interbank market at 11:00
A.M. (London time) two Business Days before the first day of such
Interest Period in an amount substantially equal to the Reference Bank's
Eurodollar Rate Advance comprising part of such Borrowing (or, if such
Borrowing is a B Borrowing, equal to $1,000,000) and for a period equal
to such Interest Period. The Eurodollar Rate for the Interest Period for
each Eurodollar Rate Advance comprising part of the same Borrowing shall
be determined by the Agent on the basis of applicable rates furnished to
and received by the Agent from the Reference Bank two Business Days
before the first day of such Interest Period, subject, however, to the
provisions of Section 2.09.
"Eurodollar Rate Advance" means an A Advance which bears interest
as provided in Section 2.07(c) or a B Advance which bears interest as
provided in Section 2.03(h) for a Quoted Margin Advance.
"Eurodollar Rate Reserve Percentage" of any Lender for the Interest
Period for any Eurodollar Rate Advance means the reserve percentage
applicable during such Interest Period (or if more than one such
percentage shall be so applicable, the daily average of such percentages
for those days in such Interest Period during which any such percentage
shall be so applicable) under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for such Lender with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term equal
to such Interest Period.
"Existing Bank Agreements" means, collectively, the
U.S.$250,000,000 364- Day Credit Agreement dated as of April 8, 1994
among the Borrower and the Banks named therein and the U.S.$500,000,000
Five Year Credit Agreement dated as of April 8, 1994 among the Borrower
and the Banks named therein.
"Events of Default" has the meaning specified in Section 6.01.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by
the Reference Bank from three Federal funds brokers of recognized
standing selected by it.
"Guaranty" has the meaning specified in Section 8.06(b).
"Hazardous Materials" means petroleum and petroleum products,
byproducts or breakdown products, radioactive materials,
asbestos-containing materials, radon gas and any other chemicals,
materials or substances designated, classified or regulated as being
"hazardous" or "toxic," or words of similar import, under any federal,
state, local or foreign statute, law, ordinance, rule, regulation, code,
order, judgment, decree or agency interpretation, policy or guidance and
applicable to the Borrower or its Subsidiaries or any property owned or
operated by the Borrower or its Subsidiaries under the laws of the
jurisdiction where the Borrower or such Subsidiary or property is
located.
"Insufficiency" means, with respect to any Plan, the amount, if
any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"Interest Period" means, for each Advance (other than a Base Rate
Advance) comprising part of the same Borrowing, the period commencing on
the date of such Advance and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The duration
of each such Interest Period shall be 30, 60, 90 or 180 days in the case
of an Adjusted CD Rate Advance, and 1, 2 or 3 weeks or one month in the
case of a Eurodollar Rate Advance, or in the case of a B Advance, such
number of days as the Borrower may select by notice received by the Agent
not later than 11:00 A.M. (New York City time) on the third Business Day
prior to the first day of such Interest Period, in the case of Eurodollar
Rate Advances, and the second Business Day prior to such first day in the
case of Adjusted CD Rate Advances; provided, however, that:
(i) the Borrower may not select any Interest Period which
ends after the Termination Date;
(ii) Interest Periods commencing on the same date for Advances
comprising part of the same Borrowing shall be of the same
duration;
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, in the case of any Interest
Period for a Eurodollar Rate Advance, that if such extension would
cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and
(iv) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of
months in such Interest Period, such Interest Period shall end on
the last Business Day of such succeeding calendar month.
"Lenders" means the Banks listed on the signature pages hereof and
each assignee that shall become a party hereto pursuant to Section 8.07
or Section 2.11(c).
"Lien" means any mortgage, lien, pledge, security interest,
encumbrance or charge of any kind, any conditional sale or other title
retention agreement or any lease in the nature thereof, provided that the
term "Lien" shall not include any lease involved in a Sale and Leaseback
Transaction.
"Major Domestic Manufacturing Property" means any Principal
Domestic Manufacturing Property the net depreciated book value of which
on the date as of which the determination is made exceeds 2.5% of
Consolidated Net Tangible Assets.
"Material Adverse Change" means any material adverse change in the
business, condition or operations of the Borrower and its Consolidated
Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on the
business, condition or operations of the Borrower and its Consolidated
Subsidiaries taken as a whole.
"Moody's" means Moody's Investors Service, Inc. or any successor
to its business of rating long-term debt.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any of its ERISA
Affiliates is making or accruing an obligation to make contributions, or
has within any of the preceding three plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined
in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
the Borrower or any of its ERISA Affiliates and at least one Person other
than the Borrower and its ERISA Affiliates or (b) was so maintained and
in respect of which the Borrower or any of its ERISA Affiliates could
have liability under Section 4064 or 4069 of ERISA in the event such plan
has been or were to be terminated.
"Note" means an A Note or a B Note.
"Notice of A Borrowing" has the meaning specified in Section 2.02(a).
"Notice of B Borrowing" has the meaning specified in Section 2.03(b).
"Offer" has the meaning specified in Section 2.03(c).
"Operating Cash Flow" of the Borrower and its Subsidiaries for any
period means (A) net income for such period plus (B) the sum of all
non-cash expenses and charges deducted in arriving at net income for such
period, including but not limited to allowances for depreciation and
amortization and accruals for interest and taxes to the extent that they
exceed payments for interest and taxes during the period, less (C) (i)
all payments of interest and taxes during the period to the extent that
they exceed accruals for interest and taxes for the period and (ii) other
payments of expenses not deducted in arriving at net income for the
period and (D) less net gains or plus net losses from the sale or other
disposition of fixed assets or businesses for the period, to the extent
they were included in computing net income for the period, but the
Borrower may exclude from the computation under this clause (D) any gains
from the sale of certain parcels of real estate in New Jersey pursuant to
its present program to develop and sell them over a period of years;
provided that the aggregate number of parcels in the program shall not
exceed 35.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture or other entity, or a government or any political
subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Principal Domestic Manufacturing Property" means any building,
structure or facility (including the land on which it is located and the
improvements and fixtures constituting a part thereof) used primarily for
manufacturing or processing which is owned or leased by the Borrower or
any of its Subsidiaries, is located in the United States of America and
the net depreciated book value of which on the date as of which the
determination is made exceeds 1% of Consolidated Net Tangible Assets,
except any such building, structure or facility which the Board of
Directors of the Borrower by resolution declares is not of material
importance to the total business conducted by the Borrower and its
Subsidiaries as an entirety.
"Principal Domestic Subsidiary" means (i) each Subsidiary which
owns or leases a Principal Domestic Manufacturing Property, (ii) each
Domestic Subsidiary the consolidated net worth of which exceeds 2.5% of
Consolidated Net Tangible Assets (as set forth in the most recent
financial statements referred to in Section 4.01(e) or delivered pursuant
to Section 5.01(e)(i) or (ii)), and (iii) each Domestic Subsidiary of
each Subsidiary referred to in the foregoing clause (i) or (ii) except
any such Subsidiary the accounts receivable and inventories of which have
an aggregate net book value of less than $5,000,000.
"Quoted Margin", "Quoted Margin Advance", "Quoted Rate" and "Quoted
Rate Advance" shall have the respective meanings specified in Section
2.03(b).
"Reference Bank" means Citibank, N.A.
"Register" has the meaning specified in Section 8.07(c).
"Rentals" with respect to any lease and for any period means the
aggregate amounts payable by the lessee pursuant to the terms of the
lease for such period, whether or not referred to as rent. Whenever it is
necessary to determine the amount of Rentals for any period in the future
and to the extent that such Rentals are not definitely determinable by
the terms of the lease, for the purpose of this definition such Rentals
may be estimated in such reasonable manner as the Borrower may determine.
"Required Lenders" means at any time Lenders holding at least
66-2/3% of the then aggregate unpaid principal amount of the A Notes held
by Lenders, or, if no such principal amount is then outstanding, Lenders
having at least 66-2/3% of the Commitments (provided that, for purposes
hereof, neither the Borrower, nor any of its Affiliates, if a Lender,
shall be included in (i) the Lenders holding such amount of the A
Advances or having such amount of the Commitments or (ii) determining the
aggregate unpaid principal amount of the A Advances or the total
Commitments).
"Restricted Property" means and includes (i) all Principal Domestic
Manufacturing Properties, (ii) all Securities of all Principal Domestic
Subsidiaries, and (iii) all inventories and accounts receivable of the
Borrower and its Principal Domestic Subsidiaries.
"S&P" means Standard & Poor's Corporation or any successor to its
business of rating long-term debt.
"Sale and Leaseback Debt" of any Person means, at the date of
determination thereof, the aggregate amount of Rentals required to be
paid by such Person under all Sale and Leaseback Transactions to which
such Person is a party during the respective remaining terms thereof
(after giving effect to any renewals and extensions at the option of the
lessor) discounted from the respective dates of payment of such Rentals
to such date of determination at the actual interest factor included in
such Rentals or, if such interest factor cannot be readily determined, at
an interest factor calculated in such manner as the Borrower shall
reasonably determine; provided, however, that if any portion of the net
proceeds of the sale of the property leased pursuant to a Sale and
Leaseback Transaction has been or is being applied as provided in Section
5.02(b)(ii) and/or Section 5.02(b)(iii), there shall be excluded in
determining Sale and Leaseback Debt that portion of the discounted
Rentals required to be paid under such Sale and Leaseback Transaction
which bears the same ratio to the total discounted Rentals required to be
paid under such Sale and Leaseback Transaction as the portion of such net
proceeds which has been or is being applied as provided in Section
5.02(b)(ii) and/or Section 5.02(b)(iii) bears to the total amount of such
net proceeds.
"Sale and Leaseback Transaction" means any arrangement directly or
indirectly providing for the leasing by the Borrower or any Principal
Domestic Subsidiary for a period in excess of three years of any
Principal Domestic Manufacturing Property which was sold or transferred
by the Borrower or any Principal Domestic Subsidiary more than 120 days
after the acquisition thereof or the completion of construction thereof,
except any such arrangement solely between the Borrower and a Principal
Domestic Subsidiary or solely between Principal Domestic Subsidiaries.
"Securities" of any corporation means and includes (i) all capital
stock of all classes of and all other equity interests in such
corporation and all rights, options or warrants to acquire the same, and
(ii) all promissory notes, debentures, bonds and other evidences of Debt
of such corporation.
"Senior Funded Debt" of any Person means, as of the date of
determination thereof, all Debt of such Person which (i) matures by its
terms more than one year after the date as of which such determination is
made (including any such Debt which is renewable or extendable, or in
effect renewable or extendable through the operation of a revolving
credit agreement or other similar agreement, at the option of such Person
for a period or periods ending more than one year after the date as of
which such determination is made), and (ii) is not, by the terms of any
instrument or instruments evidencing or securing such Debt or pursuant to
which such Debt is outstanding, expressly subordinated in right of
payment to any other Debt of such Person.
"Significant Subsidiary" means (x) each Subsidiary which is a
Principal Domestic Subsidiary by operation of clause (i), (ii) or (iii)
of the definition of Principal Domestic Subsidiary, and (y) each other
Subsidiary whose assets as at the end of the fiscal year immediately
preceding the time of determination exceeded 2% of consolidated assets of
the Borrower and its Subsidiaries as at the end of such fiscal year.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any of its ERISA Affiliates and no Person other than the
Borrower and its ERISA Affiliates or (b) was so maintained and in respect
of which the Borrower or any of its ERISA Affiliates could have liability
under Section 4069 of ERISA in the event such plan has been or were to be
terminated.
"Subsidiary" means any corporation of which more than 50% of the
outstanding capital stock having ordinary voting power to elect a
majority of the Board of Directors of such corporation (irrespective of
whether or not at the time capital stock of any other class or classes of
such corporation shall or might have voting power upon the occurrence of
any contingency) is at the time directly or indirectly owned by the
Borrower, by the Borrower and one or more other Subsidiaries, or by one
or more other Subsidiaries.
"Termination Date" means the earlier of (a) January 31, 1995 and
(b) the date of termination in whole of the Commitments pursuant to
Section 2.05 or 6.01.
"Withdrawal Liability" shall have the meaning given such term under
Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(e).
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The A Advances. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make A Advances to the Borrower
or a Borrowing Subsidiary from time to time on any Business Day during the
period from the date hereof until the Termination Date in an aggregate amount
not to exceed at any time outstanding the amount set opposite such Lender's name
on the signature pages hereof or, if such Lender has entered into any Assignment
and Acceptance, set forth for such Lender in the Register maintained by the
Agent pursuant to Section 8.07(c), as such amount may be reduced pursuant to
Section 2.05 (such Lender's "Commitment"), provided that the aggregate amount of
the Commitments of the Lenders shall be deemed used from time to time to the
extent of the aggregate amount of the B Advances then outstanding and such
deemed use of the aggregate amount of the Commitments shall be applied to the
Lenders ratably according to their respective Commitments (such deemed use of
the aggregate amount of the Commitments being a "B Reduction"). Each A Borrowing
shall be in an aggregate amount not less than $25,000,000 or an integral
multiple of $5,000,000 in excess thereof (unless the aggregate amount of the
unused Commitments is less than $25,000,000, in which case such Borrowing shall
be equal to the aggregate amount of the unused Commitments) and shall consist of
A Advances of the same Type and having the same Interest Period made on the same
day by the Lenders ratably according to their respective Commitments. Within the
limits of each Lender's Commitment, the Borrower may from time to time borrow,
repay pursuant to Section 2.06 or prepay pursuant to Section 2.10 or 2.11(b) and
reborrow under this Section 2.01.
SECTION 2.02. Making the A Advances. (a) Each A Borrowing shall be
made on notice given by the Borrower or a Borrowing Subsidiary, as the case may
be, and received by the Agent, which shall give prompt notice thereof to each
Lender by telecopier or telex, not later than 11:00 A.M. (New York City time) on
the third Business Day prior to the date of the proposed A Borrowing in the case
of Eurodollar Rate Advances, on the second Business Day prior to such date in
the case of Adjusted CD Rate Advances, or the same Business Day in the case of
Base Rate Advances. Each such notice of an A Borrowing (a "Notice of A
Borrowing") shall be given by telecopier, telex or cable, confirmed immediately
by hand or by mail, in substantially the form of Exhibit B-1 hereto, specifying
therein the requested (i) date of such A Borrowing, (ii) Type of A Advances
comprising such A Borrowing, (iii) aggregate amount of such A Borrowing, and
(iv) in the case of an A Borrowing comprised of Adjusted CD Rate Advances or
Eurodollar Rate Advances, the Interest Period for each such A Advance. Upon
fulfillment of the applicable conditions set forth in Article III, each Lender
shall, before 12:00 noon (New York City time) on the date of such A Borrowing,
make available for the account of its Applicable Lending Office to the Agent at
the Agent's Account, in immediately available funds, such Lender's ratable
portion of such A Borrowing. After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the Agent
will promptly make such funds available to the Borrower at the Agent's address
referred to in Section 8.02.
(b) Anything in subsection (a) above to the contrary
notwithstanding:
(i) if any Lender shall, at least one Business Day before the date
of any requested Borrowing, notify the Agent that the introduction of or
any change in or in the interpretation of any law or regulation makes it
unlawful, or that any central bank or other governmental authority
asserts that it is unlawful, for such Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to fund or maintain Eurodollar Rate Advances hereunder, the
Agent shall immediately notify the Borrower and each other Lender and the
right of the Borrower and any Borrowing Subsidiary to select Eurodollar
Rate Advances for the portion of such Borrowing advanced by the Lender
which has provided the notice described above or the portion of any
subsequent Borrowing advanced by such Lender shall be suspended until
such Lender shall notify the Agent and the Agent will notify the Borrower
that the circumstances causing such suspension no longer exist, and each
such Advance shall be a Base Rate Advance;
(ii) if no Reference Bank furnishes timely information to the Agent
for determining the Adjusted CD Rate for any Adjusted CD Rate Advances,
or the Eurodollar Rate for any Eurodollar Rate Advances, comprising any
requested Borrowing, the Agent shall immediately notify each Lender and
the Borrower and the right of the Borrower and any Borrowing Subsidiary
to select Adjusted CD Rate Advances or Eurodollar Rate Advances, as the
case may be, for such Borrowing or any subsequent Borrowing shall be
suspended until the Agent shall notify the Lenders and the Borrower that
the circumstances causing such suspension no longer exist, and each
Advance comprising such Borrowing shall be a Base Rate Advance; and
(iii) if the Required Lenders shall, at least one Business Day before
the date of any requested Borrowing, notify the Agent that the Eurodollar
Rate for Eurodollar Rate Advances comprising such Borrowing will not
adequately reflect the cost to such Required Lenders of making, funding
or maintaining their respective Eurodollar Rate Advances for such
Borrowing, the Agent shall immediately notify the Borrower and each other
Lender and the right of the Borrower and any Borrowing Subsidiary to
select Eurodollar Rate Advances for such Borrowing or any subsequent
Borrowing shall be suspended, and each Advance comprising such Borrowing
shall be a Base Rate Advance. The Lenders will review regularly the
circumstances causing such suspension, and as soon as such circumstances
no longer exist the Required Lenders will notify the Agent and the Agent
shall notify the Borrower that such suspension is terminated.
(c) Each Notice of A Borrowing shall be irrevocable and binding on
the Borrower or Borrowing Subsidiary, as the case may be. In the case of any A
Borrowing that the related Notice of A Borrowing specifies is to be comprised of
Adjusted CD Rate Advances or Eurodollar Rate Advances, the Borrower or Borrowing
Subsidiary, as the case may be, shall indemnify each Lender against any loss,
cost or expense incurred by such Lender as a result of any failure to fulfill on
or before the date specified in such Notice of A Borrowing for such A Borrowing
the applicable conditions set forth in Article III, including, without
limitation, any loss (excluding in any event loss of anticipated profits), cost
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund the A Advance to be made by such
Lender as part of such A Borrowing when such A Advance, as a result of such
failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Lender prior
to the date of any A Borrowing that such Lender will not make available to the
Agent such Lender's ratable portion of such A Borrowing, the Agent may assume
that such Lender has made such portion available to the Agent on the date of
such A Borrowing in accordance with subsection (a) of this Section 2.02 and the
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Lender shall
not have so made such ratable portion available to the Agent, such Lender and
the Borrower severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, the interest rate
applicable at the time to A Advances comprising such A Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender shall repay to the
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the A Advance to be made by
it as part of any A Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its A Advance on the date of such A
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the A Advance to be made by such other Lender on the date of any
A Borrowing.
SECTION 2.03. The B Advances. (a) Each Lender severally agrees that
the Borrower or a Borrowing Subsidiary, as the case may be, may request B
Borrowings under this Section 2.03 from time to time on any Business Day during
the period from the date hereof until the date occurring (i) one day prior to
the Termination Date in the case of a Quoted Rate Advance (as defined below) or
(ii) one week prior to the Termination Date in the case of a Quoted Margin
Advance (as defined below), in the manner set forth below; provided that,
following the making of each B Borrowing, the aggregate amount of the Advances
then outstanding shall not exceed the aggregate amount of the Commitments of the
Lenders (computed without regard to any B Reduction).
(b) The Borrower or a Borrowing Subsidiary, as the case may be, may
request a B Borrowing under this Section 2.03 by delivering to the Agent, by
telecopier, telex or cable, confirmed immediately by hand or by mail, a notice
of a B Borrowing (a "Notice of B Borrowing"), in substantially the form of
Exhibit B-2 hereto, specifying:
(i) the date and aggregate amount of the proposed B Borrowing (which
shall not be less than $25,000,000 or an integral multiple of $5,000,000
in excess thereof; provided that if the aggregate amount of the unused
Commitments is less than $25,000,000, the amount of such proposed
Borrowing shall be equal to the aggregate amount of the unused
Commitments),
(ii) whether each Lender should quote (x) a rate of interest (a
"Quoted Rate") to be the entire rate applicable to the proposed B Advance
(a "Quoted Rate Advance") or (y) a marginal per annum rate (a "Quoted
Margin") to be added to the Eurodollar Rate for an Interest Period equal
to the term of the proposed B Borrowing (a "Quoted Margin Advance"),
(iii) the maturity date for repayment of each B Advance to be made as
part of such B Borrowing (which maturity date may not be later than the
Termination Date),
(iv) the interest payment date or dates relating thereto, and
(v) any other terms to be applicable to such B Borrowing,
not later than 10:00 A.M. (New York City time) (A) at least one Business Day
prior to the date of the proposed B Borrowing, in the case of a Quoted Rate
Advance and (B) at least five Business Days prior to the date of the proposed B
Borrowing, in the case of a Quoted Margin Advance. The Agent shall in turn
promptly notify each Lender of each request for a B Borrowing received by it
from the Borrower or a Borrowing Subsidiary, as the case may be, by sending such
Lender a copy of the related Notice of B Borrowing.
(c) Each Lender may, if, in its sole discretion, it elects to do
so, irrevocably offer to make one or more B Advances to the Borrower or
Borrowing Subsidiary, as the case may be, as part of such proposed B Borrowing
at a rate or rates of interest specified by such Lender in its sole discretion,
by delivering written notice (an "Offer") to the Agent (which shall give prompt
notice thereof to the Borrower or Borrowing Subsidiary, as the case may be)
before 9:30 A.M. (New York City time) on the date of such proposed B Borrowing,
in the case of a Quoted Rate Advance and before 10:00 A.M. (New York City time)
three Business Days before the date of such proposed B Borrowing, in the case of
a Quoted Margin Advance, specifying (x) the minimum amount and maximum amount of
each B Advance which such Lender would be willing to make as part of such
proposed B Borrowing (which amounts may, subject to the proviso to Section
2.03(a), exceed such Lender's Commitment, if any), (y) a Quoted Rate or a Quoted
Margin therefor (as requested by the Notice of B Borrowing) and (z) such
Lender's Applicable Lending Office with respect to such B Advance; provided that
if the Agent in its capacity as a Lender shall, in its sole discretion, elect to
make any such Offer, it shall notify the Borrower of such Offer at least 30
minutes before the time and on the date on which notice of such election is to
be given to the Agent by the other Lenders. If any Lender shall elect not to
make an Offer, such Lender shall so notify the Agent before the time and on the
date on which notice of such election is to be given to the Agent by the other
Lenders, and such Lender shall not be obligated to, and shall not, make any B
Advance as part of such B Borrowing; provided that the failure by any Lender to
give such notice shall not cause such Lender to be obligated to make any B
Advance as part of such proposed B Borrowing.
(d) The Borrower or Borrowing Subsidiary, as the case may be,
shall, in turn, (A) before 10:30 A.M. (New York City time) on the date of such
proposed B Borrowing, in the case of a Quoted Rate Advance and (B) before 11:00
A.M. (New York City time) three Business Days before the date of such proposed B
Borrowing, in the case of a Quoted Margin Advance, either
(i) cancel such B Borrowing by giving the Agent notice to that
effect, and such B Borrowing shall not be made, or
(ii) accept one or more of the Offers made by any Lender or Lenders
pursuant to paragraph (c) above, in its sole discretion, by giving notice
to the Agent of the amount of each B Advance to be made by each Lender as
part of such B Borrowing (which amount shall be equal to or greater than
the minimum amount, and equal to or less than the maximum amount, offered
to the Borrower or Borrowing Subsidiary, as the case may be, by the Agent
on behalf of such Lender for such B Advance in such Lender's notice given
pursuant to subsection (c) above), and such notice shall reject any
remaining Offers made by Lenders pursuant to subsection (c) above,
provided that (x) the Borrower or Borrowing Subsidiary, as the case may
be, shall not accept Offers for an aggregate principal amount of B
Advances in excess of the aggregate principal amount stated in the Notice
of B Borrowing, (y) the Borrower or Borrowing Subsidiary, as the case may
be, shall not accept any Offer unless all Offers specifying a lower
Quoted Rate or Quoted Margin, as the case may be, are also accepted, and
(z) if all Offers specifying the same Quoted Rate or Quoted Margin, as
the case may be, are not accepted in full, the Borrower or Borrowing
Subsidiary, as the case may be, shall apportion its acceptances among
such Offers in proportion to the respective principal amounts of such
Offers (rounded, where necessary, to the nearest $1,000,000).
(iii) If the Borrower notifies the Agent that such B Borrowing is
cancelled pursuant to paragraph (d)(i) above, the Agent shall give prompt
notice thereof to the Lenders and such B Borrowing shall not be made.
(e) If the Borrower accepts one or more of the Offers, the Agent
shall in turn promptly (but in any event, not later than 11:30 A.M. on such
date) notify (i) each Lender that has made an Offer, of the date and aggregate
amount of such B Borrowing and whether or not any Offer made by such Lender has
been accepted by the Borrower, (ii) each Lender that is to make a B Advance as
part of such B Borrowing, of the amount of each B Advance to be made by such
Lender as part of such B Borrowing, and (iii) each Lender that is to make a B
Advance as part of such B Borrowing, upon receipt, that the Agent has received
forms of documents appearing to fulfill the applicable conditions set forth in
Article III. Each Lender that is to make a B Advance as part of such B Borrowing
shall, before 12:00 noon (New York City time) on the date of such B Borrowing
specified in the notice received from the Agent pursuant to clause (i) of the
preceding sentence or any later time when such Lender shall have received notice
from the Agent pursuant to clause (iii) of the preceding sentence, make
available for the account of its Applicable Lending Office to the Agent at the
Agent's Account, in immediately available funds, such Lender's portion of such B
Borrowing. Upon fulfillment of the applicable conditions set forth in Article
III and after receipt by the Agent of such funds, the Agent will make such funds
promptly available to the Borrower at the Agent's address referred to in Section
8.02. Promptly after each B Borrowing the Agent will notify each Lender of the
amount of the B Borrowing, the consequent B Reduction and the dates upon which
such B Reduction commenced and will terminate.
(f) If the Borrower notifies the Agent that it accepts one or more
of the Offers made by any Lender or Lenders pursuant to paragraph (d)(ii) above,
such notice of acceptance shall be irrevocable and binding on the Borrower. The
Borrower shall indemnify each Lender against any loss, cost or expense incurred
by such Lender as a result of any failure to fulfill on or before the date
specified in the related Notice of B Borrowing for such B Borrowing the
applicable conditions set forth in Article III, including, without limitation,
any loss (excluding in any event loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the B Advance to be made by such Lender as part
of such B Borrowing when such B Advance, as a result of such failure, is not
made on such date.
(g) Within the limits and on the conditions set forth in this
Section 2.03, the Borrower may from time to time borrow under this Section 2.03,
repay or prepay pursuant to subsection (h) below, and reborrow under this
Section 2.03, provided that a B Borrowing shall not be made within two Business
Days of the date of any other B Borrowing.
(h) The Borrower shall repay to the Agent for the account of each
Lender that has made a B Advance, or for the account of each other holder of a B
Note, on the maturity date of such B Advance (such maturity date being that
specified by the Borrower for repayment of such B Advance in the related Notice
of B Borrowing and provided in the B Note evidencing such B Advance), the then
unpaid principal amount of such B Advance. The Borrower shall have no right to
prepay any principal amount of any B Advance.
(i) The Borrower shall pay interest on the unpaid principal amount
of each B Advance from the date of such B Advance to the date the principal
amount of such B Advance is repaid in full, at (x) the Quoted Rate, in the case
of a Quoted Rate Advance, and (y) at the sum of the Eurodollar Rate for the
Interest Period of such B Advance plus the Quoted Margin, in the case of a
Quoted Margin Advance, in each case as specified for such B Advance by the
Lender making such B Advance in its Offer with respect thereto, payable on the
interest payment date or dates specified by the Borrower for such B Advance in
the related Notice of B Borrowing and set forth in the B Note evidencing such B
Advance.
(j) The indebtedness of the Borrower resulting from each B Advance
made to the Borrower as part of a B Borrowing shall be evidenced by a separate B
Note of the Borrower payable to the order of the Lender making such B Advance.
(k) Upon delivery of each Notice of B Borrowing, the Borrower shall
pay a non-refundable fee to the Agent for its own account in such amount as
shall have been agreed to in writing by the Borrower and the Agent.
SECTION 2.04. Facility Fee. The Borrower agrees to pay to the Agent
for the account of each Lender a facility fee on the average daily amount of
such Lender's Commitment, accruing from the date on which this Agreement becomes
fully executed in the case of each Bank and from the effective date specified in
the Assignment and Acceptance pursuant to which it became a Lender in the case
of each other Lender until the Termination Date, payable in arrears and on the
Termination Date, computed from time to time at the rate per annum set forth
below opposite the lower of the ratings then applicable to the Borrower's
long-term senior debt as published by S&P and Moody's:
Facility
Moody's S&P Fee
A3 or above A- or above .0900%
Baa1 or below, or unrated BBB+ or below, or unrated .1500%
(b) Agent's Fees. The Borrower shall pay to the Agent for its own account
such fees as may from time to time be agreed between the Borrower and the Agent.
SECTION 2.05. Reduction of the Commitments. The Borrower shall have
the right, upon at least three Business Days' notice to the Agent, to terminate
in whole all of the Commitments or reduce ratably in part the unused portions of
the respective Commitments of the Lenders, provided that the aggregate amount of
the Commitments of the Lenders shall not be reduced to an amount which is less
than the aggregate principal amount of the Advances then outstanding, and
provided further that each partial reduction (other than a reduction pursuant to
Section 2.11) shall be in the aggregate amount of $25,000,000 or an integral
multiple thereof.
SECTION 2.06. Repayment of A Advances. The Borrower or Borrowing
Subsidiary, as the case may be, shall repay to the Agent for the ratable account
of the Lenders (a) on the Termination Date, the unpaid principal amount of each
Base Rate Advance made to the Borrower or Borrowing Subsidiary, as the case may
be, and (b) on the last day of the Interest Period for each other A Advance made
to the Borrower or Borrowing Subsidiary, as the case may be, the unpaid
principal amount of such A Advance.
SECTION 2.07. Interest on A Advances. The Borrower or Borrowing
Subsidiary, as the case may be, shall pay interest on the unpaid principal
amount of each A Advance made by each Lender to the Borrower or Borrowing
Subsidiary, as the case may be, from the date of such A Advance until such
principal amount shall be paid in full, at the following rates per annum:
(a) Base Rate Advances. If such A Advance is a Base Rate Advance, a
rate per annum equal at all times to the Base Rate in effect from time to
time, payable on the date such Base Rate Advance shall be paid in full;
provided that any amount of principal which is not paid when due (whether
at stated maturity, by acceleration or otherwise) 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 at all times to 1% per
annum above the Base Rate in effect from time to time.
(b) Adjusted CD Rate Advances. If such A Advance is an Adjusted CD
Rate Advance, a rate per annum equal during the Interest Period for such
A Advance to the sum of the Adjusted CD Rate for such Interest Period
plus the per annum rate equal from time to time to the rate set forth
below opposite the lower of the ratings then applicable to the Borrower's
long-term senior debt as published by S&P and Moody's:
Moody's S&P Rate
A3 or above A- or above .3600%
Baa1 or below, or unrated BBB+ or below, or unrated .4750%
payable on the last day of such Interest Period and, if such Interest
Period has a duration of more than 90 days, on each day which occurs
during such Interest Period every 90 days from the first day of such
Interest Period; provided that any amount of principal which is not paid
when due (whether at stated maturity, by acceleration or otherwise) 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
(x) until the end of the then current Interest Period, 1% per annum above
the rate per annum required to be paid on such A Advance immediately
prior to the date on which such amount became due, and (y) thereafter, 1%
per annum above the Base Rate in effect from time to time.
(c) Eurodollar Rate Advances. If such A Advance is a Eurodollar
Rate Advance, a rate per annum equal during the Interest Period for such
A Advance to the sum of the Eurodollar Rate for such Interest Period plus
the per annum rate equal from time to time to the rate set forth below
opposite the lower of the ratings then applicable to the Borrower's
long-term senior debt as published by S&P and Moody's:
Moody's S&P Rate
A3 or above A- or above .2350%
Baa1 or below, or unrated BBB+ or below, or unrated .3500%
payable on the last day of such Interest Period and, if such Interest
Period has a duration of more than three months, on each day which occurs
during such Interest Period every three months from the first day of such
Interest Period; provided that any amount of principal which is not paid
when due (whether at stated maturity, by acceleration or otherwise) 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
(x) until the end of the then current Interest Period, 1% per annum above
the rate per annum required to be paid on such A Advance immediately
prior to the date on which such amount became due, and (y) thereafter, 1%
per annum above the Base Rate in effect from time to time.
SECTION 2.08. Additional Interest on Eurodollar Rate Advances. The
Borrower or Borrowing Subsidiary, as the case may be, shall pay to each Lender,
so long as such Lender shall be required under regulations of the Board of
Governors of the Federal Reserve System to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
additional interest on the unpaid principal amount of each Eurodollar Rate
Advance of such Lender to the Borrower or Borrowing Subsidiary, as the case may
be, from the date of such Advance until such principal amount is paid in full,
at an interest rate per annum equal at all times to the remainder obtained by
subtracting (i) the Eurodollar Rate for the Interest Period for such Advance
from (ii) the rate obtained by dividing such Eurodollar Rate by a percentage
equal to 100% minus the Eurodollar Rate Reserve Percentage of such Lender for
such Interest Period, payable on each date on which interest is payable on such
Advance. Such additional interest shall be determined by such Lender and the
Borrower or Borrowing Subsidiary, as the case may be, shall be notified of such
additional interest.
SECTION 2.09. Interest Rate Determination. (a) The Reference Bank
agrees to furnish to the Agent timely information for the purpose of determining
the Base Rate from time to time in effect and each Adjusted CD Rate or
Eurodollar Rate, as applicable.
(b) The Agent shall give prompt notice to the Borrower or Borrowing
Subsidiary and the Lenders of the applicable interest rate determined by the
Agent for purposes of Section 2.03(i)(y) or Section 2.07, and the rate, if any,
furnished by the Reference Bank for the purpose of determining the interest
rate.
(c) If no Reference Bank furnishes timely information to the Agent
for determining the Base Rate in effect from time to time when Base Rate
Advances are outstanding, the Agent shall immediately give notice to each Lender
and the Required Lenders shall immediately designate an additional Reference
Bank for the purpose of determining the Base Rate, but such designation shall
terminate if a replacement Reference Bank is nominated and approved as provided
in the following sentence. Whenever a Reference Bank either ceases to be a
Lender or repeatedly fails to give timely information to the Agent for
determining the Base Rate, the Adjusted CD Rate or the Eurodollar Rate, the
Agent will give prompt notice thereof to the Lenders and will nominate another
Lender to replace such Reference Bank, and such Lender shall, if approved by the
Required Lenders and the Borrower, replace such Reference Bank.
SECTION 2.10. Prepayments of A Advances. The Borrower or Borrowing
Subsidiary, as the case may be, may, upon notice to the Agent stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given, or if the Borrower or Borrowing Subsidiary, as the case may be,
is required to prepay any A Advance pursuant to Section 2.11(c) or 5.02(b)(ii)
hereof, the Borrower or Borrowing Subsidiary, as the case may be, shall, prepay
the outstanding principal amounts of the A Advances comprising part of the same
A Borrowing in whole or ratably in part (provided that with regard to
prepayments made pursuant to Section 2.11(c), the Borrower or such Borrowing
Subsidiary shall be required to prepay only the outstanding principal amounts of
the A Advances owing to the Lender or Lenders affected by Section 2.11(c)),
together with accrued interest to the date of such prepayment on the principal
amount prepaid, and the losses, costs and expenses, if any, payable pursuant to
Section 8.04(c). Such notice shall be received by the Agent not later than 11:00
A.M. (New York City time), on the third Business Day prior to the date of the
proposed prepayment in the case of Eurodollar Rate Advances, on the second
Business Day prior to such date in the case of Adjusted CD Rate Advances or on
the Business Day prior to such date in the case of Base Rate Advances. Except
for prepayments made pursuant to Section 2.11(c) or 5.02(b), each partial
prepayment shall be in an aggregate principal amount not less than $5,000,000 or
an integral multiple of $1,000,000 in excess thereof, and any partial prepayment
of any Adjusted CD Rate Advances or Eurodollar Rate Advances shall not leave
outstanding less than $25,000,000 aggregate principal amount of such A Advances
comprising part of any A Borrowing.
SECTION 2.11. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change (other than any change by way of imposition or
increase of reserve requirements, in the case of Adjusted CD Rate Advances,
included in the Adjusted CD Rate Reserve Percentage or, in the case of
Eurodollar Rate Advances, included in the Eurodollar Rate Reserve Percentage) in
or in the interpretation of any law or regulation or (ii) the compliance with
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
costs to any Lender of agreeing to make or making, funding or maintaining
Adjusted CD Rate Advances or Eurodollar Rate Advances, then the Borrower shall
from time to time, upon demand by such Lender (with a copy of such demand to the
Agent), pay to the Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased costs for a period
beginning not more than 90 days prior to such demand. A certificate as to the
amount of such increased cost submitted to the Borrower and the Agent by such
Lender, setting forth in reasonable detail the calculation of the increased
costs, shall be conclusive and binding for all purposes, absent manifest error.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender which decreases such Lender's
return on its capital (after taking into account any changes in the Eurodollar
Rate and Eurodollar Rate Reserve Percentage) and that the amount of such capital
is increased by or based upon the existence of such Lender's commitment to lend
hereunder and other commitments of this type, then, upon demand by such Lender
(with a copy of such demand to the Agent), the Borrower shall immediately pay to
the Agent for the account of such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender or such
corporation in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder, such compensation to cover a
period beginning not more than 90 days prior to such demand. A certificate as to
such amounts submitted to the Borrower and the Agent by such Lender, setting
forth in reasonable detail the calculation of the amount required to be paid
hereunder, shall be conclusive and binding for all purposes, absent manifest
error.
(c) Within 30 days after the receipt of (A) notice from a Lender as
described in Section 2.02(b)(i), or (B) a demand for compensation from a Lender
under subsection (a) or (b) above, the Borrower may, by at least three Business
Days' notice to the Agent, terminate the Commitment (in whole but not in part)
of any Lender which has provided such notice under Section 2.02(b)(i), or
demanded compensation under subsection (a) or (b) above in an amount (expressed
as a percentage per annum of its unused Commitment) which exceeds the
compensation demanded by the other Lenders, provided that (i) the Borrower shall
first pay to the Agent for the account of such Lender all compensation required
to be paid under subsection (a) or (b) above accrued to the termination date of
such Commitment, (ii) the Borrower shall first prepay all outstanding A Advances
owing to such Lender in accordance with the provisions of Section 2.10 hereof,
(iii) the Borrower shall not terminate the Commitment of any Lender under this
subsection unless it also terminates the Commitment of all other Lenders
providing similar notice to the Agent under Section 2.02(b)(i) or demanding
compensation at a rate equal to or higher than that demanded by such Lender
under subsection (a) or (b) above, and (iv) the Borrower shall not take any
action under this subsection which would reduce the aggregate of the Commitments
below the aggregate of the Advances outstanding. Effective with such
termination, the Borrower may substitute for such Lender one or more other banks
or entities which will assume the Commitment and other obligations hereunder of
such terminated Lender or Lenders, and will become a Lender or Lenders hereunder
upon executing an assumption agreement in form and substance reasonably
satisfactory to the Borrower and the Required Lenders.
SECTION 2.12. Payments and Computations. (a) The Borrower or
Borrowing Subsidiary, as the case may be, shall make each payment hereunder and
under the Notes not later than 11:00 A.M. (New York City time) on the day when
due in U.S. dollars to the Agent at the Agent's Account in immediately available
funds. The Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal or interest or utilization or facility fees
ratably (other than amounts payable pursuant to Section 2.03, 2.11, 2.14 or
8.04(c)) to the Lenders for the account of their respective Applicable Lending
Offices, and like funds relating to payment of any other amount payable to any
Lender to such Lender for the account of its Applicable Lending Office, in each
case to be applied according to the terms of this Agreement. Upon its acceptance
of an Assignment and Acceptance and recording of the information contained
therein in the Register pursuant to Section 8.07(d), from and after the
effective date specified in such Assignment and Acceptance, the Agent shall make
all payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender's assignee thereunder, and the parties to such Assignment
and Acceptance shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(b) Each of the Borrower and any Borrowing Subsidiary hereby
authorizes each Lender, if and to the extent payment owed to such Lender is not
made when due hereunder or under any Note held by such Lender, to charge from
time to time against any or all of the Borrower's or such Borrowing Subsidiary's
as the case may be, accounts with such Lender any amount so due.
(c) All computations of interest based on clause (a) of the
definition of "Base Rate" shall be made by the Agent on the basis of a year of
365 or 366 days, as the case may be, and all computations of interest based on
the Adjusted CD Rate, the Eurodollar Rate, a Quoted Rate or the Federal Funds
Rate and of commitment fees and facility fees shall be made by the Agent on the
basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest or fees are payable. Each determination by the Agent of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest, commitment fee or
facility fee, as the case may be; provided, however, if such extension would
cause payment of interest on or principal of Eurodollar Rate Advances to be made
in the next following calendar month, such payment shall be made on the next
preceding Business Day.
(e) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the Agent,
each Lender shall repay to the Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate.
(f) The date and amount of each A Advance owing to each Lender, the
date on which it is due, the interest rate applicable thereto and any
prepayments thereof shall be recorded by the Agent in the Register, which shall
be presumptive evidence thereof, whether or not the same is endorsed on the grid
annexed to such Lender's A Note.
SECTION 2.13. Taxes. (a) Subject to subsection (f) below, any and
all payments hereunder or under the A Notes shall be made, in accordance with
Section 2.12, (i) if made by the Borrower, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings of the United States of America or any state thereof or
political subdivision of any of them or any other jurisdiction from or through
which the Borrower elects to make such payment, and all liabilities with respect
thereto, and (ii) if made by a Borrowing Subsidiary, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings of any jurisdiction within which it is
organized or does business or is managed or controlled or has its head or
principal office or from or through which such Borrowing Subsidiary elects to
make such payment, and all liabilities with respect thereto, excluding (w) in
the case of each Lender and the Agent, taxes imposed on its income, and
franchise taxes imposed on it, by any jurisdiction under the laws of which such
Lender or the Agent (as the case may be) is organized or, as to the United
States of America or any state thereof or any political subdivision of any of
them, is doing business or any political subdivision thereof and by the
jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof, (x) in the case of each Lender and the Agent, any income
tax or franchise tax imposed on it by a jurisdiction (except the United States
of America or any state thereof or any political subdivision of any of them) as
a result of a connection between such jurisdiction and such Lender or the Agent
(as the case may be) (other than as a result of such Lender's or the Agent's
having entered into this Agreement, performing hereunder or enforcing this
Agreement), (y) any payment of tax which the Borrower is obliged to make
pursuant to Section 159 of the Income and Corporation Taxes Act 1970 of the
United Kingdom (or any re-enactment or replacement thereof) on behalf of a
Lender which is resident for tax purposes in the United Kingdom but is not
recognized as a bank by H.M. Inland Revenue and (z) Other Taxes as defined in
subsection (b) below, (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrower or any Borrowing Subsidiary shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder or under any A Note to
any Lender or the Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.13) such Lender or
the Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower or such Borrowing
Subsidiary shall make such deductions and (iii) the Borrower or such Borrowing
Subsidiary shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law.
(b) In addition, the Borrower or the Borrowing Subsidiary shall pay
any present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made hereunder or
under the A Notes or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or the A Notes (hereinafter referred
to as "Other Taxes"). Each Bank and the Agent represents that at the date of
this Agreement it is not aware of any Other Taxes applicable to it. Each Lender
and the Agent agrees to notify the Borrower or such Borrowing Subsidiary on
becoming aware of the imposition of any such Other Taxes.
(c) The Borrower or the Borrowing Subsidiary will indemnify each
Lender and the Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.13) paid by such Lender or the Agent (as
the case may be) and any liability (including penalties, interest and expenses
not attributable to acts or omissions of any party other than the Borrower or
such Borrowing Subsidiary) arising therefrom or with respect thereto. This
indemnification shall be paid within 30 days from the date such Lender or the
Agent (as the case may be) makes written demand therefor.
(d) As soon as practicable after the date of any payment of Taxes
(other than Taxes of the United States of America or any state thereof or
political subdivision of any of them), the Borrower or the Borrowing Subsidiary
will furnish to the Agent, at its address referred to in Section 8.02, the
original or a certified copy of a receipt evidencing payment thereof (if any
such receipt is reasonably available), other evidence of such payment or, if
neither a receipt nor other evidence is available, a statement by the Borrower
or such Borrowing Subsidiary confirming payment thereof. If no such Taxes are
payable in respect of any payment hereunder or under the A Notes, the Borrower
or such Borrowing Subsidiary will at the request of a Lender or the Agent
furnish to the Agent, an opinion of counsel for the Borrower or such Borrowing
Subsidiary stating that such payment is exempt from or not subject to Taxes.
(e) Each Lender and the Agent will, from time to time as requested
by the Borrower or the Borrowing Subsidiary in writing, provide the Borrower or
the Borrowing Subsidiary with any applicable forms, completed and signed, that
may be required by the tax authority of a jurisdiction in order to certify such
Lender's or the Agent's exemption from or applicable reduction in any applicable
Taxes of such jurisdiction with respect to any and all payments that are subject
to such an exemption or reduction to be made to such Lender or the Agent
hereunder and under the A Notes, if the Lender or the Agent is entitled to such
an exemption or reduction.
(f) Notwithstanding anything contained herein to the contrary, the
Borrower or the Borrowing Subsidiary shall not be required to pay any additional
amounts pursuant to this Section on account of any Taxes of, or imposed by, the
United States, to any Lender or the Agent (as the case may be) which is not
entitled on the date on which it signed this Agreement (or, in the case of an
assignee of a Lender, on the date on which the assignment to it became
effective), to submit Form 1001 or Form 4224 or a certification that it is a
corporation or other entity organized in or under the laws of the United States
or a state thereof, so as to establish a complete exemption from such Taxes with
respect to all payments hereunder and under the A Notes. If as a result of an
erroneous certification made by a Lender or the Agent, the Borrower or such
Borrowing Subsidiary makes a payment to it without deduction for United States
withholding taxes, but would have made such a deduction had such certification
not been erroneous and the Borrower or such Borrowing Subsidiary subsequently is
required to account, and does account, to the United States tax authorities for
any amount which should have been deducted, such Lender or the Agent (as the
case may be) shall pay to the Borrower or such Borrowing Subsidiary an amount
sufficient to reimburse the Borrower or such Borrowing Subsidiary for such
amount.
(g) At the request of a Borrower or a Borrowing Subsidiary, any
Lender claiming any additional amounts payable pursuant to this Section 2.13
shall use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to change the jurisdiction of its Applicable Lending
Office if the making of such a change would avoid the need for, or reduce the
amount of, any such additional amounts which may thereafter accrue and would
not, in the reasonable judgment of such Lender, be otherwise disadvantageous to
such Lender. The Borrower or such Borrowing Subsidiary shall reimburse such
Lender for the Borrower's or such Borrowing Subsidiary's equitable share of such
Lender's reasonable expenses incurred in connection with such change or in
considering such a change.
(h) Without prejudice to the survival of any other agreement of the
Borrower and its Borrowing Subsidiaries hereunder, the agreements and
obligations of the Borrower and its Borrowing Subsidiaries contained in this
Section 2.13 shall survive the payment in full of principal and interest
hereunder and under the A Notes, provided, however, that the Borrower or such
Borrowing Subsidiary has received timely notice of the assertion of any Taxes or
Other Taxes in order for it to contest such Taxes or Other Taxes to the extent
permitted by law.
SECTION 2.14. Sharing of Payments, Etc. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the A Advances (whether for principal,
interest, fees or otherwise) made by it (other than pursuant to Section 2.08,
2.11 or 2.13) in excess of its ratable share of payments on account of the A
Advances obtained by all the Lenders, such Lender shall forthwith purchase from
the other Lenders such participations in the A Advances made by them as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them, provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and each such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
Each of the Borrower and any Borrowing Subsidiary agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.14
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower or such Borrowing
Subsidiary, as the case may be, in the amount of such participation.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Condition Precedent to Initial Advances. The
obligation of each Lender to make its initial Advance is subject to the
condition precedent that the Agent shall have received, on or before the date of
such Advance, the following, each dated such date, in form and substance
satisfactory to each Lender and (except for the Notes) in sufficient copies for
each Lender:
(a) The A Note and, if applicable, the B Note payable to the order
of such Lender.
(b) Certified copies of the resolutions of the Board of Directors
of the Borrower approving this Agreement and the Notes and each Guaranty,
and of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement and the
Notes.
(c) A certificate of the Secretary or an Assistant Secretary of the
Borrower certifying the names and true signatures of the officers of the
Borrower authorized to sign this Agreement and the Notes and the other
documents to be delivered hereunder.
(d) A certificate of a duly authorized officer of the Borrower
certifying that the representations and warranties contained in Section
4.01 are correct on and as of such date (before and after giving effect
to any Borrowing on such date and the application of the proceeds
therefrom), as though made on and as of such date, and that no event has
occurred and is continuing (or would result from any such Borrowing or
application of the proceeds thereof) which constitutes an Event of
Default or would constitute an Event of Default but for the requirement
that notice be given or time elapse or both.
(e) A favorable opinion of the General Counsel or an Associate
General Counsel of the Borrower, substantially in the form of Exhibit D
hereto.
(f) A favorable opinion of Shearman & Sterling, counsel for the
Agent, substantially in the form of Exhibit E hereto.
SECTION 3.02. Conditions Precedent to Each A Borrowing. The
obligation of each Lender to make an A Advance on the occasion of each A
Borrowing (including the initial A Borrowing) shall be subject to the further
conditions precedent that on the date of such A Borrowing (a) the following
statements shall be true (and each of the giving of the applicable Notice of A
Borrowing and the acceptance by the Borrower or any Borrowing Subsidiary of the
proceeds of such A Borrowing shall constitute a representation and warranty by
the Borrower that on the date of such A Borrowing such statements are true):
(i) The representations and warranties contained in Section 4.01 are
correct on and as of the date of such A Borrowing, before and after
giving effect to such A Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, and
(ii) No event has occurred and is continuing, or would result from
such A Borrowing or from the application of the proceeds therefrom, which
constitutes an Event of Default or would constitute an Event of Default
but for the requirement that notice be given or time elapse or both;
provided, however, that, on the occasion of an A Borrowing which would not
increase the aggregate outstanding amount of A Advances owing to each Lender
over the aggregate outstanding amount of A Advances owing to such Lender
immediately prior to making such A Borrowing, the statements set forth in
subsections (i) and (ii) above shall be modified as follows:
(i) In subsection (i) the phrase "(excluding those contained in the
last sentence of subsection (e) and in subsection (f) thereof)" shall be
inserted immediately after "Section 4.01"; and
(ii) In subsection (ii) the words "or would constitute an Event of
Default but for the requirement that notice be given or time elapse or
both" shall be omitted;
and (b) the Agent shall have received such other approvals, opinions or
documents as any Lender through the Agent may reasonably request, evidencing the
accuracy of the representations and warranties and compliance with other
conditions of lending.
SECTION 3.03. Conditions Precedent to Each B Borrowing. The
obligation of each Lender which is to make a B Advance on the occasion of a B
Borrowing (including the initial B Borrowing) to make such B Advance as part of
such B Borrowing is subject to the conditions precedent that (i) the Agent shall
have received the written confirmatory Notice of B Borrowing with respect
thereto, (ii) on or before the date of such B Borrowing, but prior to such B
Borrowing, the Agent shall have received a B Note payable to the order of such
Lender for each of the one or more B Advances to be made by such Lender as part
of such B Borrowing, each in a principal amount equal to the principal amount of
the B Advance to be evidenced thereby and otherwise on such terms as were agreed
to for such B Advance in accordance with Section 2.03, and (iii) on the date of
such B Borrowing the following statements shall be true (and each of the giving
of the applicable Notice of B Borrowing and the acceptance by the Borrower or
any Borrowing Subsidiary of the proceeds of such B Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such B Borrowing
such statements are true):
(a) The representations and warranties contained in Section 4.01
are correct on and as of the date of such B Borrowing, before and after
giving effect to such B Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date,
(b) No event has occurred and is continuing, or would result from
such B Borrowing or from the application of the proceeds therefrom, which
constitutes an Event of Default or which would constitute an Event of
Default but for the requirement that notice be given or time elapse or
both, and
(c) The information concerning the Borrower that has been provided
in writing to the Agent by the Borrower in connection herewith as
required by the provisions of this Agreement did not include an untrue
statement of a material fact or omit to state any material fact or any
fact necessary to make the statements contained therein, in the light of
the circumstances under which they were made, not misleading; provided
that with regard to any information delivered to a Lender pursuant to
Section 5.01(e)(vii), the representation and warranty in this Section
3.03(c) shall apply only to such information that is specifically
identified to the Borrower at the time the request is made as information
(i) that may be delivered to a purchaser of a B Note, or (ii) that is
otherwise requested to be subject to this Section 3.03(c).
SECTION 3.04. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the Initial Borrowing
specifying its objection thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation.
(b) The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, and do not
contravene (i) the Borrower's charter or by-laws or (ii) law or any
contractual restriction binding on or affecting the Borrower.
(c) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Borrower
of this Agreement or the Notes.
(d) This Agreement is, and each of the Notes when executed and
delivered hereunder will be, the legal, valid and binding obligation of
the Borrower enforceable against the Borrower in accordance with their
respective terms, except as the same may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law
affecting creditors' rights generally, or by general principles of
equity.
(e) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as at December 31, 1993 and the related
consolidated statements of income, cash flow and retained earnings of the
Borrower and its Consolidated Subsidiaries for the fiscal year then
ended, accompanied by an opinion of Arthur Andersen & Co., independent
public accountants, copies of which have been furnished to each Bank,
fairly present the consolidated financial condition of the Borrower and
its Consolidated Subsidiaries as at such date and the consolidated
results of the operations of the Borrower and its Consolidated
Subsidiaries for the period ended on such date, all in accordance with
generally accepted accounting principles consistently applied (except for
mandated changes in accounting disclosed in such financial statements).
Except as disclosed to each of the Lenders in writing prior to the date
hereof, since December 31, 1993 there has been no Material Adverse
Change.
(f) There is no pending or (to the knowledge of the Borrower)
threatened action or proceeding, including, without limitation, any
Environmental Action, affecting the Borrower or any of its Subsidiaries
before any court, governmental agency or arbitrator that (i) is
reasonably likely to have a Material Adverse Effect, other than as
disclosed on Schedule 4.01(f) (the "Disclosed Litigation") or (ii)
purports to affect the legality, validity or enforceability of this
Agreement or any Note or Guaranty, and there has been no change in the
status, or financial effect on the Borrower or any of its Subsidiaries,
of the Disclosed Litigation from that described on Schedule 4.01(f) which
is reasonably likely to have a Material Adverse Effect.
(g) None of the Borrower or any of its Subsidiaries is engaged in
the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U issued by the
Board of Governors of the Federal Reserve System), and no proceeds of any
Advance will be used in such manner as to cause any Lender to be in
violation of such Regulation U.
(h) The Borrower and each Subsidiary are in compliance in all
material respects with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority, non-compliance with
which would have a Material Adverse Effect.
(i) In the ordinary course of its business, the Borrower conducts
reviews (which reviews are in varying stages of implementation) of the
effect of Environmental Laws on the business, operations and properties
of the Borrower and its Subsidiaries, in the course of which it
identifies and evaluates associated liabilities and costs. On the basis
of these reviews, the Borrower has reasonably concluded that
Environmental Laws are unlikely to have a Material Adverse Effect.
(j) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan that is reasonably likely to result in the
imposition of a lien in excess of $25,000,000 on the assets of the
Borrower and/or any of its ERISA Affiliates in favor of the PBGC or the
Plan or in a requirement that the Borrower or any of its ERISA Affiliates
provide security to the Plan in an amount exceeding $25,000,000.
(k) The most recently filed Schedule B (Actuarial Information)
annual report (Form 5500 Series) for each Plan was complete and accurate
and fairly presented the funding status of such Plan as of the date of
such Schedule B, and since the date of such Schedule B, there has been no
change in such funding status which is reasonably likely to have a
Material Adverse Effect.
(l) Neither the Borrower nor any of its ERISA Affiliates has
incurred, or is reasonably expected to incur, any Withdrawal Liability to
any Multiemployer Plan which is reasonably likely to have a Material
Adverse Effect.
(m) Neither the Borrower nor any of its ERISA Affiliates has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of
Title IV of ERISA, which in either case would be reasonably likely to
have a Material Adverse Effect, and no such Multiemployer Plan is
reasonably expected to be in reorganization or to be terminated, within
the meaning of Title IV of ERISA, which in either case would be
reasonably likely to have a Material Adverse Effect.
(n) Except as set forth in the financial statements described in
Section 4.01(e) or delivered pursuant to Section 5.01(e), the Borrower
and its Subsidiaries have no material liability with respect to "expected
postretirement benefit obligations" within the meaning of Statement of
Financial Accounting Standards No. 106.
(o) The Borrower and each Subsidiary have filed all tax returns
(Federal, state and local) required to be filed and paid all taxes shown
thereon to be due, including interest and penalties other than those not
yet delinquent and except for those contested in good faith, or provided
adequate reserves for payment thereof.
(p) Each of the Existing Bank Agreements remains in full force and
effect and the commitments thereunder remain available to the Borrower
for borrowing an aggregate amount of not less than $400,000,000.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Note shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will, unless the Required Lenders shall otherwise consent in writing:
(a) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each Significant Subsidiary to preserve and maintain,
its corporate existence except as permitted under Section 5.02(c);
provided, however, that the Borrower or any Significant Subsidiary shall
not be required to preserve the corporate existence of any Significant
Subsidiary if the Board of Directors of the Borrower shall determine that
the preservation thereof is no longer desirable in the conduct of the
business of the Borrower or such Significant Subsidiary, as the case may
be, and that the liquidation thereof is not disadvantageous in any
material respect to the Lenders.
(b) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable
laws, rules, regulations and orders, where any failure to comply would
have a Material Adverse Effect, such compliance to include, without
limitation, paying before the same become delinquent all material taxes,
assessments and governmental charges imposed upon it or upon its property
except to the extent contested in good faith.
(c) Maintenance of Properties, Etc. Maintain and preserve, and
cause each Significant Subsidiary to maintain and preserve, all of its
properties which are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted, except
where the failure to do so would not be reasonably likely to have a
Material Adverse Effect.
(d) Maintenance of Insurance. Maintain, and cause each Significant
Subsidiary to maintain, insurance with responsible and reputable
insurance companies or associations (including affiliated companies) for
such amounts, covering such risks and with such deductibles as is usually
carried by companies of comparable size engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower
or such Subsidiary operates, or maintain a sound self-insurance program
for such risks as may be prudently self-insured.
(e) Reporting Requirements. Furnish to each Lender:
(i) as soon as available and in any event within 60 days
after the end of each of the first three quarters of each fiscal
year of the Borrower, a consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of the end of such quarter and
related consolidated statements of income and cash flow for the
period commencing at the end of the previous fiscal year and ending
with the end of such quarter, prepared in accordance with generally
accepted accounting principles applicable to interim statements and
certified by the Treasurer or chief financial officer of the
Borrower;
(ii) as soon as available and in any event within 105 days
after the end of each fiscal year of the Borrower, a copy of the
annual report for such year for the Borrower and its Consolidated
Subsidiaries, containing consolidated financial statements for such
year certified without exception as to scope by Arthur Andersen &
Co. or other independent public accountants acceptable to the
Required Lenders;
(iii) concurrently with the financial statements delivered
pursuant to clause (ii) above, a certificate of the Treasurer,
principal financial officer or the principal accounting officer of
the Borrower, and concurrently with the financial statements
delivered pursuant to clause (i) above, a certificate of the
Treasurer or controller of the Borrower, stating in each case that
a review of the activities of the Borrower and its Consolidated
Subsidiaries during the preceding quarter or fiscal year, as the
case may be, has been made under his supervision to determine
whether the Borrower has fulfilled all of its respective
obligations under this Agreement and the Notes, and also stating
that, to the best of his knowledge, (x) neither an Event of Default
nor an event which, with the giving of notice or the lapse of time
or both, would constitute an Event of Default has occurred, or (y)
if any such Event of Default or event exists, specifying such Event
of Default or event, the nature and status thereof, and the action
the Borrower is taking or proposes to take with respect thereto;
(iv) as soon as possible and in any event within five days
after the occurrence of each Event of Default and each event which,
with the giving of notice or lapse of time, or both, would
constitute an Event of Default, continuing on the date of such
statement, a statement of the chief financial officer of the
Borrower setting forth details of such Event of Default or event
and the action which the Borrower has taken and proposes to take
with respect thereto;
(v) promptly after the sending or filing thereof, copies of
all reports which the Borrower sends to its security holders
generally, and copies of all publicly available reports and
registration statements except registration statements on Form S-8
which the Borrower or any Subsidiary files with the Securities and
Exchange Commission or any national securities exchange;
(vi) promptly after the filing or receiving thereof each
notice that the Borrower or any Subsidiary receives from the PBGC
regarding the Insufficiency of any Plan, and, to any Lender
requesting same, copies of each Form 5500 annual return/report
(including Schedule B thereto) filed with respect to each Plan
under ERISA with the Internal Revenue Service;
(vii) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as any Lender through the Agent may from time to time
reasonably request; and
(viii) promptly after any corporation shall become a Principal
Domestic Subsidiary, written notice thereof, including the name of
such corporation, the jurisdiction of its incorporation and the
nature of its business.
SECTION 5.02. Negative Covenants. So long as any Note shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will not,
without the written consent of the Required Lenders:
(a) Liens, Etc. Create or suffer to exist, or permit any of its
Principal Domestic Subsidiaries to create or suffer to exist, any Lien on
any Restricted Property, whether now owned or hereafter acquired, without
making effective provision (and the Borrower covenants and agrees that it
will make or cause to be made effective provision) whereby the Notes
shall be directly secured by such Lien equally and ratably with (or prior
to) all other indebtedness secured by such Lien as long as such other
indebtedness shall be so secured; provided, however, that there shall be
excluded from the foregoing restrictions:
(i) Liens securing Debt not exceeding $10,000,000 which are
existing on the date hereof on Restricted Property; and, if any
property now owned or leased by Borrower or by a present Principal
Domestic Subsidiary at any time hereafter becomes a Principal
Domestic Manufacturing Property, any Liens existing on the date
hereof on such property securing the Debt now secured or evidenced
thereby;
(ii) Liens on Restricted Property of a Principal Domestic
Subsidiary as security for Debt of such Subsidiary to the Borrower
or to another Principal Domestic Subsidiary;
(iii) in the case of any corporation which becomes a Principal
Domestic Subsidiary after the date of this Agreement, Liens on
Restricted Property of such Principal Domestic Subsidiary which are
in existence at the time it becomes a Principal Domestic Subsidiary
and which were not incurred in contemplation of its becoming a
Principal Domestic Subsidiary;
(iv) any Lien existing prior to the time of acquisition of any
Principal Domestic Manufacturing Property acquired by the Borrower
or a Principal Domestic Subsidiary after the date of this Agreement
through purchase, merger, consolidation or otherwise;
(v) any Lien on any Principal Domestic Manufacturing Property
(other than a Major Domestic Manufacturing Property) acquired or
constructed by the Borrower or a Principal Domestic Subsidiary
after the date of this Agreement, which is placed on such Property
at the time of or within 120 days after the acquisition thereof or
prior to, at the time of or within 120 days after completion of
construction thereof to secure all or a portion of the price of
such acquisition or construction or funds borrowed to pay all or a
portion of the price of such acquisition or construction;
(vi) extensions, renewals or replacements of any Lien referred
to in clause (i), (iii), (iv) or (v) of this subsection (a) to the
extent that the principal amount of the Debt secured or evidenced
thereby is not increased, provided that the Lien is not extended to
any other Restricted Property unless the aggregate value of
Restricted Property encumbered by such Lien is not materially
greater than the value (as determined at the time of such
extension, renewal or replacement) of the Restricted Property
originally encumbered by the Lien being extended, renewed or
replaced;
(vii) Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's, vendors' and landlords' liens, and Liens
arising out of judgments or awards against the Borrower or any
Principal Domestic Subsidiary which are (x) immaterial or (y) with
respect to which the Borrower or such Subsidiary at the time shall
currently be prosecuting an appeal or proceedings for review and
with respect to which it shall have secured a stay of execution
pending such appeal or proceedings for review;
(viii) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, rights of way, sewers,
electric lines, telegraph and telephone lines and other similar
purposes, and zoning or other restrictions as to the use of any
Principal Domestic Manufacturing Property, which exceptions,
encumbrances, easements, reservations, rights and restrictions do
not, in the opinion of the Borrower, in the aggregate materially
detract from the value of such Principal Domestic Manufacturing
Property or materially impair its use in the operation of the
business of the Borrower and its Principal Domestic Subsidiaries;
and
(ix) any Lien on Restricted Property not referred to in
clauses (i) through (viii) of this subsection (a) if, at the time
such Lien is created, incurred, assumed or suffered to be created,
incurred or assumed, and after giving effect thereto and to the
Debt secured or evidenced thereby, the sum of (A) the aggregate
amount of all outstanding Debt of the Borrower and its Principal
Domestic Subsidiaries secured or evidenced by Liens on Restricted
Property which are not referred to in clauses (i) through (viii) of
this subsection (a) and which do not equally and ratably secure the
Notes plus (B) the aggregate amount of all outstanding Sale and
Leaseback Debt of the Borrower and its Principal Domestic
Subsidiaries, shall not exceed 15% of Consolidated Net Tangible
Assets.
If at any time the Borrower or any Principal Domestic Subsidiary shall
create, incur or assume or suffer to be created, incurred or assumed any
Lien on Restricted Property by which the Notes are required to be secured
pursuant to the requirements of this subsection (a), the Borrower will
promptly deliver to each Lender an opinion, in form and substance
reasonably satisfactory to the Required Lenders, of the General Counsel
of the Borrower (so long as the General Counsel is able to render an
opinion as to the relevant local law) or other counsel reasonably
satisfactory to the Required Lenders, to the effect that the Notes have
been secured in accordance with such requirements.
(b) Sale and Leaseback Transactions. The Borrower will not, and
will not permit any Principal Domestic Subsidiary to, enter into any
Sale and Leaseback Transaction unless either:
(i) immediately after giving effect to such Sale and
Leaseback Transaction, the sum of (A) the aggregate amount of all
outstanding Sale and Leaseback Debt of the Borrower and its
Principal Domestic Subsidiaries and (B) the aggregate amount of all
outstanding Debt of the Borrower and its Principal Domestic
Subsidiaries secured or evidenced by Liens on Restricted Property
which are not referred to in clauses (i) through (viii) of Section
5.02(a) and which do not equally and ratably secure the Notes,
shall not exceed 15% of Consolidated Net Tangible Assets; or
(ii) within 90 days after the effective date of such Sale and
Leaseback Transaction, the Borrower shall apply or cause to be
applied an amount equal to the net proceeds of the sale of the
property leased pursuant to such Sale and Leaseback Transaction to
the prepayment or other retirement (other than any mandatory
prepayment or retirement) of the A Notes in accordance with the
provisions of Section 2.10 hereof and/or Senior Funded Debt of the
Borrower or any of its Principal Domestic Subsidiaries which is
then subject to optional prepayment or other retirement, and shall
deliver to the holders of the A Notes a certificate executed by the
principal financial officer, treasurer or the chief executive
officer of the Borrower specifying the Debt so prepaid or retired;
or
(iii) within 90 days after the effective date of such Sale and
Leaseback Transaction, the Borrower shall deliver to the holders of
the A Notes a certificate executed by the principal financial
officer, treasurer or the chief executive officer of the Borrower
stating that an amount equal to the net proceeds of the sale of the
property leased pursuant to such Sale and Leaseback Transaction has
been applied, or is in good faith being retained for application
within a reasonable time after the date of such Sale and Leaseback
Transaction (and the Borrower covenants and agrees that such
proceeds will be so applied), to the payment of the cost of the
purchase, construction or improvement of one or more Principal
Domestic Manufacturing Properties.
(c) Mergers, Etc. Merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in
a series of transactions) all or substantially all of its assets (whether
now owned or hereafter acquired) to, any Person, or permit any of its
Subsidiaries to do so, except that (i) any Subsidiary of the Borrower may
merge or consolidate with or into, or transfer assets to, any other
Subsidiary of the Borrower, (ii) any Subsidiary of the Borrower may merge
or consolidate with or into or transfer assets to the Borrower, and (iii)
the Borrower may merge with or transfer assets to, and any Subsidiary of
the Borrower may merge or consolidate with or into or transfer assets to,
any other Person, provided that (A) in each case, immediately after
giving effect to such proposed transaction, no Event of Default or event
which, with the giving of notice or lapse of time, or both, would
constitute an Event of Default would exist, (B) in the case of any such
merger to which the Borrower is a party, the Borrower is the surviving
corporation and (C) in the case of any such merger or consolidation of a
Borrowing Subsidiary of the Borrower with or into any other Person, the
Borrower shall remain the guarantor of such Subsidiary's obligations
hereunder.
(d) Debt. Create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Debt if (after giving
effect to the applications of the proceeds of any Debt) the ratio of (x)
the Operating Cash Flow of the Borrower and its Subsidiaries on a
consolidated basis for the most recent four consecutive calendar quarters
then ended to (y) the aggregate amount of Debt of the Borrower and its
Subsidiaries on a consolidated basis is less than 0.25 to 1.
(e) Use of Proceeds. Use, or permit any of its Subsidiaries to use,
any proceeds of any Advance for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System), or to extend credit to others
for such purpose, if, following application of the proceeds of such
Advance, more than 25% of the value of the assets (either of the Borrower
only or of the Borrower and its Subsidiaries on a consolidated basis)
which are subject to the restrictions of Section 5.02(a) or (b) or
subject to any restriction contained in any agreement or instrument
between the Borrower and any Lender or any Affiliate of any Lender,
relating to Debt and within the scope of Section 6.01(d) (without giving
effect to any limitation in principal amount contained therein) will be
margin stock (as defined in such Regulation U).
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower or any Borrowing Subsidiary shall fail to pay when
due any principal of any Note or to pay, within five days after the date
when due, the interest on any Note, any fees or any other amount payable
hereunder or under any Guaranty; or
(b) Any representation or warranty made by the Borrower herein or
by the Borrower (or any of its officers) in connection with this
Agreement or any Guaranty shall prove to have been incorrect in any
material respect when made; or
(c) The Borrower shall fail to perform or observe (i) any term,
covenant or agreement contained in Section 5.02, or (ii) any other term,
covenant or agreement contained in this Agreement (other than those
referred to in clauses (a) and (b) of this Section 6.01) on its part to
be performed or observed if the failure to perform or observe such other
term, covenant or agreement referred to in this clause (ii) shall remain
unremedied for 30 days after written notice thereof shall have been given
to the Borrower by the Agent or any Lender; or
(d) The Borrower or any of its Significant Subsidiaries shall fail
to pay any principal of or premium or interest on any Debt which is
outstanding in a principal amount of at least $50,000,000 in the
aggregate (but excluding Debt evidenced by the Notes) of the Borrower or
such Subsidiary (as the case may be), when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after
the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is (i) to accelerate the maturity of such Debt or (ii) if the
long-term senior debt of the Borrower is not then rated either at or
above BBB by S&P or at or above Baa2 by Moody's, to permit the
acceleration of the maturity of such Debt; or any such Debt shall be
declared to be due and payable, or required to be prepaid (other than by
a regularly scheduled required prepayment), prior to the stated maturity
thereof; or
(e) The Borrower or any of its Significant Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Borrower or any of its Significant
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee, custodian or other similar official for it or for
any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed and unstayed for a period of 60 days,
or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment
of a receiver, trustee, custodian or other similar official for, it or
for any substantial part of its property) shall occur; or the Borrower or
any of its Significant Subsidiaries shall take any corporate action to
authorize any of the actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess of
$25,000,000 (calculated after deducting from the sum so payable each
amount thereof which will be paid by any insurer that is not an Affiliate
of the Borrower to the extent such insurer has confirmed in writing its
obligation to pay such amount with respect to such judgment or order)
shall be rendered against the Borrower or any of its Subsidiaries and
either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period of
20 consecutive days during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(g) The Borrower or any of its ERISA Affiliates shall have incurred
or, in the reasonable opinion of the Required Lenders shall be reasonably
likely to incur, liability in excess of $50,000,000 in the aggregate as a
result of one or more of the following events which shall have occurred:
(i) any ERISA Event; (ii) the partial or complete withdrawal of the
Borrower or any of its ERISA Affiliates from a Multiemployer Plan; or
(iii) the reorganization or termination of a Multiemployer Plan; or
(h) Any Guaranty or any provision of any Guaranty after delivery
thereof pursuant to Section 8.06(b) shall for any reason cease to be
valid and binding on the Borrower, or the Borrower shall so state in
writing; or
(i) The Borrower shall fail to be entitled to borrow at least
$400,000,000 in the aggregate under the Existing Bank Agreements;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the Notes,
all interest thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to the Borrower or any of its
Subsidiaries which borrows hereunder under the Federal Bankruptcy Code, (A) the
obligation of each Lender to make Advances shall automatically be terminated and
(B) the Notes, all such interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the Borrower. The Lenders
giving any notice hereunder shall give copies thereof to the Agent, but failure
to do so shall not impair the effect of such notice.
In the event the Borrower assigns to one or more Subsidiaries the
right to borrow under this Agreement (as provided in Section 8.06), each
reference in this Article VI to the Borrower shall be a reference to each such
Subsidiary as well as to the Borrower.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to this Agreement or applicable law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may treat
the payee of any Note as the holder thereof until the Agent receives and accepts
an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an assignee, as provided in Section 8.07; (ii) may
consult with legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or oral) made in or
in connection with this Agreement; (iv) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of the Borrower or any Borrowing
Subsidiary or to inspect the property (including the books and records) of the
Borrower or any Borrowing Subsidiary; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability under or in respect
of this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier, telegram or telex) believed
by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. Citibank and Affiliates. With respect to its
Commitment, the Advances made by it and the Note issued to it, Citibank, N.A.
shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not the Agent; and the term "Lender"
or "Lenders" shall, unless otherwise expressly indicated, include Citibank, N.A.
in its individual capacity. Citibank, N.A. and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, the Borrower, any of its Subsidiaries and any Person who may do business
with or own securities of the Borrower or any such Subsidiary, all as if
Citibank, N.A. were not the Agent and without any duty to account therefor to
the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Agent or any other Lender
and based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify the
Agent (to the extent not reimbursed by the Borrower), ratably according to the
respective principal amounts of the A Notes then held by each of such Lenders
(or if no A Notes are at the time outstanding or if any A Notes are held by
Persons that are not Lenders, ratably according to the respective amounts of
their Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent under this Agreement,
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 the Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including counsel fees) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
to the extent that the Agent is not reimbursed for such expenses by the
Borrower.
SECTION 7.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower and may be removed
at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent, which successor Agent, so long as no Event of Default has
occurred and is continuing, shall be approved by the Borrower, which approval
shall not be unreasonably withheld or delayed. If no successor Agent shall have
been so appointed by the Required Lenders in accordance with the immediately
preceding sentence, and shall have accepted such appointment, within 30 days
after the retiring Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $50,000,000, which
successor Agent, so long as no Event of Default has occurred and is continuing,
shall be approved by the Borrower, which approval shall not be unreasonably
withheld or delayed. Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article VII shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the A Notes, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, do any of the following: (a)
waive any of the conditions specified in Section 3.01, 3.02 or 3.03 (if and to
the extent that the Borrowing for which such condition or conditions are waived
would result in an increase in the aggregate amount of A Advances over the
aggregate amount of A Advances outstanding immediately prior to such Borrowing),
(b) increase the Commitments of the Lenders or subject the Lenders to any
additional obligations, (c) reduce the principal of, or interest on, the A Notes
or any fees or other amounts payable hereunder, (d) postpone any date fixed for
any payment of principal of, or interest on, the A Notes or any fees or other
amounts payable hereunder, (e) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the A Notes, or the number of Lenders,
which shall be required for the Lenders or any of them to take any action
hereunder or (f) amend Section 8.06(b)(ii) or this Section 8.01; provided,
further, that no amendment, waiver or consent shall, unless in writing and
signed by the Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Agent under this Agreement or any
Note. No amendment or waiver of any provision of a B Note, nor any consent to
any departure by the Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by the holder of such B Note.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic,
telex or cable communication) and mailed, telecopied, telegraphed, telexed,
cabled or delivered, if to the Borrower, at its address at 300 Park Avenue, New
York, New York 10022, Attention: Treasurer; if to any Borrowing Subsidiary, c/o
the Borrower at its above address; if to any Bank, at its Domestic Lending
Office specified opposite its name on Schedule I hereto; and if to any other
Lender, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender; and if to the Agent, at its
address at 1 Court Square, 7th Floor, Long Island City, New York 11120,
Attention: John Makrinos, with a copy to 399 Park Avenue, New York, New York
10043, Attention: Jay Schiff; or, as to the Borrower or the Agent, at such other
address as shall be designated by such party in a written notice to the other
parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the Agent. All
such notices and communications shall, when mailed, telecopied, telegraphed,
telexed or cabled, be effective when deposited in the mails, telecopied,
delivered to the telegraph company, confirmed by telex answerback or delivered
to the cable company, respectively, except that notices and communications to
the Agent pursuant to Article II shall not be effective until received by the
Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs, Expenses, Etc. (a) The Borrower agrees to pay
on demand all out-of-pocket costs and expenses of the Agent in connection with
the preparation, execution, delivery, administration, modification and amendment
of this Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and out-of-pocket expenses of
not more than one counsel for the Agent, with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under this
Agreement. The Borrower further agrees to pay on demand all costs and expenses
of the Agent and the Lenders, if any (including, without limitation, reasonable
counsel fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the Notes and
the other documents to be delivered hereunder, including, without limitation,
reasonable counsel fees and expenses in connection with the enforcement of
rights under this Section 8.04(a).
(b) The Borrower undertakes and agrees to indemnify and hold
harmless the Agent, Citicorp Securities, Inc. and J.P. Morgan Securities, Inc.
(each, an "Arranger") and each Lender against any and all claims, damages,
liabilities and expenses (including but not limited to fees and disbursements of
counsel) which may be incurred by or asserted against the Agent, such Arranger
or such Lender (as the case may be), except where the direct result of the
Agent's, such Arranger's or such Lender's own negligence or willful misconduct,
in connection with or arising out of any investigation, litigation, or
proceeding (whether or not the Agent, any Arranger or any of the Lenders is a
party thereto) relating to or arising out of this Agreement, the Notes or any
actual or proposed use of proceeds of Advances hereunder, including but not
limited to any acquisition or proposed acquisition by the Borrower or any
Subsidiary of all or any portion of the stock or substantially all of the assets
of any Person.
(c) If any payment of principal of any Adjusted CD Rate Advance or
Eurodollar Rate Advance is made other than on the last day of the Interest
Period for such A Advance, as a result of a prepayment pursuant to Section 2.10,
2.11(c) or 5.02(b)(ii) or acceleration of the maturity of the Notes pursuant to
Section 6.01 or for any other reason, the Borrower shall upon demand by any
Lender (with a copy of such demand to the Agent) pay to the Agent for the
account of such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses which it may reasonably incur as a result
of such payment, including, without limitation, any loss (excluding in any event
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to fund or maintain such A Advance.
(d) Without prejudice to the survival of any other agreement or
obligation of the Borrower hereunder, the agreements and obligations of the
Borrower contained in Sections 2.13 and 8.04 shall survive the payment in full
of principal, interest and all other amounts payable hereunder and under the
Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during
the continuance of any Event of Default and (ii) the making of the request or
the granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 6.01,
each Lender and each of its Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement and any Note held by such Lender, whether or not (in the case of
obligations other than principal and interest) such Lender shall have made any
demand under this Agreement or such Note and although such obligations (other
than principal) may be unmatured. Each Lender agrees promptly to notify the
Borrower after any such set-off and application, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of each Lender and its Affiliates under this Section are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) which such Lender and its Affiliates may have.
SECTION 8.06. Binding Effect; Assignment by Borrower. (a) This
Agreement shall become effective when it shall have been executed by the
Borrower and the Agent and when the Agent shall have been notified by each Bank
that such Bank has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Agent and each Lender and (subject to Section
8.07) their respective successors and assigns, except that the Borrower shall
not have the right to assign its rights hereunder or any interest herein without
the prior written consent of the Lenders.
(b) Notwithstanding subsection (a) above, the Borrower shall have
the right to assign its rights to borrow hereunder (in whole or in part) to any
Subsidiary (a "Borrowing Subsidiary"), provided that (i) such Subsidiary assumes
the obligations of the Borrower hereunder relating to the rights so assigned by
executing and delivering an assignment and assumption agreement reasonably
satisfactory to the Agent and the Required Lenders, covering notices, places of
payment and other mechanical details, (ii) the Borrower guarantees such
Subsidiary's obligations thereunder and under the Notes issued in connection
with such assignment and assumption by executing and delivering a Guaranty
substantially in the form of Exhibit F hereto (a "Guaranty") and (iii) the
Borrower and such Subsidiary furnish the Agent with such other documents and
legal opinions as the Agent or the Required Lenders may reasonably request
relating to the existence of such Subsidiary, its corporate power and authority
to request Advances hereunder, and the authority of the Borrower to execute and
deliver such Guaranty and the legality, validity, binding effect and
enforceability of such assignment, assumption and Guaranty. No such assignment
and assumption shall substitute a Borrowing Subsidiary for the Borrower or
relieve the Borrower named herein (i.e., Colgate-Palmolive Company) of its
obligations with respect to the covenants, representations, warranties, Events
of Default and other terms and conditions of this Agreement, all of which shall
continue to apply to such Borrower and its Subsidiaries.
SECTION 8.07. Assignments and Participations. (a) Each Lender may
assign to one or more banks or other entities all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the A Advances owing to it and the A Note or Notes
held by it); provided, however, that (i) each such assignment shall be of a
constant, and not a varying, percentage of all rights and obligations under this
Agreement (other than any B Advances or B Notes), (ii) each assignee shall be
subject to the prior written approval and acceptance of the Borrower (unless the
assignee is an Affiliate of the assignor), and (iii) the parties to each such
assignment shall execute and deliver to the Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance consented to by the
Borrower, together with any A Note or Notes subject to such assignment and a
processing and recordation fee of $3,000, and give notice of such assignment to
each other Lender. Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in each Assignment and Acceptance, (x)
the assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender hereunder and (y)
the Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any Borrowing Subsidiary or the performance or observance by the
Borrower or any Borrowing Subsidiary of any of its obligations under this
Agreement or any other instrument or document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 4.01 and/or
Section 5.01(e)(i) and (ii) and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee appoints and authorizes the Agent to
take such action on its behalf and to exercise such powers and discretion under
this Agreement as are delegated to the Agent by the terms hereof, together with
such powers and discretion as are reasonably incidental thereto; and (vi) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(c) The Agent shall maintain at its address referred to in Section
8.02 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders and
the Commitment of, and principal amount of the A Advances owing to, each Lender
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, with regard to
the names, addresses and Commitments of each Lender, and the Borrower, the Agent
and the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection and copying by any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any A Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and signed by the Borrower and is in substantially the form of Exhibit
C hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
other Lenders. Within five Business Days after its receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the Agent in exchange
for the surrendered A Note or Notes a new A Note to the order of such assignee
in an amount equal to the Commitment assumed by it pursuant to such Assignment
and Acceptance and, if the assigning Lender has retained a Commitment hereunder,
a new A Note to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new A Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered A Note or Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
Exhibit A-1 hereto.
(e) Each Lender may assign to one or more banks or other entities
any B Note or Notes held by it. Each Lender may assign to any Affiliate of such
Lender, without the consent of the Borrower, its interest in this Agreement, the
A Advances owing to it and the A Note held by it, but such assignment shall not
relieve such assigning Lender of its obligations hereunder including, without
limitation, its Commitment.
(f) Each Lender may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment to the Borrower hereunder) shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender shall
remain the holder of any such Note for all purposes of this Agreement, (iv) the
Borrower, the Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (v) such Lender shall not grant to any such
participant the right to participate in the Lender's actions on amendments,
waivers or consents permitted under this Agreement, except to the extent that
such actions would change the amount of the Commitment, the principal amount,
payment dates or maturity of any Notes or Advances, the interest rate, or the
method of computing the interest rate thereon, or any fees payable hereunder.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any confidential information relating to the
Borrower received by it from such Lender.
(h) No assignee of a Lender shall be entitled to the benefits of
Sections 2.11 and 2.13 in relation to circumstances applicable to such assignee
immediately following the assignment to it which at such time (if a payment were
then due to the assignee on its behalf from the Borrower) would give rise to any
greater financial burden on the Borrower under Sections 2.11 and 2.13 than those
which it would have been under in the absence of such assignment.
(i) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time, without the consent of the Borrower,
create a security interest in all or any portion of its rights under this
Agreement (including, without limitation, the Advances owing to it and the Notes
held by it) in favor of any Federal Reserve Bank in accordance with Regulation A
of the Board of Governors of the Federal Reserve System.
SECTION 8.08. Change of Control. (a) Notwithstanding any other
provision of this agreement, the Required Lenders may, upon and after the
occurrence of a Change in Control, by notice to the Borrower (with a copy to the
Agent) (i) immediately suspend or terminate the obligations of the Lenders to
make Advances hereunder and/or (ii) require the Borrower to repay all or any
portion of the Advances on the date or dates specified in the notice which shall
not be less than 30 days after the giving of the notice.
(b) For purposes of this Section "Change in Control" shall mean the
happening of any of the following events:
(i) An acquisition, directly or indirectly, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 30% or more of either (A) the then outstanding
shares of common stock of the Borrower or (B) the combined voting power
of the then outstanding voting securities of the Borrower entitled to
vote generally in the election of directors; excluding, however (1) any
acquisition by the Borrower, or (2) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Borrower
or any corporation controlled by the Borrower; or
(ii) A change in composition of the Board of Directors of the
Borrower (the "Board") such that the individuals who, as of the date
hereof, constitute the Board (such Board shall be hereinafter referred to
as the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, for purposes of this Section
8.08, that any individual who becomes a member of the Board subsequent to
the date hereof, whose election, or nomination for election by the
Borrower's stockholders, was approved by a vote of at least a majority of
those individuals who are members of the Board and who were also members
of the Incumbent Board (or deemed to be such pursuant to this proviso)
shall be considered as though such individual were a member of the
Incumbent Board; but, provided further, that any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board shall not be so considered as a member of the
Incumbent Board.
SECTION 8.09. Mitigation of Adverse Circumstances. If circumstances
arise which would or would upon the giving of notice result in a payment or an
increase in the amount of any payment to be made to a Lender by reason of
Section 2.02(c), 2.11 or 2.12, or which would result in a Lender being unable to
make Eurodollar Rate Advances by reason of Section 2.02(b) then, without in any
way limiting, reducing or otherwise qualifying the obligations of the Borrower
under any of the such Sections, such Lender shall promptly, upon becoming aware
of the same, notify the Borrower thereof and, in consultation with the Borrower,
take such reasonable steps as may be open to it to mitigate the effects of such
circumstances, including the transfer of its Applicable Lending Office to
another jurisdiction; provided that such Lender shall be under no obligation to
make any such transfer if in the bona fide opinion of such Lender, such transfer
would or would likely have an adverse effect upon its business, operations or
financial condition.
SECTION 8.10. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.11. [Intentionally omitted.]
SECTION 8.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.13 Jurisdiction, Etc. (a) Each of the parties hereto
(including each Borrowing Subsidiary) hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement, the Notes, or any
Guaranty, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State or, to the extent permitted by law, in such federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement, the Notes or any Guaranty in
the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the Notes
in any such New York State or federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
SECTION 8.14. Waiver of Jury Trial. Each of the Borrower, the
Borrowing Subsidiaries and the Lenders hereby irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Agreement, the
Notes or any Guaranty or the actions of the Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.
COLGATE-PALMOLIVE COMPANY
Brian J. Heidtke
By __________________________________________
Vice President and Corporate Treasurer
CITIBANK, N.A., as Agent
Michel R.R. Pendill
By __________________________________________
Vice President
<PAGE>
Banks
Commitment
$200,000,000 CITIBANK, N.A.
Michel R.R. Pendill
By __________________________________________
Vice President
$200,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
Mathias Blumschein
By __________________________________________
Title: Associate
$400,000,000 Total of the Commitments
<PAGE>
SCHEDULE I
Colgate-Palmolive Company
$400,000,000 CREDIT AGREEMENT
APPLICABLE LENDING OFFICES
<TABLE>
<CAPTION>
Name of
Bank Domestic Lending Office CD Lending Office Eurodollar Lending Office
<S> <C> <C> <C>
Citibank, N.A. 399 Park Avenue 399 Park Avenue 399 Park Avenue
New York, NY 10043 New York, NY 10043 New York, NY 10043
Morgan 500 Stanton Christiana Rd 500 Stanton Christiana Rd 500 Stanton Christiana Rd
Guaranty Newark, DE 19713 Newark, DE 19713 Newark, DE 19713
Trust Company
of New York
</TABLE>
<PAGE>
Schedule 4.01(f)
None.
<PAGE>
EXHIBIT A-1 - FORM OF
A NOTE
U.S.$ Dated: , 19
FOR VALUE RECEIVED, the undersigned, COLGATE-PALMOLIVE COMPANY, a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
(the "Lender") for the account of its Applicable Lending Office (as defined in
the Credit Agreement referred to below) the principal sum of U.S.$[amount of the
Lender's Commitment in figures] or, if less, the aggregate principal amount of
each Base Rate Advance (as defined in the Credit Agreement referred to below) on
the Termination Date (as defined in the Credit Agreement referred to below) and
the principal amount of each other A Advance (as defined in the Credit Agreement
referred to below) owing to the Lender by the Borrower pursuant to the
$400,000,000 Credit Agreement dated as of January 8, 1995 among the Borrower,
the Lender and certain other lenders parties thereto, and Citibank, N.A., as
Agent for the Lender and such other lenders (as amended or modified from time to
time, the "Credit Agreement"; the terms defined therein being used herein as
therein defined) on the last day of the Interest Period for such Advance.
The Borrower promises to pay interest on the unpaid principal
amount of each A Advance from the date of such A Advance until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Citibank, as Agent, at its offices at 1 Court
Square, Long Island City, New York 11120, in immediately available funds. Each A
Advance owing to the Lender by the Borrower pursuant to the Credit Agreement,
the date on which it is due, the interest rate thereon and all prepayments made
on account of principal thereof shall be recorded by the Lender on its books,
and for each A Advance outstanding at the time of any transfer hereof the same
information shall be endorsed on the grid attached hereto which is part of this
Promissory Note.
This Promissory Note is one of the A Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, (i) provides for the making of A Advances by the Lender to the
Borrower from time to time in an aggregate amount not to exceed at any time
outstanding the U.S. dollar amount first above mentioned, the indebtedness of
the Borrower resulting from each such A Advance being evidenced by this
Promissory Note, and (ii) contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events and also for prepayments on
account of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified.
The Borrower hereby waives presentment, demand, protest and notice
of any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York, United States.
COLGATE-PALMOLIVE COMPANY
By __________________________________________
Title:
- ------------
[Note: Upon request by a Lender, the Borrower will issue separate A Notes
payable to one or more offices of the Lender, for Base Rate Advances, CD
Rate Advances and Eurodollar Rate Advances. This form will be modified to
refer to the specific type of A Advance and to the appropriate maturity
of such type of A Advance.]
<PAGE>
SCHEDULE TO PROMISSORY NOTE
DATED JANUARY _, 1995 OF COLGATE-PALMOLIVE COMPANY
ADVANCES AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
===================================================================================================================================
Amount of
Date Principal Unpaid
Amount of Principal Paid Principal Notation
Date Advance Due Rate or Prepaid Balance Made By
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
</TABLE>
<PAGE>
EXHIBIT A-2 - FORM OF
B NOTE
U.S.$ Dated: , 199
FOR VALUE RECEIVED, the undersigned, COLGATE-PALMOLIVE COMPANY, a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
________ (the "Lender") for the account of its Applicable Lending Office (as
defined in the Credit Agreement referred to below), on ________ , 19__, the
principal amount of Dollars (U.S.$________).
The Borrower promises to pay interest on the unpaid principal
amount hereof from the date hereof until such principal amount is paid in full,
at the interest rate and payable on the interest payment date or dates provided
below:
Interest Rate:________% per annum (calculated on the basis of a year of
360 days for the actual number of days elapsed).
Interest Payment Date or Dates:________
Both principal and interest are payable in lawful money of the
United States of America to the Lender at its office at , in immediately
available funds.
This Promissory Note is one of the B Notes referred to in, and is
entitled to the benefits of, the $400,000,000 Credit Agreement dated as of
January 8, 1995 (as amended or otherwise modified from time to time, the "Credit
Agreement") among the Borrower, the Lender and certain other lenders party
thereto and Citibank, N.A., as Agent for the Lender and such other parties. The
Credit Agreement, among other things, contains provisions for acceleration of
the maturity hereof upon the happening of certain stated events.
The Borrower hereby waives presentment, demand, protest and notice
of any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
<PAGE>
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York, United States.
COLGATE-PALMOLIVE COMPANY
By ______________________________________
Title:
<PAGE>
EXHIBIT B-1 - FORM OF
NOTICE OF A BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
1 Court Square, 7th Floor
Long Island City, NY 11120
Attention: John Makrinos
Ladies and Gentlemen:
The undersigned, Colgate-Palmolive Company, refers to the
$400,000,000 Credit Agreement, dated as of January 8, 1995 (as amended or
otherwise modified through the date hereof, the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the undersigned,
certain Lenders parties thereto and Citibank, N.A., as Agent for said Lenders,
and hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit
Agreement that the undersigned hereby requests an A Borrowing under the Credit
Agreement, and in that connection sets forth below the information relating to
such A Borrowing (the "Proposed A Borrowing") as required by Section 2.02(a) of
the Credit Agreement:
(i) The Business Day of the Proposed A Borrowing is ______, 199 .
(ii) The Type of A Advances comprising the Proposed A Borrowing is
[Adjusted CD Rate Advances] [Base Rate Advances] [Eurodollar Rate
Advances].
(iii) The aggregate amount of the Proposed A Borrowing is $_______.
[(iv) The Interest Period for each A Advance made as part of the
Proposed A Borrowing is [__ days] [__ weeks] [__ month[s].]
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed A
Borrowing:
(A) the representations and warranties contained in Section 4.01 of
the Credit Agreement are correct, before and after giving effect to the
Proposed A Borrowing and to the application of the proceeds therefrom, as
though made on and as of such date; and
(B) no event has occurred and is continuing, or would result from
such Proposed A Borrowing or from the application of the proceeds
therefrom, that constitutes an Event of Default or would constitute an
Event of Default but for the requirement that notice be given or time
elapse or both.
[As an alternative, the following three representations may be substituted if
the proviso in Section 3.02 is applicable:
(A) the Proposed A Borrowing will not increase the aggregate
outstanding amount of A Advances owing to each Lender over the aggregate
outstanding amount of A Advances owing to such Lender immediately prior
to such A Borrowing;
(B) the representations and warranties contained in Section 4.01
(excluding those contained in the last sentence of subsection (e) and in
subsection (f) thereof) are correct, before and after giving effect to
the Proposed A Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date; and
(C) no event has occurred and is continuing, or would result from
such Proposed A Borrowing or from the application of the proceeds
therefrom, which constitutes an Event of Default.]
Very truly yours,
COLGATE-PALMOLIVE COMPANY
By ________________________________
Title:
<PAGE>
EXHIBIT B-2 - FORM OF
NOTICE OF B BORROWING
Citibank, N.A., as Agent for
the Lenders parties to
the Credit Agreement
referred to below
1 Court Square, 7th Floor
Long Island City, NY 11120 [Date]
Attention: John Makrinos
Ladies and Gentlemen:
The undersigned, Colgate-Palmolive Company, refers to the
$400,000,000 Credit Agreement dated as of January 8, 1995 (as amended or
otherwise modified through the date hereof, the "Credit Agreement", the terms
defined therein being used herein as therein defined) among the undersigned,
certain Lenders party thereto and Citibank, N.A., as Agent for such Lenders, and
hereby gives you notice pursuant to Section 2.03 of the Credit Agreement that
the undersigned hereby requests a B Borrowing under the Credit Agreement, and in
that connection sets forth the terms on which such B Borrowing (the "Proposed B
Borrowing") is requested to be made:
(A) Date of Proposed B Borrowing _______________
(B) Aggregate Amount of Proposed B Borrowing _______________
(C) Interest Rate Basis _______________
(D) Maturity Date _______________
(E) Interest Payment Date(s) _______________
(F) _________________________________________ _______________
(G) _________________________________________ _______________
(H) _________________________________________ _______________
<PAGE>
The undersigned hereby certifies that the following statements are
true on the date hereof and will be true on the date of the Proposed B
Borrowing:
(a) the representations and warranties contained in Section 4.01
are correct, before and after giving effect to the Proposed B Borrowing
and to the application of the proceeds therefrom, as though made on and
as of such date;
(b) no event has occurred and is continuing, or would result from
the Proposed B Borrowing or from the application of the proceeds
therefrom, which constitutes an Event of Default or would constitute an
Event of Default but for the requirement that notice be given or time
elapse or both;
(c) The information concerning the undersigned that has been
provided in writing to the Agent or each Lender by the undersigned in
connection with the Credit Agreement as required by the terms of the
Credit Agreement did not include an untrue statement of a material fact
or omit to state any material fact or any fact necessary to make the
statements contained therein, in the light of the circumstances under
which they were made, not misleading; provided that with regard to any
information delivered to a Lender pursuant to Section 5.01(e)(vii) of the
Credit Agreement, the representation and warranty in this paragraph (c)
shall apply only to such information that is specifically identified to
the undersigned at the time the request is made as information (i) that
may be delivered to a purchaser of a B Note, or (ii) that is otherwise
requested to be subject to this paragraph (c).
(d) the aggregate amount of the Proposed B Borrowing and all other
Borrowings to be made on the same day under the Credit Agreement is
within the aggregate amount of the unused Commitments of the Lenders.
The undersigned hereby confirms that the Proposed B Borrowing is to
be made available to it in accordance with Section 2.03(e) of the Credit
Agreement.
Very truly yours,
COLGATE-PALMOLIVE COMPANY
By: _____________________________________________
Title:
<PAGE>
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the $400,000,000 Credit Agreement dated as of
January 8, 1995 (as amended or modified from time to time, the "Credit
Agreement") among COLGATE-PALMOLIVE COMPANY, a Delaware corporation (the
"Borrower"), the Lenders (as defined in the Credit Agreement) and Citibank,
N.A., as agent for the Lenders (the "Agent"). Terms defined in the Credit
Agreement are used herein with the same meaning.
________(the "Assignor") and ______________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
all of the Assignor's rights and obligations under the Credit Agreement as of
the date hereof (other than in respect of B Advances and B Notes) which
represents the percentage interest specified on Schedule 1 of all outstanding
rights and obligations under the Credit Agreement (other than in respect of B
Advances and B Notes), including, but not limited to, such interest in the
Assignor's Commitment, the A Advances owing to the Assignor, and the A Note[s]
held by the Assignor. After giving effect to such sale and assignment, the
Assignee's Commitment and the amount of the A Advances owing to the Assignee
will be as set forth in Section 2 of Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; (iii) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the Borrower of
any of its obligations under the Credit Agreement or any other instrument or
document furnished pursuant thereto; and (iv) attaches the A Note[s] referred to
in paragraph 1 above and requests that the Borrower exchange such A Note[s] for
a new A Note payable to the order of the Assignee in an amount equal to the
Commitment assumed by the Assignee pursuant hereto or new A Notes payable to the
order of the Assignee in an amount equal to the Commitment assumed by the
Assignee pursuant hereto and to the order of the Assignor in an amount equal to
the Commitment retained by the Assignor under the Credit Agreement,
respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.01 or delivered pursuant to Section 5.01(e) thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (ii) agrees
that it will, independently and without reliance upon the Assignor, the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (iii) agrees that it will perform
in accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender; (iv) appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Credit Agreement as are delegated
to the Agent by the terms thereof, together with such powers and discretion as
are reasonably incidental thereto; [and] (v) specifies as its CD Lending Office,
Domestic Lending Office (and address for notices) and Eurodollar Lending Office
the offices set forth beneath its name on the signature pages hereof; [and (vi)
attaches the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee's status for purposes of determining
exemption from United States withholding taxes with respect to all payments to
be made to the Assignee under the Credit Agreement and the Notes or such other
documents as are necessary to indicate that all such payments are subject to
such rates at a rate reduced by an applicable tax treaty].*
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Agent for acceptance and
recording by the Agent. The effective date of this Assignment and Acceptance
shall be the date of acceptance thereof by the Agent, unless otherwise specified
on Schedule 1 hereto (the "Effective Date").
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after
the Effective Date, the Agent shall make all payments under the Credit Agreement
and the A Notes in respect of the interest assigned hereby (including, but not
limited to, all payments of principal, interest and commitment and facility fees
with respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the A Notes
for periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
__________
* If the Assignee is organized under the laws of a jurisdiction outside the
United States.
<PAGE>
Schedule 1
to
Assignment and Acceptance
Dated , 19
Section 1.
Percentage Interest: ______%
Section 2.
Assignee's Commitment: $______
Assignor's Retained Commitment: $______
Aggregate Outstanding Principal
Amount of A Advances owing to the Assignee: $______
Aggregate Outstanding Principal
Amount of A Advances owing to the Assignor: $______
An A Note payable to the order of the Assignee
Dated: , 19
Principal amount:
An A Note payable to the order of the Assignor
Dated: , 19
Principal amount:
Section 3.
Effective Date*: , 19
[NAME OF ASSIGNOR]
By: ____________________________________________
Title:
__________
* This date should be no earlier than the date of acceptance by the Agent.
<PAGE>
[NAME OF ASSIGNEE]
By:_____________________________
Title:
CD Lending Office:
[Address]
Domestic Lending Office (and address for
notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this ___ day
of _______________, 19__
CITIBANK, N.A., as Agent
By:______________________
Title:
Accepted this ___ day
of _______________, 19__
COLGATE-PALMOLIVE COMPANY
By:______________________
Title:
<PAGE>
EXHIBIT D
January __, 1995
To each of the Lenders party
to the Credit Agreement
referred to below and Citibank, N.A.,
as Agent
Ladies and Gentlemen:
As Senior Vice President, General Counsel and Secretary for
Colgate-Palmolive Company (hereinafter referred to as the "Borrower"), I am
familiar with the $400,000,000 Credit Agreement, dated as of January 8, 1995
among the Borrower, the Lenders parties thereto and Citibank, N.A. as Agent for
the Lenders thereto (the "Credit Agreement"). This opinion is being furnished to
you pursuant to Section 3.01(e) of the Credit Agreement. Terms used in this
opinion which are defined in the Credit Agreement are used herein as so defined.
I or attorneys under my supervision in the Borrower's Legal
Department have examined such records, certificates, and other documents and
such questions of law as I have considered necessary or appropriate for purposes
of this opinion. In addition, I or attorneys under my supervision in the
Borrower's Legal Department have examined such records, certificates, and other
documents, relied on upon certificates of the officers of the Borrower and
performed such investigations as I have considered necessary or appropriate for
purposes of this opinion in respect of matters of fact. I believe that both you
and I are justified in relying upon such certificates. Based upon, and subject
to, the foregoing, it is my opinion that:
1. The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of Delaware.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement, the Notes and the Guaranties are within the Borrower's
corporate powers, have been duly authorized by all necessary corporate action,
and do not contravene (i) the Borrower's charter or by-laws or (ii) law or (to
my knowledge after due inquiry) any contractual restriction binding on or
affecting the Borrower. The Credit Agreement and the A Note have been duly
executed and delivered on behalf of the Borrower.
3. No authorization, approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Borrower of the Credit
Agreement, the Notes and the Guaranties.
4. The Credit Agreement is and the A Note will be, and each of the
Guaranties and B Notes when executed and delivered will be, upon the receipt of
due consideration therefor, the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their respective
terms.
5. The Borrower has a procedure of reviewing its material
litigation on a quarterly basis and has imposed an ongoing obligation on its
Subsidiaries whereby they must advise me, or attorneys under my supervision,
immediately of any material litigation matter arising between reviews. Based on
this review, to my actual knowledge, there is no pending or threatened action or
proceeding affecting the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator which may have a Material Adverse Effect or
which purports to affect the legality, validity or enforceability of the Credit
Agreement, any Notes and any Guaranties; provided, however, that I express no
opinion with respect to certain Brazilian regulatory risks discussed with you.
I am licensed to practice law in the State of New York and do not
purport to be an expert on, or to express any opinion (other than to the extent
necessary to render the opinions set forth in paragraph (1) above, which opinion
in based on certificates of public officials) concerning any law other than the
law of the State of New York, the General Corporation Law of the State of
Delaware and the Federal law of the United States. The opinions expressed herein
are solely for your benefit and may not be relied upon in any manner or for any
purpose by any other persons.
The opinion set forth in paragraph (4) above is subject to the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors' rights generally, and to the effect of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding equity or at law).
Very truly yours,
<PAGE>
EXHIBIT E
OPINION OF COUNSEL TO THE AGENT
January __, 1995
To the Lenders party to the
Credit Agreement referred
to below and Citibank, N.A.,
as Agent
Colgate-Palmolive Company
Ladies and Gentlemen:
We have acted as counsel to Citibank, N.A., as Agent, in connection
with the preparation, execution and delivery of the Credit Agreement dated as of
January 8, 1995 (the "Credit Agreement") among Colgate-Palmolive Company (the
"Borrower"), each of you and Citibank, N.A., as Agent. Terms defined in the
Credit Agreement are used herein as therein defined.
In that connection, we have examined the following documents:
(1) A counterpart of the Credit Agreement, executed by each of the parties
thereto.
(2) The documents furnished by the Borrower pursuant to Section 3.01 of the
Credit Agreement, including the opinion of Andrew D. Hendry, General Counsel
of the Borrower.
In our examination of the documents referred to above, we have
assumed the authenticity of all such documents submitted to us as originals, the
genuineness of all signatures, the due authority of the parties executing such
documents, and the conformity to the originals of all such documents submitted
to us as copies. We have also assumed that each of you has duly executed and
delivered, with all necessary power and authority (corporate and otherwise), the
Credit Agreement.
To the extent that our opinions expressed below involve conclusions
as to the matters set forth in paragraphs 1, 2 and 3 of the above-mentioned
opinion of counsel for the Borrower, we have assumed without independent
investigation the correctness of the matters set forth in such paragraphs, our
opinion being subject to the assumptions, qualifications and limitations set
forth in such opinion with respect thereto.
Based upon the foregoing and upon such other investigation as we
have deemed necessary, we are of the following opinion:
1. The Credit Agreement and each Note delivered on the date hereof
are the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms.
2. The above-mentioned opinion of counsel for the Borrower, and
the other documents referred to in item (2) above, are substantially
responsive to the requirements of the Credit Agreement.
Our opinions above are subject to the following qualifications:
(a) Our opinion in paragraph 1 above is subject to the effect of
general principles of equity, including (without limitation) concepts of
materiality, reasonableness, good faith and fair dealing (regardless of
whether considered in a proceeding in equity or at law).
(b) Our opinion in paragraph 1 above is also subject to the effect
of any applicable bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or
similar law affecting creditors' rights generally.
(c) Our opinions expressed above are limited to the law of the
State of New York and the Federal law of the United States, and we do not
express any opinion herein concerning any other law. Without limiting the
generality of the foregoing, we express no opinion as to the effect of
the law of any jurisdiction other than the State of New York wherein any
Lender may be located or wherein enforcement of the Credit Agreement or
the Notes may be sought which limits the rates of interest legally
chargeable or collectible.
Very truly yours,
SHEARMAN & STERLING
LCJ:SLH
<PAGE>
EXHIBIT F
FORM OF GUARANTY
GUARANTY, dated _____, 19__, made by COLGATE-PALMOLIVE COMPANY, a
corporation organized and existing under the laws of Delaware (the "Guarantor"),
in favor of Citibank, N.A., as agent (the "Agent") for each of the Lenders (the
"Lenders") parties to the Credit Agreement (as defined below).
PRELIMINARY STATEMENTS.
(1) The Agent, the Lenders and the Guarantor have entered into a
$400,000,000 Credit Agreement dated as of January 8, 1995 (said Agreement, as it
may heretofore have been or hereafter be amended or otherwise modified from time
to time, being the "Credit Agreement", the terms defined therein and not
otherwise defined herein being used herein as therein defined). Pursuant to
Section 8.06(b) of the Credit Agreement and an Assignment and Assumption
Agreement dated _____, 19__ the Guarantor has assigned to _____________________
_______________________, a corporation organized and existing under the laws of
_____________________________(the "Assignee"), certain rights under the Credit
Agreement, so that the Assignee may borrow and receive Advances under the Credit
Agreement. The Assignee is a Subsidiary of the Guarantor and engages in business
transactions with the Guarantor, and the Guarantor represents that it will
derive substantial direct and indirect benefit from all Advances to the
Assignee.
(2) It is a condition precedent to the making of such assignment to
the Assignee that the Guarantor shall have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to accept such assignment and to make Advances to the
Assignee under the Credit Agreement, the Guarantor hereby agrees as follows:
SECTION 1. Guaranty. The Guarantor hereby unconditionally
guarantees the punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all obligations of the Assignee now or hereafter
existing under the Credit Agreement and under the Notes evidencing Advances to
the Assignee (the "Notes"), whether for principal, interest, fees, expenses or
otherwise (such obligations being the "Obligations"), and agrees to pay any and
all expenses (including counsel fees and expenses) incurred by the Agent and the
Lenders in enforcing any rights under this Guaranty. Without limiting the
generality of the foregoing, the Guarantor's liability shall extend to all
amounts which constitute part of the Obligations and would be owed by the
Assignee to the Lenders under the Credit Agreement and the Notes but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Assignee.
SECTION 2. Guaranty Absolute. The Guarantor guarantees that the
Obligations will be paid strictly in accordance with the terms of the Credit
Agreement and the Notes, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Lenders with respect thereto. The obligations of the Guarantor
under this Guaranty are independent of the Obligations, and a separate action or
actions may be brought and prosecuted against the Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against the Assignee or
whether the Assignee is joined in any such action or actions. The liability of
the Guarantor under this Guaranty shall be absolute and unconditional
irrespective of:
(i) any lack of validity or enforceability of the Credit
Agreement, the Notes or any other agreement or instrument relating
thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment
or waiver of or any consent to departure from the Credit Agreement or the
Notes, including, without limitation, any increase in the Obligations
resulting from the extension of additional credit to the Assignee or any
of its subsidiaries or otherwise;
(iii) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the Obligations;
(iv) any manner of application of collateral, or proceeds thereof,
to all or any of the Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Obligations or any
other assets of the Assignee or any of its subsidiaries;
(v) any change, restructuring or termination of the corporate
structure or existence of the Assignee or any of its subsidiaries or its
status as a Subsidiary of the Guarantor; or
(vi) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Assignee or a guarantor.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by the Agent or any Lender upon the insolvency, bankruptcy
or reorganization of the Assignee or otherwise, all as though such payment had
not been made.
SECTION 3. Waiver. The Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations, this Guaranty or any circumstance referred to in Section 2, and
waives any requirement that the Agent or any Lender protect, secure, perfect or
insure any security interest or lien or any property subject thereto or exhaust
any right or take any action against the Assignee or any other person or entity
or any collateral.
SECTION 4. Subrogation. (a) The Guarantor will not exercise any
rights which it may acquire by way of subrogation under this Guaranty, by any
payment made hereunder or otherwise, until all the Obligations and all other
amounts payable under this Guaranty shall have been paid in full and the
Commitments shall have expired or terminated. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time prior to the later
of (x) the payment in full of the Obligations and all other amounts payable
under this Guaranty and (y) the expiration or termination of the Commitments,
such amount shall be deemed to have been paid to the Guarantor for the benefit
of, and held in trust for the benefit of, the Agent and the Lenders and shall
forthwith be paid to the Agent to be credited and applied upon the Obligations,
whether matured or unmatured, in accordance with the terms of the Credit
Agreement or to be held by the Agent as collateral security for any Obligations
thereafter existing. If (i) the Guarantor shall make payment to the Agent of all
or any part of the Obligations, (ii) all the Obligations and all other amounts
payable under this Guaranty shall be paid in full and (iii) the Commitments
shall have expired or terminated, the Agent will, at the Guarantor's request,
execute and deliver to the Guarantor appropriate documents, without recourse and
without representation or warranty, necessary to evidence the transfer by
subrogation to the Guarantor of an interest in the Obligations resulting from
such payment by the Guarantor.
[The preceding Section 4(a) will be used if the Assignee is
incorporated and has its principal office in a jurisdiction other than the
United States of America, or a State, Territory or possession thereof.
Otherwise, the following Section 4(a) will be used.]
SECTION 4. Waiver of Subrogation. (a) The Guarantor hereby
irrevocably waives any claim or other right which it may now or hereafter
acquire against the Assignee that arises from the existence, payment,
performance or enforcement of the Guarantor's obligations under this Guaranty or
any other Loan Document, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, any
right to participate in any claim or remedy of the Agent or any Lender against
the Assignee or any collateral which the Agent or any Lender now has or
hereafter acquires, whether or not such claim, remedy or right arises in equity,
or under contract, statute or common law, including without limitation, the
right to take or receive from the Assignee, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim or other right. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time prior to the later
of (x) the payment in full of the Obligations and all other amounts payable
under this Guaranty and (y) the expiration or termination of the Commitments,
such amount shall be deemed to have been paid to the Guarantor for the benefit
of, and held in trust for the benefit of the Agent and the Lenders and shall
forthwith be paid to the Agent to be credited and applied upon the Obligations,
whether matured or unmatured, in accordance with the terms of the Credit
Agreement or to be held by the Agent as collateral security for any Obligations
thereafter existing. The waiver set forth in this Section 4(a) is knowingly made
in contemplation of the benefits referred to in the Preliminary Statements.
(b) The Guarantor agrees that, to the extent that the Assignee
makes a payment or payments to the Agent or any Lender or the Agent or any
Lender receives any proceeds of collateral, which payment or payments or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or otherwise required to be repaid to the Assignee, its
estate, trustee, receiver or any other party, including, without limitation,
under any bankruptcy law, state or federal law, common law or equitable cause,
then to the extent of such payment or repayment, the Obligation or part thereof
which has been paid, reduced or satisfied by such amount shall be reinstated and
continued in full force and effect as of the date such initial payment,
reduction or satisfaction occurred. The Guarantor shall defend and indemnify the
Agent and each Lender from and against any claim or loss under this Section 4(b)
(including reasonable attorneys' fees and expenses) in the defense of any such
action or suit.
SECTION 5. Payments With Respect to Taxes, Etc. Any and all
payments made by the Guarantor hereunder shall be subject to and made in
accordance with Section 2.13 of the Credit Agreement as if all such payments
were being made by the Borrower.
SECTION 6. Representations and Warranties. The Guarantor hereby
represents and warrants as follows:
(a) The Guarantor is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware, and has all
corporate power required to carry on its business as now conducted.
(b) The execution and delivery by the Guarantor of this Guaranty,
and the performance of its obligations hereunder, are within the
Guarantor's corporate power, have been duly authorized by all necessary
corporate and other action, require no action by or in respect of, or
filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable
law or regulation or of the certificate of incorporation or by-laws of
the Guarantor or of any agreement, judgment, injunction, order, decree or
other instrument binding upon or affecting the Guarantor or result in the
creation or imposition of any Lien on any asset of the Guarantor or any
of its Subsidiaries.
(c) This Guaranty has been duly executed and delivered by the
Guarantor and constitutes a valid and binding agreement of the Guarantor
enforceable in accordance with its terms.
(d) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Guarantor
of this Guaranty.
(e) The Assignee is a Subsidiary of the Guarantor and is a
corporation duly incorporated, validly existing and in good standing
under the laws of __________________________.
(f) There are no conditions precedent to the effectiveness of this
Guaranty that have not been satisfied or waived.
(g) The Guarantor has, independently and without reliance upon any
Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Guaranty.
SECTION 7. Amendments, Etc. No amendment or waiver of any provision
of this Guaranty, and no consent to any departure by the Guarantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Required Lenders, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given, provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, (a) limit or release the liability of the Guarantor
hereunder, (b) postpone any date fixed for payment hereunder, or (c) change the
number of Lenders required to take any action hereunder.
SECTION 8. Addresses for Notices. All notices and other
communications provided for hereunder shall be given and effective as provided
in Section 8.02 of the Credit Agreement.
SECTION 9. No Waiver; Remedies. No failure on the part of any
Lender to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 10. Right of Set-off. If the Guarantor shall fail to make
any payment promptly when due hereunder after notice by the Agent or any Lender
to the Guarantor that the Assignee has failed to pay any Obligation when due,
each Lender is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender to or for the credit or the
account of the Guarantor against any and all of the obligations of the Guarantor
now or hereafter existing under this Guaranty, whether or not such Lender shall
have made any demand under this Guaranty and although such obligations may be
contingent and unmatured. Each Lender agrees to notify the Guarantor, the Agent
and each other Lender promptly after any such set-off and application made by
such Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
SECTION 11. Continuing Guaranty; Assignments under Credit
Agreement. This Guaranty is a continuing guaranty and shall (i) remain in full
force and effect until the later of (x) the payment in full of the Obligations
and all other amounts payable under this Guaranty and (y) the expiration or
termination of the Commitments, (ii) be binding upon the Guarantor, its
successors and assigns, and (iii) inure to the benefit of, and be enforceable
by, the Agent, the Lenders and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing clause (iii), any
Lender may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without limitation, all or
any portion of its Commitment, the Advances owing to it and any Note held by it)
to any other person or entity, and such other person or entity shall thereupon
become vested with all the benefits in respect thereof granted to such Lender
herein or otherwise, subject, however, to the provisions of Section 8.07 of the
Credit Agreement.
SECTION 12. Governing Law. This Guaranty shall be governed by,
and construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
COLGATE-PALMOLIVE COMPANY
By ________________________________________
Title:
EXECUTION COPY
U.S. $ 770,000,000
FIVE YEAR CREDIT AGREEMENT
Dated as of January 8, 1995
Among
COLGATE-PALMOLIVE COMPANY
as Borrower
THE BANKS NAMED HEREIN
as Banks
CITIBANK, N.A.
as Agent
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
as Co-Agent
and
CITICORP SECURITIES, INC.
and
J.P. MORGAN SECURITIES, INC.
as Arrangers
<PAGE>
TABLE OF CONTENTS
1.01. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . 1
1.02. Computation of Time Periods . . . . . . . . . . . . . . . . . 12
1.03. Accounting Terms. . . . . . . . . . . . . . . . . . . . . . . 13
2.01. The A Advances. . . . . . . . . . . . . . . . . . . . . . . . 13
2.02. Making the A Advances . . . . . . . . . . . . . . . . . . . . 13
2.03. The B Advances. . . . . . . . . . . . . . . . . . . . . . . . 15
2.04. Utilization and Facility Fees . . . . . . . . . . . . . . . . 19
2.05. Reduction of the Commitments. . . . . . . . . . . . . . . . . 20
2.06. Repayment of A Advances . . . . . . . . . . . . . . . . . . . 20
2.07. Interest on A Advances. . . . . . . . . . . . . . . . . . . . 20
2.08. Additional Interest on Eurodollar Rate Advances . . . . . . . 21
2.09. Interest Rate Determination . . . . . . . . . . . . . . . . . 22
2.10. Prepayments of A Advances . . . . . . . . . . . . . . . . . . 22
2.11. Increased Costs, Etc. . . . . . . . . . . . . . . . . . . . . 23
2.12. Payments and Computations . . . . . . . . . . . . . . . . . . 24
2.13. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.14. Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . 28
3.01. Condition Precedent to Initial Advances . . . . . . . . . . . 29
3.02. Conditions Precedent to Each A Borrowing. . . . . . . . . . . 29
3.03. Conditions Precedent to Each B Borrowing. . . . . . . . . . . 30
3.04. Determinations Under Section 3.01 . . . . . . . . . . . . . . 31
4.01. Representations and Warranties of the Borrower. . . . . . . . 31
5.01. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . 34
5.02. Negative Covenants. . . . . . . . . . . . . . . . . . . . . . 36
6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . 40
7.01. Authorization and Action . . . . . . . . . . . . . . . . . . . 43
7.02. Agent's Reliance, Etc. . . . . . . . . . . . . . . . . . . . . 43
7.03. Citibank and Affiliates. . . . . . . . . . . . . . . . . . . . 44
7.04. Lender Credit Decision. . . . . . . . . . . . . . . . . . . . 44
7.05. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 44
7.06. Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . 45
8.01. Amendments, Etc . . . . . . . . . . . . . . . . . . . . . . . 45
8.02. Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 46
8.03. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . 46
8.04. Costs, Expenses, Etc. . . . . . . . . . . . . . . . . . . . . 46
8.05. Right of Set-off. . . . . . . . . . . . . . . . . . . . . . . 47
8.06. Binding Effect; Assignment by Borrower. . . . . . . . . . . . 48
8.07. Assignments and Participations. . . . . . . . . . . . . . . . 49
8.08. Change of Control . . . . . . . . . . . . . . . . . . . . . . 51
8.09. Mitigation of Adverse Circumstances . . . . . . . . . . . . . 52
8.10. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 53
8.11. Execution in Counterparts . . . . . . . . . . . . . . . . . . 53
8.12 Jurisdiction, Etc. . . . . . . . . . . . . . . . . . . . . . . 53
8.13. Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . 54
<PAGE>
iv
Exhibit A-1 - Form of A Note
Exhibit A-2 - Form of B Note
Exhibit B-1 - Notice of A Borrowing
Exhibit B-2 - Notice of B Borrowing
Exhibit C - Assignment and Acceptance
Exhibit D - Form of Opinion of Counsel for the Borrower
Exhibit E - Form of Opinion of Counsel to the Agent
Exhibit F - Form of Guaranty
Schedule I - List of Applicable Lending Offices
Schedule 4.01(f) - Disclosed Litigation
<PAGE>
EXECUTION COPY
FIVE YEAR CREDIT AGREEMENT
Dated as of January 8, 1995
COLGATE-PALMOLIVE COMPANY, a Delaware corporation (the
"Borrower"), the banks (the "Banks") listed on the signature pages hereof,
Citibank, N.A., as agent (the "Agent") for the Lenders (as hereinafter defined),
and Morgan Guaranty Trust Company of New York, as co-agent (the "Co-Agent"),
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"A Advance" means an advance by a Lender to the Borrower as part of
an A Borrowing and refers to a Base Rate Advance or a Eurodollar Rate
Advance, each of which shall be a "Type" of A Advance.
"A Borrowing" means a borrowing consisting of simultaneous A Advances
of the same Type and having the same Interest Period made by each of the
Lenders pursuant to Section 2.01.
"A Note" means a promissory note of the Borrower payable to the order
of any Lender, in substantially the form of Exhibit A-1 hereto, evidencing
the aggregate indebtedness of the Borrower to such Lender resulting from
the A Advances made by such Lender.
"Advance" means an A Advance or a B Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person.
"Agent's Account" means the account of the Agent, maintained by the
Agent at Citibank, N.A. with its office at 1 Court Square, 7th Floor, Long
Island City, New York 11120, account no. 36852248, Attention: John
Makrinos.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance, such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance and, in the case of a B Advance, the office of such Lender
notified by such Lender to the Borrower as its Applicable Lending Office
with respect to such B Advance.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Borrower and
the Agent, in substantially the form of Exhibit C hereto.
"B Advance" means an advance by a Lender to the Borrower as part of a
B Borrowing resulting from the auction bidding procedure described in
Section 2.03.
"B Borrowing" means a borrowing consisting of simultaneous B Advances
from each of the Lenders whose offer to make one or more B Advances as
part of such borrowing has been accepted by the Borrower under the auction
bidding procedure described in Section 2.03.
"B Note" means a promissory note of the Borrower payable to the order
of any Lender, in substantially the form of Exhibit A-2 hereto, evidencing
the indebtedness of the Borrower to such Lender resulting from a B Advance
made by such Lender.
"B Reduction" has the meaning specified in Section 2.01.
"Base Rate" means 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 average of the rates of interest announced publicly by
the Reference Banks in New York, New York, from time to time, as
their base or prime rate;
(b) 1/4 of one percent per annum above 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 any such date is not a
Business Day, on the next succeeding Business Day) for the three-week
period ending on the previous Friday by the Reference Banks 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 the
average of the quotations for such rates received by each Reference
Bank from three New York certificate of deposit dealers of recognized
standing selected by it, in either case adjusted to the nearest 1/4
of one percent or, if there is no nearest 1/4 of one percent, to the
next higher 1/4 of one percent; and
(c) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means an A Advance which bears interest as
provided in Section 2.07(a).
"Borrowing" means an A Borrowing or a B Borrowing.
"Borrowing Subsidiary" has the meaning specified in Section 8.06(b).
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings
are carried on in the London interbank market.
"Change of Control" has the meaning specified in Section 8.08(b).
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.
"Commitment" has the meaning specified in Section 2.01.
"Consolidated Net Tangible Assets" means, at any time, the excess of
(a) all assets which appear on the most recent consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries prepared in accordance
with generally accepted accounting principles, after deducting therefrom
the sum of:
(i) the book amount appearing on such consolidated balance
sheet of good will, trademarks, trademark rights, trade names, trade
name rights, copyrights, patents, patent rights, licenses,
unamortized debt discount and expense and other like intangibles;
(ii) any write-up in the book value of any asset resulting from
a revaluation thereof subsequent to December 31, 1993, except
write-ups of assets located outside of the United States of America
pursuant to applicable law or custom;
(iii)all reserves, including reserves for deferred taxes,
depreciation, obsolescence, depletion, insurance and inventory
valuation, but excluding contingency reserves not allocated for any
particular purpose and not deducted from assets;
(iv) the amount, if any, at which any shares of capital stock
of the Borrower appear on the asset side of such consolidated balance
sheet; and
(v) the amount of the minority interest, if any, in the shares
of stock and surplus of any Consolidated Subsidiary;
over (b) all current liabilities of the Borrower and its Consolidated
Subsidiaries on a consolidated basis.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would, in accordance with generally accepted
accounting principles, be included with those of the Borrower in its
consolidated financial statements as of such date.
"Debt" means (i) indebtedness for borrowed money, (ii) obligations
evidenced by bonds, debentures, notes or other similar instruments, (iii)
obligations to pay the deferred purchase price of property or services
(other than accounts payable in the ordinary course of business), (iv)
obligations as lessee under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as
capital leases, and (v) obligations under direct or indirect guaranties in
respect of, and obligations (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds referred to
in clauses (i) through (iv) above.
"Disclosed Litigation" has the meaning specified in Section 4.01(f).
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant
to which it became a Lender, or such other office of such Lender as such
Lender may from time to time specify to the Borrower.
"Domestic Subsidiary" means any Subsidiary a majority of the business
of which is conducted within the United States of America, or a majority
of the properties and assets of which are located within the United States
of America, except (i) any Subsidiary substantially all of the assets of
which consist of the securities of Subsidiaries which are not Domestic
Subsidiaries, (ii) any Subsidiary which is an FSC as defined in Section
922 of the Code and (iii) any Subsidiary for any period during which an
election under Section 936 of the Code applies to such Subsidiary.
"Environmental Action" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of
non-compliance or violation, investigation, proceeding, consent order or
consent agreement relating in any way to any Environmental Law,
Environmental Permit or Hazardous Materials or arising from alleged injury
or threat of injury to the environment including, without limitation, (a)
by any governmental or regulatory authority for enforcement, cleanup,
removal, response, remedial or other actions or damages and (b) by any
governmental or regulatory authority or any third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment, decree
or judicial or agency interpretation, policy or guidance relating to the
environment or Hazardous Materials and applicable to the Borrower or its
Subsidiaries or any property owned or operated by the Borrower or its
Subsidiaries under the laws of the jurisdiction where the Borrower or such
Subsidiary or property is located.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the Borrower's controlled group, or under common
control with the Borrower, within the meaning of Section 414 of the
Internal Revenue Code.
"ERISA Event" means (a) the occurrence of a reportable event, within
the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by
the PBGC; (b) the provision by the administrator of any Plan of a notice
of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA); (c) the cessation of operations at a facility
of the Borrower or any of its ERISA Affiliates in the circumstances
described in Section 4062(e) of ERISA; (d) the withdrawal by the Borrower
or any of its ERISA Affiliates from a Multiple Employer Plan during a plan
year for which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (e) the failure by the Borrower or any of its ERISA
Affiliates to make a payment to a Plan if the conditions for imposition of
a lien under Section 302(f)(1) of ERISA are satisfied; (f) the adoption of
an amendment to a Plan requiring the provision of security to such Plan,
pursuant to Section 307 of ERISA; or (g) the institution by the PBGC of
proceedings to terminate a Plan, pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA
that could constitute grounds for the termination of, or the appointment
of a trustee to administer, a Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender (or, if no such office is specified,
its Domestic Lending Office), or such other office of such Lender as such
Lender may from time to time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing, an interest rate per
annum equal to the average (rounded upward to the nearest whole multiple
of 1/16 of 1% per annum, if such average is not such a multiple) of the
rate per annum at which deposits in U.S. dollars are offered by the
principal office of each of the Reference Banks in London, England to
prime banks in the London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
substantially equal to such Reference Bank's Eurodollar Rate Advance
comprising part of such Borrowing (or, if such Borrowing is a B Borrowing,
equal to $1,000,000) and for a period equal to such Interest Period. The
Eurodollar Rate for the Interest Period for each Eurodollar Rate Advance
comprising part of the same Borrowing shall be determined by the Agent on
the basis of applicable rates furnished to and received by the Agent from
the Reference Banks two Business Days before the first day of such
Interest Period, subject, however, to the provisions of Section 2.09.
"Eurodollar Rate Advance" means an A Advance which bears interest as
provided in Section 2.07(c) or a B Advance which bears interest as
provided in Section 2.03(h) for a Quoted Margin Advance.
"Eurodollar Rate Reserve Percentage" of any Lender for the Interest
Period for any Eurodollar Rate Advance means the reserve percentage
applicable during such Interest Period (or if more than one such
percentage shall be so applicable, the daily average of such percentages
for those days in such Interest Period during which any such percentage
shall be so applicable) under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for such Lender with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term equal to
such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by
each Reference Bank from three Federal funds brokers of recognized
standing selected by it.
"Guaranty" has the meaning specified in Section 8.06(b).
"Hazardous Materials" means petroleum and petroleum products,
byproducts or breakdown products, radioactive materials,
asbestos-containing materials, radon gas and any other chemicals,
materials or substances designated, classified or regulated as being
"hazardous" or "toxic," or words of similar import, under any federal,
state, local or foreign statute, law, ordinance, rule, regulation, code,
order, judgment, decree or agency interpretation, policy or guidance and
applicable to the Borrower or its Subsidiaries or any property owned or
operated by the Borrower or its Subsidiaries under the laws of the
jurisdiction where the Borrower or such Subsidiary or property is located.
"Insufficiency" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
"Interest Period" means, for each Advance (other than a Base Rate
Advance) comprising part of the same Borrowing, the period commencing on
the date of such Advance and ending on the last day of the period selected
by the Borrower pursuant to the provisions below. The duration of each
such Interest Period shall be 1, 2, 3 or 6 months in the case of a
Eurodollar Rate Advance, or in the case of a B Advance, such period as the
Borrower may select by notice received by the Agent not later than 11:00
A.M. (New York City time) on the third Business Day prior to the first day
of such Interest Period; provided, however, that:
(i) the Borrower may not select any Interest Period which ends
after the Termination Date;
(ii) Interest Periods commencing on the same date for Advances
comprising part of the same Borrowing shall be of the same duration;
(iii)whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, in the case of any Interest Period
for a Eurodollar Rate Advance, that if such extension would cause the
last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day; and
(iv) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Lenders" means the Banks listed on the signature pages hereof and
each assignee that shall become a party hereto pursuant to Section 8.07 or
Section 2.11(c).
"Lien" means any mortgage, lien, pledge, security interest,
encumbrance or charge of any kind, any conditional sale or other title
retention agreement or any lease in the nature thereof, provided that the
term "Lien" shall not include any lease involved in a Sale and Leaseback
Transaction.
"Major Domestic Manufacturing Property" means any Principal Domestic
Manufacturing Property the net depreciated book value of which on the date
as of which the determination is made exceeds 2.5% of Consolidated Net
Tangible Assets.
"Material Adverse Change" means any material adverse change in the
business, condition or operations of the Borrower and its Consolidated
Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on the
business, condition or operations of the Borrower and its Consolidated
Subsidiaries taken as a whole.
"Moody's" means Moody's Investors Service, Inc. or any successor to
its business of rating long-term debt.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any of its ERISA
Affiliates is making or accruing an obligation to make contributions, or
has within any of the preceding three plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any of its ERISA Affiliates and at least one Person other than
the Borrower and its ERISA Affiliates or (b) was so maintained and in
respect of which the Borrower or any of its ERISA Affiliates could have
liability under Section 4064 or 4069 of ERISA in the event such plan has
been or were to be terminated.
"Note" means an A Note or a B Note.
"Notice of A Borrowing" has the meaning specified in Section 2.02(a).
"Notice of B Borrowing" has the meaning specified in Section 2.03(b).
"Offer" has the meaning specified in Section 2.03(c).
"Operating Cash Flow" of the Borrower and its Subsidiaries for any
period means (A) net income for such period plus (B) the sum of all
non-cash expenses and charges deducted in arriving at net income for such
period, including but not limited to allowances for depreciation and
amortization and accruals for interest and taxes to the extent that they
exceed payments for interest and taxes during the period, less (C) (i) all
payments of interest and taxes during the period to the extent that they
exceed accruals for interest and taxes for the period and (ii) other
payments of expenses not deducted in arriving at net income for the period
and (D) less net gains or plus net losses from the sale or other
disposition of fixed assets or businesses for the period, to the extent
they were included in computing net income for the period, but the
Borrower may exclude from the computation under this clause (D) any gains
from the sale of certain parcels of real estate in New Jersey pursuant to
its present program to develop and sell them over a period of years;
provided that the aggregate number of parcels in the program shall not
exceed 35.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture or other entity, or a government or any political
subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Principal Domestic Manufacturing Property" means any building,
structure or facility (including the land on which it is located and the
improvements and fixtures constituting a part thereof) used primarily for
manufacturing or processing which is owned or leased by the Borrower or
any of its Subsidiaries, is located in the United States of America and
the net depreciated book value of which on the date as of which the
determination is made exceeds 1% of Consolidated Net Tangible Assets,
except any such building, structure or facility which the Board of
Directors of the Borrower by resolution declares is not of material
importance to the total business conducted by the Borrower and its
Subsidiaries as an entirety.
"Principal Domestic Subsidiary" means (i) each Subsidiary which owns
or leases a Principal Domestic Manufacturing Property, (ii) each Domestic
Subsidiary the consolidated net worth of which exceeds 2.5% of
Consolidated Net Tangible Assets (as set forth in the most recent
financial statements referred to in Section 4.01(e) or delivered pursuant
to Section 5.01(e)(i) or (ii)), and (iii) each Domestic Subsidiary of each
Subsidiary referred to in the foregoing clause (i) or (ii) except any such
Subsidiary the accounts receivable and inventories of which have an
aggregate net book value of less than $5,000,000.
"Quoted Margin", "Quoted Margin Advance", "Quoted Rate" and "Quoted
Rate Advance" shall have the respective meanings specified in Section
2.03(b).
"Reference Banks" means Citibank, N.A. and Morgan Guaranty Trust
Company of New York.
"Register" has the meaning specified in Section 8.07(c).
"Rentals" with respect to any lease and for any period means the
aggregate amounts payable by the lessee pursuant to the terms of the lease
for such period, whether or not referred to as rent. Whenever it is
necessary to determine the amount of Rentals for any period in the future
and to the extent that such Rentals are not definitely determinable by the
terms of the lease, for the purpose of this definition such Rentals may be
estimated in such reasonable manner as the Borrower may determine.
"Required Lenders" means at any time Lenders holding at least 66-2/3%
of the then aggregate unpaid principal amount of the A Notes held by
Lenders, or, if no such principal amount is then outstanding, Lenders
having at least 66-2/3% of the Commitments (provided that, for purposes
hereof, neither the Borrower, nor any of its Affiliates, if a Lender,
shall be included in (i) the Lenders holding such amount of the A Advances
or having such amount of the Commitments or (ii) determining the aggregate
unpaid principal amount of the A Advances or the total Commitments).
"Restricted Property" means and includes (i) all Principal Domestic
Manufacturing Properties, (ii) all Securities of all Principal Domestic
Subsidiaries, and (iii) all inventories and accounts receivable of the
Borrower and its Principal Domestic Subsidiaries.
"S&P" means Standard & Poor's Corporation or any successor to its
business of rating long-term debt.
"Sale and Leaseback Debt" of any Person means, at the date of
determination thereof, the aggregate amount of Rentals required to be paid
by such Person under all Sale and Leaseback Transactions to which such
Person is a party during the respective remaining terms thereof (after
giving effect to any renewals and extensions at the option of the lessor)
discounted from the respective dates of payment of such Rentals to such
date of determination at the actual interest factor included in such
Rentals or, if such interest factor cannot be readily determined, at an
interest factor calculated in such manner as the Borrower shall reasonably
determine; provided, however, that if any portion of the net proceeds of
the sale of the property leased pursuant to a Sale and Leaseback
Transaction has been or is being applied as provided in Section
5.02(b)(ii) and/or Section 5.02(b)(iii), there shall be excluded in
determining Sale and Leaseback Debt that portion of the discounted Rentals
required to be paid under such Sale and Leaseback Transaction which bears
the same ratio to the total discounted Rentals required to be paid under
such Sale and Leaseback Transaction as the portion of such net proceeds
which has been or is being applied as provided in Section 5.02(b)(ii)
and/or Section 5.02(b)(iii) bears to the total amount of such net
proceeds.
"Sale and Leaseback Transaction" means any arrangement directly or
indirectly providing for the leasing by the Borrower or any Principal
Domestic Subsidiary for a period in excess of three years of any Principal
Domestic Manufacturing Property which was sold or transferred by the
Borrower or any Principal Domestic Subsidiary more than 120 days after the
acquisition thereof or the completion of construction thereof, except any
such arrangement solely between the Borrower and a Principal Domestic
Subsidiary or solely between Principal Domestic Subsidiaries.
"Securities" of any corporation means and includes (i) all capital
stock of all classes of and all other equity interests in such corporation
and all rights, options or warrants to acquire the same, and (ii) all
promissory notes, debentures, bonds and other evidences of Debt of such
corporation.
"Senior Funded Debt" of any Person means, as of the date of
determination thereof, all Debt of such Person which (i) matures by its
terms more than one year after the date as of which such determination is
made (including any such Debt which is renewable or extendable, or in
effect renewable or extendable through the operation of a revolving credit
agreement or other similar agreement, at the option of such Person for a
period or periods ending more than one year after the date as of which
such determination is made), and (ii) is not, by the terms of any
instrument or instruments evidencing or securing such Debt or pursuant to
which such Debt is outstanding, expressly subordinated in right of payment
to any other Debt of such Person.
"Significant Subsidiary" means (x) each Subsidiary which is a
Principal Domestic Subsidiary by operation of clause (i), (ii) or (iii) of
the definition of Principal Domestic Subsidiary, and (y) each other
Subsidiary whose assets as at the end of the fiscal year immediately
preceding the time of determination exceeded 2% of consolidated assets of
the Borrower and its Subsidiaries as at the end of such fiscal year.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any of its ERISA Affiliates and no Person other than the
Borrower and its ERISA Affiliates or (b) was so maintained and in respect
of which the Borrower or any of its ERISA Affiliates could have liability
under Section 4069 of ERISA in the event such plan has been or were to be
terminated.
"Subsidiary" means any corporation of which more than 50% of the
outstanding capital stock having ordinary voting power to elect a majority
of the Board of Directors of such corporation (irrespective of whether or
not at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by the Borrower,
by the Borrower and one or more other Subsidiaries, or by one or more
other Subsidiaries.
"Termination Date" means the earlier of (a) January 31, 2000 and (b)
the date of termination in whole of the Commitments pursuant to Section
2.05 or 6.01.
"Withdrawal Liability" shall have the meaning given such term under
Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(e).
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The A Advances. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make A Advances to the Borrower
or a Borrowing Subsidiary from time to time on any Business Day during the
period from the date hereof until the Termination Date in an aggregate amount
not to exceed at any time outstanding the amount set opposite such Lender's name
on the signature pages hereof or, if such Lender has entered into any Assignment
and Acceptance, set forth for such Lender in the Register maintained by the
Agent pursuant to Section 8.07(c), as such amount may be reduced pursuant to
Section 2.05 (such Lender's "Commitment"), provided that the aggregate amount of
the Commitments of the Lenders shall be deemed used from time to time to the
extent of the aggregate amount of the B Advances then outstanding and such
deemed use of the aggregate amount of the Commitments shall be applied to the
Lenders ratably according to their respective Commitments (such deemed use of
the aggregate amount of the Commitments being a "B Reduction"). Each A Borrowing
shall be in an aggregate amount not less than $25,000,000 or an integral
multiple of $5,000,000 in excess thereof (unless the aggregate amount of the
unused Commitments is less than $25,000,000, in which case such Borrowing shall
be equal to the aggregate amount of the unused Commitments) and shall consist of
A Advances of the same Type and having the same Interest Period made on the same
day by the Lenders ratably according to their respective Commitments. Within the
limits of each Lender's Commitment, the Borrower may from time to time borrow,
repay pursuant to Section 2.06 or prepay pursuant to Section 2.10 or 2.11(b) and
reborrow under this Section 2.01.
SECTION 2.02. Making the A Advances. (a) Each A Borrowing shall be
made on notice given by the Borrower or a Borrowing Subsidiary, as the case may
be, and received by the Agent, which shall give prompt notice thereof to each
Lender by telecopier or telex, not later than 11:00 A.M. (New York City time) on
the third Business Day prior to the date of the proposed A Borrowing in the case
of Eurodollar Rate Advances, or the same Business Day in the case of Base Rate
Advances. Each such notice of an A Borrowing (a "Notice of A Borrowing") shall
be given by telecopier, telex or cable, confirmed immediately by hand or by
mail, in substantially the form of Exhibit B-1 hereto, specifying therein the
requested (i) date of such A Borrowing, (ii) Type of A Advances comprising such
A Borrowing, (iii) aggregate amount of such A Borrowing, and (iv) in the case of
an A Borrowing comprised of Eurodollar Rate Advances, the Interest Period for
each such A Advance. Upon fulfillment of the applicable conditions set forth in
Article III, each Lender shall, before 12:00 noon (New York City time) on the
date of such A Borrowing, make available for the account of its Applicable
Lending Office to the Agent at the Agent's Account, in immediately available
funds, such Lender's ratable portion of such A Borrowing. After the Agent's
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article III, the Agent will promptly make such funds available to the
Borrower at the Agent's address referred to in Section 8.02.
(b) Anything in subsection (a) above to the contrary notwithstanding:
(i) if any Lender shall, at least one Business Day before the date of
any requested Borrowing, notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it
unlawful, or that any central bank or other governmental authority asserts
that it is unlawful, for such Lender or its Eurodollar Lending Office to
perform its obligations hereunder to make Eurodollar Rate Advances or to
fund or maintain Eurodollar Rate Advances hereunder, the Agent shall
immediately notify the Borrower and each other Lender and the right of the
Borrower and any Borrowing Subsidiary to select Eurodollar Rate Advances
for the portion of such Borrowing advanced by the Lender which has
provided the notice described above or the portion of any subsequent
Borrowing advanced by such Lender shall be suspended until such Lender
shall notify the Agent and the Agent will notify the Borrower that the
circumstances causing such suspension no longer exist, and each such
Advance shall be a Base Rate Advance;
(ii) if no Reference Bank furnishes timely information to the Agent
for determining the Eurodollar Rate for any Eurodollar Rate Advances
comprising any requested Borrowing, theAgent shall immediately notify each
Lender and the Borrower and the right of the Borrower and any Borrowing
Subsidiary to select Eurodollar Rate Advances for such Borrowing or any
subsequent Borrowing shall be suspended until the Agent shall notify the
Lenders and the Borrower that the circumstances causing such suspension no
longer exist, and each Advance comprising such Borrowing shall be a Base
Rate Advance; and
(iii) if the Required Lenders shall, at least one Business Day before
the date of any requested Borrowing, notify the Agent that the Eurodollar
Rate for Eurodollar Rate Advances comprising such Borrowing will not
adequately reflect the cost to such Required Lenders of making, funding or
maintaining their respective Eurodollar Rate Advances for such Borrowing,
the Agent shall immediately notify the Borrower and each other Lender and
the right of the Borrower and any Borrowing Subsidiary to select
Eurodollar Rate Advances for such Borrowing or any subsequent Borrowing
shall be suspended, and each Advance comprising such Borrowing shall be a
Base Rate Advance. The Lenders will review regularly the circumstances
causing such suspension, and as soon as such circumstances no longer exist
the Required Lenders will notify Agent and the Agent shall notify the
Borrower that such suspension is terminated.
(c) Each Notice of A Borrowing shall be irrevocable and binding on
the Borrower or Borrowing Subsidiary, as the case may be. In the case of any A
Borrowing that the related Notice of A Borrowing specifies is to be comprised of
Eurodollar Rate Advances, the Borrower or Borrowing Subsidiary, as the case may
be, shall indemnify each Lender against any loss, cost or expense incurred by
such Lender as a result of any failure to fulfill on or before the date
specified in such Notice of A Borrowing for such A Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss
(excluding in any event loss of anticipated profits), cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds acquired
by such Lender to fund the A Advance to be made by such Lender as part of such A
Borrowing when such A Advance, as a result of such failure, is not made on such
date.
(d) Unless the Agent shall have received notice from a Lender prior
to the date of any A Borrowing that such Lender will not make available to the
Agent such Lender's ratable portion of such A Borrowing, the Agent may assume
that such Lender has made such portion available to the Agent on the date of
such A Borrowing in accordance with subsection (a) of this Section 2.02 and the
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Lender shall
not have so made such ratable portion available to the Agent, such Lender and
the Borrower severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, the interest rate
applicable at the time to A Advances comprising such A Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender shall repay to the
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's A Advance as part of such A Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the A Advance to be made by it
as part of any A Borrowing shall not relieve any other Lender of its obligation,
if any, hereunder to make its A Advance on the date of such A Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the A
Advance to be made by such other Lender on the date of any A Borrowing.
SECTION 2.03. The B Advances. (a) Each Lender severally agrees that
the Borrower or a Borrowing Subsidiary, as the case may be, may request B
Borrowings under this Section 2.03 from time to time on any Business Day during
the period from the date hereof until the date occurring one week prior to the
Termination Date, in the manner set forth below; provided that, following the
making of each B Borrowing, the aggregate amount of the Advances then
outstanding shall not exceed the aggregate amount of the Commitments of the
Lenders (computed without regard to any B Reduction).
(b) The Borrower or a Borrowing Subsidiary, as the case may be, may
request a B Borrowing under this Section 2.03 by delivering to the Agent, by
telecopier, telex or cable, confirmed immediately by hand or by mail, a notice
of a B Borrowing (a "Notice of B Borrowing"), in substantially the form of
Exhibit B-2 hereto, specifying:
(i) the date and aggregate amount of the proposed B Borrowing (which
shall not be less than $25,000,000 or an integral multiple of $5,000,000
in excess thereof; provided that if the aggregate amount of the unused
Commitments is less than $25,000,000, the amount of such proposed
Borrowing shall be equal to the aggregate amount of the unused
Commitments),
(ii) whether each Lender should quote (x) a rate of interest (a
"Quoted Rate") to be the entire rate applicable to the proposed B Advance
(a "Quoted Rate Advance") or (y) a marginal per annum rate (a "Quoted
Margin") to be added to the Eurodollar Rate for an Interest Period equal
to the term of the proposed B Borrowing (a "Quoted Margin Advance"),
(iii) the maturity date for repayment of each B Advance to be made as
part of such B Borrowing (which maturity date may not be earlier than the
date occurring one week after the date of such B Borrowing and may not be
later than the Termination Date),
(iv) the interest payment date or dates relating thereto, and
(v) any other terms to be applicable to such B Borrowing,
not later than 10:00 A.M. (New York City time) (A) at least one Business Day
prior to the date of the proposed B Borrowing, in the case of a Quoted Rate
Advance and (B) at least five Business Days prior to the date of the proposed B
Borrowing, in the case of a Quoted Margin Advance. The Agent shall in turn
promptly notify each Lender of each request for a B Borrowing received by it
from the Borrower or a Borrowing Subsidiary, as the case may be, by sending such
Lender a copy of the related Notice of B Borrowing.
(c) Each Lender may, if, in its sole discretion, it elects to do so,
irrevocably offer to make one or more B Advances to the Borrower or Borrowing
Subsidiary, as the case may be, as part of such proposed B Borrowing at a rate
or rates of interest specified by such Lender in its sole discretion, by
delivering written notice (an "Offer") to the Agent (which shall give prompt
notice thereof to the Borrower or Borrowing Subsidiary, as the case may be)
before 9:30 A.M. (New York City time) on the date of such proposed B Borrowing,
in the case of a Quoted Rate Advance and before 10:00 A.M. (New York City time)
three Business Days before the date of such proposed B Borrowing, in the case of
a Quoted Margin Advance, specifying (x) the minimum amount and maximum amount of
each B Advance which such Lender would be willing to make as part of such
proposed B Borrowing (which amounts may, subject to the proviso to Section
2.03(a), exceed such Lender's Commitment, if any), (y) a Quoted Rate or a Quoted
Margin therefor (as requested by the Notice of B Borrowing) and (z) such
Lender's Applicable Lending Office with respect to such B Advance; provided that
if the Agent in its capacity as a Lender shall, in its sole discretion, elect to
make any such Offer, it shall notify the Borrower of such Offer at least 30
minutes before the time and on the date on which notice of such election is to
be given to the Agent by the other Lenders. If any Lender shall elect not to
make an Offer, such Lender shall so notify the Agent before the time and on the
date on which notice of such election is to be given to the Agent by the other
Lenders, and such Lender shall not be obligated to, and shall not, make any B
Advance as part of such B Borrowing; provided that the failure by any Lender to
give such notice shall not cause such Lender to be obligated to make any B
Advance as part of such proposed B Borrowing.
(d) The Borrower or Borrowing Subsidiary, as the case may be, shall,
in turn, (A) before 10:30 A.M. (New York City time) on the date of such proposed
B Borrowing, in the case of a Quoted Rate Advance and (B) before 11:00 A.M. (New
York City time) three Business Days before the date of such proposed B
Borrowing, in the case of a Quoted Margin Advance, either
(i) cancel such B Borrowing by giving the Agent notice to that
effect, and such B Borrowing shall not be made, or
(ii) accept one or more of the Offers made by any Lender or Lenders
pursuant to paragraph (c) above, in its sole discretion, by giving notice
to the Agent of the amount of each B Advance to be made by each Lender as
part of such B Borrowing (which amount shall be equal to or greater than
the minimum amount, and equal to or less than the maximum amount, offered
to the Borrower or Borrowing Subsidiary, as the case may be, by the Agent
on behalf of such Lender for such B Advance in such Lender's notice given
pursuant to subsection (c) above), and such notice shall reject any
remaining Offers made by Lenders pursuant to subsection (c) above,
provided that (x) the Borrower or Borrowing Subsidiary, as the case may
be, shall not accept Offers for an aggregate principal amount of B
Advances in excess of the aggregate principal amount stated in the Notice
of B Borrowing, (y) the Borrower or Borrowing Subsidiary, as the case may
be, shall not accept any Offer unless all Offers specifying a lower Quoted
Rate or Quoted Margin, as the case may be, are also accepted, and (z) if
all Offers specifying the same Quoted Rate or Quoted Margin, as the case
may be, are not accepted in full, the Borrower or Borrowing Subsidiary, as
the case may be, shall apportion its acceptances among such Offers in
proportion to the respective principal amounts of such Offers (rounded,
where necessary, to the nearest $1,000,000).
(iii) If the Borrower notifies the Agent that such B Borrowing is
cancelled pursuant to paragraph (d)(i) above, the Agent shall give prompt
notice thereof to the Lenders and such B Borrowing shall not be made.
(e) If the Borrower accepts one or more of the Offers, the Agent
shall in turn promptly (but in any event, not later than 11:30 A.M. on such
date) notify (A) each Lender that has made an Offer, of the date and aggregate
amount of such B Borrowing and whether or not any Offer made by such Lender has
been accepted by the Borrower, (B) each Lender that is to make a B Advance as
part of such B Borrowing, of the amount of each B Advance to be made by such
Lender as part of such B Borrowing, and (C) each Lender that is to make a B
Advance as part of such B Borrowing, upon receipt, that the Agent has received
forms of documents appearing to fulfill the applicable conditions set forth in
Article III. Each Lender that is to make a B Advance as part of such B Borrowing
shall, before 12:00 noon (New York City time) on the date of such B Borrowing
specified in the notice received from the Agent pursuant to clause (A) of the
preceding sentence or any later time when such Lender shall have received notice
from the Agent pursuant to clause (C) of the preceding sentence, make available
for the account of its Applicable Lending Office to the Agent at the Agent's
Account, in immediately available funds, such Lender's portion of such B
Borrowing. Upon fulfillment of the applicable conditions set forth in Article
III and after receipt by the Agent of such funds, the Agent will make such funds
promptly available to the Borrower at the Agent's address referred to in Section
8.02. Promptly after each B Borrowing the Agent will notify each Lender of the
amount of the B Borrowing, the consequent B Reduction and the dates upon which
such B Reduction commenced and will terminate.
(f) If the Borrower notifies the Agent that it accepts one or more of
the Offers made by any Lender or Lenders pursuant to paragraph (d)(ii) above,
such notice of acceptance shall be irrevocable and binding on the Borrower. The
Borrower shall indemnify each Lender against any loss, cost or expense incurred
by such Lender as a result of any failure to fulfill on or before the date
specified in the related Notice of B Borrowing for such B Borrowing the
applicable conditions set forth in Article III, including, without limitation,
any loss (excluding in any event loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the B Advance to be made by such Lender as part
of such B Borrowing when such B Advance, as a result of such failure, is not
made on such date.
(g) Within the limits and on the conditions set forth in this Section
2.03, the Borrower may from time to time borrow under this Section 2.03, repay
or prepay pursuant to subsection (h) below, and reborrow under this Section
2.03, provided that a B Borrowing shall not be made within three Business Days
of the date of any other B Borrowing.
(h) The Borrower shall repay to the Agent for the account of each
Lender that has made a B Advance, or for the account of each other holder of a B
Note, on the maturity date of such B Advance (such maturity date being that
specified by the Borrower for repayment of such B Advance in the related Notice
of B Borrowing and provided in the B Note evidencing such B Advance), the then
unpaid principal amount of such B Advance. The Borrower shall have no right to
prepay any principal amount of any B Advance.
(i) The Borrower shall pay interest on the unpaid principal amount of
each B Advance from the date of such B Advance to the date the principal amount
of such B Advance is repaid in full, at (x) the Quoted Rate, in the case of a
Quoted Rate Advance, and (y) at the sum of the Eurodollar Rate for the Interest
Period of such B Advance plus the Quoted Margin, in the case of a Quoted Margin
Advance, in each case as specified for such B Advance by the Lender making such
B Advance in its Offer with respect thereto, payable on the interest payment
date or dates specified by the Borrower for such B Advance in the related Notice
of B Borrowing and set forth in the B Note evidencing such B Advance.
(j) The indebtedness of the Borrower resulting from each B Advance
made to the Borrower as part of a B Borrowing shall be evidenced by a separate B
Note of the Borrower payable to the order of the Lender making such B Advance.
(k) Upon delivery of each Notice of B Borrowing, the Borrower shall
pay a non-refundable fee to the Agent for its own account in such amount as
shall have been agreed to in writing by the Borrower and the Agent.
SECTION 2.04. Utilization and Facility Fees. (a) The Borrower agrees
to pay to the Agent for the account of each Lender (i) a utilization fee on the
average daily amount of such Lender's Commitment (whether or not used) and (ii)
a facility fee on the average daily amount of such Lender's Commitment (whether
or not used), each accruing from the date on which this Agreement becomes fully
executed in the case of each Bank and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender in the case of
each other Lender until the Termination Date, payable on the last day of each
March, June, September and December during the term of such Lender's Commitment,
commencing March 31, 1995, and on the Termination Date, computed from time to
time at the rates per annum set forth below under the headings Utilization Fee
and Facility Fee, respectively, opposite the lower of the ratings then
applicable to the Borrower's long-term senior debt as published by S&P and
Moody's:
<PAGE>
Utilization Facility
Moody's S&P Fee Fee
A3 or above and A- or above 0.000 % 0.125 %
Baa2 or above and BBB or above 0.070 % 0.175 %
Lower than above or not rated 0.150 % 0.250 %
provided, however, that the utilization fee shall be payable only with respect
to days on which the sum of the average daily unpaid principal amount of all
Advances hereunder is in excess of fifty percent of the average daily amount of
the sum of the Commitments hereunder.
(b) Agent's Fees. The Borrower shall pay to the Agent for its own
account such fees as may from time to time be agreed between the Borrower and
the Agent.
SECTION 2.05. Reduction of the Commitments. The Borrower shall have
the right, upon at least three Business Days' notice to the Agent, to terminate
in whole all of the Commitments or reduce ratably in part the unused portions of
the respective Commitments of the Lenders, provided that the aggregate amount of
the Commitments of the Lenders shall not be reduced to an amount which is less
than the aggregate principal amount of the Advances then outstanding, and
provided further that each partial reduction (other than a reduction pursuant to
Section 2.11) shall be in the aggregate amount of $25,000,000 or an integral
multiple thereof.
SECTION 2.06. Repayment of A Advances. The Borrower or Borrowing
Subsidiary, as the case may be, shall repay to the Agent for the ratable account
of the Lenders (a) on the Termination Date the unpaid principal amount of each
Base Rate Advance made to the Borrower or Borrowing Subsidiary, as the case may
be, and (b) on the last day of the Interest Period for each other A Advance made
to the Borrower or Borrowing Subsidiary, as the case may be, the unpaid
principal amount of such A Advance.
SECTION 2.07. Interest on A Advances. The Borrower or Borrowing
Subsidiary, as the case may be, shall pay interest on the unpaid principal
amount of each A Advance made by each Lender to the Borrower or Borrowing
Subsidiary, as the case may be, from the date of such A Advance until such
principal amount shall be paid in full, at the following rates per annum:
(a) Base Rate Advances. If such A Advance is a Base Rate Advance, a
rate per annum equal at all times to the Base Rate in effect from time to
time, payable quarterly on the last day of each March, June, September,
and December during such period and on the date such Base Rate Advance
shall be paid in full; provided that any amount of principal which is not
paid when due (whether at stated maturity, by acceleration or otherwise)
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 at
all times to 1% per annum above the Base Rate in effect from time to time.
(b) Eurodollar Rate Advances. If such A Advance is a Eurodollar Rate
Advance, a rate per annum equal during the Interest Period for such A
Advance to the sum of the Eurodollar Rate for such Interest Period plus
the per annum rate equal from time to time to the rate set forth below
opposite the lower of the ratings then applicable to the Borrower's
long-term senior debt as published by S&P and Moody's:
Moody's S&P Rate
A3 or above A- or above 0.200 %
Baa2 BBB 0.225 %
Lower than above or not rated 0.300 %
payable on the last day of such Interest Period and, if such Interest
Period has a duration of more than three months, on each day which occurs
during such Interest Period every three months from the first day of such
Interest Period; provided that any amount of principal which is not paid
when due (whether at stated maturity, by acceleration or otherwise) 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 (x) until
the end of the then current Interest Period, 1% per annum above the rate
per annum required to be paid on such A Advance immediately prior to the
date on which such amount became due, and (y) thereafter, 1% per annum
above the Base Rate in effect from time to time.
SECTION 2.08. Additional Interest on Eurodollar Rate Advances. The
Borrower or Borrowing Subsidiary, as the case may be, shall pay to each Lender,
so long as such Lender shall be required under regulations of the Board of
Governors of the Federal Reserve System to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
additional interest on the unpaid principal amount of each Eurodollar Rate
Advance of such Lender to the Borrower or Borrowing Subsidiary, as the case may
be, from the date of such Advance until such principal amount is paid in full,
at an interest rate per annum equal at all times to the remainder obtained by
subtracting (i) the Eurodollar Rate for the Interest Period for such Advance
from (ii) the rate obtained by dividing such Eurodollar Rate by a percentage
equal to 100% minus the Eurodollar Rate Reserve Percentage of such Lender for
such Interest Period, payable on each date on which interest is payable on such
Advance. Such additional interest shall be determined by such Lender and the
Borrower or Borrowing Subsidiary, as the case may be, shall be notified of such
additional interest.
SECTION 2.09. Interest Rate Determination. (a) Each Reference Bank
agrees to furnish to the Agent timely information for the purpose of determining
the Base Rate from time to time in effect and each Eurodollar Rate, as
applicable.
(b) The Agent shall give prompt notice to the Borrower or Borrowing
Subsidiary and the Lenders of the applicable interest rate determined by the
Agent for purposes of Section 2.03(i)(y) or Section 2.07, and the rate, if any,
furnished by the Reference Banks for the purpose of determining the interest
rate.
(c) If no Reference Bank furnishes timely information to the Agent for
determining the Base Rate in effect from time to time when Base Rate Advances
are outstanding, the Agent shall immediately give notice to each Lender and the
Required Lenders shall immediately designate an additional Reference Bank for
the purpose of determining the Base Rate, but such designation shall terminate
if a replacement Reference Bank is nominated and approved as provided in the
following sentence. Whenever a Reference Bank either ceases to be a Lender or
repeatedly fails to give timely information to the Agent for determining the
Base Rate or the Eurodollar Rate, the Agent will give prompt notice thereof to
the Lenders and will nominate another Lender to replace such Reference Bank, and
such Lender shall, if approved by the Required Lenders and the Borrower, replace
such Reference Bank.
SECTION 2.10. Prepayments of A Advances. The Borrower or a Borrowing
Subsidiary, as the case may be, may, upon notice to the Agent stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given, or if the Borrower or Borrowing Subsidiary, as the case may be,
is required to prepay any A Advance pursuant to Section 2.11(c) or 5.02(b)(ii)
hereof, the Borrower or Borrowing Subsidiary, as the case may be, shall, prepay
the outstanding principal amounts of the A Advances comprising part of the same
A Borrowing in whole or ratably in part (provided that with regard to
prepayments made pursuant to Section 2.11(c), the Borrower or such Borrowing
Subsidiary shall be required to prepay only the outstanding principal amounts of
the A Advances owing to the Lender or Lenders affected by Section 2.11(c)),
together with accrued interest to the date of such prepayment on the principal
amount prepaid, and the losses, costs and expenses, if any, payable pursuant to
Section 8.04(c). Such notice shall be received by the Agent, not later than
11:00 A.M. (New York City time), on the third Business Day prior to the date of
the proposed prepayment in the case of Eurodollar Rate Advances, or on the
Business Day prior to such date in the case of Base Rate Advances. Except for
prepayments made pursuant to Section 2.11(c) or 5.02(b), each partial prepayment
shall be in an aggregate principal amount not less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, and any partial prepayment of
any Eurodollar Rate Advances shall not leave outstanding less than $25,000,000
aggregate principal amount of such A Advances comprising part of any A
Borrowing.
SECTION 2.11. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change (other than any change by way of imposition or
increase of reserve requirements, in the case of Eurodollar Rate Advances,
included in the Eurodollar Rate Reserve Percentage) in or in the interpretation
of any law or regulation or (ii) the compliance with any guideline or request
from any central bank or other governmental authority (whether or not having the
force of law), there shall be any increase in the costs to any Lender of
agreeing to make or making, funding or maintaining Eurodollar Rate Advances,
then the Borrower shall from time to time, upon demand by such Lender (with a
copy of such demand to the Agent), pay to the Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased costs for a period beginning not more than 90 days prior to such
demand. A certificate as to the amount of such increased cost submitted to the
Borrower and the Agent by such Lender, setting forth in reasonable detail the
calculation of the increased costs, shall be conclusive and binding for all
purposes, absent manifest error.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender which decreases such Lender's
return on its capital (after taking into account any changes in the Eurodollar
Rate and Eurodollar Rate Reserve Percentage) and that the amount of such capital
is increased by or based upon the existence of such Lender's commitment to lend
hereunder and other commitments of this type, then, upon demand by such Lender
(with a copy of such demand to the Agent), the Borrower shall immediately pay to
the Agent for the account of such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender or such
corporation in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder, such compensation to cover a
period beginning not more than 90 days prior to such demand. A certificate as to
such amounts submitted to the Borrower and the Agent by such Lender, setting
forth in reasonable detail the calculation of the amount required to be paid
hereunder, shall be conclusive and binding for all purposes, absent manifest
error.
(c) Within 30 days after the receipt of (A) notice from a Lender as
described in Section 2.02(b)(i), or (B) a demand for compensation from a Lender
under subsection (a) or (b) above, the Borrower may, by at least three Business
Days' notice to the Agent, terminate the Commitment (in whole but not in part)
of any Lender which has provided such notice under Section 2.02(b)(i), or
demanded compensation under subsection (a) or (b) above in an amount (expressed
as a percentage per annum of its unused Commitment) which exceeds the
compensation demanded by the other Lenders, provided that (i) the Borrower shall
first pay to the Agent for the account of such Lender all compensation required
to be paid under subsection (a) or (b) above accrued to the termination date of
such Commitment, (ii) the Borrower shall first prepay all outstanding A Advances
owing to such Lender in accordance with the provisions of Section 2.10 hereof,
(iii) the Borrower shall not terminate the Commitment of any Lender under this
subsection unless it also terminates the Commitment of all other Lenders
providing similar notice to the Agent under Section 2.02(b)(i) or demanding
compensation at a rate equal to or higher than that demanded by such Lender
under subsection (a) or (b) above, and (iv) the Borrower shall not take any
action under this subsection which would reduce the aggregate of the Commitments
below the aggregate of the Advances outstanding. Effective with such
termination, the Borrower may substitute for such Lender one or more other banks
or entities which will assume the Commitment and other obligations hereunder of
such terminated Lender or Lenders, and will become a Lender or Lenders hereunder
upon executing an assumption agreement in form and substance reasonably
satisfactory to the Borrower and the Required Lenders.
SECTION 2.12. Payments and Computations. (a) The Borrower or
Borrowing Subsidiary, as the case may be, shall make each payment hereunder and
under the Notes not later than 11:00 A.M. (New York City time) on the day when
due in U.S. dollars to the Agent at the Agent's Account in immediately available
funds. The Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal or interest or utilization or facility fees
ratably (other than amounts payable pursuant to Section 2.03, 2.11, 2.14, or
8.04(c)) to the Lenders for the account of their respective Applicable Lending
Offices, and like funds relating to payment of any other amount payable to any
Lender to such Lender for the account of its Applicable Lending Office, in each
case to be applied according to the terms of this Agreement. Upon its acceptance
of an Assignment and Acceptance and recording of the information contained
therein in the Register pursuant to Section 8.07(d), from and after the
effective date specified in such Assignment and Acceptance, the Agent shall make
all payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender's assignee thereunder, and the parties to such Assignment
and Acceptance shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(b) Each of the Borrower and any Borrowing Subsidiary hereby
authorizes each Lender, if and to the extent payment owed to such Lender is not
made when due hereunder or under any Note held by such Lender, to charge from
time to time against any or all of the Borrower's or such Borrowing
Subsidiary's, as the case may be, accounts with such Lender any amount so due.
(c) All computations of interest based on clause (a) of the
definition of "Base Rate" shall be made by the Agent on the basis of a year of
365 or 366 days, as the case may be, and all computations of interest based on
the Eurodollar Rate, a Quoted Rate or the Federal Funds Rate and of commitment
fees and facility fees shall be made by the Agent on the basis of a year of 360
days, in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest or fees
are payable. Each determination by the Agent of an interest rate hereunder shall
be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest, commitment fee or facility
fee, as the case may be; provided, however, if such extension would cause
payment of interest on or principal of Eurodollar Rate Advances to be made in
the next following calendar month, such payment shall be made on the next
preceding Business Day.
(e) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the Agent,
each Lender shall repay to the Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate.
(f) The date and amount of each A Advance owing to each Lender, the
date on which it is due, the interest rate applicable thereto and any
prepayments thereof shall be recorded by the Agent in the Register, which shall
be presumptive evidence thereof, whether or not the same is endorsed on the grid
annexed to such Lender's A Note.
SECTION 2.13. Taxes. (a) Subject to subsection (f) below, any and all
payments hereunder or under the A Notes shall be made, in accordance with
Section 2.12, (i) if made by the Borrower, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings of the United States of America or any state thereof or
political subdivision of any of them or any other jurisdiction from or through
which the Borrower elects to make such payment, and all liabilities with respect
thereto, and (ii) if made by a Borrowing Subsidiary, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings of any jurisdiction within which it is
organized or does business or is managed or controlled or has its head or
principal office or from or through which such Borrowing Subsidiary elects to
make such payment, and all liabilities with respect thereto, excluding (w) in
the case of each Lender and the Agent, taxes imposed on its income, and
franchise taxes imposed on it, by any jurisdiction under the laws of which such
Lender or the Agent (as the case may be) is organized or, as to the United
States of America or any state thereof or any political subdivision of any of
them, is doing business or any political subdivision thereof and by the
jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof, (x) in the case of each Lender and the Agent, any income
tax or franchise tax imposed on it by a jurisdiction (except the United States
of America or any state thereof or any political subdivision of any of them) as
a result of a connection between such jurisdiction and such Lender or the Agent
(as the case may be) (other than as a result of such Lender's or the Agent's
having entered into this Agreement, performing hereunder or enforcing this
Agreement), (y) any payment of tax which the Borrower is obliged to make
pursuant to Section 159 of the Income and Corporation Taxes Act 1970 of the
United Kingdom (or any re-enactment or replacement thereof) on behalf of a
Lender which is resident for tax purposes in the United Kingdom but is not
recognized as a bank by H.M. Inland Revenue and (z) Other Taxes as defined in
subsection (b) below, (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrower or any Borrowing Subsidiary shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder or under any A Note to
any Lender or the Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.13) such Lender or
the Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower or such Borrowing
Subsidiary shall make such deductions and (iii) the Borrower or such Borrowing
Subsidiary shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law.
(b) In addition, the Borrower or the Borrowing Subsidiary shall pay
any present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made hereunder or
under the A Notes or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or the A Notes (hereinafter referred
to as "Other Taxes"). Each Bank and the Agent represents that at the date of
this Agreement it is not aware of any Other Taxes applicable to it. Each Lender
and the Agent agrees to notify the Borrower or such Borrowing Subsidiary on
becoming aware of the imposition of any such Other Taxes.
(c) The Borrower or the Borrowing Subsidiary will indemnify each
Lender and the Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.13) paid by such Lender or the Agent (as
the case may be) and any liability (including penalties, interest and expenses
not attributable to acts or omissions of any party other than the Borrower or
such Borrowing Subsidiary) arising therefrom or with respect thereto. This
indemnification shall be paid within 30 days from the date such Lender or the
Agent (as the case may be) makes written demand therefor.
(d) As soon as practicable after the date of any payment of Taxes
(other than Taxes of the United States of America or any state thereof or
political subdivision of any of them), the Borrower or the Borrowing Subsidiary
will furnish to the Agent, at its address referred to in Section 8.02, the
original or a certified copy of a receipt evidencing payment thereof (if any
such receipt is reasonably available), other evidence of such payment or, if
neither a receipt nor other evidence is available, a statement by the Borrower
or such Borrowing Subsidiary confirming payment thereof. If no such Taxes are
payable in respect of any payment hereunder or under the A Notes, the Borrower
or such Borrowing Subsidiary will at the request of a Lender or the Agent
furnish to the Agent, an opinion of counsel for the Borrower or such Borrowing
Subsidiary stating that such payment is exempt from or not subject to Taxes.
(e) Each Lender and the Agent will, from time to time as requested by
the Borrower or the Borrowing Subsidiary in writing, provide the Borrower or the
Borrowing Subsidiary with any applicable forms, completed and signed, that may
be required by the tax authority of a jurisdiction in order to certify such
Lender's or the Agent's exemption from or applicable reduction in any applicable
Taxes of such jurisdiction with respect to any and all payments that are subject
to such an exemption or reduction to be made to such Lender or the Agent
hereunder and under the A Notes, if the Lender or the Agent is entitled to such
an exemption or reduction.
(f) Notwithstanding anything contained herein to the contrary, the
Borrower or the Borrowing Subsidiary shall not be required to pay any additional
amounts pursuant to this Section on account of any Taxes of, or imposed by, the
United States, to any Lender or the Agent (as the case may be) which is not
entitled on the date on which it signed this Agreement (or, in the case of an
assignee of a Lender, on the date on which the assignment to it became
effective), to submit Form 1001 or Form 4224 or a certification that it is a
corporation or other entity organized in or under the laws of the United States
or a state thereof, so as to establish a complete exemption from such Taxes with
respect to all payments hereunder and under the A Notes. If as a result of an
erroneous certification made by a Lender or the Agent the Borrower or such
Borrowing Subsidiary makes a payment to it without deduction for United States
withholding taxes, but would have made such a deduction had such certification
not been erroneous and the Borrower or such Borrowing Subsidiary subsequently is
required to account, and does account, to the United States tax authorities for
any amount which should have been deducted, such Lender or the Agent (as the
case may be) shall pay to the Borrower or such Borrowing Subsidiary an amount
sufficient to reimburse the Borrower or such Borrowing Subsidiary for such
amount.
(g) At the request of a Borrower or a Borrowing Subsidiary, any
Lender claiming any additional amounts payable pursuant to this Section 2.13
shall use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to change the jurisdiction of its Applicable Lending
Office if the making of such a change would avoid the need for, or reduce the
amount of, any such additional amounts which may thereafter accrue and would
not, in the reasonable judgment of such Lender, be otherwise disadvantageous to
such Lender. The Borrower or such Borrowing Subsidiary shall reimburse such
Lender for the Borrower's or such Borrowing Subsidiary's equitable share of such
Lender's reasonable expenses incurred in connection with such change or in
considering such a change.
(h) Without prejudice to the survival of any other agreement of the
Borrower and its Borrowing Subsidiaries hereunder, the agreements and
obligations of the Borrower and its Borrowing Subsidiaries contained in this
Section 2.13 shall survive the payment in full of principal and interest
hereunder and under the A Notes, provided, however, that the Borrower or such
Borrowing Subsidiary has received timely notice of the assertion of any Taxes or
Other Taxes in order for it to contest such Taxes or Other Taxes to the extent
permitted by law.
SECTION 2.14. Sharing of Payments, Etc. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the A Advances (whether for principal,
interest, fees or otherwise) made by it (other than pursuant to Section 2.08,
2.11 or 2.13) in excess of its ratable share of payments on account of the A
Advances obtained by all the Lenders, such Lender shall forthwith purchase from
the other Lenders such participations in the A Advances made by them as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them, provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and each such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
Each of the Borrower and any Borrowing Subsidiary agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.14
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower or such Borrowing
Subsidiary, as the case may be, in the amount of such participation.
<PAGE>
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Condition Precedent to Initial Advances. The obligation
of each Lender to make its initial Advance is subject to the condition precedent
that the Agent shall have received, on or before the date of such Advance, the
following, each dated such date, in form and substance satisfactory to each
Lender and (except for the Notes) in sufficient copies for each Lender:
(a) The A Note and, if applicable, the B Note payable to the order of
such Lender.
(b) Certified copies of the resolutions of the Board of Directors of
the Borrower approving this Agreement and the Notes and each Guaranty, and
of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement and the
Notes.
(c) A certificate of the Secretary or an Assistant Secretary of the
Borrower certifying the names and true signatures of the officers of the
Borrower authorized to sign this Agreement and the Notes and the other
documents to be delivered hereunder.
(d) A certificate of a duly authorized officer of the Borrower
certifying that the representations and warranties contained in Section
4.01 are correct on and as of such date (before and after giving effect to
any Borrowing on such date and the application of the proceeds therefrom),
as though made on and as of such date, and that no event has occurred and
is continuing (or would result from any such Borrowing or application of
the proceeds thereof) which constitutes an Event of Default or would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
(e) A favorable opinion of the General Counsel or an Associate
General Counsel of the Borrower, substantially in the form of Exhibit D
hereto.
(f) A favorable opinion of Shearman & Sterling, counsel for the
Agent, substantially in the form of Exhibit E hereto.
SECTION 3.02. Conditions Precedent to Each A Borrowing. The
obligation of each Lender to make an A Advance on the occasion of each A
Borrowing (including the initial A Borrowing) shall be subject to the further
conditions precedent that on the date of such A Borrowing (a) the following
statements shall be true (and each of the giving of the applicable Notice of A
Borrowing and the acceptance by the Borrower or any Borrowing Subsidiary of the
proceeds of such A Borrowing shall constitute a representation and warranty by
the Borrower that on the date of such A Borrowing such statements are true):
(i) The representations and warranties contained in Section 4.01 are
correct on and as of the date of such A Borrowing, before and after giving
effect to such A Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, and
(ii) No event has occurred and is continuing, or would result from
such A Borrowing or from the application of the proceeds therefrom, which
constitutes an Event of Default or would constitute an Event of Default
but for the requirement that notice be given or time elapse or both;
provided, however, that, on the occasion of an A Borrowing which would not
increase the aggregate outstanding amount of A Advances owing to each Lender
over the aggregate outstanding amount of A Advances owing to such Lender
immediately prior to making such A Borrowing, the statements set forth in
subsections (i) and (ii) above shall be modified as follows:
(i) In subsection (i) the phrase "(excluding those contained in the
last sentence of subsection (e) and in subsection (f) thereof)" shall be
inserted immediately after "Section 4.01"; and
(ii) In subsection (ii) the words "or would constitute an Event of
Default but for the requirement that notice be given or time elapse or
both" shall be omitted;
and (b) the Agent shall have received such other approvals, opinions or
documents as any Lender through the Agent may reasonably request, evidencing the
accuracy of the representations and warranties and compliance with other
conditions of lending.
SECTION 3.03. Conditions Precedent to Each B Borrowing. The
obligation of each Lender which is to make a B Advance on the occasion of a B
Borrowing (including the initial B Borrowing) to make such B Advance as part of
such B Borrowing is subject to the conditions precedent that (i) the Agent shall
have received the written confirmatory Notice of B Borrowing with respect
thereto, (ii) on or before the date of such B Borrowing, but prior to such B
Borrowing, the Agent shall have received a B Note payable to the order of such
Lender for each of the one or more B Advances to be made by such Lender as part
of such B Borrowing, each in a principal amount equal to the principal amount of
the B Advance to be evidenced thereby and otherwise on such terms as were agreed
to for such B Advance in accordance with Section 2.03, and (iii) on the date of
such B Borrowing the following statements shall be true (and each of the giving
of the applicable Notice of B Borrowing and the acceptance by the Borrower or
any Borrowing Subsidiary of the proceeds of such B Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such B Borrowing
such statements are true):
(a) The representations and warranties contained in Section 4.01 are
correct on and as of the date of such B Borrowing, before and after giving
effect to such B Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date,
(b) No event has occurred and is continuing, or would result from
such B Borrowing or from the application of the proceeds therefrom, which
constitutes an Event of Default or which would constitute an Event of
Default but for the requirement that notice be given or time elapse or
both, and
(c) The information concerning the Borrower that has been provided in
writing to the Agent and each Lender by the Borrower in connection
herewith as required by the provisions of this Agreement did not include
an untrue statement of a material fact or omit to state any material fact
or any fact necessary to make the statements contained therein, in the
light of the circumstances under which they were made, not misleading;
provided that with regard to any information delivered to a Lender
pursuant to Section 5.01(e)(vii), the representation and warranty in this
Section 3.03(c) shall apply only to such information that is specifically
identified to the Borrower at the time the request is made as information
(i) that may be delivered to a purchaser of a B Note, or (ii) that is
otherwise requested to be subject to this Section 3.03(c).
SECTION 3.04. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the initial Borrowing
specifying its objection thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation.
(b) The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, and do not
contravene (i) the Borrower's charter or by-laws or (ii) law or any
contractual restriction binding on or affecting the Borrower.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required
for the due execution, delivery and performance by the Borrower of this
Agreement or the Notes.
(d) This Agreement is, and each of the Notes when executed and
delivered hereunder will be, the legal, valid and binding obligation of
the Borrower enforceable against the Borrower in accordance with their
respective terms, except as the same may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law
affecting creditors' rights generally, or by general principles of equity.
(e) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as at December 31, 1993 and the related
consolidated statements of income, cash flow and retained earnings of the
Borrower and its Consolidated Subsidiaries for the fiscal year then ended,
accompanied by an opinion of Arthur Andersen & Co., independent public
accountants, copies of which have been furnished to each Bank, fairly
present the consolidated financial condition of the Borrower and its
Consolidated Subsidiaries as at such date and the consolidated results of
the operations of the Borrower and its Consolidated Subsidiaries for the
period ended on such date, all in accordance with generally accepted
accounting principles consistently applied (except for mandated changes in
accounting disclosed in such financial statements). Except as disclosed to
each of the Lenders in writing prior to the date hereof, since December
31, 1993 there has been no Material Adverse Change.
(f) There is no pending or (to the knowledge of the Borrower)
threatened action or proceeding, including, without limitation, any
Environmental Action, affecting the Borrower or any of its Subsidiaries
before any court, governmental agency or arbitrator that (i) is reasonably
likely to have a Material Adverse Effect, other than as disclosed on
Schedule 4.01(f) (the "Disclosed Litigation") or (ii) purports to affect
the legality, validity or enforceability of this Agreement or any Note or
Guaranty, and there has been no change in the status, or financial effect
on the Borrower or any of its Subsidiaries, of the Disclosed Litigation
from that described on Schedule 4.01(f) which is reasonably likely to have
a Material Adverse Effect.
(g) None of the Borrower or any of its Subsidiaries is engaged in the
business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System), and no proceeds of any Advance
will be used in such manner as to cause any Lender to be in violation of
such Regulation U.
(h) The Borrower and each Subsidiary are in compliance in all
material respects with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority, non-compliance with
which would have a Material Adverse Effect.
(i) In the ordinary course of its business, the Borrower conducts
reviews (which reviews are in varying stages of implementation) of the
effect of Environmental Laws on the business, operations and properties of
the Borrower and its Subsidiaries, in the course of which it identifies
and evaluates associated liabilities and costs. On the basis of these
reviews, the Borrower has reasonably concluded that Environmental Laws are
unlikely to have a Material Adverse Effect.
(j) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan that is reasonably likely to result in the
imposition of a lien in excess of $25,000,000 on the assets of the
Borrower and/or any of its ERISA Affiliates in favor of the PBGC or the
Plan or in a requirement that the Borrower or any of its ERISA Affiliates
provide security to the Plan in an amount exceeding $25,000,000.
(k) The most recently filed Schedule B (Actuarial Information) annual
report (Form 5500 Series) for each Plan was complete and accurate and
fairly presented the funding status of such Plan as of the date of such
Schedule B, and since the date of such Schedule B, there has been no
change in such funding status which is reasonably likely to have a
Material Adverse Effect.
(l) Neither the Borrower nor any of its ERISA Affiliates has
incurred, or is reasonably expected to incur, any Withdrawal Liability to
any Multiemployer Plan which is reasonably likely to have a Material
Adverse Effect.
(m) Neither the Borrower nor any of its ERISA Affiliates has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of
Title IV of ERISA, which in either case would be reasonably likely to have
a Material Adverse Effect, and no such Multiemployer Plan is reasonably
expected to be in reorganization or to be terminated, within the meaning
of Title IV of ERISA, which in either case would be reasonably likely to
have a Material Adverse Effect.
(n) Except as set forth in the financial statements described in
Section 4.01(e) or delivered pursuant to Section 5.01(e), the Borrower and
its Subsidiaries have no material liability with respect to "expected
postretirement benefit obligations" within the meaning of Statement of
Financial Accounting Standards No. 106.
(o) The Borrower and each Subsidiary have filed all tax returns
(Federal, state and local) required to be filed and paid all taxes shown
thereon to be due, including interest and penalties other than those not
yet delinquent and except for those contested in good faith, or provided
adequate reserves for payment thereof.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Note shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will,
unless the Required Lenders shall otherwise consent in writing:
(a) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each Significant Subsidiary to preserve and maintain, its
corporate existence except as permitted under Section 5.02(c); provided,
however, that the Borrower or any Significant Subsidiary shall not be
required to preserve the corporate existence of any Significant Subsidiary
if the Board of Directors of the Borrower shall determine that the
preservation thereof is no longer desirable in the conduct of the business
of the Borrower or such Significant Subsidiary, as the case may be, and
that the liquidation thereof is not disadvantageous in any material
respect to the Lenders.
(b) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders, where any failure to comply would have a
Material Adverse Effect, such compliance to include, without limitation,
paying before the same become delinquent all material taxes, assessments
and governmental charges imposed upon it or upon its property except to
the extent contested in good faith.
(c) Maintenance of Properties, Etc. Maintain and preserve, and cause
each Significant Subsidiary to maintain and preserve, all of its
properties which are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted, except where
the failure to do so would not be reasonably likely to have a Material
Adverse Effect.
(d) Maintenance of Insurance. Maintain, and cause each Significant
Subsidiary to maintain, insurance with responsible and reputable insurance
companies or associations (including affiliated companies) for such
amounts, covering such risks and with such deductibles as is usually
carried by companies of comparable size engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower
or such Subsidiary operates, or maintain a sound self-insurance program
for such risks as may be prudently self-insured.
(e) Reporting Requirements. Furnish to each Lender:
(i) as soon as available and in any event within 60 days after
the end of each of the first three quarters of each fiscal year of
the Borrower, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and related
consolidated statements of income and cash flow for the period
commencing at the end of the previous fiscal year and ending with the
end of such quarter, prepared in accordance with generally accepted
accounting principles applicable to interim statements and certified
by the Treasurer or chief financial officer of the Borrower;
(ii) as soon as available and in any event within 105 days
after the end of each fiscal year of the Borrower, a copy of the
annual report for such year for the Borrower and its Consolidated
Subsidiaries, containing consolidated financial statements for such
year certified without exception as to scope by Arthur Andersen & Co.
or other independent public accountants acceptable to the Required
Lenders;
(iii)concurrently with the financial statements delivered
pursuant to clause (ii) above, a certificate of the Treasurer,
principal financial officer or the principal accounting officer of
the Borrower, and concurrently with the financial statements
delivered pursuant to clause (i) above, a certificate of the
Treasurer or controller of the Borrower, stating in each case that a
review of the activities of the Borrower and its Consolidated
Subsidiaries during the preceding quarter or fiscal year, as the case
may be, has been made under his supervision to determine whether the
Borrower has fulfilled all of its respective obligations under this
Agreement and the Notes, and also stating that, to the best of his
knowledge, (x) neither an Event of Default nor an event which, with
the giving of notice or the lapse of time or both, would constitute
an Event of Default has occurred, or (y) if any such Event of Default
or event exists, specifying such Event of Default or event, the
nature and status thereof, and the action the Borrower is taking or
proposes to take with respect thereto;
(iv) as soon as possible and in any event within five days
after the occurrence of each Event of Default and each event which,
with the giving of notice or lapse of time, or both, would constitute
an Event of Default, continuing on the date of such statement, a
statement of the chief financial officer of the Borrower setting
forth details of such Event of Default or event and the action which
the Borrower has taken and proposes to take with respect thereto;
(v) promptly after the sending or filing thereof, copies of all
reports which the Borrower sends to its security holders generally,
and copies of all publicly available reports and registration
statements except registration statements on Form S-8 which the
Borrower or any Subsidiary files with the Securities and Exchange
Commission or any national securities exchange;
(vi) promptly after the filing or receiving thereof each notice
that the Borrower or any Subsidiary receives from the PBGC regarding
the Insufficiency of any Plan, and, to any Lender requesting same,
copies of each Form 5500 annual return/report (including Schedule B
thereto) filed with respect to each Plan under ERISA with the
Internal Revenue Service;
(vii)such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as any Lender through the Agent may from time to time
reasonably request; and
(viii)promptly after any corporation shall become a Principal
Domestic Subsidiary, written notice thereof, including the name of
such corporation, the jurisdiction of its incorporation and the
nature of its business.
SECTION 5.02. Negative Covenants. So long as any Note shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will not,
without the written consent of the Required Lenders:
(a) Liens, Etc. Create or suffer to exist, or permit any of its
Principal Domestic Subsidiaries to create or suffer to exist, any Lien on
any Restricted Property, whether now owned or hereafter acquired, without
making effective provision (and the Borrower covenants and agrees that it
will make or cause to be made effective provision) whereby the Notes shall
be directly secured by such Lien equally and ratably with (or prior to)
all other indebtedness secured by such Lien as long as such other
indebtedness shall be so secured; provided, however, that there shall be
excluded from the foregoing restrictions:
(i) Liens securing Debt not exceeding $10,000,000 which are
existing on the date hereof on Restricted Property; and, if any
property now owned or leased by Borrower or by a present Principal
Domestic Subsidiary at any time hereafter becomes a Principal
Domestic Manufacturing Property, any Liens existing on the date
hereof on such property securing the Debt now secured or evidenced
thereby;
(ii) Liens on Restricted Property of a Principal Domestic
Subsidiary as security for Debt of such Subsidiary to the Borrower or
to another Principal Domestic Subsidiary;
(iii)in the case of any corporation which becomes a Principal
Domestic Subsidiary after the date of this Agreement, Liens on
Restricted Property of such Principal Domestic Subsidiary which are
in existence at the time it becomes a Principal Domestic Subsidiary
and which were not incurred in contemplation of its becoming a
Principal Domestic Subsidiary;
(iv) any Lien existing prior to the time of acquisition of any
Principal Domestic Manufacturing Property acquired by the Borrower or
a Principal Domestic Subsidiary after the date of this Agreement
through purchase, merger, consolidation or otherwise;
(v) any Lien on any Principal Domestic Manufacturing Property
(other than a Major Domestic Manufacturing Property) acquired or
constructed by the Borrower or a Principal Domestic Subsidiary after
the date of this Agreement, which is placed on such Property at the
time of or within 120 days after the acquisition thereof or prior to,
at the time of or within 120 days after completion of construction
thereof to secure all or a portion of the price of such acquisition
or construction or funds borrowed to pay all or a portion of the
price of such acquisition or construction;
(vi) extensions, renewals or replacements of any Lien referred
to in clause (i), (iii), (iv) or (v) of this subsection (a) to the
extent that the principal amount of the Debt secured or evidenced
thereby is not increased, provided that the Lien is not extended to
any other Restricted Property unless the aggregate value of
Restricted Property encumbered by such Lien is not materially greater
than the value (as determined at the time of such extension, renewal
or replacement) of the Restricted Property originally encumbered by
the Lien being extended, renewed or replaced;
(vii)Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's, vendors' and landlords' liens, and Liens
arising out of judgments or awards against the Borrower or any
Principal Domestic Subsidiary which are (x) immaterial or (y) with
respect to which the Borrower or such Subsidiary at the time shall
currently be prosecuting an appeal or proceedings for review and with
respect to which it shall have secured a stay of execution pending
such appeal or proceedings for review;
(viii)minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, rights of way, sewers,
electric lines, telegraph and telephone lines and other similar
purposes, and zoning or other restrictions as to the use of any
Principal Domestic Manufacturing Property, which exceptions,
encumbrances, easements, reservations, rights and restrictions do
not, in the opinion of the Borrower, in the aggregate materially
detract from the value of such Principal Domestic Manufacturing
Property or materially impair its use in the operation of the
business of the Borrower and its Principal Domestic Subsidiaries; and
(ix) any Lien on Restricted Property not referred to in clauses
(i) through (viii) of this subsection (a) if, at the time such Lien
is created, incurred, assumed or suffered to be created, incurred or
assumed, and after giving effect thereto and to the Debt secured or
evidenced thereby, the sum of (A) the aggregate amount of all
outstanding Debt of the Borrower and its Principal Domestic
Subsidiaries secured or evidenced by Liens on Restricted Property
which are not referred to in clauses (i) through (viii) of this
subsection (a) and which do not equally and ratably secure the Notes
plus (B) the aggregate amount of all outstanding Sale and Leaseback
Debt of the Borrower and its Principal Domestic Subsidiaries, shall
not exceed 15% of Consolidated Net Tangible Assets.
If at any time the Borrower or any Principal Domestic Subsidiary shall
create, incur or assume or suffer to be created, incurred or assumed any
Lien on Restricted Property by which the Notes are required to be secured
pursuant to the requirements of this subsection (a), the Borrower will
promptly deliver to each Lender an opinion, in form and substance
reasonably satisfactory to the Required Lenders, of the General Counsel of
the Borrower (so long as the General Counsel is able to render an opinion
as to the relevant local law) or other counsel reasonably satisfactory to
the Required Lenders, to the effect that the Notes have been secured in
accordance with such requirements.
(b) Sale and Leaseback Transactions. The Borrower will not, and
will not permit any Principal Domestic Subsidiary to, enter into any Sale
and Leaseback Transaction unless either:
(i) immediately after giving effect to such Sale and Leaseback
Transaction, the sum of (A) the aggregate amount of all outstanding
Sale and Leaseback Debt of the Borrower and its Principal Domestic
Subsidiaries and (B) the aggregate amount of all outstanding Debt of
the Borrower and its Principal Domestic Subsidiaries secured or
evidenced by Liens on Restricted Property which are not referred to
in clauses (i) through (viii) of Section 5.02(a) and which do not
equally and ratably secure the Notes, shall not exceed 15% of
Consolidated Net Tangible Assets; or
(ii) within 90 days after the effective date of such Sale and
Leaseback Transaction, the Borrower shall apply or cause to be
applied an amount equal to the net proceeds of the sale of the
property leased pursuant to such Sale and Leaseback Transaction to
the prepayment or other retirement (other than any mandatory
prepayment or retirement) of the A Notes in accordance with the
provisions of Section 2.10 hereof, and/or Senior Funded Debt of the
Borrower or any of its Principal Domestic Subsidiaries which is then
subject to optional prepayment or other retirement, and shall deliver
to the holders of the A Notes a certificate executed by the principal
financial officer, treasurer or the chief executive officer of the
Borrower specifying the Debt so prepaid or retired; or
(iii)within 90 days after the effective date of such Sale and
Leaseback Transaction, the Borrower shall deliver to the holders of
the A Notes a certificate executed by the principal financial
officer, treasurer or the chief executive officer of the Borrower
stating that an amount equal to the net proceeds of the sale of the
property leased pursuant to such Sale and Leaseback Transaction has
been applied, or is in good faith being retained for application
within a reasonable time after the date of such Sale and Leaseback
Transaction (and the Borrower covenants and agrees that such proceeds
will be so applied), to the payment of the cost of the purchase,
construction or improvement of one or more Principal Domestic
Manufacturing Properties.
(c) Mergers, Etc. Merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in
a series of transactions) all or substantially all of its assets (whether
now owned or hereafter acquired) to, any Person, or permit any of its
Subsidiaries to do so, except that (i) any Subsidiary of the Borrower may
merge or consolidate with or into, or transfer assets to, any other
Subsidiary of the Borrower, (ii) any Subsidiary of the Borrower may merge
or consolidate with or into or transfer assets to the Borrower, and (iii)
the Borrower may merge with or transfer assets to, and any Subsidiary of
the Borrower may merge or consolidate with or into or transfer assets to,
any other Person, provided that (A) in each case, immediately after giving
effect to such proposed transaction, no Event of Default or event which,
with the giving of notice or lapse of time, or both, would constitute an
Event of Default would exist, (B) in the case of any such merger to which
the Borrower is a party, the Borrower is the surviving corporation and (C)
in the case of any such merger or consolidation of a Borrowing Subsidiary
of the Borrower with or into any other Person, the Borrower shall remain
the guarantor of such Subsidiary's obligations hereunder.
(d) Debt. Create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Debt if (after giving
effect to the applications of the proceeds of any Debt) the ratio of (x)
the Operating Cash Flow of the Borrower and its Subsidiaries on a
consolidated basis for the most recent four consecutive calendar quarters
then ended to (y) the aggregate amount of Debt of the Borrower and its
Subsidiaries on a consolidated basis is less than 0.25 to 1.
(e) Use of Proceeds. Use, or permit any of its Subsidiaries to use,
any proceeds of any Advance for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System), or to extend credit to others
for such purpose, if, following application of the proceeds of such
Advance, more than 25% of the value of the assets (either of the Borrower
only or of the Borrower and its Subsidiaries on a consolidated basis)
which are subject to the restrictions of Section 5.02(a) or (b) or subject
to any restriction contained in any agreement or instrument between the
Borrower and any Lender or any Affiliate of any Lender, relating to Debt
and within the scope of Section 6.01(d) (without giving effect to any
limitation in principal amount contained therein) will be margin stock (as
defined in such Regulation U).
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower or any Borrowing Subsidiary shall fail to pay when
due any principal of any Note or to pay, within five days after the date
when due, the interest on any Note, any fees or any other amount payable
hereunder or under any Guaranty; or
(b) Any representation or warranty made by the Borrower herein or by
the Borrower (or any of its officers) in connection with this Agreement or
any Guaranty shall prove to have been incorrect in any material respect
when made; or
(c) The Borrower shall fail to perform or observe (i) any term,
covenant or agreement contained in Section 5.02, or (ii) any other term,
covenant or agreement contained in this Agreement (other than those
referred to in clauses (a) and (b) of this Section 6.01) on its part to be
performed or observed if the failure to perform or observe such other
term, covenant or agreement referred to in this clause (ii) shall remain
unremedied for 30 days after written notice thereof shall have been given
to the Borrower by the Agent or any Lender; or
(d) The Borrower or any of its Significant Subsidiaries shall fail to
pay any principal of or premium or interest on any Debt which is
outstanding in a principal amount of at least $50,000,000 in the aggregate
(but excluding Debt evidenced by the Notes) of the Borrower or such
Subsidiary (as the case may be), when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand
or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall continue after
the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is (i) to accelerate
the maturity of such Debt or (ii) if the long-term senior debt of the
Borrower is not then rated either at or above BBB by S&P or at or above
Baa2 by Moody's, to permit the acceleration of the maturity of such Debt;
or any such Debt shall be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment),
prior to the stated maturity thereof; or
(e) The Borrower or any of its Significant Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Borrower or any of its Significant
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding
shall remain undismissed and unstayed for a period of 60 days, or any of
the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Borrower or any of
its Significant Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess of
$25,000,000 (calculated after deducting from the sum so payable each
amount thereof which will be paid by any insurer that is not an Affiliate
of the Borrower to the extent such insurer has confirmed in writing its
obligation to pay such amount with respect to such judgment or order)
shall be rendered against the Borrower or any of its Subsidiaries and
either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period of
20 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(g) The Borrower or any of its ERISA Affiliates shall have incurred
or, in the reasonable opinion of the Required Lenders, shall be reasonably
likely to incur liability in excess of $50,000,000 in the aggregate as a
result of one or more of the following events which shall have occurred:
(i) any ERISA Event; (ii) the partial or complete withdrawal of the
Borrower or any of its ERISA Affiliates from a Multiemployer Plan; or
(iii) the reorganization or termination of a Multiemployer Plan; or
(h) Any Guaranty or any provision of any Guaranty after delivery
thereof pursuant to Section 8.06(b) shall for any reason cease to be valid
and binding on the Borrower, or the Borrower shall so state in writing;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the Notes,
all interest thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to the Borrower or any of its
Subsidiaries which borrows hereunder under the Federal Bankruptcy Code, (A) the
obligation of each Lender to make Advances shall automatically be terminated and
(B) the Notes, all such interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the Borrower. The Lenders
giving any notice hereunder shall give copies thereof to the Agent, but failure
to do so shall not impair the effect of such notice.
In the event the Borrower assigns to one or more Subsidiaries the
right to borrow under this Agreement (as provided in Section 8.06), each
reference in this Article VI to the Borrower shall be a reference to each such
Subsidiary as well as to the Borrower.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to this Agreement or applicable law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. (a) Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may treat
the payee of any Note as the holder thereof until the Agent receives and accepts
an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an assignee, as provided in Section 8.07; (ii) may
consult with legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or oral) made in or
in connection with this Agreement; (iv) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of the Borrower or any Borrowing
Subsidiary or to inspect the property (including the books and records) of the
Borrower or any Borrowing Subsidiary; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability under or in respect
of this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier, telegram or telex) believed
by it to be genuine and signed or sent by the proper party or parties.
(b) the Co-Agent, as such, shall have no duties or obligations whatsoever
with respect to this Agreement, the Notes or any matter related thereto.
SECTION 7.03. Citibank and Affiliates. With respect to its
Commitment, the Advances made by it and the Note issued to it, Citibank, N.A.
shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not the Agent; and the term "Lender"
or "Lenders" shall, unless otherwise expressly indicated, include Citibank, N.A.
in its individual capacity. Citibank, N.A. and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, the Borrower, any of its Subsidiaries and any Person who may do business
with or own securities of the Borrower or any such Subsidiary, all as if
Citibank, N.A. were not the Agent and without any duty to account therefor to
the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Agent or any other Lender
and based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify the
Agent (to the extent not reimbursed by the Borrower), ratably according to the
respective principal amounts of the A Notes then held by each of such Lenders
(or if no A Notes are at the time outstanding or if any A Notes are held by
Persons that are not Lenders, ratably according to the respective amounts of
their Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent under this Agreement,
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 the Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including counsel fees) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
to the extent that the Agent is not reimbursed for such expenses by the
Borrower.
SECTION 7.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower and may be removed
at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent, which successor Agent, so long as no Event of Default has
occurred and is continuing, shall be approved by the Borrower, which approval
shall not be unreasonably withheld or delayed. If no successor Agent shall have
been so appointed by the Required Lenders in accordance with the immediately
preceding sentence, and shall have accepted such appointment, within 30 days
after the retiring Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $50,000,000, which
successor Agent, so long as no Event of Default has occurred and is continuing,
shall be approved by the Borrower, which approval shall not be unreasonably
withheld or delayed. Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article VII shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the A Notes, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, do any of the following: (a)
waive any of the conditions specified in Section 3.01, 3.02 or 3.03 (if and to
the extent that the Borrowing for which such condition or conditions are waived
would result in an increase in the aggregate amount of A Advances over the
aggregate amount of A Advances outstanding immediately prior to such Borrowing),
(b) increase the Commitments of the Lenders or subject the Lenders to any
additional obligations, (c) reduce the principal of, or interest on, the A Notes
or any fees or other amounts payable hereunder, (d) postpone any date fixed for
any payment of principal of, or interest on, the A Notes or any fees or other
amounts payable hereunder, (e) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the A Notes, or the number of Lenders,
which shall be required for the Lenders or any of them to take any action
hereunder or (f) amend Section 8.06(b)(ii) or this Section 8.01; provided,
further, that no amendment, waiver or consent shall, unless in writing and
signed by the Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Agent under this Agreement or any
Note. No amendment or waiver of any provision of a B Note, nor any consent to
any departure by the Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by the holder of such B Note.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic,
telex or cable communication) and mailed, telecopied, telegraphed, telexed,
cabled or delivered, if to the Borrower, at its address at 300 Park Avenue, New
York, New York 10022, Attention: Treasurer; if to any Borrowing Subsidiary, c/o
the Borrower at its above address; if to any Bank, at its Domestic Lending
Office specified opposite its name on Schedule I hereto; and if to any other
Lender, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender; and if to the Agent, at its
address at 1 Court Square, 7th Floor, Long Island City, New York 11120,
Attention: John Makrinos, with a copy to 399 Park Avenue, New York, New York
10043, Attention: Jay Schiff; or, as to the Borrower or the Agent, at such other
address as shall be designated by such party in a written notice to the other
parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the Agent. All
such notices and communications shall, when mailed, telecopied, telegraphed,
telexed or cabled, be effective when deposited in the mails, telecopied,
delivered to the telegraph company, confirmed by telex answerback or delivered
to the cable company, respectively, except that notices and communications to
the Agent pursuant to Article II shall not be effective until received by the
Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs, Expenses, Etc. (a) The Borrower agrees to pay on
demand all out-of-pocket costs and expenses of the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and out-of-pocket expenses of
not more than one counsel for the Agent, with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under this
Agreement. The Borrower further agrees to pay on demand all costs and expenses
of the Agent and the Lenders, if any (including, without limitation, reasonable
counsel fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the Notes and
the other documents to be delivered hereunder, including, without limitation,
reasonable counsel fees and expenses in connection with the enforcement of
rights under this Section 8.04(a).
(b) The Borrower undertakes and agrees to indemnify and hold harmless
the Agent, Citicorp Securities, Inc. and J.P. Morgan Securities, Inc. (each, an
"Arranger") and each Lender against any and all claims, damages, liabilities and
expenses (including but not limited to fees and disbursements of counsel) which
may be incurred by or asserted against the Agent, such Arranger or such Lender
(as the case may be), except where the direct result of the Agent's, such
Arranger's or such Lender's own gross negligence or willful misconduct, in
connection with or arising out of any investigation, litigation, or proceeding
(whether or not the Agent, any Arranger or any of the Lenders is a party
thereto) relating to or arising out of this Agreement, the Notes or any actual
or proposed use of proceeds of Advances hereunder, including but not limited to
any acquisition or proposed acquisition by the Borrower or any Subsidiary of all
or any portion of the stock or substantially all of the assets of any Person.
(c) If any payment of principal of any Eurodollar Rate Advance is
made other than on the last day of the Interest Period for such A Advance, as a
result of a prepayment pursuant to Section 2.10, 2.11(c) or 5.02(b)(ii) or
acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason, the Borrower shall upon demand by any Lender (with a copy of such
demand to the Agent) pay to the Agent for the account of such Lender any amounts
required to compensate such Lender for any additional losses, costs or expenses
which it may reasonably incur as a result of such payment, including, without
limitation, any loss (excluding in any event loss of anticipated profits), cost
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund or maintain such A Advance.
(d) Without prejudice to the survival of any other agreement or
obligation of the Borrower hereunder, the agreements and obligations of the
Borrower contained in Sections 2.13 and 8.04 shall survive the payment in full
of principal, interest and all other amounts payable hereunder and under the
Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during
the continuance of any Event of Default and (ii) the making of the request or
the granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 6.01,
each Lender and each of its Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement and any Note held by such Lender, whether or not (in the case of
obligations other than principal and interest) such Lender shall have made any
demand under this Agreement or such Note and although such obligations (other
than principal) may be unmatured. Each Lender agrees promptly to notify the
Borrower after any such set-off and application, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of each Lender and its Affiliates under this Section are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) which such Lender and its Affiliates may have.
SECTION 8.06. Binding Effect; Assignment by Borrower. (a) This
Agreement shall become effective when it shall have been executed by the
Borrower and the Agent and when the Agent shall have been notified by each Bank
that such Bank has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Agent and each Lender and (subject to Section
8.07) their respective successors and assigns, except that the Borrower shall
not have the right to assign its rights hereunder or any interest herein without
the prior written consent of the Lenders.
(b) Notwithstanding subsection (a) above, the Borrower shall have the
right to assign its rights to borrow hereunder (in whole or in part) to any
Subsidiary (a "Borrowing Subsidiary"), provided that (i) such Subsidiary assumes
the obligations of the Borrower hereunder relating to the rights so assigned by
executing and delivering an assignment and assumption agreement reasonably
satisfactory to the Agent and the Required Lenders, covering notices, places of
payment and other mechanical details, (ii) the Borrower guarantees such
Subsidiary's obligations thereunder and under the Notes issued in connection
with such assignment and assumption by executing and delivering a Guaranty
substantially in the form of Exhibit F hereto (a "Guaranty") and (iii) the
Borrower and such Subsidiary furnish the Agent with such other documents and
legal opinions as the Agent or the Required Lenders may reasonably request
relating to the existence of such Subsidiary, its corporate power and authority
to request Advances hereunder, and the authority of the Borrower to execute and
deliver such Guaranty and the legality, validity, binding effect and
enforceability of such assignment, assumption and Guaranty. No such assignment
and assumption shall substitute a Borrowing Subsidiary for the Borrower or
relieve the Borrower named herein (i.e., Colgate-Palmolive Company) of its
obligations with respect to the covenants, representations, warranties, Events
of Default and other terms and conditions of this Agreement, all of which shall
continue to apply to such Borrower and its Subsidiaries.
SECTION 8.07. Assignments and Participations. (a) Each Lender may
assign to one or more banks or other entities all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the A Advances owing to it and the A Note or Notes
held by it); provided, however, that (i) each such assignment shall be of a
constant, and not a varying, percentage of all rights and obligations under this
Agreement (other than any B Advances or B Notes), (ii) each assignee shall be
subject to the prior written approval and acceptance (not to be unreasonably
withheld or delayed) of the Agent and the Borrower (unless the assignee is an
Affiliate of the assignor), and (iii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance consented to by the Borrower, together
with any A Note or Notes subject to such assignment and a processing and
recordation fee of $3,000, and give notice of such assignment to each other
Lender. Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any Borrowing Subsidiary or the performance or observance by the
Borrower or any Borrowing Subsidiary of any of its obligations under this
Agreement or any other instrument or document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 4.01 and/or
Section 5.01(e)(i) and (ii) and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers and discretion as are reasonably incidental
thereto; and (vi) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(c) The Agent shall maintain at its address referred to in Section
8.02 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders and
the Commitment of, and principal amount of the A Advances owing to, each Lender
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, with regard to
the names, addresses and Commitments of each Lender, and the Borrower, the Agent
and the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection and copying by any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any A Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and signed by the Borrower and is in substantially the form of Exhibit
C hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
other Lenders. Within five Business Days after its receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the Agent in exchange
for the surrendered A Note or Notes a new A Note to the order of such assignee
in an amount equal to the Commitment assumed by it pursuant to such Assignment
and Acceptance and, if the assigning Lender has retained a Commitment hereunder,
a new A Note to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new A Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered A Note or Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
Exhibit A-1 hereto.
(e) Each Lender may assign to one or more banks or other entities any
B Note or Notes held by it. Each Lender may assign to any Affiliate of such
Lender, without the consent of the Borrower, its interest in this Agreement, the
A Advances owing to it and the A Note held by it, but such assignment shall not
relieve such assigning Lender of its obligations hereunder including, without
limitation, its Commitment.
(f) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Advances owing to it and the Note or Notes held by it); provided, however,
that (i) such Lender's obligations under this Agreement (including, without
limitation, its Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Lender shall remain the holder
of any such Note for all purposes of this Agreement, (iv) the Borrower, the
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and (v) such Lender shall not grant to any such participant the right
to participate in the Lender's actions on amendments, waivers or consents
permitted under this Agreement, except to the extent that such actions would
change the amount of the Commitment, the principal amount, payment dates or
maturity of any Notes or Advances, the interest rate, or the method of computing
the interest rate thereon, or any fees payable hereunder.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any confidential information relating to the
Borrower received by it from such Lender.
(h) No assignee of a Lender shall be entitled to the benefits of
Sections 2.11 and 2.13 in relation to circumstances applicable to such assignee
immediately following the assignment to it which at such time (if a payment were
then due to the assignee on its behalf from the Borrower) would give rise to any
greater financial burden on the Borrower under Sections 2.11 and 2.13 than those
which it would have been under in the absence of such assignment.
(i) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time, without the consent of the Borrower, create a
security interest in all or any portion of its rights under this Agreement
(including, without limitation, the Advances owing to it and the Notes held by
it) in favor of any Federal Reserve Bank in accordance with Regulation A of the
Board of Governors of the Federal Reserve System.
SECTION 8.08. Change of Control. (a) Notwithstanding any other
provision of this agreement, the Required Lenders may, upon and after the
occurrence of a Change in Control, by notice to the Borrower (with a copy to the
Agent) (i) immediately suspend or terminate the obligations of the Lenders to
make Advances hereunder and/or (ii) require the Borrower to repay all or any
portion of the Advances on the date or dates specified in the notice which shall
not be less than 30 days after the giving of the notice.
(b) For purposes of this Section "Change in Control" shall mean the
happening of any of the following events:
(i) An acquisition, directly or indirectly, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 30% or more of either (A) the then outstanding shares
of common stock of the Borrower or (B) the combined voting power of the
then outstanding voting securities of the Borrower entitled to vote
generally in the election of directors; excluding, however (1) any
acquisition by the Borrower, or (2) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Borrower or
any corporation controlled by the Borrower; or
(ii) A change in composition of the Board of Directors of the
Borrower (the "Board") such that the individuals who, as of the date
hereof, constitute the Board (such Board shall be hereinafter referred to
as the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, for purposes of this Section
8.08, that any individual who becomes a member of the Board subsequent to
the date hereof, whose election, or nomination for election by the
Borrower's stockholders, was approved by a vote of at least a majority of
those individuals who are members of the Board and who were also members
of the Incumbent Board (or deemed to be such pursuant to this proviso)
shall be considered as though such individual were a member of the
Incumbent Board; but, provided further, that any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a- 11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board shall not be so considered as a member of the
Incumbent Board.
SECTION 8.09. Mitigation of Adverse Circumstances. If circumstances
arise which would or would upon the giving of notice result in a payment or an
increase in the amount of any payment to be made to a Lender by reason of
Section 2.02(c), 2.11 or 2.12, or which would result in a Lender being unable to
make Eurodollar Rate Advances by reason of Section 2.02(b), then, without in any
way limiting, reducing or otherwise qualifying the obligations of the Borrower
under any of the such Sections, such Lender shall promptly, upon becoming aware
of the same, notify the Borrower thereof and, in consultation with the Borrower,
take such reasonable steps as may be open to it to mitigate the effects of such
circumstances, including the transfer of its Applicable Lending Office to
another jurisdiction; provided that such Lender shall be under no obligation to
make any such transfer if in the bona fide opinion of such Lender, such transfer
would or would likely have an adverse effect upon its business, operations or
financial condition.
SECTION 8.10. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of
New York.
SECTION 8.11. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.12 Jurisdiction, Etc. (a) Each of the parties hereto
(including each Borrowing Subsidiary) hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement, the Notes, or any
Guaranty, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State or, to the extent permitted by law, in such federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement, the Notes or any Guaranty in
the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the Notes
in any such New York State or federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
<PAGE>
SECTION 8.13. Waiver of Jury Trial. Each of the Borrower, the
Borrowing Subsidiaries and the Lenders hereby irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Agreement, the
Notes or any Guaranty or the actions of the Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
COLGATE-PALMOLIVE COMPANY
Brian J. Heidtke
By ___________________________________________
Vice President and Corporate Treasurer
CITIBANK, N.A., as Agent
Michel R.R. Pendill
By ___________________________________________
Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Co-Agent
Mathias Blumschein
By ___________________________________________
Title: Associate
<PAGE>
Banks
Commitment
$490,000,000 CITIBANK, N.A.,
Michel R.R. Pendill
By ___________________________________________
Vice President
$280,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
Mathias Blumschein
By ___________________________________________
Title: Associate
$770,000,000 Total of the Commitments
<PAGE>
SCHEDULE I
Colgate-Palmolive Company
$770,000,000 CREDIT AGREEMENT
APPLICABLE LENDING OFFICES
Name of
Bank Domestic Lending Office Eurodollar Lending Office
Citibank, N.A. 399 Park Avenue 399 Park Avenue
New York, New York 10043 New York, New York 10043
Morgan Guaranty 500 Stanton Christiana Road 500 Stanton Christiana Road
Trust Company of Newark, Del. 19713 Newark, Del. 19713
New York
<PAGE>
Schedule 4.01(f)
None.
<PAGE>
EXHIBIT A-1 - FORM OF
A NOTE
U.S.$ Dated: , 19
FOR VALUE RECEIVED, the undersigned, COLGATE-PALMOLIVE COMPANY, a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
(the "Lender") for the account of its Applicable Lending Office (as defined in
the Five Year Credit Agreement referred to below) the principal sum of ________
U.S.$[amount of the Lender's Commitment in figures] or, if less, the aggregate
principal amount of each Base Rate Advance (as defined in the Five Year Credit
Agreement referred to below) on the Termination Date (as defined in the Five
Year Credit Agreement referred to below) and the principal amount of each other
A Advance (as defined in the Five Year Credit Agreement referred to below) owing
to the Lender by the Borrower pursuant to the Five Year Credit Agreement dated
as of January 8, 1995 among the Borrower, the Lender and certain other lenders
parties thereto, Citibank, N.A., as Agent for the Lender and such other lenders,
and Morgan Guaranty Trust Company of New York, as Co-Agent (as amended or
modified from time to time, the "Five Year Credit Agreement"; the terms defined
therein being used herein as therein defined) on the last day of the Interest
Period for such Advance.
The Borrower promises to pay interest on the unpaid principal amount
of each A Advance from the date of such A Advance until such principal amount is
paid in full, at such interest rates, and payable at such times, as are
specified in the Five Year Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Citibank, as Agent, at its offices at 1 Court Square, Long
Island City, New York 11120, in immediately available funds. Each A Advance
owing to the Lender by the Borrower pursuant to the Five Year Credit Agreement,
the date on which it is due, the interest rate thereon and all prepayments made
on account of principal thereof shall be recorded by the Lender on its books,
and for each A Advance outstanding at the time of any transfer hereof, the same
information shall be endorsed on the grid attached hereto which is part of this
Promissory Note.
This Promissory Note is one of the A Notes referred to in, and is
entitled to the benefits of, the Five Year Credit Agreement. The Five Year
Credit Agreement, among other things, (i) provides for the making of A Advances
by the Lender to the Borrower from time to time in an aggregate amount not to
exceed at any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such A Advance being evidenced
by this Promissory Note, and (ii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York, United States.
COLGATE-PALMOLIVE COMPANY
By __________________________________________
Title:
- ------------
[Note:Upon request by a Lender, the Borrower will issue separate A Notes payable
to one or more offices of the Lender, for Base Rate Advances and
Eurodollar Rate Advances. This form will be modified to refer to the
specific type of A Advance and to the appropriate maturity of such type of
A Advance.]
<PAGE>
SCHEDULE TO PROMISSORY NOTE DATED JANUARY 9, 1995
OF COLGATE-PALMOLIVE COMPANY
ADVANCES AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
===================================================================================================================================
Amount of
Date Principal Unpaid
Amount of Principal Paid Principal Notation
Date Advance Due Rate or Prepaid Balance Made By
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
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- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
</TABLE>
<PAGE>
EXHIBIT A-2 - FORM OF
B NOTE
U.S.$ Dated: , 199
FOR VALUE RECEIVED, the undersigned, COLGATE-PALMOLIVE COMPANY, a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
(the "Lender") for the account of its Applicable Lending Office (as defined in
the Five Year Credit Agreement referred to below), on ________, 19__, the
principal amount of ________ Dollars (U.S.$________).
The Borrower promises to pay interest on the unpaid principal amount
hereof from the date hereof until such principal amount is paid in full, at the
interest rate and payable on the interest payment date or dates provided below:
Interest Rate:_____% per annum (calculated on the basis of a year of 360
days for the actual number of days elapsed).
Interest Payment Date or Dates: _______________________
Both principal and interest are payable in lawful money of the United
States of America to the Lender at its office at , in immediately available
funds.
This Promissory Note is one of the B Notes referred to in, and is
entitled to the benefits of, the Five Year Credit Agreement dated as of January
8, 1995 (as amended or otherwise modified from time to time, the "Five Year
Credit Agreement") among the Borrower, the Lender and certain other lenders
party thereto Citibank, N.A., as Agent for the Lender and such other parties,
and Morgan Guaranty Trust Company of New York, as Co-Agent. The Five Year Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events.
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
<PAGE>
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York, United States.
COLGATE-PALMOLIVE COMPANY
By __________________________________________
Title:
<PAGE>
EXHIBIT B-1 - FORM OF
NOTICE OF A BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Five Year Credit Agreement
referred to below
1 Court Square, 7th Floor
Long Island City, NY 11120 [Date]
Attention: John Makrinos
Ladies and Gentlemen:
The undersigned, Colgate-Palmolive Company, refers to the Five Year
Credit Agreement, dated as of January 8, 1995 (as amended or otherwise modified
through the date hereof, the "Five Year Credit Agreement", the terms defined
therein being used herein as therein defined), among the undersigned, certain
Lenders parties thereto Citibank, N.A., as Agent for said Lenders, and Morgan
Guaranty Trust Company of New York, as Co-Agent, and hereby gives you notice,
irrevocably, pursuant to Section 2.02 of the Five Year Credit Agreement that the
undersigned hereby requests an A Borrowing under the Five Year Credit Agreement,
and in that connection sets forth below the information relating to such A
Borrowing (the "Proposed A Borrowing") as required by Section 2.02(a) of the
Five Year Credit Agreement:
(i) The Business Day of the Proposed A Borrowing is , 199 .
(ii) The Type of A Advances comprising the Proposed A Borrowing
is [Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed A Borrowing is $ .
(iv) The Interest Period for each A Advance made as part of the
Proposed A Borrowing is ________ month[s].
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed A
Borrowing:
(A) the representations and warranties contained in Section 4.01 of
the Five Year Credit Agreement are correct, before and after giving effect
to the Proposed A Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date; and
(B) no event has occurred and is continuing, or would result from
such Proposed A Borrowing or from the application of the proceeds
therefrom, that constitutes an Event of Default or would constitute an
Event of Default but for the requirement that notice be given or time
elapse or both.
[As an alternative, the following three representations may be substituted if
the proviso in Section 3.02 is applicable:
(A) the Proposed A Borrowing will not increase the aggregate
outstanding amount of A Advances owing to each Lender over the aggregate
outstanding amount of A Advances owing to such Lender immediately prior to
such A Borrowing;
(B) the representations and warranties contained in Section 4.01
(excluding those contained in the last sentence of subsection (e) and in
subsection (f) thereof, in each case as incorporated by reference) are
correct, before and after giving effect to the Proposed A Borrowing and to
the application of the proceeds therefrom, as though made on and as of
such date; and
(C) no event has occurred and is continuing, or would result from
such Proposed A Borrowing or from the application of the proceeds
therefrom, which constitutes an Event of Default.]
Very truly yours,
COLGATE-PALMOLIVE COMPANY
By __________________________________________
Title:
<PAGE>
EXHIBIT B-2 - FORM OF
NOTICE OF B BORROWING
Citibank, N.A, as Agent
for the Lenders parties
to the Five Year Credit Agreement
referred to below
1 Court Square, 7th Floor
Long Islan City, NY 11120 [Date]
Attention: John Makrinos
Ladies and Gentlemen:
The undersigned, Colgate-Palmolive Company, refers to the Five Year
Credit Agreement dated as of January 8, 1995 (as amended or otherwise modified
through the date hereof, the "Five Year Credit Agreement", the terms defined
therein being used herein as therein defined) among the undersigned, certain
Lenders party thereto, Citibank, N.A., as Agent for such Lenders, and Morgan
Guaranty Trust Company of New York, as Co-Agent, and hereby gives you notice
pursuant to Section 2.03 of the Five Year Credit Agreement that the undersigned
hereby requests a B Borrowing under the Five Year Credit Agreement, and in that
connection sets forth the terms on which such B Borrowing (the "Proposed B
Borrowing") is requested to be made:
(A) Date of Proposed B Borrowing _______________
(B) Aggregate Amount of Proposed B Borrowing _______________
(C) Interest Rate Basis _______________
(D) Maturity Date _______________
(E) Interest Payment Date(s) _______________
(F) _________________________________________ _______________
(G) _________________________________________ _______________
(H) _________________________________________ _______________
<PAGE>
The undersigned hereby certifies that the following statements are
true on the date hereof and will be true on the date of the Proposed B
Borrowing:
(a) the representations and warranties contained in Section 4.01 are
correct, before and after giving effect to the Proposed B Borrowing and to
the application of the proceeds therefrom, as though made on and as of
such date;
(b) no event has occurred and is continuing, or would result from the
Proposed B Borrowing or from the application of the proceeds therefrom,
which constitutes an Event of Default or would constitute an Event of
Default but for the requirement that notice be given or time elapse or
both;
(c) The information concerning the undersigned that has been provided
in writing to the Agent or each Lender by the undersigned in connection
with the Five Year Credit Agreement as required by the terms of the Five
Year Credit Agreement did not include an untrue statement of a material
fact or omit to state any material fact or any fact necessary to make the
statements contained therein, in the light of the circumstances under
which they were made, not misleading; provided that with regard to any
information delivered to a Lender pursuant to Section 5.01(e)(vii) of the
Five Year Credit Agreement, the representation and warranty in this
paragraph (c) shall apply only to such information that is specifically
identified to the undersigned at the time the request is made as
information (i) that may be delivered to a purchaser of a B Note, or (ii)
that is otherwise requested to be subject to this paragraph (c).
(d) the aggregate amount of the Proposed B Borrowing and all other
Borrowings to be made on the same day under the Five Year Credit Agreement
is within the aggregate amount of the unused Commitments of the Lenders.
The undersigned hereby confirms that the Proposed B Borrowing is to
be made available to it in accordance with Section 2.03(e) of the Five Year
Credit Agreement.
Very truly yours,
COLGATE-PALMOLIVE COMPANY
By: __________________________________________
Title:
<PAGE>
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Five Year Credit Agreement dated as of
January 8, 1995 (as amended or modified from time to time, the "Five Year Credit
Agreement") among COLGATE-PALMOLIVE COMPANY, a Delaware corporation (the
"Borrower"), the Lenders (as defined in the Five Year Credit Agreement),
Citibank, N.A., as agent for the Lenders (the "Agent"), and Morgan Guaranty
Trust Company of New York, as co-agent. Terms defined in the Five Year Credit
Agreement are used herein with the same meaning.
_________ (the "Assignor") and _____________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
all of the Assignor's rights and obligations under the Five Year Credit
Agreement as of the date hereof (other than in respect of B Advances and B
Notes) which represents the percentage interest specified on Schedule 1 of all
outstanding rights and obligations under the Five Year Credit Agreement (other
than in respect of B Advances and B Notes), including, but not limited to, such
interest in the Assignor's Commitment, the A Advances owing to the Assignor, and
the A Note[s] held by the Assignor. After giving effect to such sale and
assignment, the Assignee's Commitment and the amount of the A Advances owing to
the Assignee will be as set forth in Section 2 of Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Five Year Credit
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Five Year Credit Agreement or any other instrument
or document furnished pursuant thereto; (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or the performance or observance by the Borrower of any of its
obligations under the Five Year Credit Agreement or any other instrument or
document furnished pursuant thereto; and (iv) attaches the A Note[s] referred to
in paragraph 1 above and requests that the Borrower exchange such A Note[s] for
a new A Note payable to the order of the Assignee in an amount equal to the
Commitment assumed by the Assignee pursuant hereto or new A Notes payable to the
order of the Assignee in an amount equal to the Commitment assumed by the
Assignee pursuant hereto and to the order of the Assignor in an amount equal to
the Commitment retained by the Assignor under the Five Year Credit Agreement,
respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the Five
Year Credit Agreement, together with copies of the financial statements referred
to in Section 4.01 or delivered pursuant to Section 5.01(e) (in each case as
incorporated into the Five Year Credit Agreement by reference) thereof and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance; (ii)
agrees that it will, independently and without reliance upon the Assignor, the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Five Year Credit Agreement; (iii) agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of the Five Year Credit Agreement are required to be performed by
it as a Lender; (iv) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Five
Year Credit Agreement as are delegated to the Agent by the terms thereof,
together with such powers and discretion as are reasonably incidental thereto;
[and] (v) specifies as its Domestic Lending Office (and address for notices) and
Eurodollar Lending Office the offices set forth beneath its name on the
signature pages hereof; [and (vi) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying as to the Assignee's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the Five Year Credit
Agreement and the Notes or such other documents as are necessary to indicate
that all such payments are subject to such rates at a rate reduced by an
applicable tax treaty].*
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Agent for acceptance and
recording by the Agent. The effective date of this Assignment and Acceptance
shall be the date of acceptance thereof by the Agent, unless otherwise specified
on Schedule 1 hereto (the "Effective Date").
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Five Year Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Lender thereunder and (ii) the Assignor shall,
to the extent provided in this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Five Year Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after
the Effective Date, the Agent shall make all payments under the Five Year Credit
Agreement and the A Notes in respect of the interest assigned hereby (including,
but not limited to, all payments of principal, interest and commitment, facility
and utilization fees with respect thereto) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under the Five Year
Credit Agreement and the A Notes for periods prior to the Effective Date
directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
__________
* If the Assignee is organized under the laws of a jurisdiction outside the
United States.
<PAGE>
Schedule 1
to
Assignment and Acceptance
Dated , 19
Section 1.
Percentage Interest: ______%
Section 2.
Assignee's Commitment: $______
Assignor's Retained Commitment: $______
Aggregate Outstanding Principal
Amount of A Advances owing to the Assignee:$______
Aggregate Outstanding Principal
Amount of A Advances owing to the Assignor:$______
An A Note payable to the order of the Assignee
Dated: , 19
Principal amount:
An A Note payable to the order of the Assignor
Dated: , 19
Principal amount:
Section 3.
Effective Date*: , 19
[NAME OF ASSIGNOR]
By: _____________________________________________
Title:
_________
* This date should be no earlier than the date of acceptance by the Agent.
<PAGE>
[NAME OF ASSIGNEE]
By:_______________________________________________
Title:
CD Lending Office:
[Address]
Domestic Lending Office (and address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this ___ day
of _______________, 19__
CITIBANK, N.A., as Agent
By:_____________________
Title:
Accepted this ___ day
of _______________, 19__
COLGATE-PALMOLIVE COMPANY
By:_____________________
Title:
<PAGE>
EXHIBIT D
January __, 1995
To each of the Lenders party to the Five Year Credit Agreement referred to below
and Citibank, N.A., as Agent
Ladies and Gentlemen:
As Senior Vice President, General Counsel and Secretary for
Colgate-Palmolive Company (hereinafter referred to as the "Borrower"), I am
familiar with the $770,000,000 Five Year Credit Agreement, dated as of January
8, 1995 among the Borrower, the Lenders parties thereto, Citibank, N.A. as Agent
for the Lenders thereto, and Morgan Guaranty Trust Company of New York, as
Co-Agent (the "Five Year Credit Agreement"). This opinion is being furnished to
you pursuant to Section 3.01(e) of the Five Year Credit Agreement. Terms used in
this opinion which are defined in the Five Year Credit Agreement are used herein
as so defined.
I or attorneys under my supervision in the Borrower's Legal
Department have examined such records, certificates, and other documents and
such questions of law as I have considered necessary or appropriate for purposes
of this opinion. In addition, I or attorneys under my supervision in the
Borrower's Legal Department have examined such records, certificates, and other
documents, relied on upon certificates of the officers of the Borrower and
performed such investigations as I have considered necessary or appropriate for
purposes of this opinion in respect of matters of fact. I believe that both you
and I are justified in relying upon such certificates. Based upon, and subject
to, the foregoing, it is my opinion that:
1. The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of Delaware.
2. The execution, delivery and performance by the Borrower of the
Five Year Credit Agreement, the Notes and the Guaranties are within the
Borrower's corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene (i) the Borrower's charter or by-laws or
(ii) law or (to my knowledge after due inquiry) any contractual restriction
binding on or affecting the Borrower. The Five Year Credit Agreement and the A
Note have been duly executed and delivered on behalf of the Borrower.
3. No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower of the Five Year Credit
Agreement, the Notes and the Guaranties.
4. The Five Year Credit Agreement is and the A Note will be, and each
of the Guaranties and B Notes when executed and delivered will be, upon the
receipt of due consideration therefor, the legal, valid and binding obligations
of the Borrower, enforceable against the Borrower in accordance with their
respective terms.
5. The Borrower has a procedure of reviewing its material litigation
on a quarterly basis and has imposed an ongoing obligation on its Subsidiaries
whereby they must advise me, or attorneys under my supervision, immediately of
any material litigation matter arising between reviews. Based on this review, to
my actual knowledge, there is no pending or threatened action or proceeding
affecting the Borrower or any of its Subsidiaries before any court, governmental
agency or arbitrator which may have a Material Adverse Effect or which purports
to affect the legality, validity or enforceability of the Five Year Credit
Agreement, any Notes and any Guaranties; provided, however, that I express no
opinion with respect to certain Brazilian regulatory risks discussed with you.
I am licensed to practice law in the State of New York and do not
purport to be an expert on, or to express any opinion (other than to the extent
necessary to render the opinions set forth in paragraph (1) above, which opinion
in based on certificates of public officials) concerning any law other than the
law of the State of New York, the General Corporation Law of the State of
Delaware and the Federal law of the United States. The opinions expressed herein
are solely for your benefit and may not be relied upon in any manner or for any
purpose by any other persons.
The opinion set forth in paragraph (4) above is subject to the effect
of any applicable bankruptcy, insolvency, reorganization, moratorium or similar
law affecting creditors' rights generally, and to the effect of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding equity or at law).
Very truly yours,
<PAGE>
EXHIBIT E
OPINION OF COUNSEL TO THE AGENT
January __, 1995
To the Lenders party to the Five Year Credit Agreement referred to below and
Citibank, N.A., as Agent
Colgate-Palmolive Company
Ladies and Gentlemen:
We have acted as counsel to Citibank, N.A., as Agent, in connection
with the preparation, execution and delivery of the Five Year Credit Agreement
dated as of January 8, 1995 (the "Five Year Credit Agreement") among
Colgate-Palmolive Company (the "Borrower"), each of you, Citibank, N.A., as
Agent, and Morgan Guaranty Trust Company of New York, as Co-Agent. Terms defined
in the Five Year Credit Agreement are used herein as therein defined.
In that connection, we have examined the following documents:
(1) A counterpart of the Five Year Credit Agreement, executed by each
of the parties thereto.
(2) The documents furnished by the Borrower pursuant to Section
3.01 of the Five Year Credit Agreement, including the opinion of Andrew
D. Hendry, General Counsel of the Borrower.
In our examination of the documents referred to above, we have
assumed the authenticity of all such documents submitted to us as originals, the
genuineness of all signatures, the due authority of the parties executing such
documents, and the conformity to the originals of all such documents submitted
to us as copies. We have also assumed that each of you has duly executed and
delivered, with all necessary power and authority (corporate and otherwise), the
Five Year Credit Agreement.
To the extent that our opinions expressed below involve conclusions
as to the matters set forth in paragraphs 1, 2 and 3 of the above-mentioned
opinion of counsel for the Borrower, we have assumed without independent
investigation the correctness of the matters set forth in such paragraphs, our
opinion being subject to the assumptions, qualifications and limitations set
forth in such opinion with respect thereto.
Based upon the foregoing and upon such other investigation as we have
deemed necessary, we are of the following opinion:
1. The Five Year Credit Agreement and each Note delivered on the
date hereof are the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective
terms.
2. The above-mentioned opinion of counsel for the Borrower, and the
other documents referred to in item (2) above, are substantially
responsive to the requirements of the Five Year Credit Agreement.
Our opinions above are subject to the following qualifications:
(a) Our opinion in paragraph 1 above is subject to the effect of
general principles of equity, including (without limitation) concepts of
materiality, reasonableness, good faith and fair dealing (regardless of
whether considered in a proceeding in equity or at law).
(b) Our opinion in paragraph 1 above is also subject to the effect of
any applicable bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar law affecting creditors' rights generally.
(c) Our opinions expressed above are limited to the law of the State
of New York and the Federal law of the United States, and we do not
express any opinion herein concerning any other law. Without limiting the
generality of the foregoing, we express no opinion as to the effect of the
law of any jurisdiction other than the State of New York wherein any
Lender may be located or wherein enforcement of the Five Year Credit
Agreement or the Notes may be sought which limits the rates of interest
legally chargeable or collectible.
Very truly yours,
SHEARMAN & STERLING
LCJ:SLH
<PAGE>
EXHIBIT F
FORM OF GUARANTY
GUARANTY, dated ________, 19__, made by COLGATE-PALMOLIVE COMPANY, a
corporation organized and existing under the laws of Delaware (the "Guarantor"),
in favor of Citibank, N.A., as agent (the "Agent") for each of the Lenders (the
"Lenders") parties to the Five Year Credit Agreement (as defined below).
PRELIMINARY STATEMENTS.
(1) The Agent, the Lenders, the Guarantor, and Morgan Guaranty Trust
Company of New York, as co-Agent have entered into a Five Year Credit Agreement
dated as of January 8, 1995 (said Agreement, as it may heretofore have been or
hereafter be amended or otherwise modified from time to time, being the "Five
Year Credit Agreement", the terms defined therein and not otherwise defined
herein being used herein as therein defined). Pursuant to Section 8.06(b) of the
Five Year Credit Agreement and an Assignment and Assumption Agreement dated
_________, 19__ the Guarantor has assigned to ________________________________
___________, a corporation organized and existing under the laws of (the
"Assignee"), certain rights under the Five Year Credit Agreement, so that the
Assignee may borrow and receive Advances under the Five Year Credit Agreement.
The Assignee is a Subsidiary of the Guarantor and engages in business
transactions with the Guarantor, and the Guarantor represents that it will
derive substantial direct and indirect benefit from all Advances to the
Assignee.
(2) It is a condition precedent to the making of such assignment to
the Assignee that the Guarantor shall have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to accept such assignment and to make Advances to the
Assignee under the Five Year Credit Agreement, the Guarantor hereby agrees as
follows:
SECTION 1. Guaranty. The Guarantor hereby unconditionally guarantees
the punctual payment when due, whether at stated maturity, by acceleration or
otherwise, of all obligations of the Assignee now or hereafter existing under
the Five Year Credit Agreement and under the Notes evidencing Advances to the
Assignee (the "Notes"), whether for principal, interest, fees, expenses or
otherwise (such obligations being the "Obligations"), and agrees to pay any and
all expenses (including counsel fees and expenses) incurred by the Agent and the
Lenders in enforcing any rights under this Guaranty. Without limiting the
generality of the foregoing, the Guarantor's liability shall extend to all
amounts which constitute part of the Obligations and would be owed by the
Assignee to the Lenders under the Five Year Credit Agreement and the Notes but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving the Assignee.
SECTION 2. Guaranty Absolute. The Guarantor guarantees that the
Obligations will be paid strictly in accordance with the terms of the Five Year
Credit Agreement and the Notes, regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Lenders with respect thereto. The obligations of the Guarantor
under this Guaranty are independent of the Obligations, and a separate action or
actions may be brought and prosecuted against the Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against the Assignee or
whether the Assignee is joined in any such action or actions. The liability of
the Guarantor under this Guaranty shall be absolute and unconditional
irrespective of:
(i) any lack of validity or enforceability of the Five Year Credit
Agreement, the Notes or any other agreement or instrument relating
thereto;
(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to departure from the Five Year Credit Agreement
or the Notes, including, without limitation, any increase in the
Obligations resulting from the extension of additional credit to the
Assignee or any of its subsidiaries or otherwise;
(iii) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Obligations;
(iv) any manner of application of collateral, or proceeds thereof, to
all or any of the Obligations, or any manner of sale or other disposition
of any collateral for all or any of the Obligations or any other assets of
the Assignee or any of its subsidiaries;
(v) any change, restructuring or termination of the corporate
structure or existence of the Assignee or any of its subsidiaries or its
status as a Subsidiary of the Guarantor; or
(vi) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Assignee or a guarantor.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by the Agent or any Lender upon the insolvency, bankruptcy
or reorganization of the Assignee or otherwise, all as though such payment had
not been made.
SECTION 3. Waiver. The Guarantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the
Obligations, this Guaranty or any circumstance referred to in Section 2, and
waives any requirement that the Agent or any Lender protect, secure, perfect or
insure any security interest or lien or any property subject thereto or exhaust
any right or take any action against the Assignee or any other person or entity
or any collateral.
SECTION 4. Subrogation. (a) The Guarantor will not exercise any
rights which it may acquire by way of subrogation under this Guaranty, by any
payment made hereunder or otherwise, until all the Obligations and all other
amounts payable under this Guaranty shall have been paid in full and the
Commitments shall have expired or terminated. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time prior to the later
of (x) the payment in full of the Obligations and all other amounts payable
under this Guaranty and (y) the expiration or termination of the Commitments,
such amount shall be deemed to have been paid to the Guarantor for the benefit
of, and held in trust for the benefit of, the Agent and the Lenders and shall
forthwith be paid to the Agent to be credited and applied upon the Obligations,
whether matured or unmatured, in accordance with the terms of the Five Year
Credit Agreement or to be held by the Agent as collateral security for any
Obligations thereafter existing. If (i) the Guarantor shall make payment to the
Agent of all or any part of the Obligations, (ii) all the Obligations and all
other amounts payable under this Guaranty shall be paid in full and (iii) the
Commitments shall have expired or terminated, the Agent will, at the Guarantor's
request, execute and deliver to the Guarantor appropriate documents, without
recourse and without representation or warranty, necessary to evidence the
transfer by subrogation to the Guarantor of an interest in the Obligations
resulting from such payment by the Guarantor.
[The preceding Section 4(a) will be used if the Assignee is
incorporated and has its principal office in a jurisdiction other than the
United States of America, or a State, Territory or possession thereof.
Otherwise, the following Section 4(a) will be used.]
SECTION 4. Waiver of Subrogation. (a) The Guarantor hereby
irrevocably waives any claim or other right which it may now or hereafter
acquire against the Assignee that arises from the existence, payment,
performance or enforcement of the Guarantor's obligations under this Guaranty or
any other Loan Document, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, any
right to participate in any claim or remedy of the Agent or any Lender against
the Assignee or any collateral which the Agent or any Lender now has or
hereafter acquires, whether or not such claim, remedy or right arises in equity,
or under contract, statute or common law, including without limitation, the
right to take or receive from the Assignee, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim or other right. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time prior to the later
of (x) the payment in full of the Obligations and all other amounts payable
under this Guaranty and (y) the expiration or termination of the Commitments,
such amount shall be deemed to have been paid to the Guarantor for the benefit
of, and held in trust for the benefit of the Agent and the Lenders and shall
forthwith be paid to the Agent to be credited and applied upon the Obligations,
whether matured or unmatured, in accordance with the terms of the Five Year
Credit Agreement or to be held by the Agent as collateral security for any
Obligations thereafter existing. The waiver set forth in this Section 4(a) is
knowingly made in contemplation of the benefits referred to in the Preliminary
Statements.
(b) The Guarantor agrees that, to the extent that the Assignee makes
a payment or payments to the Agent or any Lender or the Agent or any Lender
receives any proceeds of collateral, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or otherwise required to be repaid to the Assignee, its estate,
trustee, receiver or any other party, including, without limitation, under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such payment or repayment, the Obligation or part thereof which has
been paid, reduced or satisfied by such amount shall be reinstated and continued
in full force and effect as of the date such initial payment, reduction or
satisfaction occurred. The Guarantor shall defend and indemnify the Agent and
each Lender from and against any claim or loss under this Section 4(b)
(including reasonable attorneys' fees and expenses) in the defense of any such
action or suit.
SECTION 5. Payments With Respect to Taxes, Etc. Any and all payments
made by the Guarantor hereunder shall be subject to and made in accordance with
Section 2.13 of the Five Year Credit Agreement as if all such payments were
being made by the Borrower.
SECTION 6. Representations and Warranties. The Guarantor hereby
represents and warrants as follows:
(a) The Guarantor is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware, and has all
corporate power required to carry on its business as now conducted.
(b) The execution and delivery by the Guarantor of this Guaranty, and
the performance of its obligations hereunder, are within the Guarantor's
corporate power, have been duly authorized by all necessary corporate and
other action, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene, or constitute
a default under, any provision of applicable law or regulation or of the
certificate of incorporation or by-laws of the Guarantor or of any
agreement, judgment, injunction, order, decree or other instrument binding
upon or affecting the Guarantor or result in the creation or imposition of
any Lien on any asset of the Guarantor or any of its Subsidiaries.
(c) This Guaranty has been duly executed and delivered by the
Guarantor and constitutes a valid and binding agreement of the Guarantor
enforceable in accordance with its terms.
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required
for the due execution, delivery and performance by the Guarantor of this
Guaranty.
(e) The Assignee is a Subsidiary of the Guarantor and is a
corporation duly incorporated, validly existing and in good standing under
the laws of __________________________________.
(f) There are no conditions precedent to the effectiveness of this
Guaranty that have not been satisfied or waived.
(g) The Guarantor has, independently and without reliance upon any
Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Guaranty.
SECTION 7. Amendments, Etc. No amendment or waiver of any provision
of this Guaranty, and no consent to any departure by the Guarantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Required Lenders, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given, provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, (a) limit or release the liability of the Guarantor
hereunder, (b) postpone any date fixed for payment hereunder, or (c) change the
number of Lenders required to take any action hereunder.
SECTION 8. Addresses for Notices. All notices and other
communications provided for hereunder shall be given and effective as provided
in Section 8.02 of the Five Year Credit Agreement.
SECTION 9. No Waiver; Remedies. No failure on the part of any Lender
to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 10. Right of Set-off. If the Guarantor shall fail to make any
payment promptly when due hereunder after notice by the Agent or any Lender to
the Guarantor that the Assignee has failed to pay any Obligation when due, each
Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Guarantor against any and all of the obligations of the Guarantor
now or hereafter existing under this Guaranty, whether or not such Lender shall
have made any demand under this Guaranty and although such obligations may be
contingent and unmatured. Each Lender agrees to notify the Guarantor, the Agent
and each other Lender promptly after any such set-off and application made by
such Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
SECTION 11. Continuing Guaranty; Assignments under Five Year Credit
Agreement. This Guaranty is a continuing guaranty and shall (i) remain in full
force and effect until the later of (x) the payment in full of the Obligations
and all other amounts payable under this Guaranty and (y) the expiration or
termination of the Commitments, (ii) be binding upon the Guarantor, its
successors and assigns, and (iii) inure to the benefit of, and be enforceable
by, the Agent, the Lenders and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing clause (iii), any
Lender may assign or otherwise transfer all or any portion of its rights and
obligations under the Five Year Credit Agreement (including, without limitation,
all or any portion of its Commitment, the Advances owing to it and any Note held
by it) to any other person or entity, and such other person or entity shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise, subject, however, to the provisions of Section 8.07
of the Five Year Credit Agreement.
SECTION 12. Governing Law. This Guaranty shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
COLGATE-PALMOLIVE COMPANY
By ____________________________________________
Title:
EXECUTION COPY
U.S. $330,000,000
364 DAY CREDIT AGREEMENT
Dated as of January 8, 1995
Among
COLGATE-PALMOLIVE COMPANY
as Borrower
THE BANKS NAMED HEREIN
as Banks
CITIBANK, N.A.
as Agent
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
as Co-Agent
and
CITICORP SECURITIES, INC.
and
J.P. MORGAN SECURITIES, INC.
as Arrangers
68888.6/NYL3
<PAGE>
T A B L E O F C O N T E N T S
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS 1
1.01. Certain Defined Terms 1
1.02. Computation of Time Periods 12
1.03. Accounting Terms 13
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES 13
2.01. The A Advances 13
2.02. Making the A Advances 13
2.03. The B Advances 15
2.04. Utilization and Facility Fees 19
2.05. Reduction of the Commitments 20
2.06. Repayment of A Advances 20
2.07. Interest on A Advances 20
2.08. Additional Interest on Eurodollar Rate Advances 21
2.09. Interest Rate Determination 22
2.10. Prepayments of A Advances 22
2.11. Increased Costs, Etc 23
2.12. Payments and Computations 24
2.13. Taxes 25
2.14. Sharing of Payments, Etc 28
ARTICLE III
CONDITIONS OF LENDING 29
3.01. Condition Precedent to Initial Advances 29
3.02. Conditions Precedent to Each A Borrowing 29
3.03. Conditions Precedent to Each B Borrowing 30
3.04. Determinations Under Section 3.01 31
ARTICLE IV
REPRESENTATIONS AND WARRANTIES 31
4.01. Representations and Warranties of the Borrower 31
ARTICLE V
68888.6/NYL3
<PAGE>
Section Page
COVENANTS OF THE BORROWER 34
5.01. Affirmative Covenants 34
5.02. Negaive Covenants 36
ARTICLE VI
EVENTS OF DEFAULT 40
6.01. Events of Default 40
ARTICLE VII
THE AGENT
7.01. Authorization and Action 43
7.02. Agent's Reliance, Etc 43
7.03. Citibank and Affiliates 44
7.04. Lender Credit Decision 44
7.05. Indemnification 44
7.06. Successor Agent 45
8.01. Amendments, Etc 45
8.02. Notices, Etc 46
8.03. No Waiver; Remedies 46
8.04. Costs, Expenses, Etc 46
8.05. Right of Set-off 47
8.06. Binding Effect; Assignment by Borrower 48
8.07. Assignments and Participations 48
8.08. Change of Control 51
8.09. Mitigation of Adverse Circumstances 52
8.10. Governing Law 52
8.11. Extensions of Termination Date for Commitments 52
8.12. Execution in Counterparts 53
8.13 Jurisdiction, Etc 53
8.14. Waiver of Jury Trial 54
68888.6/NYL3
<PAGE>
Exhibit A-1 - Form of A Note
Exhibit A-2 - Form of B Note
Exhibit B-1 - Notice of A Borrowing
Exhibit B-2 - Notice of B Borrowing
Exhibit C - Assignment and Acceptance
Exhibit D - Form of Opinion of Counsel for the Borrower
Exhibit E - Form of Opinion of Counsel to the Agent
Exhibit F - Form of Guaranty
Schedule I - List of Applicable Lending Offices
Schedule 4.01(f) - Disclosed Litigation
68888.6/NYL3
<PAGE>
EXECUTION COPY
364 DAY CREDIT AGREEMENT
Dated as of January 8, 1995
COLGATE-PALMOLIVE COMPANY, a Delaware corporation (the
"Borrower"), the banks (the "Banks") listed on the signature pages hereof,
Citibank, N.A., as agent (the "Agent") for the Lenders (as herein defined), and
Morgan Guaranty Trust Company of New York, as co-agent (the "Co-Agent"), agree
as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"A Advance" means an advance by a Lender to the Borrower as
part of an A Borrowing and refers to a Base Rate Advance or a
Eurodollar Rate Advance, each of which shall be a "Type" of A Advance.
"A Borrowing" means a borrowing consisting of simultaneous A
Advances of the same Type and having the same Interest Period made by
each of the Lenders pursuant to Section 2.01.
"A Note" means a promissory note of the Borrower payable to
the order of any Lender, in substantially the form of Exhibit A-1
hereto, evidencing the aggregate indebtedness of the Borrower to such
Lender resulting from the A Advances made by such Lender.
"Advance" means an A Advance or a B Advance.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
"Agent's Account" means the account of the Agent maintained by
the Agent at Citibank, N.A. with its office at 1 Court Square, 7th
Floor, Long Island City, New York 11120, account no. 36852248,
Attention: John Makrinos.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a Base
Rate Advance, such Lender's
68888.6/NYL3
<PAGE>
Eurodollar Lending Office in the case of a Eurodollar Rate Advance and,
in the case of a B Advance, the office of such Lender notified by such
Lender to the Borrower as its Applicable Lending Office with respect to
such B Advance.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Borrower
and the Agent, in substantially the form of Exhibit C hereto.
"B Advance" means an advance by a Lender to the Borrower as
part of a B Borrowing resulting from the auction bidding procedure
described in Section 2.03.
"B Borrowing" means a borrowing consisting of simultaneous B
Advances from each of the Lenders whose offer to make one or more B
Advances as part of such borrowing has been accepted by the Borrower
under the auction bidding procedure described in Section 2.03.
"B Note" means a promissory note of the Borrower payable to
the order of any Lender, in substantially the form of Exhibit A-2
hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from a B Advance made by such Lender.
"B Reduction" has the meaning specified in Section 2.01.
"Base Rate" means 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 average of the rates of interest announced
publicly by the Reference Banks in New York, New York, from
time to time, as their base or prime rate;
(b) 1/4 of one percent per annum above 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 any such date is not a Business Day, on the
next succeeding Business Day) for the three-week period ending
on the previous Friday by the Reference Banks 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
the average of the quotations for such rates received by each
Reference Bank from three New York certificate of deposit
dealers of recognized standing selected by it, in either case
adjusted to the nearest 1/4 of
68888.6/NYL3
<PAGE>
one percent or, if there is no nearest 1/4 of one percent, to
the next higher 1/4 of one percent; and
(c) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means an A Advance which bears interest as
provided in Section 2.07(a).
"Borrowing" means an A Borrowing or a B Borrowing.
"Borrowing Subsidiary" has the meaning specified in Section
8.06(b).
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings
are carried on in the London interbank market.
"Change of Control" has the meaning specified in Section
8.08(b).
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.
"Commitment" has the meaning specified in Section 2.01.
"Consolidated Net Tangible Assets" means, at any time, the
excess of (a) all assets which appear on the most recent consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries
prepared in accordance with generally accepted accounting principles,
after deducting therefrom the sum of:
(i) the book amount appearing on such consolidated
balance sheet of good will, trademarks, trademark rights,
trade names, trade name rights, copyrights, patents, patent
rights, licenses, unamortized debt discount and expense and
other like intangibles;
(ii) any write-up in the book value of any asset
resulting from a revaluation thereof subsequent to December
31, 1993, except write-ups of assets located outside of the
United States of America pursuant to applicable law or custom;
(iii) all reserves, including reserves for
deferred taxes, depreciation, obsolescence, depletion,
insurance and inventory valuation, but excluding
68888.6/NYL3
<PAGE>
contingency reserves not allocated for any particular purpose
and not deducted from assets;
(iv) the amount, if any, at which any shares of
capital stock of the Borrower appear on the asset side of such
consolidated balance sheet; and
(v) the amount of the minority interest, if any, in
the shares of stock and surplus of any Consolidated
Subsidiary;
over (b) all current liabilities of the Borrower and its Consolidated
Subsidiaries on a consolidated basis.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which would, in accordance with generally
accepted accounting principles, be included with those of the Borrower
in its consolidated financial statements as of such date.
"Debt" means (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, debentures, notes or other similar
instruments, (iii) obligations to pay the deferred purchase price of
property or services (other than accounts payable in the ordinary
course of business), (iv) obligations as lessee under leases which
shall have been or should be, in accordance with generally accepted
accounting principles, recorded as capital leases, and (v) obligations
under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness
or obligations of others of the kinds referred to in clauses (i)
through (iv) above.
"Disclosed Litigation" has the meaning specified in Section
4.01(f).
"Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender, or such other office
of such Lender as such Lender may from time to time specify to the
Borrower.
"Domestic Subsidiary" means any Subsidiary a majority of the
business of which is conducted within the United States of America, or
a majority of the properties and assets of which are located within the
United States of America, except (i) any Subsidiary substantially all
of the assets of which consist of the securities of Subsidiaries which
are not Domestic Subsidiaries, (ii) any Subsidiary which is an FSC as
defined in Section 922 of the Code and (iii) any Subsidiary for any
period during which an election under Section 936 of the Code applies
to such Subsidiary.
68888.6/NYL3
<PAGE>
"Environmental Action" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of
non-compliance or violation, investigation, proceeding, consent order
or consent agreement relating in any way to any Environmental Law,
Environmental Permit or Hazardous Materials or arising from alleged
injury or threat of injury to the environment including, without
limitation, (a) by any governmental or regulatory authority for
enforcement, cleanup, removal, response, remedial or other actions or
damages and (b) by any governmental or regulatory authority or any
third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment,
decree or judicial or agency interpretation, policy or guidance
relating to the environment or Hazardous Materials and applicable to
the Borrower or its Subsidiaries or any property owned or operated by
the Borrower or its Subsidiaries under the laws of the jurisdiction
where the Borrower or such Subsidiary or property is located.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title
IV of ERISA is a member of the Borrower's controlled group, or under
common control with the Borrower, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA Event" means (a) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has
been waived by the PBGC; (b) the provision by the administrator of any
Plan of a notice of intent to terminate such Plan, pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (c) the cessation
of operations at a facility of the Borrower or any of its ERISA
Affiliates in the circumstances described in Section 4062(e) of ERISA;
(d) the withdrawal by the Borrower or any of its ERISA Affiliates from
a Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (e)
the failure by the Borrower or any of its ERISA Affiliates to make a
payment to a Plan if the conditions for imposition of a lien under
Section 302(f)(1) of ERISA are satisfied; (f) the adoption of an
amendment to a Plan requiring the provision of security to such Plan,
pursuant to Section 307 of ERISA; or (g) the institution by the PBGC of
proceedings to terminate a Plan, pursuant to Section 4042 of ERISA, or
the occurrence of any event or condition described in Section 4042 of
68888.6/NYL3
<PAGE>
ERISA that could constitute grounds for the termination of, or the
appointment of a trustee to administer, a Plan.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender (or, if no such office
is specified, its Domestic Lending Office), or such other office of
such Lender as such Lender may from time to time specify to the
Borrower and the Agent.
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to the average (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such average is not
such a multiple) of the rate per annum at which deposits in U.S.
dollars are offered by the principal office of each of the Reference
Banks in London, England to prime banks in the London interbank market
at 11:00 A.M. (London time) two Business Days before the first day of
such Interest Period in an amount substantially equal to such Reference
Bank's Eurodollar Rate Advance comprising part of such Borrowing (or,
if such Borrowing is a B Borrowing, equal to $1,000,000) and for a
period equal to such Interest Period. The Eurodollar Rate for the
Interest Period for each Eurodollar Rate Advance comprising part of the
same Borrowing shall be determined by the Agent on the basis of
applicable rates furnished to and received by the Agent from the
Reference Banks two Business Days before the first day of such Interest
Period, subject, however, to the provisions of Section 2.09.
"Eurodollar Rate Advance" means an A Advance which bears
interest as provided in Section 2.07(c) or a B Advance which bears
interest as provided in Section 2.03(h) for a Quoted Margin Advance.
"Eurodollar Rate Reserve Percentage" of any Lender for the
Interest Period for any Eurodollar Rate Advance means the reserve
percentage applicable during such Interest Period (or if more than one
such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any
such percentage shall be so applicable) under regulations issued from
time to time by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Lender with
68888.6/NYL3
<PAGE>
respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on such
transactions received by each Reference Bank from three Federal funds
brokers of recognized standing selected by it.
"Guaranty" has the meaning specified in Section 8.06(b).
"Hazardous Materials" means petroleum and petroleum products,
byproducts or breakdown products, radioactive materials,
asbestos-containing materials, radon gas and any other chemicals,
materials or substances designated, classified or regulated as being
"hazardous" or "toxic," or words of similar import, under any federal,
state, local or foreign statute, law, ordinance, rule, regulation,
code, order, judgment, decree or agency interpretation, policy or
guidance and applicable to the Borrower or its Subsidiaries or any
property owned or operated by the Borrower or its Subsidiaries under
the laws of the jurisdiction where the Borrower or such Subsidiary or
property is located.
"Insufficiency" means, with respect to any Plan, the amount,
if any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"Interest Period" means, for each Advance (other than a Base
Rate Advance) comprising part of the same Borrowing, the period
commencing on the date of such Advance and ending on the last day of
the period selected by the Borrower pursuant to the provisions below.
The duration of each such Interest Period shall be 1, 2, 3 or 6 months
in the case of a Eurodollar Rate Advance, or in the case of a B
Advance, such period as the Borrower may select by notice received by
the Agent not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the first day of such Interest Period; provided,
however, that:
(i) the Borrower may not select any Interest Period
which ends after the Termination Date;
68888.6/NYL3
<PAGE>
(ii) Interest Periods commencing on the same date for
Advances comprising part of the same Borrowing shall be of the
same duration;
(iii) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, provided, in the case of any
Interest Period for a Eurodollar Rate Advance, that if such
extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding
Business Day; and
(iv) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month.
"Lenders" means the Banks listed on the signature pages hereof
and each assignee that shall become a party hereto pursuant to Section
8.07 or Section 2.11(c).
"Lien" means any mortgage, lien, pledge, security interest,
encumbrance or charge of any kind, any conditional sale or other title
retention agreement or any lease in the nature thereof, provided that
the term "Lien" shall not include any lease involved in a Sale and
Leaseback Transaction.
"Major Domestic Manufacturing Property" means any Principal
Domestic Manufacturing Property the net depreciated book value of which
on the date as of which the determination is made exceeds 2.5% of
Consolidated Net Tangible Assets.
"Material Adverse Change" means any material adverse change in
the business, condition or operations of the Borrower and its
Consolidated Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
the business, condition or operations of the Borrower and its
Consolidated Subsidiaries taken as a whole.
"Moody's" means Moody's Investors Service, Inc. or any
successor to its business of rating long-term debt.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any of its
ERISA Affiliates is
68888.6/NYL3
<PAGE>
making or accruing an obligation to make contributions, or has within
any of the preceding three plan years made or accrued an obligation to
make contributions.
"Multiple Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of the Borrower or any of its ERISA Affiliates and at least
one Person other than the Borrower and its ERISA Affiliates or (b) was
so maintained and in respect of which the Borrower or any of its ERISA
Affiliates could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"Note" means an A Note or a B Note.
"Notice of A Borrowing" has the meaning specified in Section
2.02(a).
"Notice of B Borrowing" has the meaning specified in Section
2.03(b).
"Offer" has the meaning specified in Section 2.03(c).
"Operating Cash Flow" of the Borrower and its Subsidiaries for
any period means (A) net income for such period plus (B) the sum of all
non-cash expenses and charges deducted in arriving at net income for
such period, including but not limited to allowances for depreciation
and amortization and accruals for interest and taxes to the extent that
they exceed payments for interest and taxes during the period, less (C)
(i) all payments of interest and taxes during the period to the extent
that they exceed accruals for interest and taxes for the period and
(ii) other payments of expenses not deducted in arriving at net income
for the period and (D) less net gains or plus net losses from the sale
or other disposition of fixed assets or businesses for the period, to
the extent they were included in computing net income for the period,
but the Borrower may exclude from the computation under this clause (D)
any gains from the sale of certain parcels of real estate in New Jersey
pursuant to its present program to develop and sell them over a period
of years; provided that the aggregate number of parcels in the program
shall not exceed 35.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer
Plan.
68888.6/NYL3
<PAGE>
"Principal Domestic Manufacturing Property" means any
building, structure or facility (including the land on which it is
located and the improvements and fixtures constituting a part thereof)
used primarily for manufacturing or processing which is owned or leased
by the Borrower or any of its Subsidiaries, is located in the United
States of America and the net depreciated book value of which on the
date as of which the determination is made exceeds 1% of Consolidated
Net Tangible Assets, except any such building, structure or facility
which the Board of Directors of the Borrower by resolution declares is
not of material importance to the total business conducted by the
Borrower and its Subsidiaries as an entirety.
"Principal Domestic Subsidiary" means (i) each Subsidiary
which owns or leases a Principal Domestic Manufacturing Property, (ii)
each Domestic Subsidiary the consolidated net worth of which exceeds
2.5% of Consolidated Net Tangible Assets (as set forth in the most
recent financial statements referred to in Section 4.01(e) or delivered
pursuant to Section 5.01(e)(i) or (ii)), and (iii) each Domestic
Subsidiary of each Subsidiary referred to in the foregoing clause (i)
or (ii) except any such Subsidiary the accounts receivable and
inventories of which have an aggregate net book value of less than
$5,000,000.
"Quoted Margin", "Quoted Margin Advance", "Quoted Rate" and
"Quoted Rate Advance" shall have the respective meanings specified in
Section 2.03(b).
"Reference Banks" means Citibank, N.A. and Morgan Guaranty
Trust Company of New York.
"Register" has the meaning specified in Section 8.07(c).
"Rentals" with respect to any lease and for any period means
the aggregate amounts payable by the lessee pursuant to the terms of
the lease for such period, whether or not referred to as rent. Whenever
it is necessary to determine the amount of Rentals for any period in
the future and to the extent that such Rentals are not definitely
determinable by the terms of the lease, for the purpose of this
definition such Rentals may be estimated in such reasonable manner as
the Borrower may determine.
"Required Lenders" means at any time Lenders holding at least
66-2/3% of the then aggregate unpaid principal amount of the A Notes
held by Lenders, or, if no such principal amount is then outstanding,
Lenders having at least 66-2/3% of the Commitments (provided that, for
purposes hereof, neither the Borrower, nor any of its Affiliates, if a
Lender, shall be included in (i) the Lenders holding such amount of the
A Advances or having such amount of the Commitments or (ii) determining
the aggregate unpaid principal amount of the A Advances or the total
Commitments).
68888.6/NYL3
<PAGE>
"Restricted Property" means and includes (i) all Principal
Domestic Manufacturing Properties, (ii) all Securities of all Principal
Domestic Subsidiaries, and (iii) all inventories and accounts
receivable of the Borrower and its Principal Domestic Subsidiaries.
"S&P" means Standard & Poor's Corporation or any successor to
its business of rating long-term debt.
"Sale and Leaseback Debt" of any Person means, at the date of
determination thereof, the aggregate amount of Rentals required to be
paid by such Person under all Sale and Leaseback Transactions to which
such Person is a party during the respective remaining terms thereof
(after giving effect to any renewals and extensions at the option of
the lessor) discounted from the respective dates of payment of such
Rentals to such date of determination at the actual interest factor
included in such Rentals or, if such interest factor cannot be readily
determined, at an interest factor calculated in such manner as the
Borrower shall reasonably determine; provided, however, that if any
portion of the net proceeds of the sale of the property leased pursuant
to a Sale and Leaseback Transaction has been or is being applied as
provided in Section 5.02(b)(ii) and/or Section 5.02(b)(iii), there
shall be excluded in determining Sale and Leaseback Debt that portion
of the discounted Rentals required to be paid under such Sale and
Leaseback Transaction which bears the same ratio to the total
discounted Rentals required to be paid under such Sale and Leaseback
Transaction as the portion of such net proceeds which has been or is
being applied as provided in Section 5.02(b)(ii) and/or Section
5.02(b)(iii) bears to the total amount of such net proceeds.
"Sale and Leaseback Transaction" means any arrangement
directly or indirectly providing for the leasing by the Borrower or any
Principal Domestic Subsidiary for a period in excess of three years of
any Principal Domestic Manufacturing Property which was sold or
transferred by the Borrower or any Principal Domestic Subsidiary more
than 120 days after the acquisition thereof or the completion of
construction thereof, except any such arrangement solely between the
Borrower and a Principal Domestic Subsidiary or solely between
Principal Domestic Subsidiaries.
"Securities" of any corporation means and includes (i) all
capital stock of all classes of and all other equity interests in such
corporation and all rights, options or warrants to acquire the same,
and (ii) all promissory notes, debentures, bonds and other evidences of
Debt of such corporation.
"Senior Funded Debt" of any Person means, as of the date of
determination thereof, all Debt of such Person which (i) matures by its
terms more than one year
68888.6/NYL3
<PAGE>
after the date as of which such determination is made (including any
such Debt which is renewable or extendable, or in effect renewable or
extendable through the operation of a revolving credit agreement or
other similar agreement, at the option of such Person for a period or
periods ending more than one year after the date as of which such
determination is made), and (ii) is not, by the terms of any instrument
or instruments evidencing or securing such Debt or pursuant to which
such Debt is outstanding, expressly subordinated in right of payment to
any other Debt of such Person.
"Significant Subsidiary" means (x) each Subsidiary which is a
Principal Domestic Subsidiary by operation of clause (i), (ii) or (iii)
of the definition of Principal Domestic Subsidiary, and (y) each other
Subsidiary whose assets as at the end of the fiscal year immediately
preceding the time of determination exceeded 2% of consolidated assets
of the Borrower and its Subsidiaries as at the end of such fiscal year.
"Single Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of the Borrower or any of its ERISA Affiliates and no Person
other than the Borrower and its ERISA Affiliates or (b) was so
maintained and in respect of which the Borrower or any of its ERISA
Affiliates could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
"Subsidiary" means any corporation of which more than 50% of
the outstanding capital stock having ordinary voting power to elect a
majority of the Board of Directors of such corporation (irrespective of
whether or not at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly
owned by the Borrower, by the Borrower and one or more other
Subsidiaries, or by one or more other Subsidiaries.
"Termination Date" means the earlier of (a) subject to the
provisions of Section 8.11, the 364th day after the date hereof and (b)
the date of termination in whole of the Commitments pursuant to Section
2.05 or 6.01.
"Withdrawal Liability" shall have the meaning given such term
under Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each means "to but excluding".
68888.6/NYL3
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SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(e).
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The A Advances. Each Lender severally agrees, on
the terms and conditions hereinafter set forth, to make A Advances to the
Borrower or a Borrowing Subsidiary from time to time on any Business Day during
the period from the date hereof until the Termination Date in an aggregate
amount not to exceed at any time outstanding the amount set opposite such
Lender's name on the signature pages hereof or, if such Lender has entered into
any Assignment and Acceptance, set forth for such Lender in the Register
maintained by the Agent pursuant to Section 8.07(c), as such amount may be
reduced pursuant to Section 2.05 (such Lender's "Commitment"), provided that the
aggregate amount of the Commitments of the Lenders shall be deemed used from
time to time to the extent of the aggregate amount of the B Advances then
outstanding and such deemed use of the aggregate amount of the Commitments shall
be applied to the Lenders ratably according to their respective Commitments
(such deemed use of the aggregate amount of the Commitments being a "B
Reduction"). Each A Borrowing shall be in an aggregate amount not less than
$25,000,000 or an integral multiple of $5,000,000 in excess thereof (unless the
aggregate amount of the unused Commitments is less than $25,000,000, in which
case such Borrowing shall be equal to the aggregate amount of the unused
Commitments) and shall consist of A Advances of the same Type and having the
same Interest Period made on the same day by the Lenders ratably according to
their respective Commitments. Within the limits of each Lender's Commitment, the
Borrower may from time to time borrow, repay pursuant to Section 2.06 or prepay
pursuant to Section 2.10 or 2.11(b) and reborrow under this Section 2.01.
SECTION 2.02. Making the A Advances. (a) Each A Borrowing
shall be made on notice given by the Borrower or a Borrowing Subsidiary, as the
case may be, and received by the Agent, which shall give prompt notice thereof
to each Lender by telecopier or telex, not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the date of the proposed A Borrowing in
the case of Eurodollar Rate Advances, or the same Business Day in the case of
Base Rate Advances. Each such notice of an A Borrowing (a "Notice of A
Borrowing") shall be given by telecopier, telex or cable, confirmed immediately
by hand or by mail, in substantially the form of Exhibit B-1 hereto, specifying
therein the requested (i) date of such A Borrowing, (ii) Type of A Advances
comprising such A Borrowing, (iii) aggregate amount of such A Borrowing, and
(iv) in the case of an A Borrowing comprised of Eurodollar Rate Advances, the
Interest Period for each such
68888.6/NYL3
<PAGE>
A Advance. Upon fulfillment of the applicable conditions set forth in Article
III, each Lender shall, before 12:00 noon (New York City time) on the date of
such A Borrowing, make available for the account of its Applicable Lending
Office to the Agent at the Agent's Account, in immediately available funds, such
Lender's ratable portion of such A Borrowing. After the Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article
III, the Agent will promptly make such funds available to the Borrower at the
Agent's address referred to in Section 8.02.
(b) Anything in subsection (a) above to the contrary
notwithstanding:
(i) if any Lender shall, at least one Business Day before the
date of any requested Borrowing, notify the Agent that the introduction
of or any change in or in the interpretation of any law or regulation
makes it unlawful, or that any central bank or other governmental
authority asserts that it is unlawful, for such Lender or its
Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or to fund or maintain Eurodollar Rate
Advances hereunder, the Agent shall immediately notify the Borrower and
each other Lender and the right of the Borrower and any Borrowing
Subsidiary to select Eurodollar Rate Advances for the portion of such
Borrowing advanced by the Lender which has provided the notice
described above or the portion of any subsequent Borrowing advanced by
such Lender shall be suspended until such Lender shall notify the Agent
and the Agent will notify the Borrower that the circumstances causing
such suspension no longer exist, and each such Advance shall be a Base
Rate Advance;
(ii) if no Reference Bank furnishes timely information to the
Agent for determining the Eurodollar Rate for any Eurodollar Rate
Advances comprising any requested Borrowing, the Agent shall
immediately notify each Lender and the Borrower and the right of the
Borrower and any Borrowing Subsidiary to select Eurodollar Rate
Advances for such Borrowing or any subsequent Borrowing shall be
suspended until the Agent shall notify the Lenders and the Borrower
that the circumstances causing such suspension no longer exist, and
each Advance comprising such Borrowing shall be a Base Rate Advance;
and
(iii) if the Required Lenders shall, at least one Business Day
before the date of any requested Borrowing, notify the Agent that the
Eurodollar Rate for Eurodollar Rate Advances comprising such Borrowing
will not adequately reflect the cost to such Required Lenders of
making, funding or maintaining their respective Eurodollar Rate
Advances for such Borrowing, the Agent shall immediately notify the
Borrower and each other Lender and the right of the Borrower and any
Borrowing Subsidiary to select Eurodollar Rate Advances for such
Borrowing or any subsequent Borrowing shall be suspended, and each
Advance comprising such Borrowing shall be a Base Rate Advance. The
Lenders will review regularly the circumstances causing such
68888.6/NYL3
<PAGE>
suspension, and as soon as such circumstances no longer exist the
Required Lenders will notify the Agent and the Agent will notify the
Borrower that such suspension is terminated.
(c) Each Notice of A Borrowing shall be irrevocable and
binding on the Borrower or Borrowing Subsidiary, as the case may be. In the case
of any A Borrowing that the related Notice of A Borrowing specifies is to be
comprised of Eurodollar Rate Advances, the Borrower or Borrowing Subsidiary, as
the case may be, shall indemnify each Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill on or before the
date specified in such Notice of A Borrowing for such A Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss
(excluding in any event loss of anticipated profits), cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds acquired
by such Lender to fund the A Advance to be made by such Lender as part of such A
Borrowing when such A Advance, as a result of such failure, is not made on such
date.
(d) Unless the Agent shall have received notice from a Lender
prior to the date of any A Borrowing that such Lender will not make available to
the Agent such Lender's ratable portion of such A Borrowing, the Agent may
assume that such Lender has made such portion available to the Agent on the date
of such A Borrowing in accordance with subsection (a) of this Section 2.02 and
the Agent may, in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If and to the extent that such Lender shall
not have so made such ratable portion available to the Agent, such Lender and
the Borrower severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, the interest rate
applicable at the time to A Advances comprising such A Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender shall repay to the
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's A Advance as part of such A Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the A Advance to be made
by it as part of any A Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its A Advance on the date of such A
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the A Advance to be made by such other Lender on the date of any
A Borrowing.
SECTION 2.03. The B Advances. (a) Each Lender severally agrees
that the Borrower or a Borrowing Subsidiary, as the case may be, may request B
Borrowings under this Section 2.03 from time to time on any Business Day during
the period from the date hereof until the date occurring one week prior to the
Termination Date, in the manner
68888.6/NYL3
<PAGE>
set forth below; provided that, following the making of each B Borrowing, the
aggregate amount of the Advances then outstanding shall not exceed the aggregate
amount of the Commitments of the Lenders (computed without regard to any B
Reduction).
(b) The Borrower or a Borrowing Subsidiary, as the case may
be, may request a B Borrowing under this Section 2.03 by delivering to the
Agent, by telecopier, telex or cable, confirmed immediately by hand or by mail,
a notice of a B Borrowing (a "Notice of B Borrowing"), in substantially the form
of Exhibit B-2 hereto, specifying:
(i) the date and aggregate amount of the proposed B Borrowing
(which shall not be less than $25,000,000 or an integral multiple of
$5,000,000 in excess thereof; provided that if the aggregate amount of
the unused Commitments is less than $25,000,000, the amount of such
proposed Borrowing shall be equal to the aggregate amount of the unused
Commitments),
(ii) whether each Lender should quote (x) a rate of interest (a
"Quoted Rate") to be the entire rate applicable to the proposed B
Advance (a "Quoted Rate Advance") or (y) a marginal per annum rate (a
"Quoted Margin") to be added to the Eurodollar Rate for an Interest
Period equal to the term of the proposed B Borrowing (a "Quoted Margin
Advance"),
(iii) the maturity date for repayment of each B Advance to be
made as part of such B Borrowing (which maturity date may not be
earlier than the date occurring one week after the date of such B
Borrowing and may not be later than the Termination Date),
(iv) the interest payment date or dates relating thereto, and
(v) any other terms to be applicable to such B Borrowing,
not later than 10:00 A.M. (New York City time) (A) at least one Business Day
prior to the date of the proposed B Borrowing, in the case of a Quoted Rate
Advance and (B) at least five Business Days prior to the date of the proposed B
Borrowing, in the case of a Quoted Margin Advance. The Agent shall in turn
promptly notify each Lender of each request for a B Borrowing received by it
from the Borrower or a Borrowing Subsidiary, as the case may be, by sending such
Lender a copy of the related Notice of B Borrowing.
(c) Each Lender may, if, in its sole discretion, it elects to
do so, irrevocably offer to make one or more B Advances to the Borrower or
Borrowing Subsidiary, as the case may be, as part of such proposed B Borrowing
at a rate or rates of interest specified by such Lender in its sole discretion,
by delivering written notice (an "Offer") to the Agent (which shall give prompt
notice thereof to the Borrower or Borrowing
68888.6/NYL3
<PAGE>
Subsidiary, as the case may be) before 9:30 A.M. (New York City time) on the
date of such proposed B Borrowing, in the case of a Quoted Rate Advance and
before 10:00 A.M. (New York City time) three Business Days before the date of
such proposed B Borrowing, in the case of a Quoted Margin Advance, specifying
(x) the minimum amount and maximum amount of each B Advance which such Lender
would be willing to make as part of such proposed B Borrowing (which amounts
may, subject to the proviso to Section 2.03(a), exceed such Lender's Commitment,
if any), (y) a Quoted Rate or a Quoted Margin therefor (as requested by the
Notice of B Borrowing) and (z) such Lender's Applicable Lending Office with
respect to such B Advance; provided that if the Agent in its capacity as a
Lender shall, in its sole discretion, elect to make any such Offer, it shall
notify the Borrower of such Offer at least 30 minutes before the time and on the
date on which notice of such election is to be given to the Agent by the other
Lenders. If any Lender shall elect not to make an Offer, such Lender shall so
notify the Agent before the time and on the date on which notice of such
election is to be given to the Agent by the other Lenders, and such Lender shall
not be obligated to, and shall not, make any B Advance as part of such B
Borrowing; provided that the failure by any Lender to give such notice shall not
cause such Lender to be obligated to make any B Advance as part of such proposed
B Borrowing.
(d) The Borrower or Borrowing Subsidiary, as the case may be,
shall, in turn, (A) before 10:30 A.M. (New York City time) on the date of such
proposed B Borrowing, in the case of a Quoted Rate Advance and (B) before 11:00
A.M. (New York City time) three Business Days before the date of such proposed B
Borrowing, in the case of a Quoted Margin Advance, either
(i) cancel such B Borrowing by giving the Agent notice to that
effect, and such B Borrowing shall not be made, or
(ii) accept one or more of the Offers made by any Lender or
Lenders pursuant to paragraph (c) above, in its sole discretion, by
giving notice to the Agent of the amount of each B Advance to be made
by each Lender as part of such B Borrowing (which amount shall be equal
to or greater than the minimum amount, and equal to or less than the
maximum amount, offered to the Borrower or Borrowing Subsidiary, as the
case may be, by the Agent on behalf of such Lender for such B Advance
in such Lender's notice given pursuant to subsection (c) above), and
such notice shall reject any remaining Offers made by Lenders pursuant
to subsection (c) above, provided that (x) the Borrower or Borrowing
Subsidiary, as the case may be, shall not accept Offers for an
aggregate principal amount of B Advances in excess of the aggregate
principal amount stated in the Notice of B Borrowing, (y) the Borrower
or Borrowing Subsidiary, as the case may be, shall not accept any Offer
unless all Offers specifying a lower Quoted Rate or Quoted Margin, as
the case may be, are also accepted, and (z) if all Offers specifying
the same Quoted Rate or Quoted Margin, as the case may be, are not
accepted in full, the Borrower or Borrowing
68888.6/NYL3
<PAGE>
Subsidiary, as the case may be, shall apportion its acceptances among
such Offers in proportion to the respective principal amounts of such
Offers (rounded, where necessary, to the nearest $1,000,000).
(iii) If the Borrower notifies the Agent that such B Borrowing
is cancelled pursuant to paragraph (d)(i) above, the Agent shall give
prompt notice thereof to the Lenders and such B Borrowing shall not be
made.
(e) If the Borrower accepts one or more of the Offers, the
Agent shall in turn promptly (but in any event, not later than 11:30 A.M. on
such date) notify (A) each Lender that has made an Offer, of the date and
aggregate amount of such B Borrowing and whether or not any Offer made by such
Lender has been accepted by the Borrower, (B) each Lender that is to make a B
Advance as part of such B Borrowing, of the amount of each B Advance to be made
by such Lender as part of such B Borrowing, and (C) each Lender that is to make
a B Advance as part of such B Borrowing, upon receipt, that the Agent has
received forms of documents appearing to fulfill the applicable conditions set
forth in Article III. Each Lender that is to make a B Advance as part of such B
Borrowing shall, before 12:00 noon (New York City time) on the date of such B
Borrowing specified in the notice received from the Agent pursuant to clause (A)
of the preceding sentence or any later time when such Lender shall have received
notice from the Agent pursuant to clause (C) of the preceding sentence, make
available for the account of its Applicable Lending Office to the Agent at the
Agent's Account, in immediately available funds, such Lender's portion of such B
Borrowing. Upon fulfillment of the applicable conditions set forth in Article
III and after receipt by the Agent of such funds, the Agent will make such funds
promptly available to the Borrower at the Agent's address referred to in Section
8.02. Promptly after each B Borrowing the Agent will notify each Lender of the
amount of the B Borrowing, the consequent B Reduction and the dates upon which
such B Reduction commenced and will terminate.
(f) If the Borrower notifies the Agent that it accepts one or
more of the Offers made by any Lender or Lenders pursuant to paragraph (d)(ii)
above, such notice of acceptance shall be irrevocable and binding on the
Borrower. The Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill on or
before the date specified in the related Notice of B Borrowing for such B
Borrowing the applicable conditions set forth in Article III, including, without
limitation, any loss (excluding in any event loss of any anticipated profit),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the B Advance to be made
by such Lender as part of such B Borrowing when such B Advance, as a result of
such failure, is not made on such date.
(g) Within the limits and on the conditions set forth in this
Section 2.03, the Borrower may from time to time borrow under this Section 2.03,
repay or prepay
68888.6/NYL3
<PAGE>
pursuant to subsection (h) below, and reborrow under this Section 2.03, provided
that a B Borrowing shall not be made within three Business Days of the date of
any other B Borrowing.
(h) The Borrower shall repay to the Agent for the account of
each Lender that has made a B Advance, or for the account of each other holder
of a B Note, on the maturity date of such B Advance (such maturity date being
that specified by the Borrower for repayment of such B Advance in the related
Notice of B Borrowing and provided in the B Note evidencing such B Advance), the
then unpaid principal amount of such B Advance. The Borrower shall have no right
to prepay any principal amount of any B Advance.
(i) The Borrower shall pay interest on the unpaid principal
amount of each B Advance from the date of such B Advance to the date the
principal amount of such B Advance is repaid in full, at (x) the Quoted Rate, in
the case of a Quoted Rate Advance, and (y) at the sum of the Eurodollar Rate for
the Interest Period of such B Advance plus the Quoted Margin, in the case of a
Quoted Margin Advance, in each case as specified for such B Advance by the
Lender making such B Advance in its Offer with respect thereto, payable on the
interest payment date or dates specified by the Borrower for such B Advance in
the related Notice of B Borrowing and set forth in the B Note evidencing such B
Advance.
(j) The indebtedness of the Borrower resulting from each B
Advance made to the Borrower as part of a B Borrowing shall be evidenced by a
separate B Note of the Borrower payable to the order of the Lender making such B
Advance.
(k) Upon delivery of each Notice of B Borrowing, the Borrower
shall pay a non-refundable fee to the Agent for its own account in such amount
as shall have been agreed to in writing by the Borrower and the Agent.
SECTION 2.04. Utilization and Facility Fees. (a) The Borrower
agrees to pay to the Agent for the account of each Lender (i) a utilization fee
on the average daily amount of such Lender's Commitment (whether or not used)
and (ii) a facility fee on the average daily amount of such Lender's Commitment
(whether or not used), each accruing from the date on which this Agreement
becomes fully executed in the case of each Bank and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender
in the case of each other Lender until the Termination Date, payable on the last
day of each March, June, September and December during the term of such Lender's
Commitment, commencing March 31, 1995, and on the Termination Date, computed
from time to time at the rates per annum set forth below under the headings
Utilization Fee and Facility Fee, respectively, opposite the lower of the
ratings then applicable to the Borrower's long-term senior debt as published by
S&P and Moody's:
68888.6/NYL3
<PAGE>
Utilization Facility
Moody's S&P Fee Fee
A3 or above and A- or above 0.000% 0.075%
Baa2 or above and BBB or above 0.070% 0.125%
Lower than above or not rated 0.150% 0.175%
provided, however, that the utilization fee shall be payable only with respect
to days on which the sum of the average daily unpaid principal amount of all
Advances hereunder is in excess of fifty percent of the average daily amount of
the sum of the Commitments hereunder.
(b) Agent's Fees. The Borrower shall pay to the Agent for its
own account such fees as may from time to time be agreed between the Borrower
and the Agent.
SECTION 2.05. Reduction of the Commitments. The Borrower shall
have the right, upon at least three Business Days' notice to the Agent, to
terminate in whole all of the Commitments or reduce ratably in part the unused
portions of the respective Commitments of the Lenders, provided that the
aggregate amount of the Commitments of the Lenders shall not be reduced to an
amount which is less than the aggregate principal amount of the Advances then
outstanding, and provided further that each partial reduction (other than a
reduction pursuant to Section 2.11) shall be in the aggregate amount of
$25,000,000 or an integral multiple thereof.
SECTION 2.06. Repayment of A Advances. The Borrower or
Borrowing Subsidiary, as the case may be, shall repay to the Agent for the
ratable account of the Lenders (a) on the Termination Date, the unpaid principal
amount of each Base Rate Advance made to the Borrower or Borrowing Subsidiary,
as the case may be, and (b) on the last day of the Interest Period for each
other A Advance made to the Borrower or Borrowing Subsidiary, as the case may
be, the unpaid principal amount of such A Advance.
SECTION 2.07. Interest on A Advances. The Borrower or
Borrowing Subsidiary, as the case may be, shall pay interest on the unpaid
principal amount of each A Advance made by each Lender to the Borrower or
Borrowing Subsidiary, as the case may be, from the date of such A Advance until
such principal amount shall be paid in full, at the following rates per annum:
(a) Base Rate Advances. If such A Advance is a Base Rate
Advance, a rate per annum equal at all times to the Base Rate in effect
from time to time, payable quarterly on the last day of each March,
June, September, and December during such
68888.6/NYL3
<PAGE>
period and on the date such Base Rate Advance shall be paid in full;
provided that any amount of principal which is not paid when due
(whether at stated maturity, by acceleration or otherwise) 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 at all
times to 1% per annum above the Base Rate in effect from time to time.
(b) Eurodollar Rate Advances. If such A Advance is a
Eurodollar Rate Advance, a rate per annum equal during the Interest
Period for such A Advance to the sum of the Eurodollar Rate for such
Interest Period plus the per annum rate equal from time to time to the
rate set forth below opposite the lower of the ratings then applicable
to the Borrower's long-term senior debt as published by S&P and
Moody's:
Moody's S&P Rate
A3 or above and A- or above 0.250%
Baa2 or above and BBB or above 0.275%
Lower than above or not rated 0.375%
payable on the last day of such Interest Period and, if such Interest
Period has a duration of more than three months, on each day which
occurs during such Interest Period every three months from the first
day of such Interest Period; provided that any amount of principal
which is not paid when due (whether at stated maturity, by acceleration
or otherwise) 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 (x) until the end of the then current Interest
Period, 1% per annum above the rate per annum required to be paid on
such A Advance immediately prior to the date on which such amount
became due, and (y) thereafter, 1% per annum above the Base Rate in
effect from time to time.
SECTION 2.08. Additional Interest on Eurodollar Rate Advances.
The Borrower or Borrowing Subsidiary, as the case may be, shall pay to each
Lender, so long as such Lender shall be required under regulations of the Board
of Governors of the Federal Reserve System to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
additional interest on the unpaid principal amount of each Eurodollar Rate
Advance of such Lender to the Borrower or Borrowing Subsidiary, as the case may
be, from the date of such Advance until such principal amount is paid in full,
at an interest rate per annum equal at all times to the remainder obtained by
subtracting (i) the Eurodollar Rate for the Interest Period for such Advance
from (ii) the rate obtained by dividing such Eurodollar Rate by a percentage
equal to 100% minus the Eurodollar Rate
68888.6/NYL3
<PAGE>
Reserve Percentage of such Lender for such Interest Period, payable on each date
on which interest is payable on such Advance. Such additional interest shall be
determined by such Lender and the Borrower or Borrowing Subsidiary, as the case
may be, shall be notified of such additional interest.
SECTION 2.09. Interest Rate Determination. (a) Each Reference
Bank agrees to furnish to the Agent timely information for the purpose of
determining the Base Rate from time to time in effect and each Eurodollar Rate,
as applicable.
(b) The Agent shall give prompt notice to the Borrower or
Borrowing Subsidiary and the Lenders of the applicable interest rate determined
by the Agent for purposes of Section 2.03(i)(y) or Section 2.07, and the rate,
if any, furnished by the Reference Banks for the purpose of determining the
interest rate.
(c) If no Reference Bank furnishes timely information to the
Agent for determining the Base Rate in effect from time to time when Base Rate
Advances are outstanding, the Agent shall immediately give notice to each Lender
and the Required Lenders shall immediately designate an additional Reference
Bank for the purpose of determining the Base Rate, but such designation shall
terminate if a replacement Reference Bank is nominated and approved as provided
in the following sentence. Whenever a Reference Bank either ceases to be a
Lender or repeatedly fails to give timely information to the Agent for
determining the Base Rate or the Eurodollar Rate, the Agent will give prompt
notice thereof to the Lenders and will nominate another Lender to replace such
Reference Bank, and such Lender shall, if approved by the Required Lenders and
the Borrower, replace such Reference Bank.
SECTION 2.10. Prepayments of A Advances. The Borrower or
Borrowing Subsidiary, as the case may be, may, upon notice to the Agent stating
the proposed date and aggregate principal amount of the prepayment, and if such
notice is given, or if the Borrower or Borrowing Subsidiary, as the case may be,
is required to prepay any A Advance pursuant to Section 2.11(c) or 5.02(b)(ii)
hereof, the Borrower or Borrowing Subsidiary, as the case may be, shall, prepay
the outstanding principal amounts of the A Advances comprising part of the same
A Borrowing in whole or ratably in part (provided that with regard to
prepayments made pursuant to Section 2.11(c), the Borrower or such Borrowing
Subsidiary shall be required to prepay only the outstanding principal amounts of
the A Advances owing to the Lender or Lenders affected by Section 2.11(c)),
together with accrued interest to the date of such prepayment on the principal
amount prepaid, and the losses, costs and expenses, if any, payable pursuant to
Section 8.04(c). Such notice shall be received by the Agent not later than 11:00
A.M. (New York City time), on the third Business Day prior to the date of the
proposed prepayment in the case of Eurodollar Rate Advances, or on the Business
Day prior to such date in the case of Base Rate Advances. Except for prepayments
made pursuant to Section 2.11(c) or 5.02(b), each partial prepayment shall be in
an aggregate
68888.6/NYL3
<PAGE>
principal amount not less than $5,000,000 or an integral multiple of $1,000,000
in excess thereof, and any partial prepayment of any Eurodollar Rate Advances
shall not leave outstanding less than $25,000,000 aggregate principal amount of
such A Advances comprising part of any A Borrowing.
SECTION 2.11. Increased Costs, Etc. (a) If, due to either (i)
the introduction of or any change (other than any change by way of imposition or
increase of reserve requirements, in the case of Eurodollar Rate Advances,
included in the Eurodollar Rate Reserve Percentage) in or in the interpretation
of any law or regulation or (ii) the compliance with any guideline or request
from any central bank or other governmental authority (whether or not having the
force of law), there shall be any increase in the costs to any Lender of
agreeing to make or making, funding or maintaining Eurodollar Rate Advances,
then the Borrower shall from time to time, upon demand by such Lender (with a
copy of such demand to the Agent), pay to the Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased costs for a period beginning not more than 90 days prior to such
demand. A certificate as to the amount of such increased cost submitted to the
Borrower and the Agent by such Lender, setting forth in reasonable detail the
calculation of the increased costs, shall be conclusive and binding for all
purposes, absent manifest error.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender which decreases such Lender's
return on its capital (after taking into account any changes in the Eurodollar
Rate and Eurodollar Rate Reserve Percentage) and that the amount of such capital
is increased by or based upon the existence of such Lender's commitment to lend
hereunder and other commitments of this type, then, upon demand by such Lender
(with a copy of such demand to the Agent), the Borrower shall immediately pay to
the Agent for the account of such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender or such
corporation in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder, such compensation to cover a
period beginning not more than 90 days prior to such demand. A certificate as to
such amounts submitted to the Borrower and the Agent by such Lender, setting
forth in reasonable detail the calculation of the amount required to be paid
hereunder, shall be conclusive and binding for all purposes, absent manifest
error.
(c) Within 30 days after the receipt of (A) notice from a
Lender as described in Section 2.02(b)(i), or (B) a demand for compensation from
a Lender under subsection (a) or (b) above, the Borrower may, by at least three
Business Days' notice to the Agent, terminate the Commitment (in whole but not
in part) of any Lender which has
68888.6/NYL3
<PAGE>
provided such notice under Section 2.02(b)(i), or demanded compensation under
subsection (a) or (b) above in an amount (expressed as a percentage per annum of
its unused Commitment) which exceeds the compensation demanded by the other
Lenders, provided that (i) the Borrower shall first pay to the Agent for the
account of such Lender all compensation required to be paid under subsection (a)
or (b) above accrued to the termination date of such Commitment, (ii) the
Borrower shall first prepay all outstanding A Advances owing to such Lender in
accordance with the provisions of Section 2.10 hereof, (iii) the Borrower shall
not terminate the Commitment of any Lender under this subsection unless it also
terminates the Commitment of all other Lenders providing similar notice to the
Agent under Section 2.02(b)(i) or demanding compensation at a rate equal to or
higher than that demanded by such Lender under subsection (a) or (b) above, and
(iv) the Borrower shall not take any action under this subsection which would
reduce the aggregate of the Commitments below the aggregate of the Advances
outstanding. Effective with such termination, the Borrower may substitute for
such Lender one or more other banks or entities which will assume the Commitment
and other obligations hereunder of such terminated Lender or Lenders, and will
become a Lender or Lenders hereunder upon executing an assumption agreement in
form and substance reasonably satisfactory to the Borrower and the Required
Lenders.
SECTION 2.12. Payments and Computations. (a) The Borrower or
Borrowing Subsidiary, as the case may be, shall make each payment hereunder and
under the Notes not later than 11:00 A.M. (New York City time) on the day when
due in U.S. dollars to the Agent at the Agent's Account in immediately available
funds. The Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal or interest or utilization or facility fees
ratably (other than amounts payable pursuant to Section 2.03, 2.11, 2.14 or
8.04(c)) to the Lenders for the account of their respective Applicable Lending
Offices, and like funds relating to payment of any other amount payable to any
Lender to such Lender for the account of its Applicable Lending Office, in each
case to be applied according to the terms of this Agreement. Upon its acceptance
of an Assignment and Acceptance and recording of the information contained
therein in the Register pursuant to Section 8.07(d), from and after the
effective date specified in such Assignment and Acceptance, the Agent shall make
all payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender's assignee thereunder, and the parties to such Assignment
and Acceptance shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(b) Each of the Borrower and any Borrowing Subsidiary hereby
authorizes each Lender, if and to the extent payment owed to such Lender is not
made when due hereunder or under any Note held by such Lender, to charge from
time to time against any or all of the Borrower's or such Borrowing Subsidiary's
as the case may be, accounts with such Lender any amount so due.
68888.6/NYL3
<PAGE>
25
(c) All computations of interest based on clause (a) of the
definition of "Base Rate" shall be made by the Agent on the basis of a year of
365 or 366 days, as the case may be, and all computations of interest based on
the Eurodollar Rate, a Quoted Rate or the Federal Funds Rate and of commitment
fees and facility fees shall be made by the Agent on the basis of a year of 360
days, in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest or fees
are payable. Each determination by the Agent of an interest rate hereunder shall
be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest, commitment fee or
facility fee, as the case may be; provided, however, if such extension would
cause payment of interest on or principal of Eurodollar Rate Advances to be made
in the next following calendar month, such payment shall be made on the next
preceding Business Day.
(e) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders hereunder
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent the Borrower shall not have so made such payment in full to
the Agent, each Lender shall repay to the Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Agent, at the Federal Funds Rate.
(f) The date and amount of each A Advance owing to each
Lender, the date on which it is due, the interest rate applicable thereto and
any prepayments thereof shall be recorded by the Agent in the Register, which
shall be presumptive evidence thereof, whether or not the same is endorsed on
the grid annexed to such Lender's A Note.
SECTION 2.13. Taxes. (a) Subject to subsection (f) below, any
and all payments hereunder or under the A Notes shall be made, in accordance
with Section 2.12, (i) if made by the Borrower, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings of the United States of America or any state thereof or
political subdivision of any of them or any other jurisdiction from or through
which the Borrower elects to make such payment, and all liabilities with respect
thereto, and (ii) if made by a Borrowing Subsidiary, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings of any jurisdiction within which it is
organized or does business or is managed
68888.6/NYL3
<PAGE>
or controlled or has its head or principal office or from or through which such
Borrowing Subsidiary elects to make such payment, and all liabilities with
respect thereto, excluding (w) in the case of each Lender and the Agent, taxes
imposed on its income, and franchise taxes imposed on it, by any jurisdiction
under the laws of which such Lender or the Agent (as the case may be) is
organized or, as to the United States of America or any state thereof or any
political subdivision of any of them, is doing business or any political
subdivision thereof and by the jurisdiction of such Lender's Applicable Lending
Office or any political subdivision thereof, (x) in the case of each Lender and
the Agent, any income tax or franchise tax imposed on it by a jurisdiction
(except the United States of America or any state thereof or any political
subdivision of any of them) as a result of a connection between such
jurisdiction and such Lender or the Agent (as the case may be) (other than as a
result of such Lender's or the Agent's having entered into this Agreement,
performing hereunder or enforcing this Agreement), (y) any payment of tax which
the Borrower is obliged to make pursuant to Section 159 of the Income and
Corporation Taxes Act 1970 of the United Kingdom (or any re-enactment or
replacement thereof) on behalf of a Lender which is resident for tax purposes in
the United Kingdom but is not recognized as a bank by H.M. Inland Revenue and
(z) Other Taxes as defined in subsection (b) below, (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower or any Borrowing Subsidiary
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under any A Note to any Lender or the Agent, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.13) such Lender or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower or such Borrowing Subsidiary shall make such deductions and
(iii) the Borrower or such Borrowing Subsidiary shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.
(b) In addition, the Borrower or the Borrowing Subsidiary
shall pay any present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies which arise from any payment made
hereunder or under the A Notes or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or the A Notes (hereinafter
referred to as "Other Taxes"). Each Bank and the Agent represents that at the
date of this Agreement it is not aware of any Other Taxes applicable to it. Each
Lender and the Agent agrees to notify the Borrower or such Borrowing Subsidiary
on becoming aware of the imposition of any such Other Taxes.
(c) The Borrower or the Borrowing Subsidiary will indemnify
each Lender and the Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.13) paid by such Lender or
the Agent (as the case may be) and any liability (including penalties, interest
and expenses not attributable to acts or omissions of any party
68888.6/NYL3
<PAGE>
other than the Borrower or such Borrowing Subsidiary) arising therefrom or with
respect thereto. This indemnification shall be paid within 30 days from the date
such Lender or the Agent (as the case may be) makes written demand therefor.
(d) As soon as practicable after the date of any payment of
Taxes (other than Taxes of the United States of America or any state thereof or
political subdivision of any of them), the Borrower or the Borrowing Subsidiary
will furnish to the Agent, at its address referred to in Section 8.02, the
original or a certified copy of a receipt evidencing payment thereof (if any
such receipt is reasonably available), other evidence of such payment or, if
neither a receipt nor other evidence is available, a statement by the Borrower
or such Borrowing Subsidiary confirming payment thereof. If no such Taxes are
payable in respect of any payment hereunder or under the A Notes, the Borrower
or such Borrowing Subsidiary will at the request of a Lender or the Agent
furnish to the Agent, an opinion of counsel for the Borrower or such Borrowing
Subsidiary stating that such payment is exempt from or not subject to Taxes.
(e) Each Lender and the Agent will, from time to time as
requested by the Borrower or the Borrowing Subsidiary in writing, provide the
Borrower or the Borrowing Subsidiary with any applicable forms, completed and
signed, that may be required by the tax authority of a jurisdiction in order to
certify such Lender's or the Agent's exemption from or applicable reduction in
any applicable Taxes of such jurisdiction with respect to any and all payments
that are subject to such an exemption or reduction to be made to such Lender or
the Agent hereunder and under the A Notes, if the Lender or the Agent is
entitled to such an exemption or reduction.
(f) Notwithstanding anything contained herein to the contrary,
the Borrower or the Borrowing Subsidiary shall not be required to pay any
additional amounts pursuant to this Section on account of any Taxes of, or
imposed by, the United States, to any Lender or the Agent (as the case may be)
which is not entitled on the date on which it signed this Agreement (or, in the
case of an assignee of a Lender, on the date on which the assignment to it
became effective), to submit Form 1001 or Form 4224 or a certification that it
is a corporation or other entity organized in or under the laws of the United
States or a state thereof, so as to establish a complete exemption from such
Taxes with respect to all payments hereunder and under the A Notes. If as a
result of an erroneous certification made by a Lender or the Agent the Borrower
or such Borrowing Subsidiary makes a payment to it without deduction for United
States withholding taxes, but would have made such a deduction had such
certification not been erroneous and the Borrower or such Borrowing Subsidiary
subsequently is required to account, and does account, to the United States tax
authorities for any amount which should have been deducted, such Lender or the
Agent (as the case may be) shall pay to the Borrower or such Borrowing
Subsidiary an amount sufficient to reimburse the Borrower or such Borrowing
Subsidiary for such amount.
68888.6/NYL3
<PAGE>
(g) At the request of a Borrower or a Borrowing Subsidiary,
any Lender claiming any additional amounts payable pursuant to this Section 2.13
shall use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to change the jurisdiction of its Applicable Lending
Office if the making of such a change would avoid the need for, or reduce the
amount of, any such additional amounts which may thereafter accrue and would
not, in the reasonable judgment of such Lender, be otherwise disadvantageous to
such Lender. The Borrower or such Borrowing Subsidiary shall reimburse such
Lender for the Borrower's or such Borrowing Subsidiary's equitable share of such
Lender's reasonable expenses incurred in connection with such change or in
considering such a change.
(h) Without prejudice to the survival of any other agreement
of the Borrower and its Borrowing Subsidiaries hereunder, the agreements and
obligations of the Borrower and its Borrowing Subsidiaries contained in this
Section 2.13 shall survive the payment in full of principal and interest
hereunder and under the A Notes, provided, however, that the Borrower or such
Borrowing Subsidiary has received timely notice of the assertion of any Taxes or
Other Taxes in order for it to contest such Taxes or Other Taxes to the extent
permitted by law.
SECTION 2.14. Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the A Advances (whether for
principal, interest, fees or otherwise) made by it (other than pursuant to
Section 2.08, 2.11 or 2.13) in excess of its ratable share of payments on
account of the A Advances obtained by all the Lenders, such Lender shall
forthwith purchase from the other Lenders such participations in the A Advances
made by them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them, provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and each such Lender
shall repay to the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Lender's ratable share (according
to the proportion of (i) the amount of such Lender's required repayment to (ii)
the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. Each of the Borrower and any Borrowing Subsidiary agrees
that any Lender so purchasing a participation from another Lender pursuant to
this Section 2.14 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower or such Borrowing Subsidiary, as the case may be, in the amount of such
participation.
68888.6/NYL3
<PAGE>
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Condition Precedent to Initial Advances. The
obligation of each Lender to make its initial Advance is subject to the
condition precedent that the Agent shall have received, on or before the date of
such Advance, the following, each dated such date, in form and substance
satisfactory to each Lender and (except for the Notes) in sufficient copies for
each Lender:
(a) The A Note and, if applicable, the B Note payable to the
order of such Lender.
(b) Certified copies of the resolutions of the Board of
Directors of the Borrower approving this Agreement and the Notes and
each Guaranty, and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to
this Agreement and the Notes.
(c) A certificate of the Secretary or an Assistant Secretary
of the Borrower certifying the names and true signatures of the
officers of the Borrower authorized to sign this Agreement and the
Notes and the other documents to be delivered hereunder.
(d) A certificate of a duly authorized officer of the Borrower
certifying that the representations and warranties contained in Section
4.01 are correct on and as of such date (before and after giving effect
to any Borrowing on such date and the application of the proceeds
therefrom), as though made on and as of such date, and that no event
has occurred and is continuing (or would result from any such Borrowing
or application of the proceeds thereof) which constitutes an Event of
Default or would constitute an Event of Default but for the requirement
that notice be given or time elapse or both.
(e) A favorable opinion of the General Counsel or an Associate
General Counsel of the Borrower, substantially in the form of Exhibit D
hereto.
(f) A favorable opinion of Shearman & Sterling, counsel for
the Agent, substantially in the form of Exhibit E hereto.
SECTION 3.02. Conditions Precedent to Each A Borrowing. The
obligation of each Lender to make an A Advance on the occasion of each A
Borrowing (including the initial A Borrowing) shall be subject to the further
conditions precedent that on the date of such A Borrowing (a) the following
statements shall be true (and each of the giving of the applicable Notice of A
Borrowing and the acceptance by the Borrower or any Borrowing
68888.6/NYL3
<PAGE>
Subsidiary of the proceeds of such A Borrowing shall constitute a representation
and warranty by the Borrower that on the date of such A Borrowing such
statements are true):
(i) The representations and warranties contained in Section
4.01 are correct on and as of the date of such A Borrowing, before and
after giving effect to such A Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date, and
(ii) No event has occurred and is continuing, or would result
from such A Borrowing or from the application of the proceeds
therefrom, which constitutes an Event of Default or would constitute an
Event of Default but for the requirement that notice be given or time
elapse or both;
provided, however, that, on the occasion of an A Borrowing which would not
increase the aggregate outstanding amount of A Advances owing to each Lender
over the aggregate outstanding amount of A Advances owing to such Lender
immediately prior to making such A Borrowing, the statements set forth in
subsections (i) and (ii) above shall be modified as follows:
(i) In subsection (i) the phrase "(excluding those contained
in the last sentence of subsection (e) and in subsection (f) thereof)"
shall be inserted immediately after "Section 4.01"; and
(ii) In subsection (ii) the words "or would constitute an Event
of Default but for the requirement that notice be given or time elapse
or both" shall be omitted;
and (b) the Agent shall have received such other approvals, opinions or
documents as any Lender through the Agent may reasonably request, evidencing the
accuracy of the representations and warranties and compliance with other
conditions of lending.
SECTION 3.03. Conditions Precedent to Each B Borrowing. The
obligation of each Lender which is to make a B Advance on the occasion of a B
Borrowing (including the initial B Borrowing) to make such B Advance as part of
such B Borrowing is subject to the conditions precedent that (i) the Agent shall
have received the written confirmatory Notice of B Borrowing with respect
thereto, (ii) on or before the date of such B Borrowing, but prior to such B
Borrowing, the Agent shall have received a B Note payable to the order of such
Lender for each of the one or more B Advances to be made by such Lender as part
of such B Borrowing, each in a principal amount equal to the principal amount of
the B Advance to be evidenced thereby and otherwise on such terms as were agreed
to for such B Advance in accordance with Section 2.03, and (iii) on the date of
such B Borrowing the following statements shall be true (and each of the giving
of the applicable Notice of B Borrowing and the acceptance by the Borrower or
any Borrowing Subsidiary of the
68888.6/NYL3
<PAGE>
proceeds of such B Borrowing shall constitute a representation and warranty by
the Borrower that on the date of such B Borrowing such statements are true):
(a) The representations and warranties contained in Section
4.01 are correct on and as of the date of such B Borrowing, before and
after giving effect to such B Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date,
(b) No event has occurred and is continuing, or would result
from such B Borrowing or from the application of the proceeds
therefrom, which constitutes an Event of Default or which would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both, and
(c) The information concerning the Borrower that has been
provided in writing to the Agent and each Lender by the Borrower in
connection herewith as required by the provisions of this Agreement did
not include an untrue statement of a material fact or omit to state any
material fact or any fact necessary to make the statements contained
therein, in the light of the circumstances under which they were made,
not misleading; provided that with regard to any information delivered
to a Lender pursuant to Section 5.01(e)(vii), the representation and
warranty in this Section 3.03(c) shall apply only to such information
that is specifically identified to the Borrower at the time the request
is made as information (i) that may be delivered to a purchaser of a B
Note, or (ii) that is otherwise requested to be subject to this Section
3.03(c).
SECTION 3.04. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the Initial Borrowing
specifying its objection thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation.
68888.6/NYL3
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(b) The execution, delivery and performance by the Borrower of
this Agreement and the Notes are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action,
and do not contravene (i) the Borrower's charter or by-laws or (ii) law
or any contractual restriction binding on or affecting the Borrower.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by the
Borrower of this Agreement or the Notes.
(d) This Agreement is, and each of the Notes when executed and
delivered hereunder will be, the legal, valid and binding obligation of
the Borrower enforceable against the Borrower in accordance with their
respective terms, except as the same may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law
affecting creditors' rights generally, or by general principles of
equity.
(e) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as at December 31, 1993 and the related
consolidated statements of income, cash flow and retained earnings of
the Borrower and its Consolidated Subsidiaries for the fiscal year then
ended, accompanied by an opinion of Arthur Andersen & Co., independent
public accountants, copies of which have been furnished to each Bank,
fairly present the consolidated financial condition of the Borrower and
its Consolidated Subsidiaries as at such date and the consolidated
results of the operations of the Borrower and its Consolidated
Subsidiaries for the period ended on such date, all in accordance with
generally accepted accounting principles consistently applied (except
for mandated changes in accounting disclosed in such financial
statements). Except as disclosed to each of the Lenders in writing
prior to the date hereof, since December 31, 1993 there has been no
Material Adverse Change.
(f) There is no pending or (to the knowledge of the Borrower)
threatened action or proceeding, including, without limitation, any
Environmental Action, affecting the Borrower or any of its Subsidiaries
before any court, governmental agency or arbitrator that (i) is
reasonably likely to have a Material Adverse Effect, other than as
disclosed on Schedule 4.01(f) (the "Disclosed Litigation") or (ii)
purports to affect the legality, validity or enforceability of this
Agreement or any Note or Guaranty, and there has been no change in the
status, or financial effect on the Borrower or any of its Subsidiaries,
of the Disclosed Litigation from that described on Schedule 4.01(f)
which is reasonably likely to have a Material Adverse Effect.
68888.6/NYL3
<PAGE>
(g) None of the Borrower or any of its Subsidiaries is engaged
in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U issued by the
Board of Governors of the Federal Reserve System), and no proceeds of
any Advance will be used in such manner as to cause any Lender to be in
violation of such Regulation U.
(h) The Borrower and each Subsidiary are in compliance in all
material respects with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority, non-compliance
with which would have a Material Adverse Effect.
(i) In the ordinary course of its business, the Borrower
conducts reviews (which reviews are in varying stages of
implementation) of the effect of Environmental Laws on the business,
operations and properties of the Borrower and its Subsidiaries, in the
course of which it identifies and evaluates associated liabilities and
costs. On the basis of these reviews, the Borrower has reasonably
concluded that Environmental Laws are unlikely to have a Material
Adverse Effect.
(j) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan that is reasonably likely to result in
the imposition of a lien in excess of $25,000,000 on the assets of the
Borrower and/or any of its ERISA Affiliates in favor of the PBGC or the
Plan or in a requirement that the Borrower or any of its ERISA
Affiliates provide security to the Plan in an amount exceeding
$25,000,000.
(k) The most recently filed Schedule B (Actuarial Information)
annual report (Form 5500 Series) for each Plan was complete and
accurate and fairly presented the funding status of such Plan as of the
date of such Schedule B, and since the date of such Schedule B, there
has been no change in such funding status which is reasonably likely to
have a Material Adverse Effect.
(l) Neither the Borrower nor any of its ERISA Affiliates has
incurred, or is reasonably expected to incur, any Withdrawal Liability
to any Multiemployer Plan which is reasonably likely to have a Material
Adverse Effect.
(m) Neither the Borrower nor any of its ERISA Affiliates has
been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been terminated, within
the meaning of Title IV of ERISA, which in either case would be
reasonably likely to have a Material Adverse Effect, and no such
Multiemployer Plan is reasonably expected to be in reorganization or to
be terminated, within the meaning of Title IV of ERISA, which in either
case would be reasonably likely to have a Material Adverse Effect.
68888.6/NYL3
<PAGE>
(n) Except as set forth in the financial statements described
in Section 4.01(e) or delivered pursuant to Section 5.01(e), the
Borrower and its Subsidiaries have no material liability with respect
to "expected postretirement benefit obligations" within the meaning of
Statement of Financial Accounting Standards No. 106.
(o) The Borrower and each Subsidiary have filed all tax
returns (Federal, state and local) required to be filed and paid all
taxes shown thereon to be due, including interest and penalties other
than those not yet delinquent and except for those contested in good
faith, or provided adequate reserves for payment thereof.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Note shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will, unless the Required Lenders shall otherwise consent in writing:
(a) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each Significant Subsidiary to preserve and
maintain, its corporate existence except as permitted under Section
5.02(c); provided, however, that the Borrower or any Significant
Subsidiary shall not be required to preserve the corporate existence of
any Significant Subsidiary if the Board of Directors of the Borrower
shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Borrower or such Significant
Subsidiary, as the case may be, and that the liquidation thereof is not
disadvantageous in any material respect to the Lenders.
(b) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable
laws, rules, regulations and orders, where any failure to comply would
have a Material Adverse Effect, such compliance to include, without
limitation, paying before the same become delinquent all material
taxes, assessments and governmental charges imposed upon it or upon its
property except to the extent contested in good faith.
(c) Maintenance of Properties, Etc. Maintain and preserve, and
cause each Significant Subsidiary to maintain and preserve, all of its
properties which are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted,
except where the failure to do so would not be reasonably likely to
have a Material Adverse Effect.
68888.6/NYL3
<PAGE>
(d) Maintenance of Insurance. Maintain, and cause each
Significant Subsidiary to maintain, insurance with responsible and
reputable insurance companies or associations (including affiliated
companies) for such amounts, covering such risks and with such
deductibles as is usually carried by companies of comparable size
engaged in similar businesses and owning similar properties in the same
general areas in which the Borrower or such Subsidiary operates, or
maintain a sound self-insurance program for such risks as may be
prudently self-insured.
(e) Reporting Requirements. Furnish to each Lender:
(i) as soon as available and in any event within 60
days after the end of each of the first three quarters of each
fiscal year of the Borrower, a consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of the end
of such quarter and related consolidated statements of income
and cash flow for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter,
prepared in accordance with generally accepted accounting
principles applicable to interim statements and certified by
the Treasurer or chief financial officer of the Borrower;
(ii) as soon as available and in any event within 105
days after the end of each fiscal year of the Borrower, a copy
of the annual report for such year for the Borrower and its
Consolidated Subsidiaries, containing consolidated financial
statements for such year certified without exception as to
scope by Arthur Andersen & Co. or other independent public
accountants acceptable to the Required Lenders;
(iii) concurrently with the financial statements
delivered pursuant to clause (ii) above, a certificate of the
Treasurer, principal financial officer or the principal
accounting officer of the Borrower, and concurrently with the
financial statements delivered pursuant to clause (i) above, a
certificate of the Treasurer or controller of the Borrower,
stating in each case that a review of the activities of the
Borrower and its Consolidated Subsidiaries during the
preceding quarter or fiscal year, as the case may be, has been
made under his supervision to determine whether the Borrower
has fulfilled all of its respective obligations under this
Agreement and the Notes, and also stating that, to the best of
his knowledge, (x) neither an Event of Default nor an event
which, with the giving of notice or the lapse of time or both,
would constitute an Event of Default has occurred, or (y) if
any such Event of Default or event exists, specifying such
Event of Default or event, the nature and status thereof, and
the action the Borrower is taking or proposes to take with
respect thereto;
68888.6/NYL3
<PAGE>
(iv) as soon as possible and in any event within five
days after the occurrence of each Event of Default and each
event which, with the giving of notice or lapse of time, or
both, would constitute an Event of Default, continuing on the
date of such statement, a statement of the chief financial
officer of the Borrower setting forth details of such Event of
Default or event and the action which the Borrower has taken
and proposes to take with respect thereto;
(v) promptly after the sending or filing thereof,
copies of all reports which the Borrower sends to its security
holders generally, and copies of all publicly available
reports and registration statements except registration
statements on Form S-8 which the Borrower or any Subsidiary
files with the Securities and Exchange Commission or any
national securities exchange;
(vi) promptly after the filing or receiving thereof
each notice that the Borrower or any Subsidiary receives from
the PBGC regarding the Insufficiency of any Plan, and, to any
Lender requesting same, copies of each Form 5500 annual
return/report (including Schedule B thereto) filed with
respect to each Plan under ERISA with the Internal Revenue
Service;
(vii) such other information respecting the condition
or operations, financial or otherwise, of the Borrower or any
of its Subsidiaries as any Lender through the Agent may from
time to time reasonably request; and
(viii) promptly after any corporation shall become a
Principal Domestic Subsidiary, written notice thereof,
including the name of such corporation, the jurisdiction of
its incorporation and the nature of its business.
SECTION 5.02. Negative Covenants. So long as any Note shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will not, without the written consent of the Required Lenders:
(a) Liens, Etc. Create or suffer to exist, or permit any of
its Principal Domestic Subsidiaries to create or suffer to exist, any
Lien on any Restricted Property, whether now owned or hereafter
acquired, without making effective provision (and the Borrower
covenants and agrees that it will make or cause to be made effective
provision) whereby the Notes shall be directly secured by such Lien
equally and ratably with (or prior to) all other indebtedness secured
by such Lien as long as such other indebtedness shall be so secured;
provided, however, that there shall be excluded from the foregoing
restrictions:
68888.6/NYL3
<PAGE>
(i) Liens securing Debt not exceeding $10,000,000
which are existing on the date hereof on Restricted Property;
and, if any property now owned or leased by Borrower or by a
present Principal Domestic Subsidiary at any time hereafter
becomes a Principal Domestic Manufacturing Property, any Liens
existing on the date hereof on such property securing the Debt
now secured or evidenced thereby;
(ii) Liens on Restricted Property of a Principal
Domestic Subsidiary as security for Debt of such Subsidiary to
the Borrower or to another Principal Domestic Subsidiary;
(iii) in the case of any corporation which becomes a
Principal Domestic Subsidiary after the date of this
Agreement, Liens on Restricted Property of such Principal
Domestic Subsidiary which are in existence at the time it
becomes a Principal Domestic Subsidiary and which were not
incurred in contemplation of its becoming a Principal Domestic
Subsidiary;
(iv) any Lien existing prior to the time of
acquisition of any Principal Domestic Manufacturing Property
acquired by the Borrower or a Principal Domestic Subsidiary
after the date of this Agreement through purchase, merger,
consolidation or otherwise;
(v) any Lien on any Principal Domestic Manufacturing
Property (other than a Major Domestic Manufacturing Property)
acquired or constructed by the Borrower or a Principal
Domestic Subsidiary after the date of this Agreement, which is
placed on such Property at the time of or within 120 days
after the acquisition thereof or prior to, at the time of or
within 120 days after completion of construction thereof to
secure all or a portion of the price of such acquisition or
construction or funds borrowed to pay all or a portion of the
price of such acquisition or construction;
(vi) extensions, renewals or replacements of any Lien
referred to in clause (i), (iii), (iv) or (v) of this
subsection (a) to the extent that the principal amount of the
Debt secured or evidenced thereby is not increased, provided
that the Lien is not extended to any other Restricted Property
unless the aggregate value of Restricted Property encumbered
by such Lien is not materially greater than the value (as
determined at the time of such extension, renewal or
replacement) of the Restricted Property originally encumbered
by the Lien being extended, renewed or replaced;
(vii) Liens imposed by law, such as carriers',
warehousemen's, mechanics', materialmen's, vendors' and
landlords' liens, and Liens arising
68888.6/NYL3
<PAGE>
out of judgments or awards against the Borrower or any
Principal Domestic Subsidiary which are (x) immaterial or (y)
with respect to which the Borrower or such Subsidiary at the
time shall currently be prosecuting an appeal or proceedings
for review and with respect to which it shall have secured a
stay of execution pending such appeal or proceedings for
review;
(viii) minor survey exceptions, minor encumbrances,
easements or reservations of, or rights of others for, rights
of way, sewers, electric lines, telegraph and telephone lines
and other similar purposes, and zoning or other restrictions
as to the use of any Principal Domestic Manufacturing
Property, which exceptions, encumbrances, easements,
reservations, rights and restrictions do not, in the opinion
of the Borrower, in the aggregate materially detract from the
value of such Principal Domestic Manufacturing Property or
materially impair its use in the operation of the business of
the Borrower and its Principal Domestic Subsidiaries; and
(ix) any Lien on Restricted Property not referred to
in clauses (i) through (viii) of this subsection (a) if, at
the time such Lien is created, incurred, assumed or suffered
to be created, incurred or assumed, and after giving effect
thereto and to the Debt secured or evidenced thereby, the sum
of (A) the aggregate amount of all outstanding Debt of the
Borrower and its Principal Domestic Subsidiaries secured or
evidenced by Liens on Restricted Property which are not
referred to in clauses (i) through (viii) of this subsection
(a) and which do not equally and ratably secure the Notes plus
(B) the aggregate amount of all outstanding Sale and Leaseback
Debt of the Borrower and its Principal Domestic Subsidiaries,
shall not exceed 15% of Consolidated Net Tangible Assets.
If at any time the Borrower or any Principal Domestic Subsidiary shall
create, incur or assume or suffer to be created, incurred or assumed
any Lien on Restricted Property by which the Notes are required to be
secured pursuant to the requirements of this subsection (a), the
Borrower will promptly deliver to each Lender an opinion, in form and
substance reasonably satisfactory to the Required Lenders, of the
General Counsel of the Borrower (so long as the General Counsel is able
to render an opinion as to the relevant local law) or other counsel
reasonably satisfactory to the Required Lenders, to the effect that the
Notes have been secured in accordance with such requirements.
(b) Sale and Leaseback Transactions. The Borrower will not,
and will not permit any Principal Domestic Subsidiary to, enter into
any Sale and Leaseback Transaction unless either:
68888.6/NYL3
<PAGE>
(i) immediately after giving effect to such Sale and
Leaseback Transaction, the sum of (A) the aggregate amount of
all outstanding Sale and Leaseback Debt of the Borrower and
its Principal Domestic Subsidiaries and (B) the aggregate
amount of all outstanding Debt of the Borrower and its
Principal Domestic Subsidiaries secured or evidenced by Liens
on Restricted Property which are not referred to in clauses
(i) through (viii) of Section 5.02(a) and which do not equally
and ratably secure the Notes, shall not exceed 15% of
Consolidated Net Tangible Assets; or
(ii) within 90 days after the effective date of such
Sale and Leaseback Transaction, the Borrower shall apply or
cause to be applied an amount equal to the net proceeds of the
sale of the property leased pursuant to such Sale and
Leaseback Transaction to the prepayment or other retirement
(other than any mandatory prepayment or retirement) of the A
Notes in accordance with the provisions of Section 2.10 hereof
and/or Senior Funded Debt of the Borrower or any of its
Principal Domestic Subsidiaries which is then subject to
optional prepayment or other retirement, and shall deliver to
the holders of the A Notes a certificate executed by the
principal financial officer, treasurer or the chief executive
officer of the Borrower specifying the Debt so prepaid or
retired; or
(iii) within 90 days after the effective date of such
Sale and Leaseback Transaction, the Borrower shall deliver to
the holders of the A Notes a certificate executed by the
principal financial officer, treasurer or the chief executive
officer of the Borrower stating that an amount equal to the
net proceeds of the sale of the property leased pursuant to
such Sale and Leaseback Transaction has been applied, or is in
good faith being retained for application within a reasonable
time after the date of such Sale and Leaseback Transaction
(and the Borrower covenants and agrees that such proceeds will
be so applied), to the payment of the cost of the purchase,
construction or improvement of one or more Principal Domestic
Manufacturing Properties.
(c) Mergers, Etc. Merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of
its assets (whether now owned or hereafter acquired) to, any Person, or
permit any of its Subsidiaries to do so, except that (i) any Subsidiary
of the Borrower may merge or consolidate with or into, or transfer
assets to, any other Subsidiary of the Borrower, (ii) any Subsidiary of
the Borrower may merge or consolidate with or into or transfer assets
to the Borrower, and (iii) the Borrower may merge with or transfer
assets to, and any Subsidiary of the Borrower may merge or consolidate
with or into or transfer assets to, any other Person, provided that (A)
in each case, immediately after giving effect to such proposed
transaction, no Event of
68888.6/NYL3
<PAGE>
Default or event which, with the giving of notice or lapse of time, or
both, would constitute an Event of Default would exist, (B) in the case
of any such merger to which the Borrower is a party, the Borrower is
the surviving corporation and (C) in the case of any such merger or
consolidation of a Borrowing Subsidiary of the Borrower with or into
any other Person, the Borrower shall remain the guarantor of such
Subsidiary's obligations hereunder.
(d) Debt. Create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Debt if (after giving
effect to the applications of the proceeds of any Debt) the ratio of
(x) the Operating Cash Flow of the Borrower and its Subsidiaries on a
consolidated basis for the most recent four consecutive calendar
quarters then ended to (y) the aggregate amount of Debt of the Borrower
and its Subsidiaries on a consolidated basis is less than 0.25 to 1.
(e) Use of Proceeds. Use, or permit any of its Subsidiaries to
use, any proceeds of any Advance for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U issued by the
Board of Governors of the Federal Reserve System), or to extend credit
to others for such purpose, if, following application of the proceeds
of such Advance, more than 25% of the value of the assets (either of
the Borrower only or of the Borrower and its Subsidiaries on a
consolidated basis) which are subject to the restrictions of Section
5.02(a) or (b) or subject to any restriction contained in any agreement
or instrument between the Borrower and any Lender or any Affiliate of
any Lender, relating to Debt and within the scope of Section 6.01(d)
(without giving effect to any limitation in principal amount contained
therein) will be margin stock (as defined in such Regulation U).
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) The Borrower or any Borrowing Subsidiary shall fail to pay
when due any principal of any Note or to pay, within five days after
the date when due, the interest on any Note, any fees or any other
amount payable hereunder or under any Guaranty; or
(b) Any representation or warranty made by the Borrower herein
or by the Borrower (or any of its officers) in connection with this
Agreement or any Guaranty shall prove to have been incorrect in any
material respect when made; or
68888.6/NYL3
<PAGE>
(c) The Borrower shall fail to perform or observe (i) any
term, covenant or agreement contained in Section 5.02, or (ii) any
other term, covenant or agreement contained in this Agreement (other
than those referred to in clauses (a) and (b) of this Section 6.01) on
its part to be performed or observed if the failure to perform or
observe such other term, covenant or agreement referred to in this
clause (ii) shall remain unremedied for 30 days after written notice
thereof shall have been given to the Borrower by the Agent or any
Lender; or
(d) The Borrower or any of its Significant Subsidiaries shall
fail to pay any principal of or premium or interest on any Debt which
is outstanding in a principal amount of at least $50,000,000 in the
aggregate (but excluding Debt evidenced by the Notes) of the Borrower
or such Subsidiary (as the case may be), when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement
or instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event
or condition is (i) to accelerate the maturity of such Debt or (ii) if
the long-term senior debt of the Borrower is not then rated either at
or above BBB by S&P or at or above Baa2 by Moody's, to permit the
acceleration of the maturity of such Debt; or any such Debt shall be
declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), prior to the stated
maturity thereof; or
(e) The Borrower or any of its Significant Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against the Borrower or any of its
Significant Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or
its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order
for relief or the appointment of a receiver, trustee, custodian or
other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain
undismissed and unstayed for a period of 60 days, or any of the actions
sought in such proceeding (including, without limitation, the entry of
an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part
of its property) shall occur; or the Borrower or any of its Significant
Subsidiaries shall take any corporate action to authorize any of the
actions set forth above in this subsection (e); or
68888.6/NYL3
<PAGE>
(f) Any judgment or order for the payment of money in excess
of $25,000,000 (calculated after deducting from the sum so payable each
amount thereof which will be paid by any insurer that is not an
Affiliate of the Borrower to the extent such insurer has confirmed in
writing its obligation to pay such amount with respect to such judgment
or order) shall be rendered against the Borrower or any of its
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 20 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(g) The Borrower or any of its ERISA Affiliates shall have
incurred or, in the reasonable opinion of the Required Lenders shall be
reasonably likely to incur, liability in excess of $50,000,000 in the
aggregate as a result of one or more of the following events which
shall have occurred: (i) any ERISA Event; (ii) the partial or complete
withdrawal of the Borrower or any of its ERISA Affiliates from a
Multiemployer Plan; or (iii) the reorganization or termination of a
Multiemployer Plan; or
(h) Any Guaranty or any provision of any Guaranty after
delivery thereof pursuant to Section 8.06(b) shall for any reason cease
to be valid and binding on the Borrower, or the Borrower shall so state
in writing;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the Notes,
all interest thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to the Borrower or any of its
Subsidiaries which borrows hereunder under the Federal Bankruptcy Code, (A) the
obligation of each Lender to make Advances shall automatically be terminated and
(B) the Notes, all such interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the Borrower. The Lenders
giving any notice hereunder shall give copies thereof to the Agent, but failure
to do so shall not impair the effect of such notice.
In the event the Borrower assigns to one or more Subsidiaries
the right to borrow under this Agreement (as provided in Section 8.06), each
reference in this Article VI to the Borrower shall be a reference to each such
Subsidiary as well as to the Borrower.
68888.6/NYL3
<PAGE>
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under this Agreement as are delegated to
the Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to this Agreement or applicable law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. (a) Neither the Agent nor
any of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the Agent:
(i) may treat the payee of any Note as the holder thereof until the Agent
receives and accepts an Assignment and Acceptance entered into by the Lender
that is the payee of such Note, as assignor, and an assignee, as provided in
Section 8.07; (ii) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations (whether written
or oral) made in or in connection with this Agreement; (iv) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of this Agreement on the part of the Borrower
or any Borrowing Subsidiary or to inspect the property (including the books and
records) of the Borrower or any Borrowing Subsidiary; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
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<PAGE>
(b) The Co-Agent, as such, shall have no duties or obligations
whatsoever with respect to this Agreement, the Notes or any matter related
thereto.
SECTION 7.03. Citibank and Affiliates. With respect to its
Commitment, the Advances made by it and the Note issued to it, Citibank, N.A.
shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not the Agent; and the term "Lender"
or "Lenders" shall, unless otherwise expressly indicated, include Citibank, N.A.
in its individual capacity. Citibank, N.A. and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, the Borrower, any of its Subsidiaries and any Person who may do business
with or own securities of the Borrower or any such Subsidiary, all as if
Citibank, N.A. were not the Agent and without any duty to account therefor to
the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Agent or any other
Lender and based on the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify
the Agent (to the extent not reimbursed by the Borrower), ratably according to
the respective principal amounts of the A Notes then held by each of such
Lenders (or if no A Notes are at the time outstanding or if any A Notes are held
by Persons that are not Lenders, ratably according to the respective amounts of
their Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent under this Agreement,
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 the Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including counsel fees) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
to the extent that the Agent is not reimbursed for such expenses by the
Borrower.
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SECTION 7.06. Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower and may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent, which successor Agent, so long as no Event of Default has
occurred and is continuing, shall be approved by the Borrower, which approval
shall not be unreasonably withheld or delayed. If no successor Agent shall have
been so appointed by the Required Lenders in accordance with the immediately
preceding sentence, and shall have accepted such appointment, within 30 days
after the retiring Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $50,000,000, which
successor Agent, so long as no Event of Default has occurred and is continuing,
shall be approved by the Borrower, which approval shall not be unreasonably
withheld or delayed. Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article VII shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the A Notes, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, do any of the following: (a)
waive any of the conditions specified in Section 3.01, 3.02 or 3.03 (if and to
the extent that the Borrowing for which such condition or conditions are waived
would result in an increase in the aggregate amount of A Advances over the
aggregate amount of A Advances outstanding immediately prior to such Borrowing),
(b) increase the Commitments of the Lenders or subject the Lenders to any
additional obligations, (c) reduce the principal of, or interest on, the A Notes
or any fees or other amounts payable hereunder, (d) postpone any date fixed for
any payment of principal of, or interest on, the A Notes or any fees or other
amounts payable hereunder, (e) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the A Notes, or the number of Lenders,
which shall be required for the Lenders or any of them to take any action
hereunder or
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(f) amend Section 8.06(b)(ii) or this Section 8.01; provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by the Agent in
addition to the Lenders required above to take such action, affect the rights or
duties of the Agent under this Agreement or any Note. No amendment or waiver of
any provision of a B Note, nor any consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the holder of such B Note.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telecopied, telegraphed,
telexed, cabled or delivered, if to the Borrower, at its address at 300 Park
Avenue, New York, New York 10022, Attention: Treasurer; if to any Borrowing
Subsidiary, c/o the Borrower at its above address; if to any Bank, at its
Domestic Lending Office specified opposite its name on Schedule I hereto; and if
to any other Lender, at its Domestic Lending Office specified in the Assignment
and Acceptance pursuant to which it became a Lender; and if to the Agent, at its
address at 1 Court Square, 7th Floor, Long Island Island City, New York 11120,
Attention: John Makrinos, with a copy to 399 Park Avenue, New York, New York
10043, Attention: Jay Schiff; or, as to the Borrower or the Agent, at such other
address as shall be designated by such party in a written notice to the other
parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the Agent. All
such notices and communications shall, when mailed, telecopied, telegraphed,
telexed or cabled, be effective when deposited in the mails, telecopied,
delivered to the telegraph company, confirmed by telex answerback or delivered
to the cable company, respectively, except that notices and communications to
the Agent pursuant to Article II shall not be effective until received by the
Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part of
any Lender or the Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs, Expenses, Etc. (a) The Borrower agrees to
pay on demand all out-of-pocket costs and expenses of the Agent in connection
with the preparation, execution, delivery, administration, modification and
amendment of this Agreement, the Notes and the other documents to be delivered
hereunder, including, without limitation, the reasonable fees and out-of-pocket
expenses of not more than one counsel for the Agent, with respect thereto and
with respect to advising the Agent as to its rights and responsibilities under
this Agreement. The Borrower further agrees to pay on demand all costs and
expenses of the Agent and the Lenders, if any (including, without limitation,
reasonable counsel fees and expenses), in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Agreement, the Notes and the other documents to be
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delivered hereunder, including, without limitation, reasonable counsel fees and
expenses in connection with the enforcement of rights under this Section
8.04(a).
(b) The Borrower undertakes and agrees to indemnify and hold
harmless the Agent, Citicorp Securities, Inc. and J.P. Morgan Securities, Inc.
(each, an "Arranger") and each Lender against any and all claims, damages,
liabilities and expenses (including but not limited to fees and disbursements of
counsel) which may be incurred by or asserted against the Agent, such Arranger
or such Lender (as the case may be), except where the direct result of the
Agent's, such Arranger's or such Lender's own gross negligence or willful
misconduct, in connection with or arising out of any investigation, litigation,
or proceeding (whether or not the Agent, any Arranger or any of the Lenders is a
party thereto) relating to or arising out of this Agreement, the Notes or any
actual or proposed use of proceeds of Advances hereunder, including but not
limited to any acquisition or proposed acquisition by the Borrower or any
Subsidiary of all or any portion of the stock or substantially all of the assets
of any Person.
(c) If any payment of principal of any Eurodollar Rate Advance
is made other than on the last day of the Interest Period for such A Advance, as
a result of a prepayment pursuant to Section 2.10, 2.11(c) or 5.02(b)(ii) or
acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason, the Borrower shall upon demand by any Lender (with a copy of such
demand to the Agent) pay to the Agent for the account of such Lender any amounts
required to compensate such Lender for any additional losses, costs or expenses
which it may reasonably incur as a result of such payment, including, without
limitation, any loss (excluding in any event loss of anticipated profits), cost
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund or maintain such A Advance.
(d) Without prejudice to the survival of any other agreement
or obligation of the Borrower hereunder, the agreements and obligations of the
Borrower contained in Sections 2.13 and 8.04 shall survive the payment in full
of principal, interest and all other amounts payable hereunder and under the
Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 6.01 to authorize
the Agent to declare the Notes due and payable pursuant to the provisions of
Section 6.01, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender or such Affiliate to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or hereafter existing
under this Agreement and any Note held by such Lender, whether or not (in the
case of obligations other than principal and
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interest) such Lender shall have made any demand under this Agreement or such
Note and although such obligations (other than principal) may be unmatured. Each
Lender agrees promptly to notify the Borrower after any such set-off and
application, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender and its
Affiliates under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which such Lender and
its Affiliates may have.
SECTION 8.06. Binding Effect; Assignment by Borrower. (a) This
Agreement shall become effective when it shall have been executed by the
Borrower and the Agent and when the Agent shall have been notified by each Bank
that such Bank has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Agent and each Lender and (subject to Section
8.07) their respective successors and assigns, except that the Borrower shall
not have the right to assign its rights hereunder or any interest herein without
the prior written consent of the Lenders.
(b) Notwithstanding subsection (a) above, the Borrower shall
have the right to assign its rights to borrow hereunder (in whole or in part) to
any Subsidiary (a "Borrowing Subsidiary"), provided that (i) such Subsidiary
assumes the obligations of the Borrower hereunder relating to the rights so
assigned by executing and delivering an assignment and assumption agreement
reasonably satisfactory to the Agent and the Required Lenders, covering notices,
places of payment and other mechanical details, (ii) the Borrower guarantees
such Subsidiary's obligations thereunder and under the Notes issued in
connection with such assignment and assumption by executing and delivering a
Guaranty substantially in the form of Exhibit F hereto (a "Guaranty") and (iii)
the Borrower and such Subsidiary furnish the Agent with such other documents and
legal opinions as the Agent or the Required Lenders may reasonably request
relating to the existence of such Subsidiary, its corporate power and authority
to request Advances hereunder, and the authority of the Borrower to execute and
deliver such Guaranty and the legality, validity, binding effect and
enforceability of such assignment, assumption and Guaranty. No such assignment
and assumption shall substitute a Borrowing Subsidiary for the Borrower or
relieve the Borrower named herein (i.e., Colgate-Palmolive Company) of its
obligations with respect to the covenants, representations, warranties, Events
of Default and other terms and conditions of this Agreement, all of which shall
continue to apply to such Borrower and its Subsidiaries.
SECTION 8.07. Assignments and Participations. (a) Each Lender
may assign to one or more banks or other entities all or a portion of its rights
and obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the A Advances owing to it and the A Note or Notes
held by it); provided, however, that (i) each such assignment shall be of a
constant, and not a varying, percentage of all rights and obligations under this
Agreement (other than any B Advances or B Notes), (ii) each assignee shall be
subject to the prior written approval and acceptance (not to be unreasonably
68888.6/NYL3
<PAGE>
withheld or delayed) of the Agent and the Borrower (unless the assignee is an
Affiliate of the assignor), and (iii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance consented to by the Borrower, together
with any A Note or Notes subject to such assignment and a processing and
recordation fee of $3,000, and give notice of such assignment to each other
Lender. Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or any Borrowing Subsidiary or the performance or observance by
the Borrower or any Borrowing Subsidiary of any of its obligations under this
Agreement or any other instrument or document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 4.01 and/or
Section 5.01(e)(i) and (ii) and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers and discretion as are reasonably incidental
thereto; and (vi) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
68888.6/NYL3
<PAGE>
(c) The Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the A Advances owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, with
regard to the names, addresses and Commitments of each Lender, and the Borrower,
the Agent and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection and copying by any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee, together with any A Note or Notes
subject to such assignment, the Agent shall, if such Assignment and Acceptance
has been completed and signed by the Borrower and is in substantially the form
of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the other Lenders. Within five Business Days after its receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent in exchange for the surrendered A Note or Notes a new A Note to the order
of such assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained a
Commitment hereunder, a new A Note to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new A Note or
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered A Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A-1 hereto.
(e) Each Lender may assign to one or more banks or other
entities any B Note or Notes held by it. Each Lender may assign to any Affiliate
of such Lender, without the consent of the Borrower, its interest in this
Agreement, the A Advances owing to it and the A Note held by it, but such
assignment shall not relieve such assigning Lender of its obligations hereunder
including, without limitation, its Commitment.
(f) Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment to the Borrower hereunder) shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender shall
remain the holder of any such Note for all purposes of this Agreement, (iv) the
Borrower, the Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's
68888.6/NYL3
<PAGE>
rights and obligations under this Agreement and (v) such Lender shall not grant
to any such participant the right to participate in the Lender's actions on
amendments, waivers or consents permitted under this Agreement, except to the
extent that such actions would change the amount of the Commitment, the
principal amount, payment dates or maturity of any Notes or Advances, the
interest rate, or the method of computing the interest rate thereon, or any fees
payable hereunder.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any confidential information relating to the
Borrower received by it from such Lender.
(h) No assignee of a Lender shall be entitled to the benefits
of Sections 2.11 and 2.13 in relation to circumstances applicable to such
assignee immediately following the assignment to it which at such time (if a
payment were then due to the assignee on its behalf from the Borrower) would
give rise to any greater financial burden on the Borrower under Sections 2.11
and 2.13 than those which it would have been under in the absence of such
assignment.
(i) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time, without the consent of the Borrower,
create a security interest in all or any portion of its rights under this
Agreement (including, without limitation, the Advances owing to it and the Notes
held by it) in favor of any Federal Reserve Bank in accordance with Regulation A
of the Board of Governors of the Federal Reserve System.
SECTION 8.08. Change of Control. (a) Notwithstanding any other
provision of this agreement, the Required Lenders may, upon and after the
occurrence of a Change in Control, by notice to the Borrower (with a copy to the
Agent) (i) immediately suspend or terminate the obligations of the Lenders to
make Advances hereunder and/or (ii) require the Borrower to repay all or any
portion of the Advances on the date or dates specified in the notice which shall
not be less than 30 days after the giving of the notice.
(b) For purposes of this Section "Change in Control" shall
mean the happening of any of the following events:
(i) An acquisition, directly or indirectly, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 30% or more of either (A) the
68888.6/NYL3
<PAGE>
then outstanding shares of common stock of the Borrower or (B) the
combined voting power of the then outstanding voting securities of the
Borrower entitled to vote generally in the election of directors;
excluding, however (1) any acquisition by the Borrower, or (2) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Borrower or any corporation controlled by the
Borrower; or
(ii) A change in composition of the Board of Directors of the
Borrower (the "Board") such that the individuals who, as of the date
hereof, constitute the Board (such Board shall be hereinafter referred
to as the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, for purposes of this
Section 8.08, that any individual who becomes a member of the Board
subsequent to the date hereof, whose election, or nomination for
election by the Borrower's stockholders, was approved by a vote of at
least a majority of those individuals who are members of the Board and
who were also members of the Incumbent Board (or deemed to be such
pursuant to this proviso) shall be considered as though such individual
were a member of the Incumbent Board; but, provided further, that any
such individual whose initial assumption of office occurs as a result
of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board shall not be so
considered as a member of the Incumbent Board.
SECTION 8.09. Mitigation of Adverse Circumstances. If
circumstances arise which would or would upon the giving of notice result in a
payment or an increase in the amount of any payment to be made to a Lender by
reason of Section 2.02(c), 2.11 or 2.12, or which would result in a Lender being
unable to make Eurodollar Rate Advances by reason of Section 2.02(b) then,
without in any way limiting, reducing or otherwise qualifying the obligations of
the Borrower under any of the such Sections, such Lender shall promptly, upon
becoming aware of the same, notify the Borrower thereof and, in consultation
with the Borrower, take such reasonable steps as may be open to it to mitigate
the effects of such circumstances, including the transfer of its Applicable
Lending Office to another jurisdiction; provided that such Lender shall be under
no obligation to make any such transfer if in the bona fide opinion of such
Lender, such transfer would or would likely have an adverse effect upon its
business, operations or financial condition.
SECTION 8.10. Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State of
New York.
SECTION 8.11. Extensions of Termination Date for Commitments.
The Borrower may from time to time request through the Agent that the Lenders
agree in writing to extend the Termination Date then in effect (the "Specified
Date") for the Commitments to
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<PAGE>
the 364th day after such Specified Date; such request shall be received by the
Agent at least 20 days (but not more than 30 days) prior to the expiration of
the Termination Date then in effect. If at least five days prior to the
expiration of the Termination Date for the Commitments then in effect the
Borrower receives written acceptance of its request from at least five Lenders,
the Termination Date for the Commitments then in effect will be extended as to
those Lenders who accept the Borrower's request but shall not be extended as to
any other Lender. Such extended Commitments shall become effective on the
Specified Date. To the extent that the Termination Date for the Commitments in
effect at any time is not extended as to any Lender pursuant to this Section
8.11 or by other prior written agreement executed by such Lender on or before
such Termination Date, the Commitment of such Lender shall automatically
terminate in whole on such unextended Termination Date without any further
notice or other action by the Borrower, such Lender or any other Person. It is
understood that no Lender shall have any obligation whatsoever to agree to any
request made by the Borrower for the extension of the Termination Date for the
Commitments.
SECTION 8.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.13 Jurisdiction, Etc. (a) Each of the parties hereto
(including each Borrowing Subsidiary) hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement, the Notes, or any
Guaranty, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State or, to the extent permitted by law, in such federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement, the Notes or any Guaranty in
the courts of any jurisdiction.
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<PAGE>
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the Notes
in any such New York State or federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
SECTION 8.14. Waiver of Jury Trial. Each of the Borrower, the
Borrowing Subsidiaries and the Lenders hereby irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Agreement, the
Notes or any Guaranty or the actions of the Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
COLGATE-PALMOLIVE COMPANY
Brian J. Heidtke
By ___________________________________________
Vice President and Corporate
Treasurer
CITIBANK, N.A., as Agent
Michel R.R. Pendill
By ___________________________________________
Title
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Co-Agent
Mathias Blumschein
By ___________________________________________
Title: Associate
68888.6/NYL3
<PAGE>
Banks
Commitment
$210,000,000 CITIBANK, N.A.,
Michel R.R. Pendill
By ___________________________________________
Title
$120,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
Mathias Blumschein
By ___________________________________________
Title: Associate
$330,000,000 Total of the Commitments
68888.6/NYL3
<PAGE>
SCHEDULE I
Colgate-Palmolive Company
$330,000,000 CREDIT AGREEMENT
APPLICABLE LENDING OFFICES
Name of
Bank Domestic Lending Office Eurodollar Lending Office
Citibank, N.A. 399 Park Avenue 399 Park Avenue
New York, New York 10043 New York, New York 10043
Morgan Guaranty 500 Stanton Christiana Road 500 Stanton Christiana Road
Trust Company of Newark, Del. 19713 Newark, Del. 19713
New York
68888.6/NYL3
<PAGE>
Schedule 4.01(f)
None.
<PAGE>
EXHIBIT A-1 - FORM OF
A NOTE
U.S.$ Dated: , 19
FOR VALUE RECEIVED, the undersigned, COLGATE-PALMOLIVE
COMPANY, a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the
order of (the "Lender") for the account of its Applicable Lending Office (as
defined in the 364 Day Credit Agreement referred to below) the principal sum of
U.S.$[amount of the Lender's Commitment in figures] or, if less, the aggregate
principal amount of each Base Rate Advance (as defined in the 364 Day Credit
Agreement referred to below) on the Termination Date (as defined in the 364 Day
Credit Agreement referred to below) and the principal amount of each other A
Advance (as defined in the 364 Day Credit Agreement referred to below) owing to
the Lender by the Borrower pursuant to the 364 Day Credit Agreement dated as of
January 8, 1995 among the Borrower, the Lender and certain other lenders parties
thereto, Citibank, N.A., as Agent for the Lender and such other lenders, and
Morgan Guaranty Trust Company of New York, as Co-Agent (as amended or modified
from time to time, the "364 Day Credit Agreement"; the terms defined therein
being used herein as therein defined) on the last day of the Interest Period for
such Advance.
The Borrower promises to pay interest on the unpaid principal
amount of each A Advance from the date of such A Advance until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in the 364 Day Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Citibank, as Agent, at its offices at 1 Court
Square, 7th Floor, Long Island City, New York 11120, in immediately available
funds. Each A Advance owing to the Lender by the Borrower pursuant to the 364
Day Credit Agreement, the date on which it is due, the interest rate thereon and
all prepayments made on account of principal thereof shall be recorded by the
Lender on its books, and for each A Advance outstanding at the time of any
transfer hereof, the same information shall be endorsed on the grid attached
hereto which is part of this Promissory Note.
This Promissory Note is one of the A Notes referred to in, and
is entitled to the benefits of, the 364 Day Credit Agreement. The 364 Day Credit
Agreement, among other things, (i) provides for the making of A Advances by the
Lender to the Borrower from time to time in an aggregate amount not to exceed at
any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such A Advance being evidenced
by this Promissory Note, and (ii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York, United States.
COLGATE-PALMOLIVE COMPANY
By _____________________________________________
Title:
- ------------
[Note: Upon request by a Lender, the Borrower will issue separate A Notes
payable to one or more offices of the Lender, for Base Rate Advances
and Eurodollar Rate Advances. This form will be modified to refer to
the specific type of A Advance and to the appropriate maturity of such
type of A Advance.]
<PAGE>
SCHEDULE TO PROMISSORY NOTE DATED JANUARY __, 1995
OF COLGATE-PALMOLIVE COMPANY
ADVANCES AND PAYMENTS OF PRINCIPAL
<TABLE>
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Amount of
Date Principal Unpaid
Amount of Principal Paid Principal Notation
Date Advance Due Rate or Prepaid Balance Made By
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
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</TABLE>
<PAGE>
EXHIBIT A-2 - FORM OF
B NOTE
U.S.$____________ Dated: ___________, 199_
FOR VALUE RECEIVED, the undersigned, COLGATE-PALMOLIVE
COMPANY, a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to
the order of ____________________ (the "Lender") for the account of its
Applicable Lending Office (as defined in the 364 Day Credit Agreement referred
to below), on _________, 19__, the principal amount of ___________ Dollars
(U.S.$__________).
The Borrower promises to pay interest on the unpaid principal
amount hereof from the date hereof until such principal amount is paid in full,
at the interest rate and payable on the interest payment date or dates provided
below:
Interest Rate: ___% per annum (calculated on the basis of a year of
360 days for the actual number of days elapsed).
Interest Payment Date or Dates: ___________________
Both principal and interest are payable in lawful money of the
United States of America to the Lender at its office at ______________________,
in immediately available funds.
This Promissory Note is one of the B Notes referred to in, and
is entitled to the benefits of, the 364 Day Credit Agreement dated as of January
8, 1995 (as amended or otherwise modified from time to time, the "364 Day Credit
Agreement") among the Borrower, the Lender and certain other lenders party
thereto, Citibank, N.A., as Agent for the Lender and such other parties, and
Morgan Guaranty Trust Company of New York, as Co-Agent. The 364 Day Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events.
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
68888.6/NYL3
<PAGE>
2
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York, United States.
COLGATE-PALMOLIVE COMPANY
By _______________________
Title:
68888.6/NYL3
<PAGE>
EXHIBIT B-1 - FORM OF
NOTICE OF A BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the 364 Day Credit Agreement
referred to below
1 Court Square, 7th Floor
Long Island City, NY 11120 [Date]
Attention: John Makrinos
Ladies and Gentlemen:
The undersigned, Colgate-Palmolive Company, refers to the 364
Day Credit Agreement, dated as of January 8, 1995 (as amended or otherwise
modified through the date hereof, the "364 Day Credit Agreement", the terms
defined therein being used herein as therein defined), among the undersigned,
certain Lenders parties thereto, Citibank, N.A., as Agent for said Lenders, and
Morgan Guaranty Trust Company of New York, as Co-Agent, and hereby gives you
notice, irrevocably, pursuant to Section 2.02 of the 364 Day Credit Agreement
that the undersigned hereby requests an A Borrowing under the 364 Day Credit
Agreement, and in that connection sets forth below the information relating to
such A Borrowing (the "Proposed A Borrowing") as required by Section 2.02(a) of
the 364 Day Credit Agreement:
(i) The Business Day of the Proposed A Borrowing is
, 199 .
(ii) The Type of A Advances comprising the Proposed A
Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed A Borrowing is
$ .
(iv) The Interest Period for each A Advance made as part of
the Proposed A Borrowing is ______ month[s].
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed A
Borrowing:
(A) the representations and warranties contained in Section
4.01 of the 364 Day Credit Agreement are correct, before and after
giving effect to the Proposed A Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date; and
(B) no event has occurred and is continuing, or would result
from such Proposed A Borrowing or from the application of the proceeds
therefrom, that
68888.6/NYL3
<PAGE>
2
constitutes an Event of Default or would constitute an Event of Default
but for the requirement that notice be given or time elapse or both.
[As an alternative, the following three representations may be substituted if
the proviso in Section 3.02 is applicable:
(A) the Proposed A Borrowing will not increase the aggregate
outstanding amount of A Advances owing to each Lender over the
aggregate outstanding amount of A Advances owing to such Lender
immediately prior to such A Borrowing;
(B) the representations and warranties contained in Section
4.01 (excluding those contained in the last sentence of subsection (e)
and in subsection (f) thereof, in each case as incorporated by
reference) are correct, before and after giving effect to the Proposed
A Borrowing and to the application of the proceeds therefrom, as though
made on and as of such date; and
(C) no event has occurred and is continuing, or would result
from such Proposed A Borrowing or from the application of the proceeds
therefrom, which constitutes an Event of Default.]
Very truly yours,
COLGATE-PALMOLIVE COMPANY
By ______________________
Title:
68888.6/NYL3
<PAGE>
EXHIBIT B-2 - FORM OF
NOTICE OF B BORROWING
Citibank, N.A, as Agent for
the Lenders parties to
the 364 Day Credit Agreement
referred to below
1 Court Square, 7th Floor
Long Island City, NY 11120
[Date]
Attention: John Makrinos
Ladies and Gentlemen:
The undersigned, Colgate-Palmolive Company, refers to the 364
Day Credit Agreement dated as of January 8, 1995 (as amended or otherwise
modified through the date hereof, the "364 Day Credit Agreement", the terms
defined therein being used herein as therein defined) among the undersigned,
certain Lenders party thereto, Citibank, N.A., as Agent for such Lenders, and
Morgan Guaranty Trust Company of New York, as Co-Agent, and hereby gives you
notice pursuant to Section 2.03 of the 364 Day Credit Agreement that the
undersigned hereby requests a B Borrowing under the 364 Day Credit Agreement,
and in that connection sets forth the terms on which such B Borrowing (the
"Proposed B Borrowing") is requested to be made:
(A) Date of Proposed B Borrowing _______________
(B) Aggregate Amount of Proposed B Borrowing _______________
(C) Interest Rate Basis _______________
(D) Maturity Date _______________
(E) Interest Payment Date(s) _______________
(F) ________________________________________ _______________
(G) ________________________________________ _______________
(H) ________________________________________ _______________
68888.6/NYL3
<PAGE>
2
The undersigned hereby certifies that the following statements
are true on the date hereof and will be true on the date of the Proposed B
Borrowing:
(a) the representations and warranties contained in Section
4.01 are correct, before and after giving effect to the Proposed B
Borrowing and to the application of the proceeds therefrom, as though
made on and as of such date;
(b) no event has occurred and is continuing, or would result
from the Proposed B Borrowing or from the application of the proceeds
therefrom, which constitutes an Event of Default or would constitute an
Event of Default but for the requirement that notice be given or time
elapse or both;
(c) The information concerning the undersigned that has been
provided in writing to the Agent or each Lender by the undersigned in
connection with the 364 Day Credit Agreement as required by the terms
of the 364 Day Credit Agreement did not include an untrue statement of
a material fact or omit to state any material fact or any fact
necessary to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading; provided that
with regard to any information delivered to a Lender pursuant to
Section 5.01(e)(vii) of the 364 Day Credit Agreement, the
representation and warranty in this paragraph (c) shall apply only to
such information that is specifically identified to the undersigned at
the time the request is made as information (i) that may be delivered
to a purchaser of a B Note, or (ii) that is otherwise requested to be
subject to this paragraph (c).
(d) the aggregate amount of the Proposed B Borrowing and all
other Borrowings to be made on the same day under the 364 Day Credit
Agreement is within the aggregate amount of the unused Commitments of
the Lenders.
The undersigned hereby confirms that the Proposed B Borrowing
is to be made available to it in accordance with Section 2.03(e) of the 364 Day
Credit Agreement.
Very truly yours,
COLGATE-PALMOLIVE COMPANY
By: _____________________
Title:
68888.6/NYL3
<PAGE>
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the 364 Day Credit Agreement dated as of
January 8, 1995 (as amended or modified from time to time, the "364 Day Credit
Agreement") among COLGATE-PALMOLIVE COMPANY, a Delaware corporation (the
"Borrower"), the Lenders (as defined in the 364 Day Credit Agreement), Citibank,
N.A., as agent for the Lenders (the "Agent"), and Morgan Guaranty Trust Company
of New York, as co-agent. Terms defined in the 364 Day Credit Agreement are used
herein with the same meaning.
___________________ (the "Assignor") and _____________ (the "Assignee") agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, that interest in
and to all of the Assignor's rights and obligations under the 364 Day Credit
Agreement as of the date hereof (other than in respect of B Advances and B
Notes) which represents the percentage interest specified on Schedule 1 of all
outstanding rights and obligations under the 364 Day Credit Agreement (other
than in respect of B Advances and B Notes), including, but not limited to, such
interest in the Assignor's Commitment, the A Advances owing to the Assignor, and
the A Note[s] held by the Assignor. After giving effect to such sale and
assignment, the Assignee's Commitment and the amount of the A Advances owing to
the Assignee will be as set forth in Section 2 of Schedule 1.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the 364
Day Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the 364 Day Credit Agreement or any other
instrument or document furnished pursuant thereto; (iii) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the Borrower of
any of its obligations under the 364 Day Credit Agreement or any other
instrument or document furnished pursuant thereto; and (iv) attaches the A
Note[s] referred to in paragraph 1 above and requests that the Borrower exchange
such A Note[s] for a new A Note payable to the order of the Assignee in an
amount equal to the Commitment assumed by the Assignee pursuant hereto or new A
Notes payable to the order of the Assignee in an amount equal to the Commitment
assumed by the Assignee pursuant hereto and to the order of the Assignor in an
amount equal to the Commitment retained by the Assignor under the 364 Day Credit
Agreement, respectively, as specified on Schedule 1 hereto.
68888.6/NYL3
<PAGE>
2
3. The Assignee (i) confirms that it has received a copy of
the 364 Day Credit Agreement, together with copies of the financial statements
referred to in Section 4.01 or delivered pursuant to Section 5.01(e) (in each
case as incorporated into the 364 Day Credit Agreement by reference) thereof and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Acceptance;
(ii) agrees that it will, independently and without reliance upon the Assignor,
the Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the 364 Day Credit Agreement; (iii) agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of the 364 Day Credit Agreement are required to be performed by it
as a Lender; (iv) appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers and discretion under the 364 Day
Credit Agreement as are delegated to the Agent by the terms thereof, together
with such powers and discretion as are reasonably incidental thereto; [and] (v)
specifies as its Domestic Lending Office (and address for notices) and
Eurodollar Lending Office the offices set forth beneath its name on the
signature pages hereof; [and (vi) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying as to the Assignee's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the 364 Day Credit
Agreement and the Notes or such other documents as are necessary to indicate
that all such payments are subject to such rates at a rate reduced by an
applicable tax treaty].*
4. Following the execution of this Assignment and Acceptance
by the Assignor and the Assignee, it will be delivered to the Agent for
acceptance and recording by the Agent. The effective date of this Assignment and
Acceptance shall be the date of acceptance thereof by the Agent, unless
otherwise specified on Schedule 1 hereto (the "Effective Date").
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the 364 Day Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Lender thereunder and (ii) the Assignor shall,
to the extent provided in this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the 364 Day Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under the 364 Day
Credit Agreement and the A Notes in respect of the interest assigned hereby
(including, but not limited to, all payments of principal, interest and
commitment, facility and utilization fees with respect thereto) to the Assignee.
The Assignor and Assignee shall make all appropriate adjustments
- --------
* If the Assignee is organized under the laws of a jurisdiction outside
the United States.
68888.6/NYL3
<PAGE>
3
in payments under the 364 Day Credit Agreement and the A Notes for periods prior
to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of a manually executed counterpart of
this Assignment and Acceptance.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective officers thereunto
duly authorized, as of the date first above written, such execution being made
on Schedule 1 hereto.
68888.6/NYL3
<PAGE>
Schedule 1
to
Assignment and Acceptance
Dated , 19
Section 1.
Percentage Interest: _____%
Section 2.
Assignee's Commitment: $_____
Assignor's Retained Commitment: $_____
Aggregate Outstanding Principal
Amount of A Advances owing to the Assignee: $_____
Aggregate Outstanding Principal
Amount of A Advances owing to the Assignor: $_____
An A Note payable to the order of the Assignee
Dated: _____, 19__
Principal amount: ___________
An A Note payable to the order of the Assignor
Dated: _____, 19__
Principal amount: ___________
Section 3.
Effective Date*: _____, 19__
[NAME OF ASSIGNOR]
By: ___________________________________________
Title:
- --------
* This date should be no earlier than the date of acceptance by the Agent
and the Borrower.
68888.6/NYL3
<PAGE>
2
[NAME OF ASSIGNEE]
By: _____________________________________________
Title:
CD Lending Office:
[Address]
Domestic Lending Office (and address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this ___ day
of _______________, 19__
CITIBANK, N.A., as Agent
By:_____________________
Title:
Accepted this ___ day
of _______________, 19__
COLGATE-PALMOLIVE COMPANY
By:_____________________
Title:
68888.6/NYL3
<PAGE>
EXHIBIT D
January __, 1995
To each of the Lenders party
to the 364 Day Credit Agreement
referred to below and Citibank, N.A.,
as Agent
Ladies and Gentlemen:
As Senior Vice President, General Counsel and Secretary for
Colgate-Palmolive Company (hereinafter referred to as the "Borrower"), I am
familiar with the $330,000,000 364 Day Credit Agreement, dated as of January 8,
1995 among the Borrower, the Lenders parties thereto, Citibank, N.A. as Agent
for the Lenders thereto, and Morgan Guaranty Trust Company of New York, as
Co-Agent (the "364 Day Credit Agreement"). This opinion is being furnished to
you pursuant to Section 3.01(e) of the 364 Day Credit Agreement. Terms used in
this opinion which are defined in the 364 Day Credit Agreement are used herein
as so defined.
I or attorneys under my supervision in the Borrower's Legal
Department have examined such records, certificates, and other documents and
such questions of law as I have considered necessary or appropriate for purposes
of this opinion. In addition, I or attorneys under my supervision in the
Borrower's Legal Department have examined such records, certificates, and other
documents, relied on upon certificates of the officers of the Borrower and
performed such investigations as I have considered necessary or appropriate for
purposes of this opinion in respect of matters of fact. I believe that both you
and I are justified in relying upon such certificates. Based upon, and subject
to, the foregoing, it is my opinion that:
1. The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of Delaware.
2. The execution, delivery and performance by the Borrower of
the 364 Day Credit Agreement, the Notes and the Guaranties are within the
Borrower's corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene (i) the Borrower's charter or by-laws or
(ii) law or (to my knowledge after due inquiry) any contractual restriction
binding on or affecting the Borrower. The 364 Day Credit Agreement and the A
Note have been duly executed and delivered on behalf of the Borrower.
3. No authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Borrower of the
364 Day Credit Agreement, the Notes and the Guaranties.
4. The 364 Day Credit Agreement is and the A Note will be, and
each of the Guaranties and B Notes when executed and delivered will be, upon the
receipt of due consideration therefor, the legal, valid and binding obligations
of the Borrower, enforceable against the Borrower in accordance with their
respective terms.
5. The Borrower has a procedure of reviewing its material
litigation on a quarterly basis and has imposed an ongoing obligation on its
Subsidiaries whereby they must advise me, or attorneys under my supervision,
immediately of any material litigation matter arising between reviews. Based on
this review, to my actual knowledge, there is no pending or threatened action or
proceeding affecting the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator which may have a Material Adverse Effect or
which purports to affect the legality, validity or enforceability of the 364 Day
Credit Agreement, any Notes and any Guaranties; provided, however, that I
express no opinion with respect to certain Brazilian regulatory risks discussed
with you.
I am licensed to practice law in the State of New York and do
not purport to be an expert on, or to express any opinion (other than to the
extent necessary to render the opinions set forth in paragraph (1) above, which
opinion in based on certificates of public officials) concerning any law other
than the law of the State of New York, the General Corporation Law of the State
of Delaware and the Federal law of the United States. The opinions expressed
herein are solely for your benefit and may not be relied upon in any manner or
for any purpose by any other persons.
The opinion set forth in paragraph (4) above is subject to the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors' rights generally, and to the effect of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding equity or at law).
Very truly yours,
<PAGE>
EXHIBIT E
OPINION OF COUNSEL TO THE AGENT
January __, 1995
To the Lenders party to the
364 Day Credit Agreement referred
to below and Citibank, N.A.,
as Agent
Colgate-Palmolive Company
Ladies and Gentlemen:
We have acted as counsel to Citibank, N.A., as Agent, in
connection with the preparation, execution and delivery of the 364 Day Credit
Agreement dated as of January 8, 1995 (the "364 Day Credit Agreement") among
Colgate-Palmolive Company (the "Borrower"), each of you, Citibank, N.A., as
Agent, and Morgan Guaranty Trust Company of New York, as Co-Agent. Terms defined
in the 364 Day Credit Agreement are used herein as therein defined.
In that connection, we have examined the following documents:
(1) A counterpart of the 364 Day Credit Agreement, executed by
each of the parties thereto.
(2) The documents furnished by the Borrower pursuant to
Section 3.01 of the 364 Day Credit Agreement, including the opinion of
Andrew D. Hendry, General Counsel of the Borrower.
In our examination of the documents referred to above, we have
assumed the authenticity of all such documents submitted to us as originals, the
genuineness of all signatures, the due authority of the parties executing such
documents, and the conformity to the originals of all such documents submitted
to us as copies. We have also assumed that each of you has duly executed and
delivered, with all necessary power and authority (corporate and otherwise), the
364 Day Credit Agreement.
To the extent that our opinions expressed below involve
conclusions as to the matters set forth in paragraphs 1, 2 and 3 of the
above-mentioned opinion of counsel for the
68888.6/NYL3
<PAGE>
2
Borrower, we have assumed without independent investigation the correctness of
the matters set forth in such paragraphs, our opinion being subject to the
assumptions, qualifications and limitations set forth in such opinion with
respect thereto.
Based upon the foregoing and upon such other investigation as
we have deemed necessary, we are of the following opinion:
1. The 364 Day Credit Agreement and each Note delivered on
the date hereof are the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their
respective terms.
2. The above-mentioned opinion of counsel for the Borrower,
and the other documents referred to in item (2) above, are
substantially responsive to the requirements of the 364 Day Credit
Agreement.
Our opinions above are subject to the following qualifications:
(a) Our opinion in paragraph 1 above is subject to the effect
of general principles of equity, including (without limitation)
concepts of materiality, reasonableness, good faith and fair dealing
(regardless of whether considered in a proceeding in equity or at law).
(b) Our opinion in paragraph 1 above is also subject to the
effect of any applicable bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar law affecting creditors' rights generally.
(c) Our opinions expressed above are limited to the law of the
State of New York and the Federal law of the United States, and we do
not express any opinion herein concerning any other law. Without
limiting the generality of the foregoing, we express no opinion as to
the effect of the law of any jurisdiction other than the State of New
York wherein any Lender may be located or wherein enforcement of the
364 Day Credit Agreement or the Notes may be sought which limits the
rates of interest legally chargeable or collectible.
Very truly yours,
SHEARMAN & STERLING
LCJ:SLH
68888.6/NYL3
<PAGE>
EXHIBIT F
FORM OF GUARANTY
GUARANTY, dated ________, 19__, made by COLGATE-PALMOLIVE COMPANY, a
corporation organized and existing under the laws of Delaware (the "Guarantor"),
in favor of Citibank, N.A., as agent (the "Agent") for each of the Lenders (the
"Lenders") parties to the 364 Day Credit Agreement (as defined below).
PRELIMINARY STATEMENTS.
(1) The Agent, the Lenders, the Guarantor, and Morgan Guaranty
Trust Company of New York, as co-agent have entered into a 364 Day Credit
Agreement dated as of January 8, 1995 (said Agreement, as it may heretofore have
been or hereafter be amended or otherwise modified from time to time, being the
"364 Day Credit Agreement", the terms defined therein and not otherwise defined
herein being used herein as therein defined). Pursuant to Section 8.06(b) of the
364 Day Credit Agreement and an Assignment and Assumption Agreement dated
________, 19__ the Guarantor has assigned to___________________________________
_____, a corporation organized and existing under the laws of ______________
(the "Assignee"), certain rights under the 364 Day Credit Agreement, so that
the Assignee may borrow and receive Advances under the 364 Day Credit
Agreement. The Assignee is a Subsidiary of the Guarantor and engages in
business transactions with the Guarantor, and the Guarantor represents that
it will derive substantial direct and indirect benefit from all Advances
to the Assignee.
(2) It is a condition precedent to the making of such
assignment to the Assignee that the Guarantor shall have executed and delivered
this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Lenders to accept such assignment and to make Advances to the
Assignee under the 364 Day Credit Agreement, the Guarantor hereby agrees as
follows:
SECTION 1. Guaranty. The Guarantor hereby unconditionally
guarantees the punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all obligations of the Assignee now or hereafter
existing under the 364 Day Credit Agreement and under the Notes evidencing
Advances to the Assignee (the "Notes"), whether for principal, interest, fees,
expenses or otherwise (such obligations being the "Obligations"), and agrees to
pay any and all expenses (including counsel fees and expenses) incurred by the
Agent and the Lenders in enforcing any rights under this Guaranty. Without
limiting the generality of the foregoing, the Guarantor's liability shall extend
to all amounts which constitute part of the Obligations and would be owed by the
Assignee to the Lenders under the 364 Day Credit Agreement and the Notes but for
the fact that they are unenforceable or
68888.6/NYL3
<PAGE>
2
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Assignee.
SECTION 2. Guaranty Absolute. The Guarantor guarantees that
the Obligations will be paid strictly in accordance with the terms of the 364
Day Credit Agreement and the Notes, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Lenders with respect thereto. The obligations of the Guarantor
under this Guaranty are independent of the Obligations, and a separate action or
actions may be brought and prosecuted against the Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against the Assignee or
whether the Assignee is joined in any such action or actions. The liability of
the Guarantor under this Guaranty shall be absolute and unconditional
irrespective of:
(i) any lack of validity or enforceability of the 364 Day
Credit Agreement, the Notes or any other agreement or instrument
relating thereto;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to departure from the 364 Day
Credit Agreement or the Notes, including, without limitation, any
increase in the Obligations resulting from the extension of additional
credit to the Assignee or any of its subsidiaries or otherwise;
(iii) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the
Obligations;
(iv) any manner of application of collateral, or proceeds
thereof, to all or any of the Obligations, or any manner of sale or
other disposition of any collateral for all or any of the Obligations
or any other assets of the Assignee or any of its subsidiaries;
(v) any change, restructuring or termination of the corporate
structure or existence of the Assignee or any of its subsidiaries or
its status as a Subsidiary of the Guarantor; or
(vi) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Assignee or a guarantor.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by the Agent or any Lender upon the insolvency, bankruptcy
or reorganization of the Assignee or otherwise, all as though such payment had
not been made.
68888.6/NYL3
<PAGE>
3
SECTION 3. Waiver. The Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations, this Guaranty or any circumstance referred to in Section 2, and
waives any requirement that the Agent or any Lender protect, secure, perfect or
insure any security interest or lien or any property subject thereto or exhaust
any right or take any action against the Assignee or any other person or entity
or any collateral.
SECTION 4. Subrogation. (a) The Guarantor will not exercise
any rights which it may acquire by way of subrogation under this Guaranty, by
any payment made hereunder or otherwise, until all the Obligations and all other
amounts payable under this Guaranty shall have been paid in full and the
Commitments shall have expired or terminated. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time prior to the later
of (x) the payment in full of the Obligations and all other amounts payable
under this Guaranty and (y) the expiration or termination of the Commitments,
such amount shall be deemed to have been paid to the Guarantor for the benefit
of, and held in trust for the benefit of, the Agent and the Lenders and shall
forthwith be paid to the Agent to be credited and applied upon the Obligations,
whether matured or unmatured, in accordance with the terms of the 364 Day Credit
Agreement or to be held by the Agent as collateral security for any Obligations
thereafter existing. If (i) the Guarantor shall make payment to the Agent of all
or any part of the Obligations, (ii) all the Obligations and all other amounts
payable under this Guaranty shall be paid in full and (iii) the Commitments
shall have expired or terminated, the Agent will, at the Guarantor's request,
execute and deliver to the Guarantor appropriate documents, without recourse and
without representation or warranty, necessary to evidence the transfer by
subrogation to the Guarantor of an interest in the Obligations resulting from
such payment by the Guarantor.
[The preceding Section 4(a) will be used if the Assignee is
incorporated and has its principal office in a jurisdiction other than the
United States of America, or a State, Territory or possession thereof.
Otherwise, the following Section 4(a) will be used.]
SECTION 4. Waiver of Subrogation. (a) The Guarantor hereby
irrevocably waives any claim or other right which it may now or hereafter
acquire against the Assignee that arises from the existence, payment,
performance or enforcement of the Guarantor's obligations under this Guaranty or
any other Loan Document, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, any
right to participate in any claim or remedy of the Agent or any Lender against
the Assignee or any collateral which the Agent or any Lender now has or
hereafter acquires, whether or not such claim, remedy or right arises in equity,
or under contract, statute or common law, including without limitation, the
right to take or receive from the Assignee, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim or other right. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time prior to the later
of (x) the
68888.6/NYL3
<PAGE>
4
payment in full of the Obligations and all other amounts payable under this
Guaranty and (y) the expiration or termination of the Commitments, such amount
shall be deemed to have been paid to the Guarantor for the benefit of, and held
in trust for the benefit of the Agent and the Lenders and shall forthwith be
paid to the Agent to be credited and applied upon the Obligations, whether
matured or unmatured, in accordance with the terms of the 364 Day Credit
Agreement or to be held by the Agent as collateral security for any Obligations
thereafter existing. The waiver set forth in this Section 4(a) is knowingly made
in contemplation of the benefits referred to in the Preliminary Statements.
(b) The Guarantor agrees that, to the extent that the Assignee
makes a payment or payments to the Agent or any Lender or the Agent or any
Lender receives any proceeds of collateral, which payment or payments or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or otherwise required to be repaid to the Assignee, its
estate, trustee, receiver or any other party, including, without limitation,
under any bankruptcy law, state or federal law, common law or equitable cause,
then to the extent of such payment or repayment, the Obligation or part thereof
which has been paid, reduced or satisfied by such amount shall be reinstated and
continued in full force and effect as of the date such initial payment,
reduction or satisfaction occurred. The Guarantor shall defend and indemnify the
Agent and each Lender from and against any claim or loss under this Section 4(b)
(including reasonable attorneys' fees and expenses) in the defense of any such
action or suit.
SECTION 5. Payments With Respect to Taxes, Etc. Any and all
payments made by the Guarantor hereunder shall be subject to and made in
accordance with Section 2.13 of the 364 Day Credit Agreement as if all such
payments were being made by the Borrower.
SECTION 6. Representations and Warranties. The Guarantor
hereby represents and warrants as follows:
(a) The Guarantor is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware, and has all
corporate power required to carry on its business as now conducted.
(b) The execution and delivery by the Guarantor of this
Guaranty, and the performance of its obligations hereunder, are within
the Guarantor's corporate power, have been duly authorized by all
necessary corporate and other action, require no action by or in
respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or
by-laws of the Guarantor or of any agreement, judgment, injunction,
order, decree or other instrument binding upon
68888.6/NYL3
<PAGE>
5
or affecting the Guarantor or result in the creation or imposition of
any Lien on any asset of the Guarantor or any of its Subsidiaries.
(c) This Guaranty has been duly executed and delivered by the
Guarantor and constitutes a valid and binding agreement of the
Guarantor enforceable in accordance with its terms.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by the
Guarantor of this Guaranty.
(e) The Assignee is a Subsidiary of the Guarantor and is a
corporation duly incorporated, validly existing and in good standing
under the laws of _____________________________.
(f) There are no conditions precedent to the effectiveness of
this Guaranty that have not been satisfied or waived.
(g) The Guarantor has, independently and without reliance upon
any Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into
this Guaranty.
SECTION 7. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty, and no consent to any departure by the Guarantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given, provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders, (a) limit or release the liability of the
Guarantor hereunder, (b) postpone any date fixed for payment hereunder, or (c)
change the number of Lenders required to take any action hereunder.
SECTION 8. Addresses for Notices. All notices and other
communications provided for hereunder shall be given and effective as provided
in Section 8.02 of the 364 Day Credit Agreement.
SECTION 9. No Waiver; Remedies. No failure on the part of any
Lender to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 10. Right of Set-off. If the Guarantor shall fail to
make any payment promptly when due hereunder after notice by the Agent or any
Lender to the
68888.6/NYL3
<PAGE>
6
Guarantor that the Assignee has failed to pay any Obligation when due, each
Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Guarantor against any and all of the obligations of the Guarantor
now or hereafter existing under this Guaranty, whether or not such Lender shall
have made any demand under this Guaranty and although such obligations may be
contingent and unmatured. Each Lender agrees to notify the Guarantor, the Agent
and each other Lender promptly after any such set-off and application made by
such Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
SECTION 11. Continuing Guaranty; Assignments under 364 Day
Credit Agreement. This Guaranty is a continuing guaranty and shall (i) remain in
full force and effect until the later of (x) the payment in full of the
Obligations and all other amounts payable under this Guaranty and (y) the
expiration or termination of the Commitments, (ii) be binding upon the
Guarantor, its successors and assigns, and (iii) inure to the benefit of, and be
enforceable by, the Agent, the Lenders and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(iii), any Lender may assign or otherwise transfer all or any portion of its
rights and obligations under the 364 Day Credit Agreement (including, without
limitation, all or any portion of its Commitment, the Advances owing to it and
any Note held by it) to any other person or entity, and such other person or
entity shall thereupon become vested with all the benefits in respect thereof
granted to such Lender herein or otherwise, subject, however, to the provisions
of Section 8.07 of the 364 Day Credit Agreement.
SECTION 12. Governing Law. This Guaranty shall be governed by,
and construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
COLGATE-PALMOLIVE COMPANY
By _________________________________________________
Title:
68888.6/NYL3
EXHIBIT 11
Page 1 of 2
COLGATE-PALMOLIVE COMPANY
COMPUTATION OF EARNINGS PER COMMON SHARE
Dollars in Millions Except Per Share Amounts (Unaudited)
<TABLE>
<CAPTION>
Year Ended December 31,
1994 1993 1992
<S> <C> <C> <C>
PRIMARY
Earnings:
Income before changes in accounting ........................................... $580.2 $548.1 $477.0
Deduct: Dividends on preferred shares ......................................... 21.6 21.6 20.7
Income applicable to common shares before cumulative effect
on prior years of accounting changes ........................................ 558.6 526.5 456.3
Cumulative effect on prior years of accounting changes ........................ -- (358.2 --
Net income applicable to common shares ........................................ $558.6 $168.3 $456.3
Shares (in millions):
Weighted average shares outstanding ........................................... 146.2 155.9 156.5
Earnings per common share, primary:
Income before changes in accounting ........................................... $ 3.82 $3.38 $ 2.92
Cumulative effect on prior years of accounting changes ........................ -- (2.30) --
Net income per share .......................................................... $ 3.82 $ 1.08 $ 2.92
</TABLE>
<PAGE>
EXHIBIT 11
Page 2 of 2
COLGATE-PALMOLIVE COMPANY
COMPUTATION OF EARNINGS PER COMMON SHARE
Dollars in Millions Except Per Share Amounts (Unaudited)
<TABLE>
<CAPTION>
Year Ended December 31,
1994 1993 1992
<S> <C> <C> <C>
ASSUMING FULL DILUTION
Earnings:
Income before changes in accounting ............................................ $580.2 $548.1 $477.0
Deduct: Dividends on preferred shares .......................................... .5 .5 .5
Deduct: Replacement funding .................................................... 7.8 9.5 5.8
Income applicable to common shares before cumulative effect
on prior years of accounting changes ......................................... 571.9 538.1 470.7
Cumulative effect on prior years of accounting changes ......................... -- (358.2 --
Net income applicable to common shares ......................................... $571.9 $179.9 $470.7
Shares (in millions):
Weighted average shares outstanding ............................................ 146.2 155.9 156.5
Add: Assumed exercise of options reduced by the number of
shares purchased with the proceeds ........................................... 1.9 2.5 3.1
Add: Assumed conversion of Series B Convertible Preference
Stock ........................................................................ 12.2 12.4 12.5
Adjusted weighted average shares outstanding ................................... 160.3 170.8 172.1
Earnings per common share, assuming full dilution:
Income before changes in accounting ............................................ $ 3.56 $ 3.15 $ 2.74
Cumulative effect on prior years of accounting changes ......................... -- (2.10) --
Net income per share ........................................................... $ 3.56 $ 1.05 $ 2.74
</TABLE>
EXHIBIT 12
COLGATE-PALMOLIVE COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Dollars in Millions (Unaudited)
<TABLE>
<CAPTION>
Year Ended
December 31, 1994
<S> <C>
Income before income taxes and cumulative effect on prior years of accounting changes .......................... $ 879.9
Add:
Interest on indebtedness and amortization of debt expense and discount or premium .............................. 120.9
Portion of rents representative of interest factor ............................................................. 27.8
Interest on ESOP debt, net of dividends ........................................................................ 1.9
Less:
Income of less than fifty-percent-owned subsidiaries ........................................................... (1.3)
Income as adjusted ............................................................................................. $1,029.2
Fixed Charges:
Interest on indebtedness and amortization of debt expense and discount or premium .............................. $ 120.9
Portion of rents representative of interest factor ............................................................. 27.8
Interest on ESOP debt, net of dividends ........................................................................ 1.9
Capitalized interest ........................................................................................... 9.7
Total fixed charges ............................................................................................ $ 160.3
Ratio of earnings to fixed charges ............................................................................. 6.4
</TABLE>
In June 1989, the Company's leveraged employee stock ownership plan (ESOP)
issued $410.0 long-term notes due through 2009 bearing an average interest
rate of 8.6%. These notes are guaranteed by the Company. Interest incurred on
the ESOP's notes was $34.2 in 1994. This interest is funded through preferred
and common stock dividends. The fixed charges presented above include
interest on ESOP indebtedness to the extent it is not funded through
preferred and common stock dividends.
EXHIBIT 21
Page 1 of 2
SUBSIDIARIES OF THE REGISTRANT
<TABLE>
<CAPTION>
State in which
Incorporated or Country
Name of Company in which Organized
<S> <C>
Colgate Juncos, Inc. ........................................................... Delaware
Colgate-Palmolive, Inc. ........................................................ Delaware
Colgate-Palmolive (Caribbean), Inc. ............................................ Delaware
Colgate-Palmolive (Central America), Inc. ...................................... Delaware
Colgate-Palmolive Cia .......................................................... Delaware
Colgate-Palmolive Development Corp. ............................................ Delaware
Colgate-Palmolive (Dominican Republic), Inc. ................................... Delaware
Colgate-Palmolive Global Trading Company ....................................... Delaware
Colgate-Palmolive International Incorporated ................................... Delaware
Colgate-Palmolive (P.R.) Inc. .................................................. Delaware
Colgate-Palmolive (Istanbul), Inc. ............................................. Delaware
Colgate Oral Pharmaceuticals, Inc. ............................................. Delaware
CPC Funding Company ............................................................ Delaware
Southampton-Hamilton Company ................................................... Delaware
Purity Holding Company ......................................................... Delaware
Hill's Pet Nutrition, Inc. ..................................................... Delaware
Mennen Limited ................................................................. Delaware
Mennen de Puerto Rico, Ltd ..................................................... Delaware
Mission Hill's Property Corporation ............................................ Delaware
Newgrange Financial Services Company ........................................... Delaware
Norwood International Incorporated ............................................. Delaware
Vipont Pharmaceutical, Inc. .................................................... Delaware
Former PHI, Inc ................................................................ Massachusetts
Softsoap Enterprises, Inc. ..................................................... Minnesota
The Mennen Company ............................................................. New Jersey
The Murphy-Phoenix Company ..................................................... Ohio
Colgate-Palmolive Sociedad Anonima Industrial Y Commercial ..................... Argentina
Colgate-Palmolive Pty. Limited ................................................. Australia
Hill's Pet Products Pty. Ltd ................................................... Australia
Colgate-Palmolive Gesellschaft m.b.H ........................................... Austria
Colgate-Palmolive Belgium S.A .................................................. Belgium
Colgate-Palmolive Europe S.A ................................................... Belgium
Hill's Pet Products (Benelux) S.A .............................................. Belgium
ELM Company Limited ............................................................ Bermuda
Colgate-Palmolive (Botswana) (Proprietary) Ltd ................................. Botswana
Colgate-Palmolive, Ltda ........................................................ Brazil
CP Textil Industria e Comercia Ltd ............................................. Brazil
Hawley & Hazel (BVI) Company Ltd ............................................... British Virgin Islands
Colgate-Palmolive (Bulgaria) ................................................... Bulgaria
Colgate-Palmolive Cameroun S.A ................................................. Cameroons
Colgate-Palmolive Canada, Inc. ................................................. Canada
Hill's Distribution Services Ltd ............................................... Canada
Colgate (Guangzhou) Limited .................................................... China
Colgate-Palmolive (Czechoslovakia) SRO ......................................... Czech Republic
Colgate-Palmolive A/S .......................................................... Denmark
Colgate-Palmolive del Ecuador, S.A ............................................. Ecuador
Colgate-Palmolive (Egypt) S.A.E ................................................ Egypt
Colgate-Palmolive (Fiji) Limited ............................................... Fiji Islands
Colgate-Palmolive .............................................................. France
Cotelle, S.A ................................................................... France
Hill's Pet Products SNC ........................................................ France
Colgate-Palmolive G.m.b.H ...................................................... Germany
Hill's Pet Products G.m.b.H .................................................... Germany
Colgate-Palmolive (Hellas) S.A ................................................. Greece
Colgate-Palmolive (Centro America) S.A ......................................... Guatemala
<PAGE>
EXHIBIT 21
Page 2 of 2
State in which
Incorporated or Country
Name of Company in which Organized
Colgate-Palmolive (H.K.) Limited ............................................... Hong Kong
Colgate-Palmolive (Hungary) Kft ................................................ Hungary
Colgate-Palmolive (India) Limited .............................................. India
P.T. Colgate-Palmolive Indonesia ............................................... Indonesia
Colgate-Palmolive (Ireland) Limited ............................................ Ireland
Colgate-Palmolive S.p.A ........................................................ Italy
Hill's Pet Products S.p.A ...................................................... Italy
Colgate-Palmolive Cote. d'lvoire, S.A .......................................... Ivory Coast
Colgate-Palmolive Co. (Jamaica) Ltd ............................................ Jamaica
Hill's-Colgate (Japan) Ltd ..................................................... Japan
Colgate-Palmolive (East Africa) Limited ........................................ Kenya
Colgate-Palmolive (Malaysia) SDN. BHD .......................................... Malaysia
Colgate-Palmolive (Malaysia) Marketing SDN. BHD ................................ Malaysia
Colgate-Palmolive, S.A. de C.V ................................................. Mexico
Hill's Pet Products de Mexico, S.A. de C.V ..................................... Mexico
Mennen de Mexico, S.A .......................................................... Mexico
Colgate-Palmolive .............................................................. Morocco
Colgate-Palmolive (Mocambique) Limitada ........................................ Mozambique
CKR Nederland B.V .............................................................. Netherlands
Hill's International Sales FSC B.V ............................................. Netherlands
Colgate-Palmolive Limited ...................................................... New Zealand
Colgate-Palmolive Investments (PNG) Pty Ltd .................................... Papua, New Guinea
Colgate-Palmolive Philippines, Inc. ............................................ Philippines
Colgate-Palmolive (Poland) Sp.z O.O ............................................ Poland
Colgate-Palmolive, S.A ......................................................... Portugal
SonadelSociedad Nacional de Detergents, S.A .................................... Portugal
Colgate-Palmolive (Romania) Ltd ................................................ Romania
A/O Colgate-Palmolive (Russia) ................................................. Russia
Societe Africaine de Detergents, S.A ........................................... Senegal
Colgate-Palmolive (Eastern) Pte. Ltd ........................................... Singapore
Colgate-Palmolive (Pty) Limited ................................................ South Africa
Colgate-Palmolive, S.A.E ....................................................... Spain
Cristasol S.A .................................................................. Spain
Colgate-Palmolive A.G .......................................................... Switzerland
Colgate-Palmolive (Tanzania) Limited ........................................... Tanzania
Siam Purity Distribution (Thailand) Ltd ........................................ Thailand
Colgate-Palmolive (Thailand) Ltd ............................................... Thailand
Colgate-Palmolive Haci Sakir Sabun Sanayi ve Ticaret Anonim Sirketi ............ Turkiye
Colgate-Palmolive (Uganda) Limited ............................................. Uganda
Colgate-Palmolive SP ........................................................... Ukraine
Colgate-Palmolive (Ukraine) A/O ................................................ Ukraine
Colgate Holdings (U.K.) Limited ................................................ United Kingdom
Colgate-Palmolive Limited ...................................................... United Kingdom
Colgate-Palmolive Mennen Limited ............................................... United Kingdom
Hill's Pet Products Limited .................................................... United Kingdom
Hill's Pet Nutrition Ltd ....................................................... United Kingdom
Alexandril S.A ................................................................. Uruguay
Colgate-Palmolive Compania Anonima ............................................. Venezuela
Colgate-Palmolive (Zambia) Ltd ................................................. Zambia
Colgate-Palmolive (Zimbabwe) (Private) Limited ................................. Zimbabwe
</TABLE>
EXHIBIT 23
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 10-K, into the Company's previously filed
Registration Statement File Nos. 2-76922, 2-96982, 33-17136, 33-27227,
33-34952, 33-48832, 33-48840, 33-58746, 33-61038 and 33-78424.
/s/ ARTHUR ANDERSEN LLP
New York, New York
March 17, 1995
EXHIBIT 24
Page 1 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities and Exchange
Commission its Annual Report on Form 10-K for the year ended December 31,
1994 ("Annual Report") pursuant to Section 13 of the Securities Exchange Act
of 1934;
NOW, THEREFORE, the undersigned in his capacity as a director or officer, or
both, of COLGATE-PALMOLIVE COMPANY hereby appoints REUBEN MARK, ANDREW
HENDRY and ROBERT AGATE, and each of them severally, his true and lawful
attorneys or attorney with power to act with or without the other and with
full power of substitution and resubstitution, to execute in his name, place
and stead, in his capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection therewith,
and to file the same with the Securities and Exchange Commission. Each of
said attorneys shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as fully to all
intents and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on March 9,
1995.
/s/ VERNON R. ALDEN
Vernon R. Alden
<PAGE>
EXHIBIT 24
Page 2 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities and Exchange
Commission its Annual Report on Form 10-K for the year ended December 31,
1994 ("Annual Report") pursuant to Section 13 of the Securities Exchange Act
of 1934;
NOW, THEREFORE, the undersigned in her capacity as a director or officer, or
both, of COLGATE-PALMOLIVE COMPANY hereby appoints REUBEN MARK, ANDREW
HENDRY and ROBERT AGATE, and each of them severally, her true and lawful
attorneys or attorney with power to act with or without the other and with
full power of substitution and resubstitution, to execute in her name, place
and stead, in her capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection therewith,
and to file the same with the Securities and Exchange Commission. Each of
said attorneys shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as fully to all
intents and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on March 9,
1995.
/s/ JILL K. CONWAY
Jill K. Conway
<PAGE>
EXHIBIT 24
Page 3 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities and Exchange
Commission its Annual Report on Form 10-K for the year ended December 31,
1994 ("Annual Report") pursuant to Section 13 of the Securities Exchange Act
of 1934;
NOW, THEREFORE, the undersigned in his capacity as a director or officer, or
both, of COLGATE-PALMOLIVE COMPANY hereby appoints REUBEN MARK, ANDREW
HENDRY and ROBERT AGATE, and each of them severally, his true and lawful
attorneys or attorney with power to act with or without the other and with
full power of substitution and resubstitution, to execute in his name, place
and stead, in his capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection therewith,
and to file the same with the Securities and Exchange Commission. Each of
said attorneys shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as fully to all
intents and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on March 9,
1995.
/s/ RONALD E. FERGUSON
Ronald E. Ferguson
<PAGE>
EXHIBIT 24
Page 4 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities and Exchange
Commission its Annual Report on Form 10-K for the year ended December 31,
1994 ("Annual Report") pursuant to Section 13 of the Securities Exchange Act
of 1934;
NOW, THEREFORE, the undersigned in his capacity as a director or officer, or
both, of COLGATE-PALMOLIVE COMPANY hereby appoints REUBEN MARK, ANDREW
HENDRY and ROBERT AGATE, and each of them severally, his true and lawful
attorneys or attorney with power to act with or without the other and with
full power of substitution and resubstitution, to execute in his name, place
and stead, in his capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection therewith,
and to file the same with the Securities and Exchange Commission. Each of
said attorneys shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as fully to all
intents and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on March 9,
1995.
/s/ ELLEN M. HANCOCK
Ellen M. Hancock
<PAGE>
EXHIBIT 24
Page 5 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities and Exchange
Commission its Annual Report on Form 10-K for the year ended December 31,
1994 ("Annual Report") pursuant to Section 13 of the Securities Exchange Act
of 1934;
NOW, THEREFORE, the undersigned in his capacity as a director or officer, or
both, of COLGATE-PALMOLIVE COMPANY hereby appoints REUBEN MARK, ANDREW
HENDRY and ROBERT AGATE, and each of them severally, his true and lawful
attorneys or attorney with power to act with or without the other and with
full power of substitution and resubstitution, to execute in his name, place
and stead, in his capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection therewith,
and to file the same with the Securities and Exchange Commission. Each of
said attorneys shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as fully to all
intents and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on March 9,
1995.
/s/ DAVID W. JOHNSON
David W. Johnson
<PAGE>
EXHIBIT 24
Page 6 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities and Exchange
Commission its Annual Report on Form 10-K for the year ended December 31,
1994 ("Annual Report") pursuant to Section 13 of the Securities Exchange Act
of 1934;
NOW, THEREFORE, the undersigned in his capacity as a director or officer, or
both, of COLGATE-PALMOLIVE COMPANY hereby appoints REUBEN MARK, ANDREW
HENDRY and ROBERT AGATE, and each of them severally, his true and lawful
attorneys or attorney with power to act with or without the other and with
full power of substitution and resubstitution, to execute in his name, place
and stead, in his capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection therewith,
and to file the same with the Securities and Exchange Commission. Each of
said attorneys shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as fully to all
intents and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on March 9,
1995.
/s/ JOHN P. KENDALL
John P. Kendall
<PAGE>
EXHIBIT 24
Page 7 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities and Exchange
Commission its Annual Report on Form 10-K for the year ended December 31,
1994 ("Annual Report") pursuant to Section 13 of the Securities Exchange Act
of 1934;
NOW, THEREFORE, the undersigned in his capacity as a director or officer, or
both, of COLGATE-PALMOLIVE COMPANY hereby appoints ANDREW HENDRY and ROBERT
AGATE, and each of them severally, his true and lawful attorneys or attorney
with power to act with or without the other and with full power of
substitution and resubstitution, to execute in his name, place and stead, in
his capacity as a director, officer, or both, of COLGATE-PALMOLIVE COMPANY,
its Annual Report and any and all amendments thereto and all instruments
necessary or incidental in connection therewith, and to file the same with
the Securities and Exchange Commission. Each of said attorneys shall have
full power and authority to do and perform in the name and on behalf of the
undersigned, in any and all capacities, every act whatsoever necessary or
desirable to be done in the premises, as fully to all intents and purposes as
the undersigned might or could do in person. The undersigned hereby ratifies
and approves the acts of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on March 9,
1995.
/s/ DELANO E. LEWIS
Delano E. Lewis
<PAGE>
EXHIBIT 24
Page 8 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities and Exchange
Commission its Annual Report on Form 10-K for the year ended December 31,
1994 ("Annual Report") pursuant to Section 13 of the Securities Exchange Act
of 1934;
NOW, THEREFORE, the undersigned in his capacity as a director or officer, or
both, of COLGATE-PALMOLIVE COMPANY hereby appoints REUBEN MARK, ANDREW
HENDRY and ROBERT AGATE, and each of them severally, his true and lawful
attorneys or attorney with power to act with or without the other and with
full power of substitution and resubstitution, to execute in his name, place
and stead, in his capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection therewith,
and to file the same with the Securities and Exchange Commission. Each of
said attorneys shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as fully to all
intents and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on March 9,
1995.
/s/ REUBEN MARK
Reuben Mark
<PAGE>
EXHIBIT 24
Page 9 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities and Exchange
Commission its Annual Report on Form 10-K for the year ended December 31,
1994 ("Annual Report") pursuant to Section 13 of the Securities Exchange Act
of 1934;
NOW, THEREFORE, the undersigned in her capacity as a director or officer, or
both, of COLGATE-PALMOLIVE COMPANY hereby appoints REUBEN MARK, ANDREW
HENDRY and ROBERT AGATE, and each of them severally, her true and lawful
attorneys or attorney with power to act with or without the other and with
full power of substitution and resubstitution, to execute in her name, place
and stead, in her capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection therewith,
and to file the same with the Securities and Exchange Commission. Each of
said attorneys shall have full power and authority to do and perform in the
name and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as fully to all
intents and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument on March 9,
1995.
/s/ HOWARD B. WENTZ, JR.
Howard B. Wentz, Jr.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
the annual report on Form 10-K for the year ended December 31, 1994
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 170
<SECURITIES> 48
<RECEIVABLES> 1,073
<ALLOWANCES> 23
<INVENTORY> 714
<CURRENT-ASSETS> 2,178
<PP&E> 3,103
<DEPRECIATION> 1,115
<TOTAL-ASSETS> 6,142
<CURRENT-LIABILITIES> 1,529
<BONDS> 1,778
<COMMON> 183
0
408
<OTHER-SE> 1,231
<TOTAL-LIABILITY-AND-EQUITY> 6,142
<SALES> 7,588
<TOTAL-REVENUES> 7,588
<CGS> 3,913
<TOTAL-COSTS> 2,625
<OTHER-EXPENSES> 83
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 87
<INCOME-PRETAX> 880
<INCOME-TAX> 300
<INCOME-CONTINUING> 580
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 580
<EPS-PRIMARY> 3.82
<EPS-DILUTED> 3.56
</TABLE>
