UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
Commission File No. 1-4329
COOPER TIRE & RUBBER COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 34-4297750
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Lima and Western Avenues, Findlay, Ohio 45840
(Address of principal executive offices)
(Zip code)
(419) 423-1321
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes (X) No ( )
Number of shares of common stock of registrant outstanding
at October 15, 1999: 75,847,962
1
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
<TABLE>
COOPER TIRE & RUBBER COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands except per-share amounts)
<CAPTION>
September 30,
1999 December 31,
(Unaudited) 1998
------------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 40,302 $ 41,966
Accounts receivable, less allowances
of $5,855 ($4,806 in 1998) 412,548 319,685
Inventories at lower of cost (last-in,
first-out) or market:
Finished goods 123,342 132,696
Work in process 18,259 20,368
Raw materials and supplies 26,210 33,322
--------- ---------
167,811 186,386
Prepaid expenses and deferred income taxes 23,349 21,436
--------- ---------
Total current assets 644,010 569,473
Property, plant and equipment - net 908,597 885,282
Intangibles and other assets 100,190 86,520
--------- ---------
$1,652,797 $1,541,275
LIABILITIES AND STOCKHOLDERS' EQUITY ========= =========
Current liabilities:
Notes payable $ 11,289 $ 8,129
Accounts payable 79,117 94,502
Accrued liabilities 122,833 87,274
Income taxes 3,473 2,834
Current portion of debt 212 249
--------- ---------
Total current liabilities 216,924 192,988
Long-term debt 205,119 205,285
Postretirement benefits other than pensions 155,985 151,520
Other long-term liabilities 50,287 48,741
Deferred income taxes 76,977 74,805
Stockholders' equity:
Preferred stock, $1 par value; 5,000,000 shares
authorized; none issued - -
Common stock, $1 par value; 300,000,000 shares
authorized; 83,836,962 shares issued
(83,781,058 in 1998) 83,837 83,781
Capital in excess of par value 4,267 3,296
Retained earnings 1,026,031 945,975
Cumulative other comprehensive income (11,052) (9,867)
--------- ---------
1,103,083 1,023,185
Less: 7,989,600 common shares in
treasury at cost (155,249) (155,249)
Deferred compensation on
restricted stock (329) -
--------- ---------
Total stockholders' equity 947,505 867,936
--------- ---------
$1,652,797 $1,541,275
<FN> ========= =========
See accompanying notes.
</TABLE>
2
<PAGE>
<TABLE>
COOPER TIRE & RUBBER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
(Dollar amounts in thousands except per-share amounts)
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Revenues:
Net sales $531,883 $480,616
Other income 376 522
------- -------
532,259 481,138
Costs and expenses:
Cost of products sold 440,524 400,670
Selling, general and administrative 34,156 30,631
Interest 3,710 3,745
------- -------
478,390 435,046
------- -------
Income before income taxes 53,869 46,092
Provision for income taxes 19,269 16,063
------- -------
Net income 34,600 30,029
Other comprehensive income:
Currency translation adjustment 2,793 1,946
------- -------
Comprehensive income $ 37,393 $ 31,975
======= =======
Basic and diluted earnings per share $.46 $.39
=== ===
Weighted average number of
shares outstanding (000's) 75,895 77,103
====== ======
Dividends per share $.105 $.095
==== ====
<FN>
See accompanying notes.
</TABLE>
3
<PAGE>
<TABLE>
COOPER TIRE & RUBBER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
(Dollar amounts in thousands except per-share amounts)
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Revenues:
Net sales $1,495,122 $1,379,914
Other income 1,525 1,771
--------- ---------
1,496,647 1,381,685
Costs and expenses:
Cost of products sold 1,222,304 1,142,607
Selling, general and administrative 100,044 87,595
Interest 11,209 11,358
--------- ---------
1,333,557 1,241,560
--------- ---------
Income before income taxes 163,090 140,125
Provision for income taxes 59,143 51,235
--------- ---------
Net income 103,947 88,890
Other comprehensive income:
Currency translation adjustment (1,185) 1,273
--------- ---------
Comprehensive income $ 102,762 $ 90,163
========= =========
Basic and diluted earnings per share $1.37 $1.14
==== ====
Weighted average number of
shares outstanding (000's) 75,895 78,267
====== ======
Dividends per share $.315 $.285
===== =====
<FN>
See accompanying notes.
</TABLE>
4
<PAGE>
<TABLE>
COOPER TIRE & RUBBER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
(Dollar amounts in thousands)
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Operating activities:
Net income $103,947 $ 88,890
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation 79,570 75,120
Deferred income taxes (1,450) 698
Changes in operating assets
and liabilities:
Accounts receivable (94,008) (43,972)
Inventories and prepaid expenses 16,097 (2,637)
Accounts payable and
accrued liabilities 20,605 21,631
Other liabilities (3,302) (4,760)
------- -------
Net cash provided by
operating activities 121,459 134,970
Investing activities:
Property, plant and equipment (103,918) (88,756)
Other 26 312
------- -------
Net cash used in investing
activities (103,892) (88,444)
Financing activities:
Issuance of debt 32,720 27,746
Payment on debt (29,957) (27,171)
Purchase of treasury shares - (54,950)
Payment of dividends (23,890) (22,304)
Issuance of common shares 697 202
------- -------
Net cash used in financing
activities (20,430) (76,477)
Effects of exchange rate changes on cash
and cash equivalents 1,199 (137)
------- -------
Changes in cash and cash equivalents (1,664) (30,088)
Cash and cash equivalents at
beginning of year 41,966 52,910
------- -------
Cash and cash equivalents at
end of period $ 40,302 $ 22,822
======= =======
Cash payments for interest $ 16,167 $ 16,472
======= =======
Cash payments for income taxes $ 59,492 $ 57,179
======= =======
<FN>
See accompanying notes.
</TABLE>
5
<PAGE>
COOPER TIRE & RUBBER COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements at September 30, 1999 and for the
three-month and nine-month periods ended September 30, 1999 and 1998 are
unaudited and include all adjustments, consisting only of normal recurring
accruals, which the Company considers necessary for a fair presentation of
financial position and operating results. The unaudited consolidated
financial statements have been prepared in accordance with Article 10 of
Regulation S-X and, therefore, do not contain all information and
footnotes normally contained in annual financial statements; accordingly,
they should be read in conjunction with the Financial Statements and notes
thereto appearing in the Annual Report on Form 10-K of the Company for the
year ended December 31, 1998.
2. The results of operations for the three-month and nine-month periods ended
September 30, 1999 are not necessarily indicative of those to be expected
for the year ending December 31, 1999.
3. Information on the Company's operating segments is as follows:
Three months ended Nine months ended
September 30 September 30
1999 1998 1999 1998
---------- ---------- ---------- ----------
Revenues from external
customers:
Tires $ 424,310 $ 389,237 $1,144,782 $1,067,107
Engineered products 107,573 91,379 350,340 312,807
------- ------- --------- ---------
Net sales $ 531,883 $ 480,616 $1,495,122 $1,379,914
======= ======= ========= =========
Segment profit:
Tires $ 45,260 $ 39,492 $ 121,087 $ 102,445
Engineered products 8,233 6,078 40,478 35,909
------- ------- --------- ---------
53,493 45,570 161,565 138,354
Other 376 522 1,525 1,771
------- ------- --------- ---------
Income before income
taxes $ 53,869 $ 46,092 $ 163,090 $ 140,125
======= ======= ========= =========
4. During the first quarter of 1999 the Company adopted Statement of
Financial Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use," requiring the capitalization of
certain costs previously expensed by the Company. The effect of adoption
was not material to the Company's consolidated financial position or
results of operations.
In June 1998 the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting
for Derivative Instruments and Hedging Activities" to become effective
for fiscal years beginning after June 15, 1999, with earlier adoption
permitted. The FASB issued SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of
FASB Statement No. 133," which amended SFAS No. 133 to defer its effective
date to years beginning after June 15, 2000. The Company is currently
evaluating the effect of the provisions of this Statement on its
accounting and reporting policies, but does not anticipate adoption of
this Statement will have a material adverse effect on the Company's
consolidated financial position or results of operations. The Company
does not have derivative instruments at September 30, 1999.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Net sales of $531.9 million set a new third quarter record for the Company.
Net sales increased 10.7% for the quarter and were 8.4% higher for the nine
months when compared to corresponding 1998 periods. Sales were strong for
both engineered products and tires during the quarter with increases in net
sales of 17.7% and 9%, respectively, from 1998. Net sales for the nine
months ended September 30, 1999 were 7.3% higher for tire operations and 12.0%
higher for engineered products operations. Other income was lower as compared
to the 1998 periods due to lower amounts of interest income.
Cost of products sold, as a percent of net sales, decreased resulting in
margin improvements of .6% in the quarter and 1.0% in the nine-month period as
compared with 1998. Decreases in raw material costs, improvements in product
mix and cost reduction initiatives are responsible for these improvements.
The 1998 nine-month period benefited from a $1.9 million recovery of
previously expensed costs related to a dispute with a former owner of an
engineered products plant site.
Selling, general and administrative expenses were higher for the quarter and
nine-month period compared to one year ago. The Company's decision to expand
its national advertising program is primarily responsible for these increases.
As a percent of net sales, selling, general and administrative expenses for
the quarter were 6.4% in 1999 and 1998. For the nine-month period, these
costs were 6.7% of net sales in 1999 compared to 6.4% in 1998.
Interest expense was lower in both the quarter and nine-month periods when
compared to the 1998 periods. The effective income tax rate during the
quarter of 35.8% in 1999 is higher than the 34.9% in 1998. The initial impact
of foreign tax planning initiatives was recognized in the quarter last year.
The nine-month tax rate decreased to 36.3% in 1999 from 36.6% in 1998.
Segment profit for the quarter was $53.5 million in 1999, an increase of 17.3%
from $45.6 million reported in the third quarter of 1998. Tire operations
segment profit increased 14.6% from the 1998 quarter and engineered products
segment profit increased 35.5%. For the nine-month period, segment profit was
$161.6 million in 1999 compared to $138.4 million in 1998. Tire operations
segment profit increased 18.2% and engineered products segment profit
increased 12.7%. Income before income taxes for the quarter increased 16.9%
from the quarter one year ago and increased 16.4% for the nine-month period.
The third quarter and nine-month period benefited from strong sales,
reductions in raw material costs and more favorable product mix.
Working capital of $427 million is up from December 31, 1998 primarily as a
result of changes in accounts receivable and accounts payable. The current
ratio of 3.0 is unchanged from December 31, 1998. Long-term debt, as a
percent of total capitalization, is 17.8% compared to 19.1% at December 31,
1998. The financial position of the Company at September 30, 1999 continues
to be excellent.
Cash flows generated by operating activities of $121 million during the first
nine months of 1999 are lower than the $135 million for the nine-month period
one year ago due primarily to the increase in accounts receivable.
Investments in property, plant and equipment of $104 million compare to $89
million in last year's period. Financing activities in 1999 and 1998 reflect
borrowing and repayment of debt required by seasonal operating needs and the
payment of dividends. Funds used for repurchase of the Company's stock in
1998 approximated $55 million.
7
<PAGE>
On July 27, 1999 the Company announced that it signed a definitive merger
agreement to acquire The Standard Products Company ("Standard Products").
Standard Products' outstanding shares will be valued at $36.50 per share or
approximately $584.4 million. In addition, the Company will assume Standard
Products' outstanding debt which was approximately $207 million at October 1,
1999.
The merger agreement calls for holders of approximately 45% of Standard
Products' outstanding shares to receive stock and 55% to receive cash. If,
however, the mean of the high and low price for Cooper shares on the closing
date is below $18, the entire acquisition transaction will be paid in cash at
$36.50 per Standard Products share.
The transaction has been approved by the board of directors of each company,
and is subject to the satisfaction of customary closing conditions and
approval of Standard Products shareholders.
The Company's credit facilities have been increased to accommodate this
transaction. The aggregate amount of borrowings authorized under these lines
of credit is $1 billion, with interest at varying rates. Of this total, $150
million is available on a long-term basis through August 31, 2004. The
Company expects available cash and the lines of credit will be sufficient to
meet normal operating requirements and to fund the merger transaction. After
the merger is completed, the Company presently intends to replace a
significant portion of the short-term borrowings with proceeds from the
issuance of long-term debt.
On October 15, 1999, the Company filed a Registration Statement on Form S-3
with the Securities and Exchange Commission covering the proposed sale of its
securities in an aggregate amount of up to $1.2 billion. Net proceeds from
the sale of the securities will be used to reduce indebtedness incurred for
the merger with Standard Products. Additionally, short-term proceeds may be
used as required for other acquisitions, working capital, repayment of
existing indebtedness and for other general corporate purposes.
The Company has developed and initiated plans to address the possible
exposures related to the impact of the Year 2000 on its systems and computer
equipment, including those involved in its manufacturing operations. The
Company initiated its planning in 1995, commenced identification of exposures
in 1996, and began remediation of its systems in 1997. Other information
systems' projects were not significantly delayed as a result of the allocation
of resources to Year 2000 remediation.
The Year 2000 issue is the result of computer programs being written in the
past using two digits rather than four to define the applicable year.
Computer equipment and systems that have date-sensitive chips or codes may not
be able to correctly recognize a two-digit year in dates beyond December 31,
1999. There is potential for failure of systems and equipment around the
world due to this logic on January 1, 2000.
All of the Company's key financial and operational systems have been assessed
and changed where necessary to address modifications required by December 31,
1999. We believe the Company is Year 2000 ready. Among other things, this
includes business systems, purchased applications, embedded processors, and
communication methods. Contingency plans are in place to assure resources are
available to resolve any system or equipment failure which may occur before or
after January 1, 2000.
8
<PAGE>
The financial impact of making the required changes is comprised of internal
labor and system upgrade capital costs and is estimated to be $3 million.
Internal costs and other non-capital costs incurred to upgrade and replace
systems have been expensed as incurred since 1997. Capital expenditures,
required for Year 2000 remediation and incurred since 1997, approximate $1
million and have been capitalized. These expenditures include amounts for
upgrades to manufacturing control systems, new personal computers, and
information systems' technical infrastructure for the transfer of data between
computers.
The Company has communicated with its significant suppliers and customers to
ensure they have appropriate plans to resolve Year 2000 issues where failure
of their systems could adversely affect the Company's operations. Contingency
plans have been developed to address potential failures by these third
parties. Certain electronic communication systems of the Company's trading
partners have been tested and are compliant and the Company believes minimal
risk exists for their failure on January 1, 2000.
The "most likely worst case scenario" for Year 2000 issues is the failure of
the systems and equipment of other parties throughout the world which could
result in the unavailability of global communications, financial resources,
transportation, critical raw materials, energy and other vital commercial
systems. The Company's ability to maintain its operations on domestic and
international levels could be disrupted by these failures until corrected.
Certain member states of the European Union adopted a common currency on
January 1, 1999 known as the euro. The many requirements for adoption of the
new currency include the single-document invoicing of customers in both the
euro and their domestic currency during a three-year transition period. After
2001 businesses must conduct all transactions in the euro and convert their
financial records and reports to be euro-based. Certain of the Company's
information systems have been converted for compliance with the requirements
of this new currency at minimal cost. The Company does not anticipate
adoption of the euro will have a material impact on the results of its
operations, financial position or liquidity.
This report contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 regarding expectations for
future financial performance, including with respect to the proposed merger,
which involve uncertainty and risk. It is possible the Company's future
financial performance and the results of the proposed merger may differ from
expectations due to a variety of factors including, but not limited to:
changes in economic and business conditions in the world, increased
competitive activity, achieving sales levels to fulfill revenue expectations,
consolidation among its competitors and customers, technology advancements,
unexpected costs and charges, fluctuations in raw material and energy prices,
changes in interest and foreign exchange rates, regulatory and other
approvals, the cyclical nature of the automotive industry, risks associated
with integrating the operations of The Standard Products Company and the
failure to achieve synergies or savings anticipated in the merger, failure to
satisfy the closing conditions of the pending merger and the failure to
complete the merger, and other unanticipated events and conditions.
It is not possible to foresee or identify all such factors. Any forward-
looking statements in this report are based on certain assumptions and
analysis made by the Company in light of its experience and perception of
historical trends, current conditions, expected future developments and other
factors it believes are appropriate in the circumstances. Prospective
investors are cautioned that any such statements are not a guarantee of future
performance and actual results or developments may differ materially from
those projected. The Company makes no commitment to update any forward-
looking statement included herein, or to disclose any facts, events or
circumstances that may affect the accuracy of any forward-looking statement.
9
<PAGE>
Part II. OTHER INFORMATION
Item 6(a). Exhibits.
(10)(i) Agreement and Plan of Merger, dated as of July 27, 1999, by and
among Cooper Tire & Rubber Company, CTB Acquisition Company and
The Standard Products Company (incorporated by reference from
Appendix A to the proxy statement/prospectus of The Standard
Products Company and Cooper Tire & Rubber Company, dated
September 14, 1999, filed as part of Amendment No. 1 to our
Form S-4 Registration Statement on September 14, 1999)
(10)(ii) Credit Agreement (270 Day) Dated as of October 15, 1999 By and
Among Cooper Tire & Rubber Company as the Borrower and The
Financial Institutions Party Hereto as the Banks and PNC Bank,
National Association as the Agent
(10)(iii) Credit Agreement (364 Day) Dated as of October 22, 1999 By and
Among Cooper Tire & Rubber Company as the Borrower and The
Financial Institutions Party Hereto as the Banks and PNC Bank,
National Association as the Agent
(27) Financial Data Schedule
Item 6(b). Reports on Form 8-K.
A Form 8-K was filed July 30, 1999 related to the Company's Agreement
and Plan of Merger with The Standard Products Company announced on
July 27, 1999
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COOPER TIRE & RUBBER COMPANY
/S/ P. G. Weaver
---------------------
P. G. Weaver
Vice President and
Chief Financial Officer
(Principal Financial Officer)
/S/ E. B. White
-----------------
E. B. White
Corporate Controller
(Principal Accounting Officer)
October 22, 1999
- -----------------
(Date)
10
<PAGE>
INDEX TO EXHIBITS
DESCRIPTION
Part II. Item 6(a).
(10)(ii) Credit Agreement (270 Day) Dated as of October 15, 1999 By and
Among Cooper Tire & Rubber Company as the Borrower and The
Financial Institutions Party Hereto as the Banks and PNC Bank,
National Association as the Agent
(10)(iii) Credit Agreement (364 Day) Dated as of October 22, 1999 By and
Among Cooper Tire & Rubber Company as the Borrower and The
Financial Institutions Party Hereto as the Banks and PNC Bank,
National Association as the Agent
(27) Financial Data Schedule
11
<PAGE>
Exhibit 10(i)
CREDIT AGREEMENT
(270 DAY)
Dated as of
October 15, 1999
By and Among
COOPER TIRE & RUBBER COMPANY
as the Borrower
and
THE FINANCIAL INSTITUTIONS PARTY HERETO
as the Banks
and
PNC BANK, NATIONAL ASSOCIATION
as the Agent
12
<PAGE>
TABLE OF CONTENTS
Page
----
INDEX OF EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . iii
INDEX OF SCHEDULES. . . . . . . . . . . . . . . . . . . . . . . . . iii
ARTICLE I. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Terms . . . . . . . . . . . . . . . . . . 11
1.3 Construction . . . . . . . . . . . . . . . . . . . . 11
ARTICLE II. THE REVOLVING CREDIT LOANS . . . . . . . . . . . . . 12
2.1 Revolving Credit Commitment. . . . . . . . . . . . . 12
2.2 Disbursement and Repayments. . . . . . . . . . . . . 12
2.3 Reduction of Revolving Credit Commitment . . . . . . 13
2.4 Revolving Credit Loan Interest Rates . . . . . . . . 14
2.5 Special Provisions Relating to Euro-Rate Options . . 15
2.6 Capital Adequacy . . . . . . . . . . . . . . . . . . 17
2.7 Method of Disbursements and Payments . . . . . . . . 18
2.8 Interest Payment Dates . . . . . . . . . . . . . . . 18
2.9 Calculation of Interest, Facility Fee and Usage Fee. 18
2.10 Loan Account . . . . . . . . . . . . . . . . . . . . 18
2.11 Fees . . . . . . . . . . . . . . . . . . . . . . . . 18
2.12 Interbank Market Presumption . . . . . . . . . . . . 18
2.13 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE III. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . 19
3.1 Corporate Existence. . . . . . . . . . . . . . . . . 19
3.2 Corporate Authority. . . . . . . . . . . . . . . . . 20
3.3 Validity of this Agreement and the Revolving
Credit Notes . . . . . . . . . . . . . . . . . . . . 20
3.4 Financial Statements . . . . . . . . . . . . . . . . 20
3.5 Litigation; Title to Properties. . . . . . . . . . . 21
3.6 Encumbrances . . . . . . . . . . . . . . . . . . . . 21
3.7 ERISA Compliance . . . . . . . . . . . . . . . . . . 21
3.8 Tax Returns and Payments . . . . . . . . . . . . . . 21
3.9 Regulations G, T, U and X. . . . . . . . . . . . . . 22
3.10 Investment Company Act; Public Utilities Holding
Company Act. . . . . . . . . . . . . . . . . . . . . 22
3.11 Environmental Matters. . . . . . . . . . . . . . . . 22
3.12 No Restrictions. . . . . . . . . . . . . . . . . . . 22
3.13 Compliance with Applicable Laws. . . . . . . . . . . 22
3.14 Governmental Approval. . . . . . . . . . . . . . . . 22
3.15 No Event of Default; Compliance with Instruments . . 23
3.16 Employment Matters . . . . . . . . . . . . . . . . . 23
3.17 Patents, Trademarks, Copyrights, Licenses, Etc . . . 23
3.18 Year 2000 Problem. . . . . . . . . . . . . . . . . . 23
3.19 Solvency . . . . . . . . . . . . . . . . . . . . . . 23
3.20 Material Contracts; Burdensome Restrictions. . . . . 23
3.21 Disclosure . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IV. AFFIRMATIVE CONVENANTS . . . . . . . . . . . . . . . 24
4.1 Use of Proceeds. . . . . . . . . . . . . . . . . . . 24
4.2 Furnishing Information . . . . . . . . . . . . . . . 24
4.3 Preservation of Existence. . . . . . . . . . . . . . 25
4.4 Payment of Taxes and Fees. . . . . . . . . . . . . . 25
4.5 Insurance. . . . . . . . . . . . . . . . . . . . . . 25
4.6 ERISA Reports. . . . . . . . . . . . . . . . . . . . 26
4.7 Environmental Matters. . . . . . . . . . . . . . . . 26
4.8 Senior Debt Status . . . . . . . . . . . . . . . . . 26
4.9 Y2K Preparedness . . . . . . . . . . . . . . . . . . 27
i
<PAGE> 13
ARTICLE V. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . 27
5.1 Percentage of Consolidated Indebtedness to
Consolidated Capitalization. . . . . . . . . . . . . 27
5.2 Fixed Charge Coverage Ratio. . . . . . . . . . . . . 27
5.3 Creation of Encumbrances . . . . . . . . . . . . . . 27
5.4 Limitation on Mergers. . . . . . . . . . . . . . . . 27
5.5 Margin Stock . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VI. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . 28
6.1 All Disbursements. . . . . . . . . . . . . . . . . . 28
6.2 Conditions Precedent for Closing . . . . . . . . . . 28
ARTICLE VII EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . 29
7.1 Immediate Defaults . . . . . . . . . . . . . . . . . 29
7.2 Defaults at Option of Banks. . . . . . . . . . . . . 30
7.3 Remedies upon Default. . . . . . . . . . . . . . . . 31
ARTICLE VIII. AGENT. . . . . . . . . . . . . . . . . . . . . . . . 32
8.1 Appointment and Grant of Authority . . . . . . . . . 32
8.2 Non-Reliance on Agent. . . . . . . . . . . . . . . . 32
8.3 Responsibility of the Agent and Other Matters. . . . 32
8.4 Action on Instructions . . . . . . . . . . . . . . . 33
8.5 Action in Event of Default . . . . . . . . . . . . . 33
8.6 Indemnification. . . . . . . . . . . . . . . . . . . 33
8.7 Agent's Rights as a Bank . . . . . . . . . . . . . . 33
8.8 Loan Advances. . . . . . . . . . . . . . . . . . . . 34
8.9 Payment to Banks . . . . . . . . . . . . . . . . . . 34
8.10 Notice of Event of Default . . . . . . . . . . . . . 34
8.11 Equalization of Banks. . . . . . . . . . . . . . . . 34
8.12 Successor Agent. . . . . . . . . . . . . . . . . . . 34
ARTICLE IX. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . 35
9.1 Waiver of Rights of Set-Off. . . . . . . . . . . . . 35
9.2 Amendments . . . . . . . . . . . . . . . . . . . . . 35
9.3 No Implied Waiver; Cumulative Remedies . . . . . . . 35
9.4 Certain Taxes. . . . . . . . . . . . . . . . . . . . 36
9.5 Notices. . . . . . . . . . . . . . . . . . . . . . . 36
9.6 Costs. . . . . . . . . . . . . . . . . . . . . . . . 36
9.7 Severability . . . . . . . . . . . . . . . . . . . . 37
9.8 Covenants to Survival. . . . . . . . . . . . . . . . 37
9.9 Investment . . . . . . . . . . . . . . . . . . . . . 37
9.10 Holiday Payments . . . . . . . . . . . . . . . . . . 37
9.11 Governing Law. . . . . . . . . . . . . . . . . . . . 37
9.12 Successors, Assigns and Participations . . . . . . . 37
9.13 Counterparts . . . . . . . . . . . . . . . . . . . . 38
9.14 Funding by Branch, Subsidiary or Affiliate . . . . . 38
9.15 Tax Withholding Forms. . . . . . . . . . . . . . . . 39
ii
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<PAGE>
INDEX OF EXHIBITS
Principal
Exhibit Section
Reference Exhibit Reference Page
- --------- ------- --------- ----
A Revolving Credit Note 2.1d 12
B Request for Disbursement 2.2b 13
C Compliance Certificate 4.2 24
D Opinion of Counsel 6.2(xi) 29
INDEX OF SCHEDULES
Principal
Schedule Section
Reference Schedule Reference Page
- --------- -------- --------- ----
3.6 Encumbrances 3.6 21
iii
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<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of October 15, 1999, by and among
COOPER TIRE & RUBBER COMPANY, as the Borrower (the "Borrower"), the FINANCIAL
INSTITUTIONS PARTY hereto, as the lenders (individually a "Bank" and
collectively the "Banks") and PNC BANK, NATIONAL ASSOCIATION, as the agent for
the Banks (the "Agent").
WITNESSETH:
WHEREAS, the Borrower desires to obtain loans from the Banks
pursuant to this Agreement in an aggregate amount not to exceed $350,000,000
at any one time outstanding and the Banks are willing to make such loans upon
the terms and conditions as hereinafter set forth.
NOW, THEREFORE, in consideration of mutual promises contained
herein and other valuable consideration and with the intent to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS.
1.1 Defined Terms. As used herein the following terms shall have the
meaning specified unless the context otherwise requires:
"Affiliate" shall mean any Person directly or indirectly
Controlling, Controlled by, or under common Control of the Borrower.
"Agent" shall mean PNC Bank, National Association in its capacity
as Agent or its successor appointed pursuant to Section 8.12 hereof.
"Agent's Letter" shall mean the letter from the Agent to the
Borrower dated as of October 15, 1999, as the same may from time to time be
amended or otherwise modified or supplemented.
"Agreement" shall mean this Credit Agreement (270 Day) as the
same may from time to time be amended or otherwise modified or supplemented.
"Applicable Margin" shall mean for each Revolving Credit Loan the
rate per annum determined from time to time based upon the Ratings in effect
by S&P and Moody's set forth under the relevant column heading below opposite
such Ratings:
RATINGS
Applicable Margin
(in basis points per annum)
S&P/Moody's Euro-Rate Option
- ----------------------------- ---------------------------
A+/A1 or higher 18.5
A/A2 or lower 30.0
provided that, in the event that the Ratings of S&P and Moody's do not
coincide, the Applicable Margin set forth above opposite the higher of such
Ratings will apply; and provided further, in the event that one Rating is in
effect, the Applicable Margin set forth above for such Rating will apply.
Notwithstanding the foregoing, in the event that no Ratings are in effect at
such time of determination, the Applicable Margin will be determined in a
manner to be mutually agreed upon by the Agent and the Borrower and consented
to by the Banks.
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<PAGE>
"Applicable Usage Fee" shall mean (i) for each day that the
outstanding balance of the Revolving Credit Loans is equal to or less than
$175,000,000, zero (0) basis points per annum, and (ii) for each day that the
outstanding balance of the Revolving Credit Loans is greater than
$175,000,000, ten (10) basis points per annum.
"Authorized Officer" shall mean the Chief Executive Officer, the
President, any Vice President, Controller, the Treasurer or the Assistant
Treasurer of the Borrower. The Agent shall be entitled to rely on the
incumbency certificates delivered pursuant to Subsection 6.2(ix) hereof for
the initial designation of each Authorized Officer. Additions or deletions to
the list of Authorized Officers may be made by the Borrower at any time by
delivering to the Agent a revised incumbency certificate.
"Bank" shall mean any of the several financial institutions party
to this Agreement.
"Bank Indebtedness" shall mean (i) the Revolving Credit Loans
then outstanding, together with all increases or refinancings thereof, (ii)
all interest, fees and any other amounts due hereunder by reason of advances
by the Banks, made to, or for the account of, the Borrower pursuant to this
Agreement, and (iii) all reasonable out-of-pocket expenses incurred by the
Banks and the Agent (including but not limited to fees and expenses of
counsel).
"Base Rate" shall mean the higher of (i) Agent's Prime Rate or
(ii) the sum of (A) the Federal Funds Effective Rate plus (B) fifty (50) basis
points (1/2%).
"Base Rate Option" shall mean the interest rate options, as
applicable, described in Subsections 2.6a(i)(A) or 2.6a(ii)(A) of this
Agreement.
"Base Rate Portion" shall mean the Revolving Credit Loans bearing
interest under the Base Rate Option.
"Base Rate Segment" shall mean each Revolving Credit Loan bearing
interest under the Base Rate Option.
"Borrower" shall have the meaning ascribed to it in the preamble
hereto.
"Business Day" shall mean, (a) when used in any context other
than in reference to or in connection with Euro-Rate Segments, any day, other
than a Saturday or Sunday, on which the Banks are open for business in
Pittsburgh, Pennsylvania and New York, New York and (b) when used in the
context of a Euro-Rate Segment, any day, other than a Saturday or Sunday, on
which (i) commercial banks are open for business in Pittsburgh, Pennsylvania
and New York, New York and (ii) dealings in eurodollar funding between banks
may be carried on at the location at which each of the Banks transacts its
eurodollar funding and the Target (the Transeuro real time gross settlement
system) is operating.
"Capital Compensation Amount" shall have the meaning given it in
Section 2.6.
"Capitalized Lease" shall mean a lease under which the
obligations of the lessee would, in accordance with GAAP, be included in
determining total liabilities as shown on the liability side of a balance
sheet of the lessee.
"Capitalized Lease Obligations" shall mean the portion of the
obligations under a Capitalized Lease which would be shown as a liability on a
balance sheet in accordance with GAAP.
2
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<PAGE>
"Change in Law" shall have the meaning given it in Section 2.6.
"Closing Date" means the date on which each of the conditions
precedent set forth in Section 6.2 is satisfied.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor legislation thereto, together with all
regulations promulgated and rulings issued thereunder.
"Commitment" shall mean, as to any Bank, the sum of the Dollar
amount set forth opposite such Bank's name on its signature page hereto under
the heading "Maximum Dollar Amount of Revolving Credit Commitment".
"Compliance Certificate" shall mean the compliance certificate in
substantially the form of Exhibit "C" hereto, which shall be delivered by the
Borrower to the Banks in accordance with Section 4.2 hereof.
"Consolidated" shall mean the consolidation of accounts of two or
more Persons in accordance with GAAP.
"Consolidated Indebtedness" shall mean the Indebtedness of the
Borrower and its Subsidiaries determined on a Consolidated basis in accordance
with GAAP, consistently applied.
"Consolidated Net Income" shall mean the total net income (or
deficit) of the Borrower and its Subsidiaries for the period in question
(taken as a cumulative whole) determined in accordance with GAAP on a
consolidated basis, consistently applied.
"Consolidated Net Income Available for Fixed Charges" shall mean
the Consolidated Net Income for any period after adding back Fixed Charges and
provisions for taxes in respect of or measured by income or excess profits,
all in the respective amounts theretofore deducted in determining Consolidated
Net Income for such period.
"Consolidated Rentals" shall mean the aggregate of the Rentals of
the Borrower and its Subsidiaries payable during a specified period in
accordance with GAAP.
"Consolidated Stockholders' Equity" shall mean the total of those
items enumerated under the heading "Stockholders' Equity" in the Borrower's
then current balance sheet determined on a Consolidated basis in accordance
with GAAP, consistently applied.
"Consolidated Subsidiary" shall mean any Subsidiary which shall,
during any relevant period be Consolidated with the Borrower in any
Consolidated financial statement furnished to the Banks.
"Consolidated Total Assets" shall mean the assets of the Borrower
and its Subsidiaries, determined on a Consolidated basis in accordance with
GAAP consistently applied.
"Control (and its derivatives)": Either (i) the ownership of
twenty percent (20%) or more of any class of voting securities, partnership
interests or other equity interests of a Person, or (ii) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, partnership interests or other equity interests, by contract or
otherwise, including without limitation the power to elect a majority of the
directors of a corporation or trustees of a trust, as the case may be.
"Date of Determination" shall mean each date as of which any test
to be made or applied under this Agreement is made or applied.
3
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<PAGE>
"Disbursement" shall mean an advance of proceeds to the Borrower
made pursuant to Section 2.1.
"Disclosure Letter" shall mean that certain letter dated on or
prior to the Closing Date delivered by the Borrower to the Agent for
redelivery to the Banks that discusses certain pending legal matters.
"Dollar" or "$" shall mean the legal tender of the United States
of America.
"Encumbrance" shall mean any encumbrance, mortgage, lien, charge,
pledge, security interest, priority payment, conditional sales agreement
right, or other title retention agreement right (including any Capitalized
Lease) in, upon or against any asset of the Borrower except for a pledge of
the stock of Cooper-Avon Tyres Limited in favor of the Borrower.
"Environmental Law" shall mean any and all statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or the Release of any Hazardous
Substances into the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as now in effect and as hereafter from time to time amended, or any
successor statute, and the rules and regulations promulgated thereunder, as
from time to time in effect.
"ERISA Affiliate" shall mean as of any relevant time any Person
subject to ERISA which is a member of a Controlled group of corporations of
which the Borrower is a member, and any trade or business which is subject to
ERISA (whether or not incorporated) under common Control with the Borrower,
and all other entities which, together with the Borrower, are treated as a
single employer under Section 414 of the Internal Revenue Code.
"Euro-Rate" shall mean with respect to any Revolving Credit Loans
denominated in Dollars comprising any Segment to which the Euro-Rate Option
applies for any Euro-Rate Interest Period, the interest rate per annum
determined by the Agent by dividing (the resulting quotient rounded upward to
the nearest 1/100th of 1% per annum) (i) the rate of interest determined by
the Agent in accordance with its usual procedures (which determination shall
be conclusive and binding upon the Borrower, absent manifest error on the part
of the Agent) to be the average of London interbank offered rates for U.S.
Dollars quoted by the British Bankers Association as set forth on Dow Jones
Markets Service (formerly known as Telerate) (or appropriate successor or, if
British Banker's Association or its successor ceases to provide such quotes a
comparable replacement determined by the Agent) display page 3750 (or such
other display page on the Dow Jones Markets Service system replacing page
3750), two (2) Business Days prior to the first day of such Euro-Rate Interest
Period for an amount comparable to such Revolving Credit Loans and having a
borrowing date and a maturity comparable to such Euro-Rate Interest Period by
(ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage. Such
Euro-Rate may also be expressed by the following formula:
Euro-Rate = Average of London interbank offered rates
quoted by BBA as shown on Dow Jones Markets
Service display page 3750 or appropriate successor
1.00 - Euro-Rate Reserve Percentage
"Euro-Rate Interest Period" shall mean any individual period of
one month, two months, three months, six months or other period then available
up to a maximum of nine months; provided however that the availability of a
period in excess of six months is subject to the express approval of the
Required Banks, commencing on the borrowing date, conversion date or renewal
date of the Euro-Rate Segment to which such period shall apply; provided,
<continued>
4
19
<PAGE>
however, that any Euro-Rate Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the next Business Day unless
such Business Day falls in the succeeding calendar month in which case such
Euro-Rate Interest Period shall end on the next preceding Business Day; and
provided further that any Euro-Rate Interest Period which begins on the last
day of a calendar month or on a day for which there is no numerically
corresponding day in the subsequent calendar month during which such Euro-Rate
Interest Period is to end shall end on the last Business Day of such
subsequent month.
"Euro-Rate Option" shall mean the ability of the Borrower to have
all or any Segment of the Revolving Credit Loans then outstanding bear
interest at a fixed rate of interest related to the Euro-Rate, all as more
fully set forth in Subsection 2.4a(ii).
"Euro-Rate Portion" shall mean the Revolving Credit Loans then
outstanding bearing interest under the Euro-Rate Option.
"Euro-Rate Reserve Percentage" shall mean, for each Euro-Rate
Interest Period, that percentage (expressed as a decimal), as determined by
the Agent as to the Euro-Rate Segment as to which the rate is then being set,
which is in effect on the first day of such Euro-Rate Interest Period, (i) as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor), for determining the maximum reserve requirements (including
without limitation supplemental, marginal or emergency reserve requirements)
with respect to eurocurrency funding (currently referred to as "Eurocurrency
Liabilities") of a member bank in such system; and (ii) to be maintained by a
Bank as required for reserve liquidity, special deposit, or a similar purpose
by any governmental or monetary authority of any country or political
subdivision thereof (including any central bank), against (A) any category of
liabilities that includes deposits by reference to which a Euro-Rate is to be
determined, or (B) any category of extension of credit or other assets that
includes Revolving Credit Loans or Segments to which a Euro-Rate applies. The
Euro-Rate shall be adjusted automatically with respect to any Euro-Rate
Segment outstanding on the effective date of any change in the Euro-Rate
Reserve Percentage, as of such effective date.
"Euro-Rate Segment" shall mean each Revolving Credit Loan bearing
interest under the Euro-Rate Option for a discrete Interest Period.
"Event of Default" shall mean an occurrence of events or the
existence of conditions described in Sections 7.1 through 7.2 inclusive, and
any continuance thereof.
"Facility Fee" shall mean as of any Date of Determination the Facility Fee
Rate multiplied by the Revolving Credit Commitment.
"Facility Fee Rate" shall mean the rate per annum determined from
time to time based upon the Ratings in effect by S&P and Moody's set forth
under the relevant column heading below opposite such Ratings:
RATINGS
Facility Fee Rate
S&P/Moody's (in basis points per annum)
- ------------------------- --------------------------
A+/A1 or higher 6.5
A/A2 or lower 7.5
provided that, in the event that the Ratings of S&P and Moody's do not
coincide, the Facility Fee Rate set forth above opposite the higher of such
Ratings will apply; and provided further, in the event that one Rating is in
effect, the Facility Fee Rate set forth above for such Rating will apply.
<continued>
5
20
<PAGE>
Notwithstanding the foregoing, in the event that no Ratings are in effect at
such time of determination, the Facility Fee Rate will be determined in a
manner to be mutually agreed upon by the Agent and the Borrower and consented
to by the Banks. The Facility Fee Rate shall be adjusted if necessary as of
the date of any change in the Ratings.
"Federal Funds Effective Rate" shall mean, for any day, the
weighted average (rounded upwards if necessary to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers as published the next
succeeding day by the Federal Reserve Bank of New York or, if such rate is not
so published for any day that is not a Business Day the average (rounded
upwards, if necessary to the next 1/100 of 1%) of the quotation for such day
for such transactions received by the Agent from three Federal funds brokers
of recognized standing selected by it.
"Fee Letter" shall mean that certain letter form the Agent to the
Borrower setting forth the closing fee due each Bank.
"Fiscal Quarter" shall mean each successive three-month period
from January 1 to and including March 31, April 1 to and including June 30,
July 1 to and including September 30, and October 1 to and including December
31.
"Fiscal Year" shall mean each successive 12-month period from
January 1 to and including December 31.
"Fixed Assets" shall mean tangible assets (real, personal or
mixed) material to the ongoing business operations of the Borrower on a
Consolidated basis.
"Fixed Charges" shall mean the aggregate interest charges
(including the portion of payments under Capitalized Leases attributable to
interest) and Rentals payable by the Borrower and its Subsidiaries for any
period with respect to Indebtedness and lease obligations existing at any time
during such period, after eliminating all inter-company items in accordance
with GAAP.
"GAAP" shall mean generally accepted accounting principles in
effect in the United States which shall include, but not be limited to, the
official interpretations thereof as defined by the Financial Accounting
Standards Board, its predecessors and its successors.
"Governmental Person" means the government of the United States
or the government of any state or locality therein, or any foreign country or
any political subdivision or any governmental, quasi-governmental, judicial,
public or statutory instrumentality, authority, body or entity, or other
regulatory bureau, authority, body or entity of the United States or any state
or locality therein, including the Federal Deposit Insurance Company, the
Comptroller of the Currency or the Board of Governors of the Federal Reserve
System, any central bank or any comparable authority.
"Granting Bank" shall have the meaning assigned to that term in
Section 9.12(a)(ii).
"Guarantee" or "Guaranty" shall mean any obligation, direct or
indirect, by which a Person undertakes to guaranty, assume or remain liable
for the payment or performance of another Person's obligations, including but
not limited to (i) endorsements of negotiable instruments (except for deposits
or collection in the ordinary course of business), (ii) discounts with
recourse, (iii) agreements to pay or perform upon a second Person's failure to
pay or perform, (iv) remaining liable on obligations assumed by a second
Person, (v) except for the Borrower's obligations pursuant to Section 2.9,
<continued>
6
21
<PAGE>
agreements to maintain the capital, working capital solvency or general
financial condition of a second Person and (vi) agreements for the purchase or
other acquisition of products, materials, supplies or services, if in any case
payment therefor is to be made regardless of the non-delivery of such
products, materials or supplies or the non-furnishing of such services.
"Hazardous Substances" shall mean (i) any hazardous, toxic or
polluting substance regulated by any Environmental Law and (ii) any petroleum
products.
"Indebtedness" shall mean as applied to any Person, without
duplication, all liabilities of such Person for borrowed money, direct or
contingent, whether evidenced by a bond, note, debenture, Capitalized Lease
Obligation, deferred purchase price arrangement, title retention device,
reimbursement agreement (except as any such reimbursement agreement relates to
the issuance of a letter of credit to support a surety or performance bond
which is a performance guaranty), Guaranty, book entry or otherwise.
"Ineligible Security" shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.
"Interest Period" shall mean a Euro-Rate Interest Period.
"Loan Account" shall mean the account maintained by the Agent
pursuant to Section 2.10.
"Loan Documents" shall mean this Agreement, the Revolving Credit
Notes and the Requests for Disbursement.
"Margin Stock" shall be defined herein as defined in Regulation U
promulgated by the Board of Governors of the Federal Reserve System as such
regulation is now in effect and may hereafter be amended.
"Material Adverse Effect" means, any change or effect that is
materially adverse to the assets, liabilities, results of operations or
financial condition of the Borrower and its Consolidated Subsidiaries taken as
a whole.
"Maturity Date" shall mean (i) July 10, 2000, (ii) such earlier
date on which the Revolving Credit Commitment shall terminate pursuant to
Section 2.3 or (iii) such date, when, pursuant to Article VII hereof, the
Revolving Credit Commitment shall terminate.
"Merger" shall mean either the merger of The Standard Products
Company with and into Borrower or CBT Acquisition Company, a wholly-owned
Subsidiary of the Borrower, pursuant to the terms of the Merger Agreement.
"Merger Agreement" shall mean the Agreement and Plan of Merger
dated July 27, 1999, by and among the Borrower, CTB Acquisition Company and
The Standard Products Company.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions or has within any of
the preceding five plan years made or accrued an obligation to make
contributions.
"Option" shall mean any of the Base Rate Option or the Euro-Rate
Option.
7
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"Other Taxes" shall have the meaning assigned to it in Section
2.13b.
"Participant" shall mean any financial institution or other
entity which purchases a Participation in any Revolving Credit Loan hereunder
from any Bank.
"Participation" shall mean the sale, pursuant to Subsection
9.12b, by any Bank to any Participant of an undivided interest in all or any
part of the Revolving Credit Loans or any Commitment under the Revolving
Credit Commitment.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Encumbrances" shall mean those Encumbrances allowed
pursuant to Section 5.3 hereof.
"Person" shall mean any individual, corporation, association,
trust, firm, partnership, joint venture, unincorporated organization, limited
liability company, or other entity or enterprise or any government or any
political subdivision, department, agency or instrumentality thereof.
"Plan" shall mean at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 302 of ERISA and
Section 412 of the Internal Revenue Code and either (i) is maintained by a
Borrower and/or any ERISA Affiliate for employees of a Borrower and/or any
ERISA Affiliate or (ii) has at any time within the preceding five years been
maintained by a Borrower and/or any ERISA Affiliate for employees of a
Borrower and/or any ERISA Affiliate. For purposes of this Agreement, the term
"Plan(s)" shall not include a terminated employee pension benefit plan for
which final distribution of assets has been made in full compliance with the
provisions of Section 4041(b) of ERISA prior to the date of this Agreement,
and for which the Internal Revenue Service has issued a favorable
determination letter regarding termination of such plan.
"PNC" shall mean PNC Bank, National Association, a national
banking association.
"Portion" shall mean any Euro-Rate Portion or any Base Rate
Portion.
"Prime Rate" shall mean the rate of interest announced from time
to time by PNC at its principal office as its prime rate, which rate may not
be the lowest interest rate then being charged commercial borrowers by the
Agent.
"Pro Rata" shall mean (i) as to amounts due to or from any Bank
with respect to advances from or repayments to the Banks under the Revolving
Credit Commitment, each such Bank's Revolving Credit Commitment Percentage of
such advances and repayments, and (ii) with respect to all fees or costs due
the Banks hereunder an amount equal to each such Bank's Revolving Credit at
the Date of Determination.
"Ratings" shall mean the senior unsecured long term debt ratings
of the Borrower in effect from time to time by Moody's or S&P.
"RCRA" shall mean the Resource Conservation and Recovery Act, 42
U.S.C. 6901 et seq. and the regulations adopted pursuant thereto, as the same
may be amended.
8
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<PAGE>
"Release" or "Released" shall mean any release, spill, discharge,
leak or disposal of any Hazardous Substance which occurs in a manner which is
not in compliance with an Environmental Law.
"Rentals" shall mean all amounts (whether or not designated as
rentals) payable by a lessee under any lease (other than a Capitalized Lease)
during a specific period after eliminating all inter-company items in
accordance with GAAP. If and to the extent the amount of any Rentals during
any future period is not definitely determinable under the lease in question,
the amount of such Rentals shall be estimated in such reasonable manner as the
Board of Directors of the affected Borrower may in good faith determine.
"Reportable Event" shall mean a "reportable event" described in
Section 4043(b) of ERISA and the regulations thereunder other than an event
described in 29 C.F.R. Part 2615.14 for which the 30-day notice to the PBGC is
waived.
"Request for Disbursement" shall mean the request for
Disbursement in substantially the form of Exhibit "C" hereto, which shall be
delivered to the Banks by the Borrower in accordance with Subsection 2.1b.
"Required Banks" shall mean Banks which in the aggregate hold at
least 51% of the sum of the Revolving Credit Commitments or if the Revolving
Credit Commitments have terminated, at least 51% of the Revolving Credit Loans
then outstanding.
"Revolving Credit Commitment" shall mean the several obligations
of the Banks, each in accordance with its Revolving Credit Commitment
Percentage, to make available to the Borrower the Revolving Credit Loans, all
as set forth in Section 2.1.
"Revolving Credit Commitment Percentage" shall mean as to any
Bank, the percentage set forth opposite such Bank's name on its signature page
hereto under the caption "Revolving Credit Commitment Percentage."
"Revolving Credit Loans" shall mean Disbursements made by the
Banks under the Revolving Credit Commitment which Disbursements in the
aggregate shall not exceed more than $350,000,000 at any one time outstanding.
"Revolving Credit Note" shall mean the evidence of Indebtedness
substantially in the form of Exhibit "A" hereto and all extensions, renewals,
amendments, substitutions and replacements thereto and thereof.
"S&P" shall mean Standard & Poor's Rating Group, a division of
McGraw-Hill, Inc.
"SEC" shall mean the Securities and Exchange Commission or any
successor agency.
"Section 20 Subsidiary" means the Subsidiary of the bank holding
company controlling any Lender, which Subsidiary has been granted authority by
the Federal Reserve Board to underwrite and deal in certain Ineligible
Securities.
"Segment" shall mean each individual part of the Revolving Credit
Loans having a separate Interest Period and bearing interest under the
Euro-Rate Option.
"Solvent" shall mean, with respect to any Person on a particular
date, that on such date (i) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (ii) the present fair salable value of
the assets of such Person is not less than the amount that will be required to
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pay the probable liability of such Person on its debts as they become absolute
and matured, (iii) such Person is able to realize upon its assets and pay its
debts and other liabilities, contingent obligations and other commitments as
they mature in the normal course of business, (iv) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (v) such
Person is not engaged or proposes to engage in business or a transaction, and
is not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such Person
is engaged or proposes to engage. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be computed
at the amount which, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"SPC" shall have the meaning given it in Section 9.12.
"Subsidiary" of any Person at any time shall mean (i) any
corporation or trust of which 51% or more (by number of shares or number of
votes) of the outstanding capital stock or shares of beneficial interest
normally entitled to vote for the election of one or more directors or
trustees (regardless of any contingency which does or may suspend or dilute
the voting rights) is at such time owned directly or indirectly by such Person
or one or more of such Person's Subsidiaries, (ii) any partnership of which
such Person is a general partner or of which 51% or more of the partnership
interests is at the time directly or indirectly owned by such Person or one or
more of such Person's Subsidiaries, or (iii) any limited liability company of
which such Person is a member or of which 51% or more of the limited liability
company interests is at the time directly or indirectly owned by such Person
or one or more of such Person's Subsidiaries.
"Taxes" shall have the meaning given it in Section 2.13a.
"Termination Event" shall mean (i) a Reportable Event with
respect to a Plan (or an event described in Section 4068(f) of ERISA with
respect to a Plan), or (ii) the withdrawal of the Borrower from a Plan during
a plan year in which the Borrower was a "substantial employer", as such term
is defined in Section 4001(a)(2) of ERISA, or the incurrence of liability by
the Borrower under Section 4064 of ERISA upon the termination of a Plan, or
(iii) the distribution of a notice of intent to terminate a Plan pursuant to
Section 4041(a)(2) of ERISA or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (iv) the institution of
proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA, or
(v) any other event or condition which might reasonably constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan.
"Usage Fee" shall mean the fee payable quarterly in arrears on
the last date of each Fiscal Quarter and be determined by multiplying the
daily balance of the Revolving Credit Loans outstanding by the Applicable
Usage Fee.
"Voting Stock" shall mean stock of any class or classes (however
designated) the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of a majority of directors
(or persons performing similar functions) of the issuer thereof even though
the right so to vote has been suspended by the happening of such a
contingency.
"Withdrawal Liability" shall mean "withdrawal liability" as
defined by the provisions of Part 1 of Subtitle E to Title IV of ERISA.
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"Year 2000 Problem" shall have the meaning ascribed to it in
Section 3.18.
1.2 Accounting Terms. All accounting terms used in this Agreement
and not otherwise defined herein shall have the respective meanings given to
such terms under GAAP, and shall be construed in accordance with GAAP.
1.3 Construction. Unless the context of this Agreement otherwise
clearly requires, the following rules of construction shall apply to this
Agreement and each of the other Loan Documents:
(i) Number: Inclusion. References to the plural include the
singular, the singular the plural and the part the whole, "or" has the
inclusive meaning represented by the phrase "and/or," and "including" has the
meaning represented by the phrase "including without limitation."
(ii) Determination. References to "determination" of or by the
Agent or the Banks shall be deemed to include good faith estimates by the
Agent or the Banks (in the case of quantitative determinations) and good faith
beliefs by the Agent or the Banks (in the case of qualitative determinations)
and such determination shall be conclusive absent manifest error.
(iii) Discretion and Consent. Whenever the Agent or the Banks
are granted the right herein to act in its or their sole discretion or to
grant or withhold consent such right shall be exercised in good faith.
(iv) Documents Taken as a Whole. The words "hereof," "herein,"
"hereunder", "hereto" and similar terms in this Agreement or any other Loan
Document refer to this Agreement or such other Loan Document as a whole and
not to any particular provision of this Agreement or such other Loan Document.
(v) Headings. The article, section and other headings
contained in this Agreement or such other Loan Documents and the Table of
Contents (if any) preceding this Agreement or such other Loan Document are for
reference purposes only and shall not control or affect the construction of
this Agreement or such other Loan Document or the interpretation thereof in
any respect.
(vi) Implied References. Article, section, subsection, item,
clause, schedule and exhibit references are to this Agreement or to such other
Loan Document, as the case may be, unless otherwise specified.
(vii) Persons. Reference to any Person includes such Person's
successors and assigns, but, if applicable, only if such successors and
assigns are permitted by this Agreement or another Loan Document, as the case
may be, and reference to a Person in a particular capacity excludes such
Person in any other capacity.
(viii) Government Acts and Agreements. Reference to any
Governmental Acts, agreement or contract includes such Governmental Acts,
agreement or contract as the same may be amended, supplemented, modified,
extended, waived, consolidated, replaced or renewed from time to time, but
only to the extent permitted by, and effected in accordance with, the terms
thereof and of this Agreement and the other Loan Documents.
(ix) From, To and Through. Relative to the determination of any
period of time, "from" means "from and including", "to" means "to but
excluding", and "through" means "through and including".
(x) Shall; Will. References to "shall" and "will" are intended
to have the same meaning.
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(xi) Writing; Written. References to "writing" include
printing, typing, lithography and other means of reproducing words in a
tangible visible form. References to "written" include "printed", "typed",
"lithographed" and other adjectives relating to words reproduced in a tangible
visible form consistent with the preceding sentence and also include
electronic images and images stored on computer disks, magnetic tape and like
media.
(xii) "To Borrower's knowledge" means the actual knowledge of
the corporate officers of the Borrower whose offices are in Findlay, Ohio.
ARTICLE II. THE REVOLVING CREDIT LOANS.
2.1 Revolving Credit Commitment.
2.1a Revolving Credit Loans. The Banks severally agree, subject to
the terms and conditions hereof and relying on the representations and
warranties set forth herein, that the Borrower shall have the right to borrow,
repay and reborrow from the date hereof until the Maturity Date in Dollars an
aggregate principal amount not to exceed $350,000,000 at any one time
outstanding. Each Bank from time to time from the date hereof to the Maturity
Date, severally will lend to the Borrower at the principal office of the Agent
in Pittsburgh, Pennsylvania, amounts not exceeding the amount or percentage
opposite such Bank's name on such Bank's signature page hereto; provided,
however, in no event shall any Bank be required to advance an amount in excess
of the Dollar amount set forth opposite such Bank's name on such Bank's
Signature page hereto; and provided, further, that if any Bank fails to
advance to the Borrower that Bank's Pro Rata share of any Disbursement, the
remaining Banks shall not be required to advance to the Borrower the
defaulting Bank's Pro Rata share of such Disbursement.
2.1b Individual Revolving Credit Commitments. Subject to the
provisions of Section 2.3 hereof, each Bank shall be individually committed to
the Borrower for each Bank's Revolving Credit Commitment Percentage as set
forth opposite such Bank's name on the signature page hereto for such Bank as
adjusted from time to time to reflect any assignment made pursuant to Section
9.12(a)(i).
2.1c Revolving Credit Notes. The obligation of the Borrower to repay
the aggregate unpaid principal amount of the Revolving Credit Loans and
interest thereon shall be evidenced by the Revolving Credit Notes, in
substantially the form of Exhibit "A" attached hereto drawn by the Borrower to
the order of each Bank in the maximum amount of such Bank's Revolving
Credit Commitment. The principal amount actually due and owing to a Bank at
any one time shall be the aggregate unpaid principal amount of all
Disbursements made by such Bank pursuant to the Revolving Credit Commitment,
all as shown on the Loan Account established pursuant to Subsection 2.12
hereof. Each Revolving Credit Note shall be dated the date hereof and shall
be delivered to the Agent on behalf of the Banks on such date. The
outstanding Revolving Credit Loans shall bear interest in accordance with the
provisions of Section 2.4.
2.1d Repayment. On the Maturity Date, the Borrower shall repay in
full all amounts outstanding under the Revolving Credit Commitment, together
with all interest thereon to the date of such repayment and all other fees and
costs due hereunder.
2.2 Disbursements and Repayments.
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2.2a Borrowings. Each Disbursement of the Revolving Credit Loans,
repayment thereof and subsequent reborrowing shall be made from or to the
Banks ratably in proportion to their respective Commitments set forth in
Subsections 2.1b and shall be in an aggregate Dollar amount of $1,000,000 or
if in excess of $1,000,000 in integral multiples of $1,000,000; provided,
however, that if a Disbursement is to bear interest at the Euro-Rate Option
then such Disbursement must be in the amounts required by Subsection 2.4d.
2.2b Disbursement Request. Each request for a Disbursement under
Section 2.1 shall be made to the Agent by an Authorized Officer of the
Borrower orally or in writing pursuant to the execution and delivery by the
Borrower to the Agent of a Request for Disbursement, substantially in the form
of Exhibit "B" hereto, (A) by 10:00 A.M. (Pittsburgh, Pennsylvania time) on
the date of the proposed Disbursement if the Disbursement is initially to bear
interest at the Base Rate Option or (B) by 10:00 A.M. (Pittsburgh,
Pennsylvania time) at least three (3) Business Days prior to the proposed
Disbursement with respect to Revolving Credit Loans if the Disbursement or any
part thereof is to initially bear interest at the Euro-Rate Option, in each
case specifying the proposed borrowing date and the Dollar amount thereof,
selecting the interest rate Option therefor pursuant to Section 2.4 hereof, if
appropriate, selecting the Interest Period therefor. Any oral request for a
Disbursement hereunder shall be followed immediately by the Borrower's written
Request for Disbursement. A request from the Borrower pursuant to this
Section 2.2b with respect to a Disbursement or any part thereof which is
initially to bear interest at the Euro-Rate Option, shall irrevocably commit
the Borrower to accept such Disbursement on the date specified in such
request. Promptly upon receipt of such notice, the Agent shall notify each
Bank of the Borrower's request and the amount of such requested Disbursement
which is to be advanced by such Bank. Each such Bank shall make its Pro Rata
share of such Disbursement available at the Agent's principal office in
immediately available funds no later than 3:00 P.M. (Pittsburgh, Pennsylvania
time) on the date of the requested Disbursement.
2.2c Repayments. Each repayment of the Revolving Credit Loans (other
than a repayment which entirely repays all such Revolving Credit Loans then
outstanding, whether on the Maturity Date or otherwise) shall be in the Dollar
amount of $1,000,000 or if in excess of $1,000,000, in integral multiples of
$1,000,000; provided, however, if such repayment is to repay Revolving Credit
Loans bearing interest at the Euro-Rate Option then such repayment must be in
the amounts required by Subsection 2.4d; and provided, further, that any such
repayment shall require notice to the Agent in accordance with the provisions
of Section 9.5(ii), (A) by 10:00A.M. (Pittsburgh, Pennsylvania time) on the
date of the proposed repayment if the repayment is for Revolving Credit Loans
bearing interest at the Base Rate Option or (B) by 10:00 A.M. (Pittsburgh,
Pennsylvania time) at least one (1) Business Day prior to the proposed
repayment if the repayment is for Revolving Credit Loans bearing interest at
the Euro-Rate Option.
2.3 Reduction of Revolving Credit Commitment. At any time and from
time to time upon at least five (5) Business Days' prior written notice to the
Agent, the Borrower may terminate, in whole or in part, without penalty, the
then unused portion of the Revolving Credit Commitment, thereby causing a
corresponding abatement of the Facility Fee; provided, however, that the
Revolving Credit Commitment shall terminate without the necessity for further
action on behalf of the Borrower, the Agent or the Banks if such commitment is
reduced to $0. Each such reduction shall be in a minimum principal amount of
$10,000,000 or, if in excess of $10,000,000, in integral multiples of
$1,000,000. The Facility Fee shall cease to accrue with respect to the
portion of the Revolving Credit Commitment so terminated five (5) Business
Days after receipt of such notice or the date of such reduction, whichever is
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later. Notice of termination once given shall be irrevocable and the portion
of the Revolving Credit Commitment so terminated shall not be available for
borrowing once such notice has been given under the terms hereof. The Agent
shall promptly notify each Bank of its Pro Rata share of such terminated
unused portion and the date of each such termination.
2.4 Revolving Credit Loan Interest Rates.
2.4a Interest Rate Options. During the term hereof and prior to the
Maturity Date, in accordance with the provisions of Subsection 2.4c, the
Borrower shall have the option of electing from time to time one or more of
the interest rate formulas set forth below to be applied by the Banks to
amounts then outstanding under Revolving Credit Loans. The actual interest
rates hereunder shall also be adjusted in accordance with Section 2.4b hereof.
(i) Base Rate Option. Interest under this Option shall accrue
at a rate per annum equal to the Base Rate. The actual interest rate in
effect under this Option shall be adjusted on the effective date of any change
in the Base Rate.
(ii) Euro-Rate Option. Interest under this Option shall accrue
for any Euro-Rate Interest Period selected at a rate per annum equal to the
sum of the Euro-Rate plus the Applicable Margin, and shall be adjusted as of
the date of any change of Ratings, if necessary.
2.4b Interest Rate Upon Default.
(i)(A) Upon the occurrence of an Event of Default under Section
7.1, and during the continuance of such Event of Default, or (B) upon the
acceleration of the Bank Indebtedness for any reason, interest under the Base
Rate Option and the Euro-Rate Option shall be 2% per annum (200 basis points)
in excess of the applicable interest rate then in effect.
(ii) Upon receipt by the Borrower of notice from the Agent of
the occurrence of an Event of Default under Section 7.2 and during the
continuance of such Event of Default, interest under the Base Rate Option and
the Euro-Rate Option shall be 2% per annum (200 basis points) in excess of the
applicable interest rate then in effect.
(iii) The provisions of the immediately preceding items (i) and
(ii) to the contrary notwithstanding, if (A) the Borrower has not given notice
to the Banks of an Event of Default in accordance with the provisions of
Section 9.5 and (B) the Banks, after becoming aware of such Event of Default
and based on such Event of Default, wish to impose the default rate of
interest in accordance with either of the preceding items (i) and (ii), such
default rate of interest shall be effective as of the first day on which such
default rate would have been in effect had the Borrower given such notice in
accordance with the provisions of Section 9.5.
2.4c Interest Rate Option Elections. The Borrower shall have the
option to elect to have all or any Portion of the Revolving Credit Loans bear
interest at either of the Base Rate Option or the Euro-Rate Option, subject,
however to the other provisions of this Agreement. Notice of the Borrower's
election shall be made to the Agent orally or in writing by 10:00 A.M.
(Pittsburgh, Pennsylvania time) (i) on the proposed effective date of such
election, if such election is the election of the Base Rate Option; and, (ii)
at least three (3) Business Days prior to the proposed effective date of such
election, if such election is the election of the Euro-Rate Option. Each such
notice of election shall specify the Option and the amount of the Revolving
Credit Loans to bear interest at such Option, and in the case of the selection
of the Euro-Rate Option, the Interest Period therefor. Upon receipt of each
such notice from the Borrower, the Agent shall promptly notify each of the
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Banks. Any oral notice of election hereunder shall be followed immediately by
the Borrower's written confirmation of such interest rate election. Elections
of or conversions to the Base Rate Option shall continue in effect until
converted as herein set forth. Elections of, conversions to or renewals of
the Euro-Rate Option shall expire as to each such Option at the expiration of
the applicable Interest Period; provided, however, that no Interest Period for
the Euro-Rate Option may be elected, converted or renewed if such Interest
Period will extend beyond the Maturity Date or so long as an Event of Default
has occurred and is continuing. Any Segment of any Revolving Credit Loan
outstanding for which no Interest Rate Option election has been made shall
bear interest at the Base Rate Option. Any Segment of any Revolving Credit
Loan bearing interest at the Euro-Rate, for which no Euro-Rate Interest Period
has been made shall have a Euro-Rate Interest Period of one month.
2.4d Limitation on Election of Euro-Rate Options. Each election of
the Euro-Rate Option for a Portion of the Revolving Credit Loans bearing
interest at the Euro-Rate Option must be in the minimum principal amount of
$5,000,000 or, if in excess of $5,000,000, in integral multiples of
$1,000,000. Any minimum amount of an election of the Euro-Rate Option
hereunder may be comprised, in whole or in part, of (i) existing Revolving
Credit Loans bearing interest at the Base Rate Option or the Euro-Rate Option
(provided the Interest Period relating thereto shall expire immediately prior
to the commencement of the Interest Period), (ii) the previously undisbursed
portion of the Revolving Credit Commitment or (iii) any combination of the
amounts described in the immediately preceding items (i) and (ii). At no time
during the term hereof may there be more than six (6) separate Interest
Periods in effect relating to Revolving Credit Loans.
2.5 Special Provisions Relating to Euro-Rate Options.
2.5a Euro-Rate Unascertainable. In the event that on any date on
which a Euro-Rate would otherwise be set, the Agent shall have determined in
good faith (which determination shall be final and conclusive) that by reason
of circumstances affecting the interbank Eurodollar market adequate and
reasonable means do not exist for ascertaining the Euro-Rate, the Agent shall
give prompt notice of such determination to the Borrower and the Banks, and
until the Agent notifies the Borrower and the Banks that the circumstances
giving rise to such determination no longer exist, the right of the Borrower
to borrow under or renew such affected Option shall be suspended. Any notice
of borrowing under or renewal of such affected Option which was to become
effective during the period of such suspension shall be treated as a request
to borrow under or renew the Base Rate Option with respect to the principal
amount therein specified.
2.5b Illegality of Offering Euro-Rate. If any Bank shall determine in
good faith (which determination shall be final and conclusive) that compliance
by such Bank with any applicable law, treaty or governmental rule, regulation,
guideline, order, request or directive (whether or not having the force of
law), or the interpretation or application thereof by any governmental or
monetary authority, adopted after the date hereof, has made it unlawful for
such Bank to make or maintain its Revolving Credit Loans under the Euro-Rate
Option, such Bank shall give notice of such determination to the Borrower and
the Agent. Notwithstanding any provision of this Agreement to the contrary,
unless and until such Bank shall have given notice that the circumstances
giving rise to such determination no longer apply:
(i) with respect to any Euro-Rate Interest Periods, as the
case may be, thereafter commencing, interest on such Bank's Pro Rata share of
the corresponding Euro-Rate Portion shall be computed and payable in Dollars
under the Base Rate Option; and
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(ii) on such date, if any, as shall be required by law, such
Bank's Pro Rata share of any Euro-Rate Portions, as the case may be, then
outstanding shall be automatically renewed at the Base Rate Option in Dollars
and the Borrower shall pay to such Bank the accrued and unpaid interest on
such Portions to (but not including) such renewal date.
The Borrower shall pay any Bank any additional amounts reasonably
necessary to compensate such Bank (on an after-tax basis) for any
out-of-pocket costs incurred by such Bank as a result of any renewal pursuant
to clause (ii) above on a day other than the last day of the relevant Interest
Period, including, but not limited to, any interest or fees payable by such
Bank to lenders of funds obtained by it to loan or maintain the lending of the
Revolving Credit Loans so converted. Such Bank shall furnish to the Borrower
and the Agent a certificate showing the calculation of the amount necessary to
compensate such Bank (on an after-tax basis) for such costs (which
certificate, in the absence of manifest error, shall be conclusive), and the
Borrower shall pay such amount to such Bank, as additional consideration
hereunder, within ten (10) days of the Borrower's receipt of such certificate.
2.5c Inability to Offer Euro-Rate. In the event that any Bank shall
determine, in its reasonable discretion, that it is unable to obtain deposits
in the interbank eurodollar market in sufficient amounts and with maturities
related to such Euro-Rate Portions which would enable such Bank to fund such
Euro-Rate Portions, then such Bank shall immediately notify the Agent of such
inability. The Agent, upon receipt of such notice, shall notify the Borrower
that the right of the Borrower to borrow under, convert to or renew the
Euro-Rate Option from such Bank shall be suspended. Following notification of
the suspension of the Euro-Rate Option with respect to any Bank, the Borrower
agrees to negotiate with such Bank for a modified Euro-Rate which will allow
such Bank to realize its anticipated and bargained for yield. In the event
that the Borrower and the affected Bank cannot agree on a modified Euro-Rate,
any notice of borrowing under, conversion to or renewal of the Euro-Rate
Option which was to become effective during the period of suspension shall be
treated as a request to borrow under, convert to or renew the Base Rate Option
with respect to the principal amount specified therein attributable to the
affected Bank. The affected Bank shall notify the Agent as to whether such
Bank and the Borrower have agreed on a modified Euro-Rate.
2.5d Yield Protection. If any law, rule, regulation, treaty or
official directive or the interpretation or application thereof by any
Governmental Person charged with the administration thereof or the compliance
with any guideline or request from any central bank or other Governmental
Person, adopted after the date hereof, (whether or not having the force of
law):
(i) subjects any Bank to any tax, levy, impost, charge, fee,
duty, deduction or withholding of any kind hereunder (other than any tax
imposed or based upon the income of such Bank and payable to any governmental
or taxing authority in the United States of America or any state thereof or
any foreign jurisdiction) or changes the basis of taxation of such Bank with
respect to payments by the Borrower of principal, interest or other amounts
due from the Borrower hereunder (other than any change which affects, and to
the extent that it affects, the taxation by the United States or any state
thereof or any foreign jurisdiction of the total net income of such Bank), or
(ii) imposes, modifies or deems applicable any reserve, special
deposit, special assessment or similar requirements against assets held by,
deposits with or for the account of or credit extended by such Bank (other
than such requirements which are included in the determination of the
Euro-Rate hereunder), or
(iii) imposes upon such Bank any other condition with respect to
this Agreement,
<continued>
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and the result of any of the foregoing is to increase the cost to such Bank,
reduce the income receivable by such Bank, reduce the rate of return on such
Bank's capital, or impose any expense upon such Bank with respect to any
Euro-Rate Portion of the Revolving Credit Loans by an amount which such Bank
in its sole but reasonable discretion deems to be material, such Bank shall
from time to time notify the Borrower and the Agent of the amount determined
by such Bank (which determination, absent error, shall be conclusive) to be
reasonably necessary to compensate such Bank (on an after-tax basis) for such
increase in cost, reduction in income, reduction in rate of return, or
additional expense, setting forth the calculations therefor, and the Borrower
shall pay such amount to such Bank, as additional consideration hereunder,
within ten (10) days of the Borrower's receipt of such notice.
2.5e Breakage Costs. In addition to the provisions of Subsections
2.5b and 2.5d hereof, the Borrower hereby agrees to reimburse each Bank
against any loss or expense which such Bank may sustain or incur as a
consequence of any default by the Borrower (i) in failing to accept any
borrowing or renewal hereunder to bear interest at the Euro-Rate Option on the
scheduled date, or (ii) in failing to make when due (whether by declaration,
acceleration or otherwise) any payment of any Euro-Rate Portion of the
Revolving Credit Loans or (iii) in making any payment or prepayment of any
Euro-Rate Portion of the Revolving Credit Loans or any part thereof on any day
other than the last day of the relevant Interest Period; including, in each
case, but not limited to, any loss of profit, premium or penalty incurred by
such Bank in respect of funds borrowed by it for the purpose of making or
maintaining any Revolving Credit Loan or any Portion thereof as determined by
such Bank in the exercise of its sole but reasonable discretion. The affected
Bank shall furnish to the Borrower and the Agent a certificate showing the
calculation of the amount of any such loss or expense (which certificate,
absent error, shall be conclusive), and the Borrower shall pay such amount in
the currency in which such Revolving Credit Loan was made to the affected Bank
within ten (10) days of the Borrower's receipt of such certificate.
2.5f Method of Calculation. In determining the amount due each Bank
hereunder by reason of the application of this Section 2.5, each Bank may use
any reasonable averaging or attribution method; provided, however, each Bank
must use reasonable efforts to minimize such losses and costs.
2.6 Capital Adequacy. If (i) any adoption of or any change in or in
the interpretation of any law, rule or regulation, or (ii) compliance with any
guideline, request or directive of any United States Governmental Person or
United States quasi-governmental authority exercising control over banks or
financial institutions generally, including but not limited to regulations set
forth at 12 C.F.R. Part 208 (Appendix A) and 12 C.F.R. Part 225 (Appendix A),
or any court requires that the Commitments of any Bank hereunder (including,
without limitation, commitments and obligations in respect of revolving loans)
be treated as an asset or otherwise be included for purposes of calculating
the appropriate amount of capital to be maintained by such Bank or any
corporation controlling such Bank (a "Change in Law"), the result of which is
to reduce the rate of return on such Bank's capital as a consequence of such
commitments to a level below that which such Bank could have achieved but for
such Change in Law, taking into consideration such Bank's policies with
respect to capital adequacy, by an amount which such Bank deems to be
material, such Bank shall deliver to the Borrower a statement of the amount
necessary to compensate such Bank for the reduction in the rate of return on
its capital attributable to such commitments (the "Capital Compensation
Amount"). Such Bank shall determine the Capital Compensation Amount in good
faith, using reasonable attribution and averaging methods. Such Bank shall
from time to time notify the Borrower of the amount so determined. Such
amount shall be due and payable by the Borrower to such Bank ten (10) Business
Days after such notice is given.
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2.7 Method of Disbursements and Payments. All Disbursements under
the Revolving Credit Loans shall be made by the Agent (i) making a wire
transfer of such funds to the account designated in the Borrower's Request for
Disbursement or (ii) transferring such funds into such accounts maintained
with the Agent designated in the Borrower's Request for Disbursement. All
payments of principal, interest or other costs relating to the Revolving
Credit Loans, the Facility Fee and the Usage Fee shall be made by the Borrower
to the Agent at the Agent's principal office or at such location as the Agent
may direct by 12:00 NOON (Pittsburgh, Pennsylvania time) on the due date. All
funds shall be immediately available funds when either transferred via wire
transfer into the account designated by the Borrower or delivered by the
Borrower to the Agent.
2.8 Interest Payment Dates. Interest due on all outstanding
Revolving Credit Loans hereunder shall be payable in arrears: (i) with respect
to each Base Rate Segment, (A) on the last Business Day of each March, June,
September and December, (B) at maturity whether by acceleration or otherwise
and (C) after maturity, on demand until paid in full; (ii) with respect to
each Euro-Rate Segment, (A) on the last day of each Euro-Rate Interest Period
(provided, however, if the Interest Period chosen for any Euro-Rate Segment
exceeds three (3) months, interest on that Euro-Rate Segment shall be due and
payable every three (3) months during such Interest Period and on the last day
of such Interest Period), (B) at maturity, whether by acceleration or
otherwise, (C) on the Maturity Date including amounts, if any, due pursuant to
Section 2.5e hereof and (D) after maturity, on demand until paid in full.
2.9 Calculation of Interest, Facility Fee and Usage Fee. The
interest rate calculated pursuant to the Base Rate Option shall be calculated
on the basis of the actual number of days elapsed using (i) a year of 365-366
days if the Base Rate is calculated utilizing the Prime Rate or (ii) a year of
360 days if the Base Rate is calculated utilizing the Federal Funds Effective
Rate, as the case may be. The interest rate calculated pursuant to the
Euro-Rate Option, the Facility Fee and the Usage Fee shall be calculated on
the basis of the actual number of days elapsed using a year of 360 days.
2.10 Loan Account. The Agent shall open and maintain on its books a
Loan Account in the name of the Borrower, with respect to Disbursements made,
repayments, the computation and payment of interest, the Facility Fee, the
Usage Fee and the computation of other amounts due and sums paid to the Banks
and the Agent pursuant to this Article II. Except in the case of manifest
error in computation, such Loan Account shall be conclusive and binding on the
Borrower as to the amount at any time due to the Banks and the Agent from the
Borrower pursuant to this Article II.
2.11 Fees.
2.11a Facility Fee. The Borrower shall pay to the Agent, for the
benefit of the Banks, on the last day of each Fiscal Quarter and on the
Maturity Date, the Facility Fee at the Facility Fee Rate on the entire amount
of the Revolving Credit Commitment. The first payment hereunder shall be only
for the actual number of days elapsed between the Closing Date and December
31, 1999.
2.11b Usage Fee. The Borrower shall pay to the Agent, for the benefit
of the Banks, the last day of each Fiscal Quarter on the Maturity Date and
thereafter until payment in full of the Bank's Indebtedness, the Usage Fee.
2.12 Interbank Market Presumption. For all purposes of this Agreement
and each Revolving Credit Note with respect to any aspects of the Euro-Rate,
any Revolving Credit Loan under the Euro-Rate Option, each Bank and the Agent
shall be presumed to have obtained rates, funding, currencies, deposits, and
the like in the applicable interbank market regardless whether it did so or
not; and, each Bank's and the Agent's determination of amounts payable under,
<continued>
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and actions required or authorized by this Agreement shall be calculated, at
each Bank's and the Agent's option, as though each Bank and the Agent funded
each Segment of Revolving Credit Loans under the Euro-Rate Option through the
purchase of deposits of the types and maturities corresponding to the deposits
used as a reference in accordance with the terms hereof in determining the
Euro-Rate applicable to such Revolving Credit Loans, whether in fact that is
the case.
2.13 Taxes.
2.13a No Deductions. All payments made by the Borrower hereunder and
under each Revolving Credit Note shall be made free and clear of and without
deduction for any present or future taxes, levies, imposts, deductions,
charges, or withholdings, and all liabilities with respect thereto, excluding
taxes imposed on the net income of any Bank and all income and franchise taxes
applicable to any Bank organized and existing under the United States or any
state thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by Law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Revolving Credit Note,
(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 2.13a) each Bank receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall timely pay
the full amount deducted to the relevant tax authority or other authority in
accordance with applicable law.
2.13b Stamp Taxes. In addition, the Borrower agrees to 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 from
the execution, delivery, or registration of, or otherwise with respect to,
this Agreement or any Revolving Credit Note (hereinafter referred to as "Other
Taxes").
2.13c Indemnification for Taxes Paid by a Bank. The Borrower shall
indemnify each Bank 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 any Bank and any liability
(including penalties, interest, and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within thirty (30) days
from the date a Bank makes written demand therefor.
2.13d Certificate. Within 30 days after the date of any payment of any
Taxes by the Borrower, the Borrower shall furnish to each Bank, at its address
referred to herein, the original or a certified copy of a receipt evidencing
payment thereof. If no Taxes are payable in respect of any payment by the
Borrower, the Borrower shall, if so requested by a Bank, provide a certificate
of an officer of the Borrower to that effect.
2.13e Survival. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.13 shall survive the payment in full of
principal and interest hereunder and under any instrument delivered hereunder.
ARTICLE III. REPRESENTATIONS AND WARRANTIES.
To induce the Banks to enter into this Agreement and to make the
Revolving Credit Loans herein provided for, the Borrower represents and
warrants to the Banks that:
3.1 Corporate Existence.
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3.1a The Borrower's Corporate Existence. The Borrower is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and it is duly qualified and in good standing as
a foreign corporation, authorized to do business in each jurisdiction where,
because of the nature of its activities or properties, such qualification is
required.
3.1b Subsidiaries' Corporate Existence. Each Subsidiary, is a
corporation, partnership, limited liability company or business trust duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, is qualified or licensed as a foreign
corporation, partnership, limited liability company or business trust
authorized to do business in all jurisdictions in which the character of the
properties owned or the nature of the activities conducted makes such
qualification or licensing necessary, and has all requisite power and
authority to own and operate its properties and to carry on its business as
now conducted. All of the issued and outstanding shares of capital stock of
each Subsidiary are validly issued and outstanding and fully paid and
nonassessable.
3.2 Corporate Authority. The Borrower is duly authorized to execute
and deliver this Agreement and the Revolving Credit Notes; all necessary
corporate action to authorize the execution and delivery of this Agreement and
the Revolving Credit Notes has been properly taken; and it is and will
continue to be duly authorized to borrow hereunder and to execute and deliver
the Revolving Credit Notes and to perform all of the other terms and
provisions of this Agreement.
3.3 Validity of this Agreement and the Revolving Credit Notes. The
execution and delivery of this Agreement does not, and the borrowings under
this Agreement, the execution and delivery of the Revolving Credit Notes with
respect thereto, and the performance by the Borrower of its obligations under
this Agreement and the Revolving Credit Notes will not contravene any
provision of law, of the Borrower's Restated Certificate of Incorporation or
Bylaws or the provisions of any agreement to which the Borrower is a party or
by which the Borrower is bound; this Agreement constitutes the legal, valid
and binding obligation of the Borrower enforceable in accordance with its
terms; and the Revolving Credit Notes, when duly executed on behalf of the
Borrower and delivered in accordance with this Agreement will constitute the
legal, valid and binding obligations of the Borrower enforceable in accordance
with their respective terms.
3.4 Financial Statements. Copies of the Borrower's consolidated
audited financial statements as at December 31, 1998, certified by independent
certified public accountants and prepared in conformity with GAAP applied on a
basis consistent with that of the preceding fiscal year and period, and its
unaudited consolidated financial statement as at June 30, 1999, have been
furnished to each of the Banks, and each statement presents fairly (a) the
consolidated financial condition of the Borrower and its Subsidiaries as at
such dates and the results of their operations for the period then ended and
(b) transactions in its Consolidated stockholders' equity accounts, including
changes in net unrealized appreciation for the period then ended. There are
no material liabilities, direct or indirect, fixed or contingent, of the
Borrower or its Subsidiaries as of December 31, 1998 which are not reflected
therein or noted thereon. Since December 31, 1998, there has been no material
adverse change in the financial condition of the Borrower.
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<PAGE>
3.5 Litigation; Title to Properties. Except as set forth in Forms
10-K, 10-Q, 8-K or S-4 most recently filed with the SEC and the Disclosure
Letter, to the Borrower's knowledge, after diligent inquiry, there is no
litigation or governmental proceedings pending or threatened against the
Borrower or any Subsidiary the results of which might materially affect the
Borrower's or such Subsidiary's financial condition or operations. The
Borrower and each Subsidiary has good title to its respective properties and
assets except for defects in title which taken as a whole are not material to
the Borrower or the Subsidiary. Other than any liability provided for or
disclosed in this Section 3.5 or in the financial statements referred to in
Section 3.4, neither the Borrower nor any Subsidiary has any material
contingent liabilities.
3.6 Encumbrances. None of the assets of the Borrower or any
Subsidiary is subject to any Encumbrance, except for (a) current taxes not
delinquent and (b) such mortgages, security interests and Encumbrances which
are listed on Schedule 3.6 hereto or permitted pursuant to Section 5.3 hereof.
3.7 ERISA Compliance. The Borrower and each ERISA Affiliate is in
compliance with the provisions of ERISA relating to minimum funding
requirements. Neither the Borrower nor any ERISA Affiliate has incurred any
liability to the PBGC with respect to any Plan. To the best of the Borrower's
knowledge, all Plans and trusts maintained by the Borrower and its ERISA
Affiliates are intended to qualify under Code Section 401(a) and Code Section
501(a) and to the best of the Borrower's knowledge, no event has occurred
which would cause them not to qualify. To the best of the Borrower's
knowledge, all Plans have been maintained in compliance with the requirements
of ERISA and the Code.
3.8 Tax Returns and Payments. The Borrower and its Subsidiaries have
filed all tax returns required by law to be filed and have paid all taxes,
assessments and other governmental charges levied upon the Borrower and its
Subsidiaries or any of their respective properties, assets, income or
franchises which are due and payable other than (a) those presently payable
without penalty or interest or (b) those which are deemed by it to be unlawful
or excessive in whole or in part which are being contested or will be, in a
timely manner, contested in good faith by appropriate proceedings or (c) those
which would not, in the aggregate, have a Material Adverse Effect on the
financial condition, business operations or assets of the Borrower and its
Subsidiaries; and as to which the Borrower or the affected Subsidiary shall
have set aside on its books reserves for such claim as are determined to be
adequate by application of GAAP consistently applied. The Borrower has
disclosed all disputed items on tax returns filed by the Borrower or any of
its Subsidiaries which, if settled adversely to the Borrower or the affected
Subsidiary, would have a Material Adverse Effect upon the financial condition,
business operations or assets of the Borrower and its Subsidiaries to the date
hereof to the Banks. The Internal Revenue Service has examined and settled
the Federal income tax liability of the affiliated group of companies,
including that of the Borrower and its domestic Subsidiaries, for all taxable
years up to and including the taxable year ended December 31, 1995. The
charges, accruals and reserves on the books of the affiliated group of
companies, including the Borrower and its Subsidiaries, in respect of Federal
and state income taxes for all fiscal periods to date are adequate, and the
Borrower knows of no unpaid assessments for additional Federal or state income
taxes for any such fiscal period or any basis therefor.
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<PAGE>
3.9 Regulations T, U and X, Ineligible Securities. The Borrower's
execution and delivery of this Agreement and the Revolving Credit Notes do not
directly or indirectly violate or result in a violation of Regulations T, U
and X of the Board of Governors of the Federal Reserve System. The Borrower
is not engaged in the business of purchasing or selling Margin Stock or
extending credit to others for the purpose of purchasing or carrying Margin
Stock and no part of the proceeds of any borrowing hereunder will be used to
purchase or carry any Margin Stock or for any other purpose which would
violate any of the regulations of such Board of Governors. Neither the
Borrower nor any Subsidiary intends to use any portion of the proceeds of the
Revolving Credit Loans, directly or indirectly, to purchase during the
underwriting period, or for a period of thirty (30) days thereafter,
Ineligible Securities being underwritten by a Section 20 Subsidiary.
3.10 Investment Company Act; Public Utilities Holding Company Act.
The Borrower is not an "investment company" as that term is defined in the
Investment Company Act of 1940, as amended from time to time. The Borrower is
not a "holding company", or a "subsidiary company" of a "holding company", or
an "affiliate" of a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
3.11 Environmental Matters. To the Borrower's knowledge, except as
set forth in the Forms 10-K, 10-Q, 8-K or S-4 most recently filed by the
Borrower with the SEC, the Borrower and its Subsidiaries are in material
compliance with all Environmental Laws.
3.12 No Restrictions. Neither the execution and delivery of this
Agreement, the Revolving Credit Notes and the other Loan Documents to which it
is or will become a party, the consummation of the transactions herein
contemplated nor compliance with the terms and provisions hereof or of the
Revolving Credit Notes, will conflict with or result in a breach of any of the
terms, conditions or provisions of the certificate of incorporation or the
by-laws of the Borrower or of any law or of any regulation, order, writ,
injunction or decree of any court or governmental agency or of any agreement,
indenture or other instrument to which the Borrower is a party or by which any
of them is bound or to which it is subject, or constitute a default thereunder
or result in the creation or imposition of any Encumbrance of any nature
whatsoever upon any of the property or assets of the Borrower pursuant to the
terms of any agreement, indenture or other instrument.
3.13 Compliance with Applicable Laws. The Borrower and each
Subsidiary, to the best of the Borrower's knowledge, (i) is not in default
with respect to any order, writ, injunction or decree of any court or of any
Federal, state, municipal or other Governmental Person; and (ii) is
substantially complying with all applicable statutes and regulations of each
Governmental Person having jurisdiction over its activities; except for those
orders, writs, injunctions, decrees, statutes and regulations, non-compliance
with which would not reasonably be likely to have a Material Adverse Effect.
3.14 Governmental Approval. No order, authorization, consent,
license, validation or approval of, or notice to, filing, recording, or
registration with, any Governmental Person, or exemption by any Governmental
Person, is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of this Agreement or the Revolving Credit
Notes or (ii) the legality, binding effect or enforceability of this Agreement
or the Revolving Credit Notes.
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<PAGE>
3.15 No Event of Default; Compliance with Instruments. No event has
occurred and is continuing and no condition exists or will exist after giving
effect to the borrowings to be made on the Closing Date under the Loan
Documents which constitutes an Event of Default. The Borrower is not in
violation of (i) any term of its certificate of incorporation, by-laws or
other organizational documents or (ii) any material agreement or instrument to
which it is a party or by which it or any of its properties may be subject or
bound where such violation would be reasonably likely to have a Material
Adverse Effect.
3.16 Employment Matters. The Borrower and each Subsidiary are in
compliance with all employee benefit plans, employment agreements, collective
bargaining agreements and labor contracts and all applicable federal, state
and local labor and employment laws including, but not limited to, those
related to equal employment opportunity and affirmative action, labor
relations, minimum wage, overtime, child labor, medical insurance
continuation, worker adjustment and relocation notices, immigration controls
and worker and unemployment compensation, except where the failure to comply
would not be reasonably likely to have a Material Adverse Effect. There are
no outstanding grievances, arbitration awards or appeals therefrom arising out
of the several agreements referred to above or current or, to the knowledge of
the Borrower, threatened strikes, picketing, handbilling or other work
stoppages or slowdowns at facilities of the Borrower or any Subsidiary which
in any case would reasonably be likely to have a Material Adverse Effect. All
payments due from the Borrower or any Subsidiary on account of employee health
and welfare insurance which could reasonably be expected to have a Material
Adverse Effect if not paid have been paid or accrued as a liability on the
books of the Borrower or such Subsidiary.
3.17 Patents, Trademarks, Copyrights, Licenses, Etc. The Borrower and
each other Subsidiary of the Borrower owns or possesses all the material
patents, trademarks, service marks, trade names, copyrights, licenses,
registrations, franchises, permits and rights necessary to own and operate its
properties and to carry on its business as presently conducted and planned to
be conducted by the Borrower, without known alleged or actual conflict with
the rights of others, which conflict would be reasonably likely to result in a
Material Adverse Effect.
3.18 Year 2000 Problem. The Borrower and each Subsidiary have
reviewed areas within their business and operations which could be adversely
affected by, and have developed or are developing a program to address on a
timely basis, the risk that certain computer applications used by the Borrower
or its Subsidiaries may be unable to recognize and perform properly date-
sensitive functions involving certain dates prior to and after December 31,
1999 (the "Year 2000 Problem"). The Year 2000 Problem will not be reasonably
likely to result in a Material Adverse Effect.
3.19 Solvency. On the date hereof the Borrower is, on a Consolidated
basis, Solvent.
3.20 Material Contracts; Burdensome Restrictions. All material
contracts relating to the business operations of the Borrower and each
Subsidiary are valid, binding and enforceable upon such Person and each of the
other parties thereto in accordance with their respective terms, and there is
no default thereunder with respect to the Borrower or Subsidiary party thereto
which would be reasonably likely to have a Material Adverse Effect, and there
is no default thereunder, to the Borrower's knowledge, with
respect to parties other than the Borrower or Subsidiary party thereto which
would be reasonably likely to have a Material Adverse Effect. No contract,
lease, agreement or other instrument to which the Borrower or any Subsidiary
is a party or is bound and no provision of any applicable Law or governmental
regulation would reasonably be expected to have a Material Adverse Effect.
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3.21 Disclosure. Neither this Agreement nor any other document,
certificate or statement furnished to the Banks by or on behalf of the
Borrower pursuant to this Agreement contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not misleading. There is no fact
known to the Borrower which materially and adversely affects or in the future
may (so far as the Borrower now foresees) materially and adversely affect the
business, operations, affairs, condition, prospects, properties or assets of
the Borrower or any of its Subsidiaries which has not been set forth in this
Agreement or in the other documents, certificates and statements (financial or
otherwise) furnished to the Banks by or on behalf of the Borrower prior to or
on the date hereof.
ARTICLE IV. AFFIRMATIVE COVENANTS.
From the date hereof and thereafter until the termination of the Revolving
Credit Commitment and until the Revolving Credit Notes and the other
liabilities of the Borrower hereunder are paid in full, the Borrower agrees
that:
4.1 Use of Proceeds. Proceeds of the Revolving Credit Loans will be
used by the Borrower solely to support the issuance by the Borrower of short
term notes in the commercial paper market.
4.2 Furnishing Information.
4.2a Quarterly Reports. The Borrower will furnish to each of the
Banks, as soon as practicable but in any event within sixty (60) days after
the end of each Fiscal Quarter its Form 10-Q filed with the SEC. Each such
report shall be certified, subject to ordinary and usual year end adjustments,
as true, complete and correct pursuant to a Compliance Certificate
substantially in the form of Exhibit "C" hereto.
4.2b Annual Report. The Borrower will furnish to each of the Banks,
as soon as practicable but in any event within ninety (90) days after the end
of each Fiscal Year, a copy of its Form 10-K filed with the SEC including
therein its Consolidated financial statements certified without qualification
by a nationally recognized independent public accountant selected by the
Borrower. Such annual audited financial statements shall be certified as
true, complete and correct pursuant to the Compliance Certificate,
substantially in the form of Exhibit "C" hereto.
In addition, the Borrower will cause to be delivered to each of
the Banks a statement by the independent certified public accountants made in
connection with the preparation of the annual audited consolidated financial
statements of the Borrower and its Subsidiaries stating (i) that the
examination has included a review of the terms of the Agreement and the Notes,
(ii) whether their examination has disclosed the existence, during the Fiscal
Year covered by such financial statements, of any condition or event which
constitutes an Event of Default hereunder, or under any of the instruments, as
executed, annexed as exhibits hereto, or which, after notice
or the lapse of time or both, would constitute an Event of Default, and, if
their examination has disclosed such an event or condition, specifying the
nature and period of existence thereof, and (iii) that they have examined such
Compliance Certificate delivered pursuant to the foregoing paragraph and
confirm the computations set forth therein.
4.2c General Information. The Borrower will deliver to the Banks such
additional financial statements, reports and other information (which shall
include, without limitation, any commercial paper dealer arrangements, any
note purchase agreements or private placements or documents equivalent thereto
and all regular and periodic reports filed with the SEC) as the Agent shall
reasonably request. Borrower shall also deliver to the Agent, within ten (10)
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days of the receipt of the same, any reports, including management letters,
submitted to the Borrower by an independent certified public accountant in
connection with any annual, interim or special audit. Further, Borrower will
maintain, and will cause its Subsidiaries to maintain, proper books of record
and account in accordance with sound accounting practice in which full, true
and correct entries shall be made of all of their respective properties and
assets and their respective dealings and business affairs. Borrower will
permit, and will cause its Subsidiaries to permit, each of the Banks to have
access, at any time and from time to time, upon reasonable notice and during
normal business hours to visit any of their respective properties, to examine
any of their respective books of record and account and such reports and
returns as Borrower or any of its Subsidiaries may file with any governmental
department or agency, and to discuss any of Borrower's or any Subsidiary's
affairs and accounts with, and be advised about them by, the officers of
Borrower or the Subsidiary as the case may be.
4.3 Preservation of Existence. At its own cost and expense, the
Borrower will do, and subject to the provisions of Section 5.4 hereof, the
Borrower will cause its Subsidiaries to do, all things necessary to preserve
and keep in full force and effect their respective existence and qualification
under the laws of the jurisdictions of their respective organization, except
that the corporate existence of any Subsidiary may be terminated, or any of
its rights or franchises abandoned if, in the good faith judgment of the Board
of Directors of the Borrower, such termination or abandonment is in the best
interest of the Borrower and is not disadvantageous to the Banks. Further,
the Borrower will substantially comply, and will cause each Subsidiary
incorporated or formed in the United States of America to substantially
comply, with all applicable laws, statutes and regulations of the United
States of America and of any state or municipality, or of any agency or
department of any of the above in respect of the conduct of their respective
businesses. The Borrower will further cause any Subsidiary not incorporated
or formed in the United States of America to comply, in all material respects,
with all laws, statutes and regulations of the nation in which such Subsidiary
is incorporated or formed or any nation which, due to the nature of its
business, is subject to the laws of or of any region, state or municipality or
of any agency or department of any of the foregoing in respect to the conduct
of such Subsidiary's Business.
4.4 Payment of Taxes and Fees. The Borrower will promptly pay, and
discharge, and the Borrower will cause each Subsidiary to promptly pay and
discharge, all taxes, assessments and governmental charges and levies upon
them or upon any of their respective income, profits or property; provided,
however, that, for purposes of this Agreement, the Borrower or the affected
Subsidiary shall not be required to pay any tax, assessment, charge or levy
(a) which it deems to be unlawful or excessive in whole or in part and the
payment of which is being contested or will be, in a timely manner, contested
in good faith by appropriate proceedings, and (b) as to which the Borrower or
the affected Subsidiary shall have set aside on its books reserves for such
claim as are determined to be adequate by the application of generally
accepted accounting principles consistently applied.
4.5 Insurance. The Borrower will keep and maintain, and the Borrower
will cause each Subsidiary to keep and maintain, insurance with responsible
insurance companies, satisfactory to the Agent, on such of their respective
properties, in such amounts and against such risks as is customarily
maintained by similar businesses similarly situated and owning, leasing or
operating similar properties. The Borrower will furnish to the Agent on
December 31 of each year during the term hereof a certificate of the
Authorized Officer of the Borrower certifying that such insurance is in force,
is adequate in nature and amount and complies with the Borrower's and each
Subsidiary's obligations under this Section 4.5.
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4.6 ERISA Reports. The Borrower will (a) notify the Agent as soon as
possible, and in any event no later than the date notification is sent to the
PBGC, of any Reportable Event and action which is proposed to be taken with
respect thereto, (b) send to the Agent, if so requested by the Agent, copies
of each annual and other report with respect to each Plan filed with the
United States Secretary of Labor or the PBGC, (c) send to the Agent,
concurrent with the filing thereof, a copy of any request to United States
Secretary of the Treasury for a waiver or variance of the minimum funding
standards of Section 302 of ERISA and Section 412 of the Code with respect to
any Plan, (d) send to the Agent, promptly, but in any event within ten (10)
calendar days after the date notification is sent to the PBGC, a copy of any
notice of failure to make a required installment or other payment, and (e)
send to the Agent promptly after receipt thereof, a copy of any notice the
Borrower or any ERISA Affiliate may receive from the PBGC relating to the
intention of the PBGC (i) to terminate any Plan, (ii) to appoint a trustee to
administer any such Plan or (iii) to assess withdrawal liability.
4.7 Environmental Matters. The Borrower shall and the Borrower shall
cause each Subsidiary to:
(i) comply in all material respects with all Environmental
Laws;
(ii) not place or permit to be placed any Hazardous Substances
on any of its business premises except as allowed pursuant to Environmental
Law;
(iii) employ appropriate technology as the Borrower determines
is reasonably necessary to comply with Environmental Law;
(iv) dispose of any and all Hazardous Substances only at
facilities and with carriers that maintain valid permits under applicable
Environmental Law;
(v) defend and indemnify the Banks and the Agent and hold the
Banks and the Agent harmless from and against all loss, liability, damage and
expense, claims, costs, fines, penalties, including any interest, assessments
or attorney's fees, suffered or incurred by the Agent or any Bank, which
arise, result from or in any way relate to a breach or violation of any
Environmental Law by the Borrower or any Subsidiary or any Person acting for
or on behalf of the Borrower or any Subsidiary. The Borrower's and the
Subsidiaries' obligation hereunder shall survive the termination of this
Agreement; and
(vi) provide to the Agent for redistribution to the Banks,
notice of: (A) any material reportable Release of Hazardous Substances; (B)
any notification that Borrower or any Subsidiary is alleged to be a
"potentially responsible party" under any Environmental Law; or (C) with
respect to Borrower's operations, any material noncompliance with the
Environmental Law; provided (A), (B) or (C) immediately above might materially
affect the Borrower's financial condition or operations. Such notice shall be
given within a reasonable period after an Authorized Officer receives
knowledge of such Release or noncompliance.
4.8 Senior Debt Status. The Bank Indebtedness shall rank at least
pari passu in priority of payment with all other Indebtedness of the Borrower,
except Indebtedness of the Borrower secured by Encumbrances pursuant to
Section 5.3.
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4.9 Y2K Preparedness. The Borrower shall cause its Subsidiaries
other than those acquired pursuant to the Merger to take all commercially
reasonable action necessary and appropriate so that they shall have developed
all programs necessary to address, on a timely basis, the Year 2000 Problem as
it affects their respective accounting, information services, sales and
manufacturing operations. The Borrower shall cause its Subsidiaries acquired
pursuant to the Merger to take all commercially reasonable action necessary
and appropriate so that they have developed all programs necessary to address,
on a timely basis, the year 2000 Problem as it affects their respective
accounting, information services, sales and manufacturing operations, except
where failure to do so would not have a Material Adverse Effect.
ARTICLE V. NEGATIVE COVENANTS.
From the date hereof and thereafter until the later of the
termination of the Revolving Credit Commitment and the payment in full of the
Bank Indebtedness and the other liabilities of the Borrower hereunder, the
Borrower agrees that:
5.1 Percentage of Consolidated Indebtedness to Consolidated
Capitalization. The Borrower shall not, at any time, allow its Consolidated
Indebtedness to be greater than fifty-five percent (55%) of the sum of (i)
Consolidated Indebtedness plus (ii) Consolidated Stockholder's Equity.
5.2 Fixed Charge Coverage Ratio. The Borrower shall not incur or
remain liable for Consolidated Indebtedness owing to any Person if (a) the
incurrence of such Consolidated Indebtedness (after giving effect thereto)
would cause the Borrower to be in violation of any provision of this Agreement
or (b) the Borrower's Consolidated Net Income Available for Fixed Charges for
the period of the four (4) Fiscal Quarters immediately preceding the Date of
Determination is equal to or less than two hundred percent (200%) of all Fixed
Charges payable in respect of such period.
5.3 Creation of Encumbrances. The Borrower shall not create, assume,
incur or suffer to exist, nor will the Borrower allow any Subsidiary to
create, assume, incur or suffer to exist, any Encumbrance upon any of their
respective properties, whether now owned or hereafter acquired, nor
acquire nor agree to acquire any kind of property subject to an Encumbrance;
provided, however, that the foregoing restrictions shall not prevent the
Borrower or any of its Subsidiaries from creating, assuming, incurring or
suffering to exist Encumbrances, including but not limited to the Encumbrances
set forth on Schedule 3.6 hereto, which secure Indebtedness or obligations
which do not exceed, in the aggregate, at any one time outstanding, twenty
percent (20%) of the Borrower's Consolidated Total Assets.
5.4 Limitation on Mergers. The Borrower will not, nor will the
Borrower allow any Subsidiary to, directly or indirectly, sell, lease or
otherwise dispose of all or substantially all of its properties or assets, or
consolidate with, or merge into any other entity or permit any entity to merge
into it; provided however,
(i) any Subsidiary may sell or otherwise transfer its assets
to the Borrower or to a Subsidiary;
(ii) any Subsidiary may merge into or consolidate with the
Borrower or any other Subsidiary so long as the affected Borrower or other
Subsidiary is the surviving entity; or
(iii) the Borrower may be consolidated with any other
corporation, or permit any other corporation to be merged into the Borrower,
if
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(A) the surviving corporation shall be the Borrower and
immediately after such consolidation or merger a majority of the Borrower's
properties and assets will be located, and a majority of its business will be
conducted, in North America,
(B) immediately after giving effect to such transaction,
no condition or event shall exist which constitutes an Event of Default or
which, after notice or lapse of time or both, would constitute an Event of
Default, and
(C) no proceeds of Revolving Credit Loans shall be used
to fund, directly or indirectly, in whole or in part, any acquisition of or
merger with another Person which is contested by such Person and which has not
been approved by such Person's board of directors or other governing body.
In addition, the Borrower will not, nor will the Borrower allow
any of its Subsidiaries to acquire all or a substantial part, of the assets or
capital stock of any other entity if, after giving effect to such acquisition,
a condition or event shall exist which constitutes an Event of Default or
which, after the giving of notice or the lapse of time or both, would
constitute an Event of Default.
5.5 Margin Stock. No proceeds of the Revolving Credit Loans will be
used for the purchase of or carrying of any Margin Stock which would cause the
Revolving Credit Loans then outstanding to be in violation of Regulation U of
the Board of Directors of the Federal Reserve.
ARTICLE VI. CONDITIONS PRECEDENT.
6.1 All Disbursements. In addition to the satisfaction of the
conditions precedent set forth in Section 6.2, the obligation of each Bank to
make each Disbursement under its Revolving Credit Commitment is subject to the
performance by the Borrower of all of its obligations under this Agreement and
to the satisfaction of each of the following conditions precedent:
(i) Receipt by the Agent of a Request for a Disbursement;
(ii) The fact that, at the time of each Disbursement, no Event
of Default and no event which, with the giving of notice or lapse of time or
both would become such an Event of Default, shall have occurred and be
continuing;
(iii) The fact that, at the time of each Disbursement, the
Borrower is in compliance with each of the financial covenants set forth in
Sections 5.1 and 5.2 then applicable; and
(iv) The fact that at the time of each Disbursement the
representations and warranties contained in this Agreement are true and
correct in all material respects on and as of the date of such Disbursement.
Each borrowing by the Borrower shall be deemed to be, as of the date of such
borrowing, a representation and warranty by the Borrower as to the facts
specified in items (ii), (iii) and (iv) of this Section 6.1.
6.2 Conditions Precedent for Closing. The obligation of each Bank to
accept delivery of the Revolving Credit Notes is subject to the satisfaction
of each of the following conditions precedent:
(i) Agreement. Receipt by the Agent for redelivery to the
Banks of fully executed counterpart originals of this Agreement.
(ii) Revolving Credit Notes. Receipt by the Agent for
redelivery to the Banks of a fully executed Revolving Credit Note made payable
to each Bank.
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(iii) Closing Fee. Receipt by the Agent of the closing fee in
accordance with the Fee Letter due each Bank.
(iv) Closing Certificate. The Borrower shall have delivered to
the Agent for redelivery to each Bank a certificate stating (a) the
representations and warranties made by the Borrower are true and correct on
the Closing Date, (b) that as of the Closing Date the Borrower is in
compliance with the covenants set forth in Articles IV and V hereof, and (c)
as of the Closing Date no Event of Default or no event which, with the giving
of notice or passage of time would become an Event of Default, has occurred
and is continuing.
(v) Material Adverse Effect. No event has occurred to the
Borrower which would reasonably be likely to have a Material Adverse Effect on
the Borrower.
(vi) Material Litigation. Except for those matters previously
disclosed to the Agent and the Banks pursuant to Section 3.5, no action or
proceeding has been instituted before any Governmental Person which, if
adversely determined, would reasonably be likely to have a Material Adverse
Effect on the Borrower.
(vii) Insurance. Receipt by the Agent of evidence that the
Borrower's insurance coverage, as required by Section 4.5, is in effect.
(viii) Borrower's Resolutions. The Borrower shall have delivered
to the Agent for redelivery to each Bank a copy, duly certified as of the date
hereof by the secretary or assistant secretary of the Borrower, of (a) the
organizational documents of the Borrower, (b) the Bylaws of the Borrower, (c)
the resolutions of the Borrower's Board of Directors authorizing the
borrowings hereunder and the execution and delivery of this Agreement and the
Revolving Credit Notes, (c) all documents evidencing other necessary corporate
action and (e) all approvals or consents, if any, with respect to this
Agreement and the Revolving Credit Notes.
(ix) Borrower's Incumbency Certificate. The Borrower shall
have delivered to the Agent for redelivery to each Bank a certificate of its
secretary or assistant secretary, certifying the names and offices of the
officers of the Borrower authorized to sign this Agreement, the Revolving
Credit Notes and all other documents or certificates to be delivered
hereunder, together with the true signatures of such officers.
(x) Disclosure Letter. The Borrower shall have delivered to
the Agent for redelivery to each Bank an executed copy of the Disclosure
Letter.
(xi) Opinion of Counsel. The Borrower shall have delivered to
the Agent for redelivery to each of the Banks the favorable opinion of Richard
D. Teeple, Esquire, General Counsel of the Borrower (a) as to the action which
has been taken to authorize the making and performance by the Borrower of this
Agreement and the Revolving Credit Notes issued under this Agreement, (b) as
to the due authorization, execution, delivery and validity of this Agreement
and the Revolving Credit Notes to be issued under this Agreement and (c) as to
such other matters as the Agent may reasonably require substantially in the
form of Exhibit "D" hereto.
ARTICLE VII. EVENTS OF DEFAULT.
7.1 Immediate Defaults. If one or more of the following Events of
Default occur:
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7.1a Insolvency.
(i) Involuntary Proceedings. A proceeding shall have been
instituted in a court having jurisdiction seeking a decree or order for relief
in respect of the Borrower or any Subsidiary in an involuntary case under
federal or foreign bankruptcy laws, or any other similar applicable federal,
state or foreign law, now or hereafter in effect, or for the appointment of a
receiver, liquidator, trustee, sequestrator or similar official for the
Borrower or the affected Subsidiary or for a substantial part of its property,
or for the winding up or liquidation of its affairs, and such shall result in
the entry of an order for relief or remain undismissed or unstayed and in
effect for a period of sixty (60) days; or
(ii) Voluntary Proceedings. The Borrower or any Subsidiary
shall institute proceedings to be adjudicated a voluntary bankrupt, or shall
consent to the filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking reorganization under federal or foreign
bankruptcy laws, or any other similar applicable federal, state or foreign
law now or hereinafter in effect, or shall consent or acquiesce in or to the
filing of any such petition or shall consent to or acquiesce in the
appointment of a receiver, liquidator, trustee, sequestrator or similar
official for the Borrower or any Subsidiary or for a substantial part of its
property, or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due,
or action shall be taken by the Borrower or any Subsidiary in furtherance of
any of the aforesaid purposes; or
7.1b Dissolution. Except as permitted by Section 5.4 hereof, the
existence of the Borrower or any Subsidiary is terminated;
then, upon the happening of an event described in this Section 7.1, the
Revolving Credit Commitment shall immediately terminate and all Revolving
Credit Notes, then outstanding shall automatically become immediately due and
payable without presentment, demand, protest or notice of any kind, all of
which are hereby waived, and the Agent shall not be under any obligation to
issue or amend a Letter of Credit; further during the sixty (60) day period
referred to in Section 7.1a (i) the Banks shall be under no obligations to
make Revolving Credit Loans. The Agent shall promptly advise the Borrower,
and each of the Banks, of the occurrence, and the consequences, of the Event
of Default; provided, however, that failure to give notice to the Borrower
shall not impair the effect of such Event of Default.
7.2 Defaults at Option of Banks. If one or more of the following
Events of Default occur:
7.2a Payment. Default in the payment of (i) principal of or interest
on any Revolving Credit Note, and continuance thereof for five (5) days, or
(ii) any Facility Fee or Usage Fee and continuance thereof for ten (10) days;
or
7.2b Agreements. Default in the performance of any of the Borrower's
agreements (including but not limited to those set forth in Articles IV and V
hereof) herein set forth (and not constituting an Event of Default under any
of the preceding subsections of this Article VII) and continuance of such
default for thirty (30) days after notice thereof to the Borrower from the
Agent or any Bank; or
7.2c Other Indebtedness. Default by the Borrower in the payment when
due of any obligation in an amount in excess of $10,000,000 (including without
limitation the Credit Agreement dated September 1, 1999, by and among the
Borrower, the financial institutions party thereto and PNC Bank in its
capacity as agent thereunder) for money borrowed or guaranteed, (whether by
acceleration or otherwise) or default by the Borrower in the performance of
any agreement (including without limitation the Credit Agreement dated
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September 1, 1999, by and among the Borrower, the financial institutions party
thereto and PNC Bank, National Association in its capacity as agent
thereunder) under which any such obligation is created if the effect of such
default is to cause such obligation to become, or to permit the holder or
holders of such obligations to declare such obligation, due prior to its
expressed maturity; or
7.2d Misrepresentation. Any representation or warranty made by the
Borrower herein is untrue in any material respect, or any schedule, statement,
report, notice or writing furnished by the Borrower or on behalf of the
Borrower to the Agent or the Banks is untrue in any material respect on the
dates as of which the facts set forth are stated or certified; or
7.2e Monetary Judgments. A final uninsured judgment which, with other
outstanding final judgments against the Borrower and its Subsidiaries, exceeds
the aggregate amount of $10,000,000 shall be rendered against the Borrower or
any Subsidiary and if, within sixty (60) days after entry thereof, such
judgment shall not have been vacated or discharged, written agreement shall
not have been reached with the plaintiff in such action providing for the
payment of any monetary award set forth in such judgment, or execution thereof
shall not have been stayed pending appeal, or if, within sixty (60) days after
the expiration of any such stay, such judgment shall not have been discharged
or a written agreement shall not have been reached with the plaintiff in such
action providing for the payment of any monetary award set forth in such
judgment; or
7.2f Litigation. Notice is given to the Borrower by the Agent or any
Bank that, in the opinion of the Agent or such Bank, any litigation or
governmental proceeding which has been instituted against the Borrower or any
Subsidiary will reasonably be likely to have a Material Adverse Effect, and
within thirty (30) days after such notice (i) such litigation or proceeding is
not dismissed or (ii) an opinion of the Borrower's or the affected
Subsidiary's trial counsel shall not have been received by each Bank, in form
and substance satisfactory to each Bank, that the Borrower or the affected
Subsidiary has a meritorious position and will ultimately prevail in the
proceedings; or
7.2g Change of Control. Any Person or group of Persons (within the
meaning of Sections 13(d) or 14(d)(2) of the Securities and Exchange Act of
1934), other than the then current officers or directors of the Borrower or an
underwriter which obtains such ownership as a result of effecting a firm
commitment underwriting of a secondary offering of the Borrower's voting stock
on behalf of such officers or directors, shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under said Act) of twenty percent (20%) or more of the
voting stock of the Borrower; then, if any such event described in this
Section 7.2 shall be continuing, the Agent may, and upon request of the
Required Banks will, declare the Revolving Credit Commitment to be terminated
and all Revolving Credit Notes then outstanding to be due and payable,
whereupon the Revolving Credit Commitment shall immediately terminate and all
then outstanding Revolving Credit Notes shall become immediately due and
payable, all without presentment, demand, protest or further notice of any
kind, all of which are hereby waived.
7.3 Remedies upon Default. In case any one or more Events of Default
shall occur and be continuing, the Agent on behalf of the Banks may proceed to
protect and enforce its rights by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained herein in the Revolving Credit Notes held by it or in any Letter of
Credit, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or
by law. No right, power or remedy conferred by this Agreement or by any
Revolving Credit Note upon any Bank shall be exclusive of any other right,
power or remedy referred to herein or therein or now or hereafter available at
law, in equity, by statute or otherwise.
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ARTICLE VIII. AGENT.
8.1 Appointment and Grant of Authority. The Banks hereby appoint PNC
Bank, National Association, and PNC Bank, National Association hereby agrees
to act, as the Agent under this Agreement. The Agent shall have and may
exercise such powers under this Agreement as are specifically delegated to the
Agent by the terms hereof, together with such other powers as are incidental
thereto.
8.2 Non-Reliance on Agent. Each Bank agrees that it has,
independently and without reliance on the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis of the Borrower and decision to enter into this Agreement and
that it will, independently and without reliance upon the Agent, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under this Agreement. The Agent shall not be required to keep informed as to
the performance or observance by the Borrower of this Agreement or any other
document referred to or provided for herein or to inspect the properties or
books of the Borrower or any of its Subsidiaries. The Agent shall use its
best efforts to relay to each Bank any information pertaining to the Borrower
or its Subsidiaries which comes into the possession of the Agent's Corporate
Banking Division; provided however, that except for notices, reports and other
documents and information expressly required to be furnished to each Bank by
the Agent hereunder, the Agent, in the absence of negligence or willful
misconduct, shall not be liable to any Bank for its failure to relay or
furnish to any Bank any information.
8.3 Responsibility of the Agent and Other Matters.
8.3a Ministerial Nature of Duties. As between the Banks and itself,
the Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement and those duties and liabilities shall be subject to
the limitations and qualifications set forth in this Article VIII. The duties
of the Agent shall be ministerial and administrative in nature.
8.3b Limitation of Liability. As between the Banks and itself,
neither the Agent nor any of its directors, officers, employees or agents
shall be liable, except for negligence or willful misconduct, for any action
taken or omitted (whether or not such action taken or omitted is within or
without the Agent's responsibilities and duties expressly set forth in this
Agreement) under or in connection with this Agreement or any other instrument
or document in connection herewith. Without limiting the foregoing, neither
the Agent nor any of its directors, officers, employees or agents shall be
responsible for, or have any duty to examine (i) the genuineness, execution,
validity, effectiveness, enforceability, value or sufficiency of (A) this
Agreement or the Revolving Credit Notes or (B) any document or instrument
furnished pursuant to or in connection with this Agreement or the Revolving
Credit Notes, (ii) the collectibility of any amounts owed by the Borrower,
(iii) the truthfulness of any recitals or statements or representations or
warranties made to the Agent in connection with this Agreement or the
Revolving Credit Notes, (iv) any failure of any party to this Agreement to
receive any communication sent, including any telegram, telex, teletype,
facsimile transmission, bank wire, cable, radiogram or telephone message sent
or any writing, application, notice, report, statement, certificate,
resolution, request, order, consent letter or other instrument or paper or
communication entrusted to the mails or to a delivery service, or (v) the
assets or liabilities or financial condition or results of operations or
business or credit worthiness of the Borrower.
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8.3c Reliance. The Agent shall be entitled to act, and shall be fully
protected in acting upon, any telegram, telex, telecopy, bank wire or cable or
any writing, application, notice, report, statement, certificate, resolution,
request, order, consent, letter or other instrument or paper or communication
believed by the Agent in good faith to be genuine and correct and to have been
signed or sent or made by a proper Person. The Agent may consult counsel and
shall be entitled to act, and shall be fully protected in any action taken in
good faith, in accordance with advice given by counsel. The Agent may employ
agents and attorneys-in-fact and shall not be liable for the default or
misconduct of any such agents or attorneys-in-fact selected by the Agent with
reasonable care. The Agent shall not be bound to ascertain or inquire as to
the performance or observance of any of the terms, provisions or conditions of
this Agreement or the Revolving Credit Notes on the part of the Borrower.
8.4 Action on Instructions. The Agent shall be entitled to act or
refrain from acting, and in all cases shall be fully protected in acting or
refraining from acting, under this Agreement or the Revolving Credit Notes or
any other instrument or document in connection herewith or therewith in
accordance with instructions in writing or by telegraph from the appropriate
number of Banks, as the case may be.
8.5 Action in Event of Default. If an Event of Default has occurred,
the Banks shall immediately consult with one another in an attempt to agree
upon a mutually acceptable course of conduct. Failing unanimous agreement
upon a course of conduct and if the appropriate number of Banks wish to
declare an Event of Default or exercise their rights hereunder, the Agent will
exercise the rights of the Banks hereunder as directed by the appropriate
number of Banks.
8.6 Indemnification. To the extent the Borrower does not reimburse
and save harmless the Agent according to the terms hereof for and from all
costs, expenses and disbursements in connection herewith, such costs, expenses
and disbursements, shall be borne by the Banks on a Pro Rata basis. Each Bank
hereby agrees on such basis (a) to reimburse Agent for all such costs,
expenses and disbursements on request and (b) to the extent of each such
Bank's pro rata share, to indemnify and save harmless the Agent against and
from any and all losses, obligations, penalties, actions, judgments and suits
and other costs, expenses and disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against the Agent, other than
as a consequence of actual negligence or willful misconduct on the part of the
Agent, arising out of or in connection with this Agreement or the Revolving
Credit Notes or any agreement, instrument or document in connection herewith
or therewith, or any request of the Banks. Such indemnification of the Agent
shall include, without limitation, reimbursement for the costs, expenses and
disbursements in connection with defending itself against any claim or
liability, or answering any subpoena, related to the exercise or performance
of any of its powers or duties under this Agreement or the taking of any
action under or in connection with this Agreement or the Revolving Credit
Notes.
8.7 Agent's Rights as a Bank. With respect to (a) the commitment of
the Agent as a Bank hereunder and any Revolving Credit Loans of the Agent
under this Agreement, (b) any Revolving Credit Note and any interest of the
Agent in any Revolving Credit Note, (c) any amount due the Agent pursuant to
Article II hereof not evidenced by a Revolving Credit Note and (d) other
amounts due the Agent hereunder, the Agent shall have the same rights and
powers under this Agreement and any such Revolving Credit Note as any other
Bank and may exercise the same as though it were not the Agent. The Agent may
accept deposits from, lend money to, and generally engage, and continue to
engage, in any kind of business with the Borrower and any of its Subsidiaries
as if it were not the Agent.
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8.8 Loan Advances. Except as otherwise provided in Section 8.8
hereof, unless the officers of the Agent responsible for administering this
Agreement shall have been notified in writing by a Bank prior to the date of
any Disbursement that such Bank will not make the amount which would
constitute its Pro Rata share of the Disbursement available to the Agent on
the date of such Disbursement, the Agent may (but shall not be required to)
assume that such Bank has made such amount available to the Agent on the date
of such advance and the Agent, in reliance upon such assumption, may make
available to the Borrower a corresponding amount in the applicable currency.
If such Pro Rata share is made available to the Agent on a date after the date
of such Disbursement, such Bank shall pay to the Agent on demand an amount in
the applicable currency equal to the product of (i) during each day included
in the period referred to in (iii) below, for each Dollar funded Revolving
Credit Loan, the Federal Funds Effective Rate, multiplied by (ii) the amount
of such Bank's Pro Rata share of such Disbursement, multiplied by (iii) a
fraction, the numerator of which is the number of days that elapse from and
including the date of such Disbursement to the date on which such Pro Rata
share of such Disbursement shall become immediately available to the Agent and
the denominator of which is 360. A statement of the Agent submitted to such
Bank with respect to any amounts owing under this Section 8.8 shall be prima
facie evidence as to the amount owed by such Bank to the Agent. If such
Bank's Pro Rata share is not in fact made available to the Agent by such Bank
within three (3) Business Days of such borrowing date, the Agent shall be
entitled to recover such amount with interest thereon at the rate per annum
applicable to the Base Rate Option during such period, on demand, from such
Bank.
8.9 Payment to Banks. Upon receipt by the Agent of any payment from
the Borrower in respect of such Banks' obligations, the Agent shall promptly
deliver to each Bank its Pro Rata share of such payment. When possible, such
delivery shall be accomplished in such a manner so as to allow each Bank to
receive its Pro Rata share of such payment in immediately available funds on
the same day that the funds representing payment due from the Borrower are
collected funds in the possession of the Agent. It is understood that the
Borrower has no obligation to the Banks to ensure that the Agent forwards to
each Bank its Pro Rata share of any such payment.
8.10 Notice of Event of Default. Each Bank shall use its best efforts
to notify immediately in writing the other Banks of any Event of Default of
which it becomes aware.
8.11 Equalization of Banks. The Banks agree among themselves that,
with respect to all amounts received by any Bank for application on any
obligation hereunder, or on the Revolving Credit Notes, equitable adjustment
will be made in the manner stated in the next succeeding sentence so that, in
effect, all such amounts will be shared pro rata among the Banks, whether
received by realization upon security, by the exercise of the right of set-off
or banker's lien, by counterclaim or cross action or from any other non-pro
rata source. Any Bank receiving any such amount shall purchase for cash from
the other Banks an interest in their Revolving Credit Notes in such
amount as shall result in a pro rata participation by each of the Banks in the
aggregate unpaid amount of all outstanding Revolving Credit Notes then held by
the Banks; provided that if all or any portion of such amount is hereafter
recovered from such Bank, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery without interest except as
required by law or by any judgment or settlement relating to such recovery.
8.12 Successor Agent. The Agent may resign upon sixty (60) days'
prior notice to the Banks and the Borrower. If such notice shall be given,
the Agent shall use reasonable commercial efforts during such sixty (60) day
period to procure a successor satisfactory to the Banks and reasonably
satisfactory the Borrower to serve as agent hereunder and under the Revolving
Credit Notes. If at the end of such sixty (60) day period, the Agent shall be
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unable to procure such a successor, the Banks shall appoint from among the
Banks a successor agent for the Banks. Any such successor agent shall succeed
to the rights, powers and duties of the Agent. Upon the appointment of such
successor agent or upon the expiration of such sixty (60) day period (or any
longer period to which the Agent has agreed), the former Agent's rights,
powers and duties as Agent shall be terminated, without any other or further
act or deed on the part of such former Agent or any of the parties to this
Agreement; provided, however, the retiring Agent shall continue to hold as
custodian any collateral in its possession until such time as it can deliver
such collateral to the successor agent. After any retiring Agent's
resignation hereunder, the provisions of this Article VIII shall inure to the
benefit of such retiring Agent as to any actions taken or omitted to be taken
by it while it was Agent under this Agreement.
ARTICLE IX. GENERAL PROVISIONS.
9.1 Waiver of Rights of Set-Off. The Banks waive any and all rights
of banker's lien, counterclaim and recoupment and any and all right to set-off
against the unpaid balance of the Revolving Credit Notes or any participation
therein as to any debt owing to the Borrower by the Banks, including, without
limitation, any funds in any deposit account (general or special) maintained
by the Borrower with the Banks.
9.2 Amendments. No amendment or waiver of any provision of this
Agreement or the Revolving Credit Notes, nor consent to any departure there-
from by the Borrower shall be effective unless the same shall be in writing
and signed by the Borrower, the Agent and the Required Banks, and then such
amendment, 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, unless in writing and signed by the Agent and
all of the Banks, shall do any of the following: (a) increase the Revolving
Credit Commitment of any Bank or the maximum aggregate principal amount of the
Revolving Credit Notes, (b) reduce the principal of, alter the formulas for
calculating interest on, the Revolving Credit Notes or reduce any fees
hereunder, (c) postpone any date fixed for any payment of principal of, or
interest on, the Revolving Credit Notes, the Facility Fee, the Usage Fee or
any of the obligations of the Borrower set forth in Article II, (d) amend the
definition of Required Banks, (f) amend this Section 9.2 or (g) amend any
section hereof which by its terms requires consent of all of the Banks. No
amendment, modification or waiver which would adversely affect the interest,
rights or obligations of the Agent shall be made without consent of the
Agent. In the case of any waiver or consent relating to any provision of this
Agreement, the parties shall be restored to their former positions and rights
hereunder (unless otherwise expressly set forth therein), and the Event of
Default so waived or consented to shall be deemed to be cured and not
continuing; but no such waiver or consent shall extend to any subsequent or
other Event of Default or impair any right consequent thereon.
9.3 No Implied Waiver; Cumulative Remedies.
9.3a No Implied Waiver. No delay on the part of Agent or any Bank in
the exercise of any power or right shall operate as a waiver thereof, nor
shall any single or partial exercise of any power or right preclude other or
further exercise thereof, or the exercise of any other power or right.
9.3b Cumulative Remedies. No delay or failure of the Agent or the
Banks in exercising any right, power or remedy under this Agreement shall
operate as a waiver hereof; nor shall any single or partial exercise thereof
or any abandonment or discontinuance of steps to enforce such a right, power
or remedy preclude any other or further exercise thereof or the exercise of
any other right, power or remedy hereunder. The rights and remedies in this
Agreement are cumulative and not exclusive of any rights or remedies
(including, without limitation, the right of specific performance) which the
Agent or the Banks would otherwise have.
35
50
<PAGE>
9.4 Certain Taxes. The Borrower agrees to pay, and save the Agent
and the Banks harmless from, all liability for any stamp or other taxes which
may be payable with respect to the execution or delivery of this Agreement,
the Revolving Credit Notes or any other documents, instruments or transactions
pursuant to or in connection herewith or therewith, which obligation shall
survive the termination of this Agreement.
9.5 Notices.
(i) Notice to the Banks. All notices required to be sent to
the Banks shall be sent to the address set forth on each Bank's signature page
hereto, by hand delivery, overnight delivery, telex, telegram, telecopier or
by the United States Mail, first class postage prepaid. Such notices shall be
effective three (3) days after mailing or when received, whichever is earlier.
(ii) Notice to the Agent. All notices required to be sent to
the Agent shall be sent to the following address by hand delivery, overnight
delivery, telex, telegram, telecopier or by the United States Mail, first
class postage prepaid:
PNC Bank, National Association
Agency Services
One PNC Plaza - 22nd Floor
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222-2707
Attn: Arlene M. Ohler
Telex: 8666533
Telephone: (412) 762-3627
Telecopier: (412) 762-8672
Such notices shall be effective three (3) days after mailing or when received,
whichever is earlier.
(iii) Notice to the Borrower. All notices required to be sent
to the Borrower shall be sent to the following addresses, by hand delivery,
overnight delivery, telex, telegram, telecopier or by the United States Mail,
first class postage prepaid:
Cooper Tire & Rubber Company
Lima and Western Avenues
Findlay, Ohio 45840
Attn: Chief Financial Officer
Telex: 242422
(answerback COOPERTIRE FLY)
Telecopier: (419) 424-4212
Telephone: (419) 424-4320
All such notices shall be effective three (3) days after mailing or when
received, whichever is earlier.
The Borrower, each Bank and the Agent may each change the address
for service of notice upon it by a notice in writing to the other parties
hereto complying with the terms of this Section 9.5.
9.6 Costs. The Borrower will pay all reasonable out-of-pocket costs
and expenses of (i) the Agent (including without limitation the reasonable
fees and disbursements of the Agent and the Agent's special counsel) in
connection with the preparation of the Loan Documents, and waivers or
amendments thereto and (ii) the Agent and the Banks and their respective
counsel in connection with the enforcement of the Loan Documents.
36
51
<PAGE>
9.7 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
enforceability without invalidating the remaining portions hereof or affecting
the validity or enforceability of such provision in any other jurisdiction.
9.8 Covenants to Survival. Until payment in full of the Bank
Indebtedness and the termination of the Revolving Credit Commitment, all
representations, warranties, covenants and agreements of the Borrower
contained herein or made in writing in connection herewith shall survive the
advances of money made by the Banks to the Borrower hereunder and the delivery
of the Revolving Credit Notes and all such representations, warranties,
covenants and agreements shall inure to the benefit of the successors and
assigns of the Banks and the Agent, whether or not so expressed.
9.9 Investment. Each Bank represents that it is the present
intention of such Bank to acquire each Revolving Credit Note made to its order
for its own account for the purpose of investment and not with a view to the
distribution or sale thereof, subject, nevertheless, to the necessity that
such Bank remain in control at all times of the disposition of property held
by it for its own account; it being understood that the foregoing
representation shall not affect the character of the Revolving Credit Loans as
commercial lending transactions.
9.10 Holiday Payments. If any payments to be made by the Borrower
hereunder shall become due on a date not a Business Day, such payments shall
be made on the next succeeding Business Day and such extension of time shall
be included in computing any interest in respect of such payment.
9.11 Governing Law. This Agreement, each Revolving Credit Note shall
each be a contract made under and governed by the laws of the Commonwealth of
Pennsylvania.
9.12 Successors, Assigns and Participations.
9.12a Successors and Assigns.
(i) This Agreement shall be binding upon the Borrower, the
Banks and the Agent and their respective successors and assigns, and shall
inure to the benefit of the Borrower, the Banks and the Agent and the
successors and assigns of the Banks and the Agent. The foregoing sentence
notwithstanding, the Borrower may not, without the consent of all of the
Banks, nor shall any Bank without the consent of the Borrower and the Agent,
such consent not to be unreasonably withheld, assign or transfer its rights or
duties hereunder; provided, however, that at any time that an Event of Default
exists the Borrower's consent to any assignment by a Bank of its rights and
duties hereunder shall not be required. Further, no consent shall be required
for assignments to the Federal Reserve Bank of New York or for assignments
described in Section 9.12(a)(ii). Each assignment by a Bank (A) shall be in a
minimum amount of $5,000,000; and (B) shall be evidenced in a manner in form
and substance satisfactory to the Agent. The Agent shall be entitled to
receive, from the assigning Bank, a fee of $3,500.00 at the time of each
assignment for processing such assignment.
(ii) Notwithstanding anything to the contrary contained herein,
any Bank (a "Granting Bank") may grant to a special purpose funding Person (an
"SPC") the option to fund all or any part of any Revolving Credit Loan that
such Granting Bank would otherwise be obligated to fund pursuant to this
Agreement; provided, however, that (A) nothing herein shall constitute a
commitment by any SPC to fund any Revolving Credit Loan, and (B) if an SPC
elects not to exercise such option or otherwise fails to fund all or any part
of such Revolving Credit Loan, the Granting Bank shall be obligated to fund
such Revolving Credit Loan pursuant to the terms hereof; and, provided,
<continued>
37
52
<PAGE>
further, (A) all credit decisions relating to any such funding by the SPC
shall be made by the Granting Bank for and on behalf of the SPC, (B) the SPC
shall have no voting rights under any of the Loan Documents, and (C) except
for the payment of principal, interest and fees, if any, the Agent shall be
entitled to treat the Granting Bank as the Bank for all purposes hereunder as
if the SPC had made no funding of any Revolving Credit Loan. The funding of a
Revolving Credit Loan by an SPC hereunder shall utilize the Revolving Credit
Commitment of the Granting Bank to the same extent, and as if, such Revolving
Credit Loan were funded by such Granting Bank. Each party hereto hereby agrees
that no SPC shall be liable for any indemnity or payment under this Agreement
for which a Bank would otherwise be liable for so long as, and to the extent,
the Granting Bank provides such indemnity or makes such payment.
Notwithstanding anything to the contrary contained in this Agreement, any SPC
may disclose on a confidential basis any non-public information relating to
its funding of Revolving Credit Loans to any rating agency, commercial paper
dealer or provider of any surety or guarantee to such SPC. This Section may
not be amended without the prior written consent of each Granting Bank, all or
any part of whose Revolving Credit Loan is being funded by an SPC at the time
of such amendment.
9.12b Participations. Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at any time
sell to one or more Participants participating interests in any Revolving
Credit Loan owing to such Bank, the interest of such Bank in any
Revolving Credit Note of such Bank, or any other interest of such Bank
hereunder. In the event of any such sale by a Bank of participating interests
to a Participant, such Bank's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Bank shall remain
solely responsible for the performance thereof, such Bank shall remain the
holder of any such Revolving Credit Note for all purposes under this Agreement
(including voting rights hereunder), and the Borrower and the Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. As between any Bank and
its Participant, the Participant's ability to direct such Bank to vote shall
be limited to (i) an increase in the Revolving Credit Commitment, (ii) a
reduction in the interest rate or fees due the Banks, and (ii) a postponement
of the scheduled payments of principal or interest.
9.13 Counterparts. This Agreement may be executed in as many
identical counterparts as shall be convenient and by the different parties
hereto on separate counterparts. This Agreement shall become binding when
each of the Agent, the Banks and the Borrower has executed at least one
counterpart. Immediately after the execution of counterparts and solely for
the convenience of the parties hereto, the Agent, the Borrower and the Banks
will execute sufficient counterparts so that the Borrower shall have
counterparts executed by each of the Banks and the Agent and the Banks shall
have counterparts executed by the Borrower, the Agent, and the Banks. All
counterparts shall constitute but one and the same instrument.
9.14 Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. Each Bank shall have the right from time
to time, without notice to the Borrower, to deem any branch, Subsidiary or
Affiliate (which for the purposes of this Section 9.14 shall mean any
corporation or association which is directly or indirectly controlled by or is
under direct or indirect common control with any corporation or association
which directly or indirectly controls such Bank) of such Bank to have made,
maintained or funded any Revolving Credit Loan to which the Euro-Rate Option
applies at any time, provided that immediately following (on the assumption
that a payment was then due from the Borrower to such other office) and as a
result of such change the Borrower would not be under any greater financial
obligation than they would have been in the absence of such change. Notional
funding offices may be selected by each Bank without regard to the Bank's
actual methods of making, maintaining or funding the Revolving Credit Loans or
any sources of funding actually used by or available to such Bank.
38
53
<PAGE>
(b) Actual Funding. Each Bank shall have the right from time to
time to make or maintain any Revolving Credit Loan by arranging for a branch,
Subsidiary or Affiliate of such Bank to make or maintain such Revolving Credit
Loan subject to the last sentence of this Section 9.14(b). If any Bank causes
a branch, Subsidiary or Affiliate to make or maintain any part of the
Revolving Credit Loans hereunder, all terms and conditions of this Agreement
shall, except where the context clearly requires otherwise, be applicable to
such part of the Revolving Credit Loans to the same extent as if such
Revolving Credit Loans were made or maintained by such Bank, provided that in
no event shall any Bank's use of such a branch, Subsidiary or Affiliate to
make or maintain any part of the Revolving Credit Loans hereunder cause such
Bank or such branch, Subsidiary or Affiliate to incur any cost or expenses
payable by the Borrower hereunder or require the Borrower to pay any other
compensation to any Bank which would otherwise not be incurred.
9.15 Tax Withholding Forms. Each Bank or assignee or participant of a
Bank that is not incorporated under the Laws of the United States of America
or a state thereof agrees that it will deliver to each of the Borrower and the
Agent two (2) duly completed copies of the following: (i) Internal Revenue
Service Form W-9, 4224 or 1001, or other applicable form prescribed by the
Internal Revenue Service, certifying that such Bank, assignee or participant
is entitled to receive payments under this Agreement and the other Loan
Documents without deduction or withholding of any United States federal income
taxes, or is subject to such tax at a reduced rate under an applicable tax
treaty, or (ii) Internal Revenue Service Form W-8 or other applicable form or
a certificate of the Bank, assignee or participant indicating that no such
exemption or reduced rate is allowable with respect to such payments. Each
assignee or participant shall deliver such form or certificate on or before
the effective date of such assignment or participation. Each Bank, assignee
or participant which so delivers a Form W-8, W-9, 4224 or 1001 further
undertakes to deliver to each of the Borrower and the Agent two (2) additional
copies of such form (or a successor form) on or before the date that such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be reasonably requested by the
Borrower or the Agent, either certifying that such Bank, assignee or
participant is entitled to receive payments under this Agreement and the other
Loan Documents without deduction or withholding of any United States federal
income taxes or is subject to such tax at a reduced rate under an applicable
tax treaty or stating that no such exemption or reduced rate is allowable.
The Agent shall be entitled to withhold United States federal income taxes at
the full withholding rate unless the Bank, assignee or participant establishes
an exemption or that it is subject to a reduced rate as established pursuant
to the above provisions.
39
54
<PAGE>
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 written above.
ATTEST/WITNESS: COOPER TIRE & RUBBER COMPANY
/S/ By /S/
- --------------------------- ------------------------------
Name: Name:
- --------------------------- ------------------------------
Title: Title:
- --------------------------- ------------------------------
By /S/
------------------------------
Name:
------------------------------
Title:
------------------------------
PNC BANK, NATIONAL ASSOCIATION
as Agent
By /S/
------------------------------
Name:
------------------------------
Title:
------------------------------
40
55
<PAGE>
IN WITNESS WHEREOF, intending to be legally bound hereby, the
undersigned Bank has caused this Agreement by and among COOPER TIRE & RUBBER
COMPANY as the Borrower, the Financial Institutions Party thereto, as the
Banks, and PNC BANK, NATIONAL ASSOCIATION, as the Agent, to be executed by its
duly authorized officers as of the date first above written.
Maximum Dollar Amount of Revolving Credit PNC BANK, NATIONAL ASSOCIATION
Commitment
$78,750,000 By: /S/
Revolving Credit Commitment Percentage ---------------------------
22.5% Name: Joseph G. Moran
Title: Vice President
Address for notice purposes:
PNC Bank, N.A.
One PNC Plaza, 22nd Floor
249 Fifth Avenue
Pittsburgh, PA 15222
Attention: Arlene Ohler
Title: Vice President
Telephone: (412) 762-3627
Facsimile: (412) 762-8672
Address for Euro-Rate Funding if different from above:
- ---------------------------
- ---------------------------
- ---------------------------
Telephone:
- ---------------------------
Facsimile:
- ---------------------------
Telex:
- ---------------------------
41
56
<PAGE>
IN WITNESS WHEREOF, intending to be legally bound hereby, the
undersigned Bank has caused this Agreement by and among the Financial
Institutions Party thereto, as the Banks and PNC BANK, NATIONAL ASSOCIATION,
as the Agent, to be executed by its duly authorized officers as of the date
first above written.
Maximum Dollar Amount of Revolving Credit BANK OF AMERICA, N.A.
Commitment
$78,750,000 By: /S/
Revolving Credit Commitment Percentage ----------------------
22.5% Name: Raju N. Patel
Title: Vice President
Address for notice purposes:
Bank of America
231 South LaSalle Street
Attention: Raju N. Patel
Title: Vice President
Telephone: (312) 828-7225
Facsimile: (312) 987-0303
Address for Euro-Rate Funding if different from above:
Bank of America
Credit Services -- 6th Floor
1850 Gateway Blvd.
Concord, CA 94520-3282
Attention: G.K. Lapitan
Telephone: (925) 675-8205
Facsimile: (925) 969-2852
42
57
<PAGE>
IN WITNESS WHEREOF, intending to be legally bound hereby, the
undersigned Bank has caused this Agreement by and among the Financial
Institutions Party thereto, as the Banks and PNC BANK, NATIONAL ASSOCIATION,
as the Agent, to be executed by its duly authorized officers as of the date
first above written.
Maximum Dollar Amount of Revolving Credit THE CHASE MANHATTAN BANK
Commitment
$78,750,000 By: /S/
Revolving Credit Commitment Percentage ------------------------
22.5% Name: Richard W. Duker
Title: Vice President
Address for notice purposes:
The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, NY 10081
Attention: Mahin Gandomi
Title: Assistant Vice President
Telephone: (212) 552-4567
Facsimile: (212) 552-5650
Address for Euro-Rate Funding if different from above:
- ---------------------------
- ---------------------------
- ---------------------------
Telephone:
- ---------------------------
Facsimile:
- ---------------------------
Telex:
- ---------------------------
43
58
<PAGE>
IN WITNESS WHEREOF, intending to be legally bound hereby, the
undersigned Bank has caused this Agreement by and among the Financial
Institutions Party thereto, as the Banks and PNC BANK, NATIONAL ASSOCIATION,
as the Agent, to be executed by its duly authorized officers as of the date
first above written.
Maximum Dollar Amount of Revolving Credit NATIONAL CITY BANK
Commitment
$78,750,000 By: /S/
Revolving Credit Commitment Percentage ---------------------
22.5% Name: Terri L. Cable
Title: Senior Vice President
Address for notice purposes:
National City Bank
1900 East Ninth Street, 7th Floor
Cleveland, OH 44114
Attention: See Attached
Title: See Attached
Telephone: See Attached
Facsimile: See Attached
Address for Euro-Rate Funding if different from above:
National City Bank
1900 East Ninth Street, 7th Floor
Cleveland, OH 44114
Telephone: See Attached
Facsimile: See Attached
Telex: See Attached
44
59
<PAGE>
IN WITNESS WHEREOF, intending to be legally bound hereby, the
undersigned Bank has caused this Agreement by and among the Financial
Institutions Party thereto, as the Banks and PNC BANK, NATIONAL ASSOCIATION,
as the Agent, to be executed by its duly authorized officers as of the date
first above written.
Maximum Dollar Amount of Revolving Credit BANK ONE, MICHIGAN
Commitment
$35,000,000 By: /S/
Revolving Credit Commitment Percentage -----------------------
10% Name: William C. Goodhue
Title: Managing Director
Address for notice purposes:
Bank One, Michigan
611 Woodward Avenue
Detroit, MI 48226
Attention: William C. Goodhue
Title: Managing Director
Telephone: (313) 225-2227
Facsimile: (313) 226-0855
Address for Euro-Rate Funding if different from above:
- ---------------------------
- ---------------------------
- ---------------------------
Telephone:
- ---------------------------
Facsimile:
- ---------------------------
Telex:
- ---------------------------
45
60
<PAGE>
Exhibit 10(ii)
CREDIT AGREEMENT
(364 DAY)
Dated as of
October 22, 1999
By and Among
COOPER TIRE & RUBBER COMPANY
as the Borrower
and
THE FINANCIAL INSTITUTIONS PARTY HERETO
as the Banks
and
PNC BANK, NATIONAL ASSOCIATION
as the Agent
61
<PAGE>
TABLE OF CONTENTS
Page
----
INDEX OF EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . iii
INDEX OF SCHEDULES. . . . . . . . . . . . . . . . . . . . . . . . . iii
ARTICLE I. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Terms . . . . . . . . . . . . . . . . . . 10
1.3 Construction . . . . . . . . . . . . . . . . . . . . 10
ARTICLE II. THE REVOLVING CREDIT LOANS . . . . . . . . . . . . . 11
2.1 Short Term Revolving Credit Commitment . . . . . . . 11
2.2 Disbursements and Repayments . . . . . . . . . . . . 12
2.3 Reduction of Revolving Credit Commitment . . . . . . 13
2.4 Revolving Credit Loan Interest Rates . . . . . . . . 13
2.5 Special Provisions Relating to Euro-Rate Options . . 15
2.6 Capital Adequacy . . . . . . . . . . . . . . . . . . 17
2.7 Method of Disbursements and Payments . . . . . . . . 17
2.8 Interest Payment Dates . . . . . . . . . . . . . . . 17
2.9 Calculation of Interest, Facility Fee and Usage Fee. 18
2.10 Loan Account . . . . . . . . . . . . . . . . . . . . 18
2.11 Fees . . . . . . . . . . . . . . . . . . . . . . . . 18
2.12 Interbank Market Presumption . . . . . . . . . . . . 18
2.13 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE III. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . 19
3.1 Corporate Existence. . . . . . . . . . . . . . . . . 19
3.2 Corporate Authority. . . . . . . . . . . . . . . . . 19
3.3 Validity of this Agreement and the Revolving
Credit Notes . . . . . . . . . . . . . . . . . . . . 19
3.4 Financial Statements . . . . . . . . . . . . . . . . 20
3.5 Litigation; Title to Properties. . . . . . . . . . . 20
3.6 Encumbrances . . . . . . . . . . . . . . . . . . . . 20
3.7 ERISA Compliance . . . . . . . . . . . . . . . . . . 20
3.8 Tax Returns and Payments . . . . . . . . . . . . . . 20
3.9 Regulations G, T, U and X. . . . . . . . . . . . . . 21
3.10 Investment Company Act; Public Utilities Holding
Company Act. . . . . . . . . . . . . . . . . . . . . 21
3.11 Environmental Matters. . . . . . . . . . . . . . . . 21
3.12 No Restrictions. . . . . . . . . . . . . . . . . . . 21
3.13 Compliance with Applicable Laws. . . . . . . . . . . 21
3.14 Governmental Approval. . . . . . . . . . . . . . . . 22
3.15 No Event of Default; Compliance with Instruments . . 22
3.16 Employment Matters . . . . . . . . . . . . . . . . . 22
3.17 Patents, Trademarks, Copyrights, Licenses, Etc . . . 22
3.18 Year 2000 Problem. . . . . . . . . . . . . . . . . . 22
3.19 Solvency . . . . . . . . . . . . . . . . . . . . . . 22
3.20 Material Contracts; Burdensome Restrictions. . . . . 22
3.21 Disclosure . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IV. AFFIRMATIVE CONVENANTS . . . . . . . . . . . . . . . 23
4.1 Use of Proceeds. . . . . . . . . . . . . . . . . . . 23
4.2 Furnishing Information . . . . . . . . . . . . . . . 23
4.3 Preservation of Existence. . . . . . . . . . . . . . 24
4.4 Payment of Taxes and Fees. . . . . . . . . . . . . . 24
4.5 Insurance. . . . . . . . . . . . . . . . . . . . . . 24
4.6 ERISA Reports. . . . . . . . . . . . . . . . . . . . 25
4.7 Environmental Matters. . . . . . . . . . . . . . . . 25
4.8 Senior Debt Status . . . . . . . . . . . . . . . . . 25
4.9 Y2K Preparedness . . . . . . . . . . . . . . . . . . 26
i
<PAGE> 62
ARTICLE V. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . 26
5.1 Percentage of Consolidated Indebtedness to
Consolidated Capitalization. . . . . . . . . . . . . 26
5.2 Fixed Charge Coverage Ratio. . . . . . . . . . . . . 26
5.3 Creation of Encumbrances . . . . . . . . . . . . . . 26
5.4 Limitation on Mergers. . . . . . . . . . . . . . . . 26
5.5 Margin Stock . . . . . . . . . . . . . . . . . . . . 27
ARTICLE VI. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . 27
6.1 All Disbursements. . . . . . . . . . . . . . . . . . 27
6.2 Conditions Precedent for Closing . . . . . . . . . . 27
ARTICLE VII EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . 28
7.1 Immediate Defaults . . . . . . . . . . . . . . . . . 28
7.2 Defaults at Option of Banks. . . . . . . . . . . . . 29
7.3 Remedies upon Default. . . . . . . . . . . . . . . . 30
ARTICLE VIII. AGENT. . . . . . . . . . . . . . . . . . . . . . . . 31
8.1 Appointment and Grant of Authority . . . . . . . . . 31
8.2 Non-Reliance on Agent. . . . . . . . . . . . . . . . 31
8.3 Responsibility of the Agent and Other Matters. . . . 31
8.4 Action on Instructions . . . . . . . . . . . . . . . 32
8.5 Action in Event of Default . . . . . . . . . . . . . 32
8.6 Indemnification. . . . . . . . . . . . . . . . . . . 32
8.7 Agent's Rights as a Bank . . . . . . . . . . . . . . 32
8.8 Loan Advances. . . . . . . . . . . . . . . . . . . . 32
8.9 Payment to Banks . . . . . . . . . . . . . . . . . . 33
8.10 Notice of Event of Default . . . . . . . . . . . . . 33
8.11 Equalization of Banks. . . . . . . . . . . . . . . . 33
8.12 Successor Agent. . . . . . . . . . . . . . . . . . . 33
ARTICLE IX. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . 34
9.1 Waiver of Rights of Set-Off. . . . . . . . . . . . . 34
9.2 Amendments . . . . . . . . . . . . . . . . . . . . . 34
9.3 No Implied Waiver; Cumulative Remedies . . . . . . . 34
9.4 Certain Taxes. . . . . . . . . . . . . . . . . . . . 34
9.5 Notices. . . . . . . . . . . . . . . . . . . . . . . 35
9.6 Costs. . . . . . . . . . . . . . . . . . . . . . . . 35
9.7 Severability . . . . . . . . . . . . . . . . . . . . 35
9.8 Covenants to Survival. . . . . . . . . . . . . . . . 35
9.9 Investment . . . . . . . . . . . . . . . . . . . . . 36
9.10 Holiday Payments . . . . . . . . . . . . . . . . . . 36
9.11 Governing Law. . . . . . . . . . . . . . . . . . . . 36
9.12 Successors, Assigns and Participations . . . . . . . 36
9.13 Counterparts . . . . . . . . . . . . . . . . . . . . 37
9.14 Funding by Branch, Subsidiary or Affiliate . . . . . 37
9.15 Tax Withholding Forms. . . . . . . . . . . . . . . . 38
ii
<PAGE> 63
INDEX OF EXHIBITS
Principal
Exhibit Section
Reference Exhibit Reference Page
- --------- ------- --------- ----
A Revolving Credit Note 2.1d 12
B Request for Disbursement 2.2b 12
C Compliance Certificate 4.2 23
D Opinion of Counsel 6.2(xi) 28
INDEX OF SCHEDULES
Principal
Schedule Section
Reference Schedule Reference Page
- --------- -------- --------- ----
3.6 Encumbrances 3.6 20
iii
<PAGE> 64
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of October 22, 1999, by and among
COOPER TIRE & RUBBER COMPANY, as the Borrower (the "Borrower"), the FINANCIAL
INSTITUTIONS PARTY hereto, as the lenders (individually a "Bank" and
collectively the "Banks") and PNC BANK, NATIONAL ASSOCIATION, as the agent for
the Banks (the "Agent").
WITNESSETH:
WHEREAS, the Borrower desires to obtain loans from the Banks
pursuant to this Agreement in an aggregate amount not to exceed $300,000,000
at any one time outstanding and the Banks are willing to make such loans upon
the terms and conditions as hereinafter set forth.
NOW, THEREFORE, in consideration of mutual promises contained
herein and other valuable consideration and with the intent to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS.
1.1 Defined Terms. As used herein the following terms shall have the
meaning specified unless the context otherwise requires:
"Affiliate" shall mean any Person directly or indirectly
Controlling, Controlled by, or under common Control of the Borrower.
"Agent" shall mean PNC Bank, National Association in its capacity
as Agent or its successor appointed pursuant to Section 8.12 hereof.
"Agreement" shall mean this Credit Agreement as the same may from
time to time be amended or otherwise modified or supplemented.
"All-Cash Acquisition" shall mean the acquisition of The Standard
Products Company by the Borrower where the consideration for such acquisition
is comprised of one hundred percent (100%) cash pursuant to the Merger
Agreement.
"Applicable Margin" shall mean for each Revolving Credit Loan the
rate per annum determined from time to time based upon the Ratings in effect
by S&P and Moody's set forth under the relevant column heading below opposite
such Ratings:
RATINGS
Applicable Margin
(in basis points per annum)
S&P/Moody's Euro-Rate Option
----------- ---------------------------
A+/A1 or higher 29
A/A2 or lower 40.5
provided that, in the event that the Ratings of S&P and Moody's do not
coincide, the Applicable Margin set forth above opposite the higher of such
Ratings will apply; and provided further, in the event that one Rating is in
effect, the Applicable Margin set forth above for such Rating will apply.
Notwithstanding the foregoing, in the event that no Ratings are in effect at
such time of determination, the Applicable Margin will be determined in a
manner to be mutually agreed upon by the Agent and the Borrower and consented
to by the Banks.
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"Authorized Officer" shall mean the Chief Executive Officer, the
President, any Vice President, Controller, the Treasurer or the Assistant
Treasurer of the Borrower. The Agent shall be entitled to rely on the
incumbency certificates delivered pursuant to Subsection 6.2(ix) hereof for
the initial designation of each Authorized Officer. Additions or deletions to
the list of Authorized Officers may be made by the Borrower at any time by
delivering to the Agent a revised incumbency certificate.
"Bank" shall mean any of the several financial institutions party
to this Agreement.
"Bank Indebtedness" shall mean (i) the Revolving Credit Loans
then outstanding, together with all increases or refinancings thereof, (ii)
all interest, fees and any other amounts due hereunder by reason of advances
by the Banks, made to, or for the account of, the Borrower pursuant to this
Agreement, and (iii) all reasonable out-of-pocket expenses incurred by the
Banks and the Agent (including but not limited to fees and expenses of
counsel).
"Base Rate" shall mean the higher of (i) Agent's Prime Rate or
(ii) the sum of (A) the Federal Funds Effective Rate plus (B) fifty (50) basis
points (1/2%).
"Base Rate Option" shall mean the interest rate options, as
applicable, described in Subsections 2.4a(i) of this Agreement.
"Base Rate Portion" shall mean the Revolving Credit Loans bearing
interest under the Base Rate Option.
"Base Rate Segment" shall mean each Revolving Credit Loan bearing
interest under the Base Rate Option.
"Borrower" shall have the meaning ascribed to it in the preamble
hereto.
"Business Day" shall mean, (a) when used in any context other
than in reference to or in connection with Euro-Rate Segments, any day, other
than a Saturday or Sunday, on which the Banks are open for business in
Pittsburgh, Pennsylvania and New York, New York and (b) when used in the
context of a Euro-Rate Segment, any day, other than a Saturday or Sunday, on
which (i) commercial banks are open for business in Pittsburgh, Pennsylvania
and New York, New York and (ii) dealings in eurodollar funding between banks
may be carried on at the location at which each of the Banks transacts its
eurodollar funding and the Target (the Transeuro real time gross settlement
system) is operating.
"Capital Compensation Amount" shall have the meaning given it in
Section 2.6.
"Capitalized Lease" shall mean a lease under which the
obligations of the lessee would, in accordance with GAAP, be included in
determining total liabilities as shown on the liability side of a balance
sheet of the lessee.
"Capitalized Lease Obligations" shall mean the portion of the
obligations under a Capitalized Lease which would be shown as a liability on a
balance sheet in accordance with GAAP.
"Change in Law" shall have the meaning given it in Section 2.6.
"Closing Date" means the date on which each of the conditions
precedent set forth in Section 6.2 is satisfied.
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"Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor legislation thereto, together with all
regulations promulgated and rulings issued thereunder.
"Commitment" shall mean, as to any Bank, the sum of the Dollar
amount set forth opposite such Bank's name on its signature page hereto under
the heading "Maximum Dollar Amount of Revolving Credit Commitment".
"Compliance Certificate" shall mean the compliance certificate in
substantially the form of Exhibit "C" hereto, which shall be delivered by the
Borrower to the Banks in accordance with Section 4.2 hereof.
"Consolidated" shall mean the consolidation of accounts of two or
more Persons in accordance with GAAP.
"Consolidated Indebtedness" shall mean the Indebtedness of the
Borrower and its Subsidiaries determined on a Consolidated basis in accordance
with GAAP, consistently applied.
"Consolidated Net Income" shall mean the total net income (or
deficit) of the Borrower and its Subsidiaries for the period in question
(taken as a cumulative whole) determined in accordance with GAAP on a
consolidated basis, consistently applied.
"Consolidated Net Income Available for Fixed Charges" shall mean
the Consolidated Net Income for any period after adding back Fixed Charges and
provisions for taxes in respect of or measured by income or excess profits,
all in the respective amounts theretofore deducted in determining Consolidated
Net Income for such period.
"Consolidated Rentals" shall mean the aggregate of the Rentals of
the Borrower and its Subsidiaries payable during a specified period in
accordance with GAAP.
"Consolidated Stockholders' Equity" shall mean the total of those
items enumerated under the heading "Stockholders' Equity" in the Borrower's
then current balance sheet determined on a Consolidated basis in accordance
with GAAP, consistently applied.
"Consolidated Subsidiary" shall mean any Subsidiary which shall,
during any relevant period be Consolidated with the Borrower in any
Consolidated financial statement furnished to the Banks.
"Consolidated Total Assets" shall mean the assets of the Borrower
and its Subsidiaries, determined on a Consolidated basis in accordance with
GAAP consistently applied.
"Control (and its derivatives)": Either (i) the ownership of
twenty percent (20%) or more of any class of voting securities, partnership
interests or other equity interests of a Person, or (ii) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, partnership interests or other equity interests, by contract or
otherwise, including without limitation the power to elect a majority of the
directors of a corporation or trustees of a trust, as the case may be.
"Date of Determination" shall mean each date as of which any test
to be made or applied under this Agreement is made or applied.
"Disbursement" shall mean an advance of proceeds to the Borrower
made pursuant to Section 2.1.
"Disclosure Letter" shall mean that certain letter dated on or
prior to the Closing Date delivered by the Borrower to the Agent for
redelivery to the Banks that discusses certain pending legal matters.
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"Dollar" or "$" shall mean the legal tender of the United States
of America.
"Encumbrance" shall mean any encumbrance, mortgage, lien, charge,
pledge, security interest, priority payment, conditional sales agreement
right, or other title retention agreement right (including any Capitalized
Lease) in, upon or against any asset of the Borrower except for a pledge of
the stock of Cooper-Avon Tyres Limited in favor of the Borrower.
"Environmental Law" shall mean any and all statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or the Release of any Hazardous
Substances into the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as now in effect and as hereafter from time to time amended, or any
successor statute, and the rules and regulations promulgated thereunder, as
from time to time in effect.
"ERISA Affiliate" shall mean as of any relevant time any Person
subject to ERISA which is a member of a Controlled group of corporations of
which the Borrower is a member, and any trade or business which is subject to
ERISA (whether or not incorporated) under common Control with the Borrower,
and all other entities which, together with the Borrower, are treated as a
single employer under Section 414 of the Internal Revenue Code.
"Euro-Rate" shall mean with respect to any Revolving Credit Loans
denominated in Dollars comprising any Segment to which the Euro-Rate Option
applies for any Euro-Rate Interest Period, the interest rate per annum
determined by the Agent by dividing (the resulting quotient rounded upward to
the nearest 1/100th of 1% per annum) (i) the rate of interest determined by
the Agent in accordance with its usual procedures (which determination shall
be conclusive and binding upon the Borrower, absent manifest error on the part
of the Agent) to be the average of London interbank offered rates for U.S.
Dollars quoted by the British Bankers Association as set forth on Dow Jones
Markets Service (formerly known as Telerate) (or appropriate successor or, if
British Banker's Association or its successor ceases to provide such quotes a
comparable replacement determined by the Agent) display page 3750 (or such
other display page on the Dow Jones Markets Service system replacing page
3750), two (2) Business Days prior to the first day of such Euro-Rate Interest
Period for an amount comparable to such Revolving Credit Loans and having a
borrowing date and a maturity comparable to such Euro-Rate Interest Period by
(ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage. Such
Euro-Rate may also be expressed by the following formula:
Euro-Rate = Average of London interbank offered rates
quoted by BBA as shown on Dow Jones Markets
Service display page 3750 or appropriate successor
1.00 - Euro-Rate Reserve Percentage
"Euro-Rate Interest Period" shall mean any individual period of
one month, two months, three months or six months, commencing on the borrowing
date, conversion date or renewal date of the Euro-Rate Segment to which such
period shall apply; provided, however, that any Euro-Rate Interest Period
which would otherwise end on a day which is not a Business Day shall be
extended to the next Business Day unless such Business Day falls in the
succeeding calendar month in which case such Euro-Rate Interest Period shall
end on the next preceding Business Day; and provided further that any
Euro-Rate Interest Period which begins on the last day of a calendar month or
on a day for which there is no numerically corresponding day in the subsequent
calendar month during which such Euro-Rate Interest Period is to end shall end
on the last Business Day of such subsequent month.
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"Euro-Rate Option" shall mean the ability of the Borrower to have
all or any Segment of the Revolving Credit Loans then outstanding bear
interest at a fixed rate of interest related to the Euro-Rate, all as more
fully set forth in Subsection 2.4a(ii).
"Euro-Rate Portion" shall mean the Revolving Credit Loans then
outstanding bearing interest under the Euro-Rate Option.
"Euro-Rate Reserve Percentage" shall mean, for each Euro-Rate
Interest Period, that percentage (expressed as a decimal), as determined by
the Agent as to the Euro-Rate Segment as to which the rate is then being set,
which is in effect on the first day of such Euro-Rate Interest Period, (i) as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor), for determining the maximum reserve requirements (including
without limitation supplemental, marginal or emergency reserve requirements)
with respect to eurocurrency funding (currently referred to as "Eurocurrency
Liabilities") of a member bank in such system; and (ii) to be maintained by a
Bank as required for reserve liquidity, special deposit, or a similar purpose
by any governmental or monetary authority of any country or political
subdivision thereof (including any central bank), against (A) any category of
liabilities that includes deposits by reference to which a Euro-Rate is to be
determined, or (B) any category of extension of credit or other assets that
includes Revolving Credit Loans or Segments to which a Euro-Rate applies. The
Euro-Rate shall be adjusted automatically with respect to any Euro-Rate
Segment outstanding on the effective date of any change in the Euro-Rate
Reserve Percentage, as of such effective date.
"Euro-Rate Segment" shall mean each Revolving Credit Loan bearing
interest under the Euro-Rate Option for a discrete Interest Period.
"Event of Default" shall mean an occurrence of events or the
existence of conditions described in Sections 7.1 through 7.2 inclusive, and
any continuance thereof.
"Facility Fee" shall mean as of any Date of Determination the Facility Fee
Rate multiplied by the Revolving Credit Commitment.
"Facility Fee Rate" shall mean the rate per annum determined from
time to time based upon the Ratings in effect by S&P and Moody's set forth
under the relevant column heading below opposite such Ratings:
RATINGS
Facility Fee Rate
S&P/Moody's (in basis points per annum)
----------- ---------------------------
A+/A1 or higher 8.5
A/A2 or lower 9.5
provided that, in the event that the Ratings of S&P and Moody's do not
coincide, the Facility Fee Rate set forth above opposite the higher of such
Ratings will apply; and provided further, in the event that one Rating is in
effect, the Facility Fee Rate set forth above for such Rating will apply.
Notwithstanding the foregoing, in the event that no Ratings are in effect at
such time of determination, the Facility Fee Rate will be determined in a
manner to be mutually agreed upon by the Agent and the Borrower and consented
to by the Banks. The Facility Fee Rate shall be adjusted if necessary as of
the date of any change in the Ratings.
"Federal Funds Effective Rate" shall mean, for any day, the
weighted average (rounded upwards if necessary to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers as published the next
succeeding day by the Federal Reserve Bank of New York or, if such rate is not
<continued>
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so published for any day that is not a Business Day the average (rounded
upwards, if necessary to the next 1/100 of 1%) of the quotation for such day
for such transactions received by the Agent from three Federal funds brokers
of recognized standing selected by it.
"Fee Letter" shall mean that certain letter from the Agent to the
Borrower dated October 14, 1999, and setting forth the commitment fee and the
underwriting fee due the Agent and it's Affiliates.
"Fiscal Quarter" shall mean each successive three-month period
from January 1 to and including March 31, April 1 to and including June 30,
July 1 to and including September 30, and October 1 to and including December
31.
"Fiscal Year" shall mean each successive 12-month period from
January 1 to and including December 31.
"Fixed Assets" shall mean tangible assets (real, personal or
mixed) material to the ongoing business operations of the Borrower on a
Consolidated basis.
"Fixed Charges" shall mean the aggregate interest charges
(including the portion of payments under Capitalized Leases attributable to
interest) and Rentals payable by the Borrower and its Subsidiaries for any
period with respect to Indebtedness and lease obligations existing at any time
during such period, after eliminating all inter-company items in accordance
with GAAP.
"GAAP" shall mean generally accepted accounting principles in
effect in the United States which shall include, but not be limited to, the
official interpretations thereof as defined by the Financial Accounting
Standards Board, its predecessors and its successors.
"Governmental Person" means the government of the United States
or the government of any state or locality therein, or any foreign country or
any political subdivision or any governmental, quasi-governmental, judicial,
public or statutory instrumentality, authority, body or entity, or other
regulatory bureau, authority, body or entity of the United States or any state
or locality therein, including the Federal Deposit Insurance Company, the
Comptroller of the Currency or the Board of Governors of the Federal Reserve
System, any central bank or any comparable authority.
"Granting Bank" shall have the meaning assigned to that term in
Section 9.12(a)(ii).
"Guarantee" or "Guaranty" shall mean any obligation, direct or
indirect, by which a Person undertakes to guaranty, assume or remain liable
for the payment or performance of another Person's obligations, including but
not limited to (i) endorsements of negotiable instruments (except for deposits
or collection in the ordinary course of business), (ii) discounts with
recourse, (iii) agreements to pay or perform upon a second Person's failure to
pay or perform, (iv) remaining liable on obligations assumed by a second
Person, (v) except for the Borrower's obligations pursuant to Section 2.9,
agreements to maintain the capital, working capital solvency or general
financial condition of a second Person and (vi) agreements for the purchase or
other acquisition of products, materials, supplies or services, if in any case
payment therefor is to be made regardless of the non-delivery of such
products, materials or supplies or the non-furnishing of such services.
"Hazardous Substances" shall mean (i) any hazardous, toxic or
polluting substance regulated by any Environmental Law and (ii) any petroleum
products.
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"Indebtedness" shall mean as applied to any Person, without
duplication, all liabilities of such Person for borrowed money, direct or
contingent, whether evidenced by a bond, note, debenture, Capitalized Lease
Obligation, deferred purchase price arrangement, title retention device,
reimbursement agreement (except as any such reimbursement agreement relates to
the issuance of a letter of credit to support a surety or performance bond
which is a performance guaranty), Guaranty, book entry or otherwise.
"Ineligible Security" shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.
"Interest Period" shall mean a Euro-Rate Interest Period.
"Loan Account" shall mean the account maintained by the Agent
pursuant to Section 2.10.
"Loan Documents" shall mean this Agreement, the Revolving Credit
Notes and the Requests for Disbursement.
"Margin Stock" shall be defined herein as defined in Regulation U
promulgated by the Board of Governors of the Federal Reserve System as such
regulation is now in effect and may hereafter be amended.
"Material Adverse Effect" means, any change or effect that is
materially adverse to the assets, liabilities, results of operations or
financial condition of the Borrower and its Consolidated Subsidiaries taken as
a whole.
"Maturity Date" shall mean (i) the earlier of (A) October 21,
2000 or (B) such earlier date upon which Borrower completes the acquisition of
The Standard Products Company and such acquisition is not an All-Cash
Acquisition, (ii) such earlier date on which the Revolving Credit Commitment
shall terminate pursuant to Section 2.3 or (iii) such date, when, pursuant to
Article VII hereof, the Revolving Credit Commitment shall terminate.
"Merger" shall mean either the merger of The Standard Products
Company with and into Borrower or CTB Acquisition Company, a wholly-owned
Subsidiary of the Borrower, pursuant to the terms of the Merger Agreement.
"Merger Agreement" shall mean the Agreement and Plan of Merger
dated July 27, 1999, by and among the Borrower, CTB Acquisition Company and
The Standard Products Company.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions or has within any of
the preceding five plan years made or accrued an obligation to make
contributions.
"Option" shall mean any of the Base Rate Option or the Euro-Rate
Option.
"Other Taxes" shall have the meaning assigned to it in Section
2.13b.
"Participant" shall mean any financial institution or other
entity which purchases a Participation in any Revolving Credit Loan hereunder
from any Bank.
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"Participation" shall mean the sale, pursuant to Subsection
9.12b, by any Bank to any Participant of an undivided interest in all or any
part of the Revolving Credit Loans or any Commitment under the Revolving
Credit Commitment.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Encumbrances" shall mean those Encumbrances allowed
pursuant to Section 5.3 hereof.
"Person" shall mean any individual, corporation, association,
trust, firm, partnership, joint venture, unincorporated organization, limited
liability company, or other entity or enterprise or any government or any
political subdivision, department, agency or instrumentality thereof.
"Plan" shall mean at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 302 of ERISA and
Section 412 of the Internal Revenue Code and either (i) is maintained by a
Borrower and/or any ERISA Affiliate for employees of a Borrower and/or any
ERISA Affiliate or (ii) has at any time within the preceding five years been
maintained by a Borrower and/or any ERISA Affiliate for employees of a
Borrower and/or any ERISA Affiliate. For purposes of this Agreement, the term
"Plan(s)" shall not include a terminated employee pension benefit plan for
which final distribution of assets has been made in full compliance with the
provisions of Section 4041(b) of ERISA prior to the date of this Agreement,
and for which the Internal Revenue Service has issued a favorable
determination letter regarding termination of such plan.
"PNC" shall mean PNC Bank, National Association, a national
banking association.
"Portion" shall mean any Euro-Rate Portion or any Base Rate
Portion.
"Prime Rate" shall mean the rate of interest announced from time
to time by PNC at its principal office as its prime rate, which rate may not
be the lowest interest rate then being charged commercial borrowers by the
Agent.
"Pro Rata" shall mean (i) as to amounts due to or from any Bank
with respect to advances from or repayments to the Banks under the Revolving
Credit Commitment, each such Bank's Revolving Credit Commitment Percentage of
such advances and repayments, and (ii) with respect to all fees or costs due
the Banks hereunder an amount equal to each such Bank's Revolving Credit at
the Date of Determination.
"Ratings" shall mean the senior unsecured long term debt ratings
of the Borrower in effect from time to time by Moody's or S&P.
"RCRA" shall mean the Resource Conservation and Recovery Act, 42
U.S.C. 6901 et seq. and the regulations adopted pursuant thereto, as the same
may be amended.
"Release" or "Released" shall mean any release, spill, discharge,
leak or disposal of any Hazardous Substance which occurs in a manner which is
not in compliance with an Environmental Law.
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"Rentals" shall mean all amounts (whether or not designated as
rentals) payable by a lessee under any lease (other than a Capitalized Lease)
during a specific period after eliminating all inter-company items in
accordance with GAAP. If and to the extent the amount of any Rentals during
any future period is not definitely determinable under the lease in question,
the amount of such Rentals shall be estimated in such reasonable manner as the
Board of Directors of the affected Borrower may in good faith determine.
"Reportable Event" shall mean a "reportable event" described in
Section 4043(b) of ERISA and the regulations thereunder other than an event
described in 29 C.F.R. Part 2615.14 for which the 30-day notice to the PBGC is
waived.
"Request for Disbursement" shall mean the request for
Disbursement in substantially the form of Exhibit "C" hereto, which shall be
delivered to the Banks by the Borrower in accordance with Subsection 2.1b.
"Required Banks" shall mean Banks which in the aggregate hold at
least 51% of the sum of the Revolving Credit Commitments or if the Revolving
Credit Commitments have terminated, at least 51% of the Revolving Credit Loans
then outstanding.
"Revolving Credit Commitment" shall mean the several obligations
of the Banks, each in accordance with its Revolving Credit Commitment
Percentage, to make available to the Borrower the Revolving Credit Loans, all
as set forth in Section 2.1.
"Revolving Credit Commitment Percentage" shall mean as to any
Bank, the percentage set forth opposite such Bank's name on its signature page
hereto under the caption "Revolving Credit Commitment Percentage."
"Revolving Credit Loans" shall mean Disbursements made by the
Banks under the Revolving Credit Commitment which Disbursements in the
aggregate shall not exceed more than $300,000,000 at any one time outstanding.
"Revolving Credit Note" shall mean the evidence of Indebtedness
substantially in the form of Exhibit "A" hereto and all extensions, renewals,
amendments, substitutions and replacements thereto and thereof.
"S&P" shall mean Standard & Poor's Rating Group, a division of
McGraw-Hill, Inc.
"SEC" shall mean the Securities and Exchange Commission or any
successor agency.
"Section 20 Subsidiary" means the Subsidiary of the bank holding
company controlling any Lender, which Subsidiary has been granted authority by
the Federal Reserve Board to underwrite and deal in certain Ineligible
Securities.
"Segment" shall mean each individual part of the Revolving Credit
Loans having a separate Interest Period and bearing interest under the
Euro-Rate Option.
"Solvent" shall mean, with respect to any Person on a particular
date, that on such date (i) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (ii) the present fair salable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (iii) such Person is able to realize upon its assets and pay its
debts and other liabilities, contingent obligations and other commitments as
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they mature in the normal course of business, (iv) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (v) such
Person is not engaged or proposes to engage in business or a transaction, and
is not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such Person
is engaged or proposes to engage. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be computed
at the amount which, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"SPC" shall have the meaning given it in Section 9.12.
"Subsidiary" of any Person at any time shall mean (i) any
corporation or trust of which 51% or more (by number of shares or number of
votes) of the outstanding capital stock or shares of beneficial interest
normally entitled to vote for the election of one or more directors or
trustees (regardless of any contingency which does or may suspend or dilute
the voting rights) is at such time owned directly or indirectly by such Person
or one or more of such Person's Subsidiaries, (ii) any partnership of which
such Person is a general partner or of which 51% or more of the partnership
interests is at the time directly or indirectly owned by such Person or one or
more of such Person's Subsidiaries, or (iii) any limited liability company of
which such Person is a member or of which 51% or more of the limited liability
company interests is at the time directly or indirectly owned by such Person
or one or more of such Person's Subsidiaries.
"Taxes" shall have the meaning given it in Section 2.13a.
"Termination Event" shall mean (i) a Reportable Event with
respect to a Plan (or an event described in Section 4068(f) of ERISA with
respect to a Plan), or (ii) the withdrawal of the Borrower from a Plan during
a plan year in which the Borrower was a "substantial employer", as such term
is defined in Section 4001(a)(2) of ERISA, or the incurrence of liability by
the Borrower under Section 4064 of ERISA upon the termination of a Plan, or
(iii) the distribution of a notice of intent to terminate a Plan pursuant to
Section 4041(a)(2) of ERISA or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (iv) the institution of
proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA, or
(v) any other event or condition which might reasonably constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan.
"Voting Stock" shall mean stock of any class or classes (however
designated) the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of a majority of directors
(or persons performing similar functions) of the issuer thereof even though
the right so to vote has been suspended by the happening of such a
contingency.
"Withdrawal Liability" shall mean "withdrawal liability" as
defined by the provisions of Part 1 of Subtitle E to Title IV of ERISA.
"Year 2000 Problem" shall have the meaning ascribed to it in
Section 3.18.
1.2 Accounting Terms. All accounting terms used in this Agreement
and not otherwise defined herein shall have the respective meanings given to
such terms under GAAP, and shall be construed in accordance with GAAP.
1.3 Construction. Unless the context of this Agreement otherwise
clearly requires, the following rules of construction shall apply to this
Agreement and each of the other Loan Documents:
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(i) Number: Inclusion. References to the plural include the
singular, the singular the plural and the part the whole, "or" has the
inclusive meaning represented by the phrase "and/or," and "including" has the
meaning represented by the phrase "including without limitation."
(ii) Determination. References to "determination" of or by the
Agent or the Banks shall be deemed to include good faith estimates by the
Agent or the Banks (in the case of quantitative determinations) and good faith
beliefs by the Agent or the Banks (in the case of qualitative determinations)
and such determination shall be conclusive absent manifest error.
(iii) Discretion and Consent. Whenever the Agent or the Banks
are granted the right herein to act in its or their sole discretion or to
grant or withhold consent such right shall be exercised in good faith.
(iv) Documents Taken as a Whole. The words "hereof," "herein,"
"hereunder", "hereto" and similar terms in this Agreement or any other Loan
Document refer to this Agreement or such other Loan Document as a whole and
not to any particular provision of this Agreement or such other Loan Document.
(v) Headings. The article, section and other headings
contained in this Agreement or such other Loan Documents and the Table of
Contents (if any) preceding this Agreement or such other Loan Document are for
reference purposes only and shall not control or affect the construction of
this Agreement or such other Loan Document or the interpretation thereof in
any respect.
(vi) Implied References. Article, section, subsection, item,
clause, schedule and exhibit references are to this Agreement or to such other
Loan Document, as the case may be, unless otherwise specified.
(vii) Persons. Reference to any Person includes such Person's
successors and assigns, but, if applicable, only if such successors and
assigns are permitted by this Agreement or another Loan Document, as the case
may be, and reference to a Person in a particular capacity excludes such
Person in any other capacity.
(viii) Government Acts and Agreements. Reference to any
Governmental Acts, agreement or contract includes such Governmental Acts,
agreement or contract as the same may be amended, supplemented, modified,
extended, waived, consolidated, replaced or renewed from time to time, but
only to the extent permitted by, and effected in accordance with, the terms
thereof and of this Agreement and the other Loan Documents.
(ix) From, To and Through. Relative to the determination of any
period of time, "from" means "from and including", "to" means "to but
excluding", and "through" means "through and including".
(x) Shall; Will. References to "shall" and "will" are intended
to have the same meaning.
(xi) Writing; Written. References to "writing" include
printing, typing, lithography and other means of reproducing words in a
tangible visible form. References to "written" include "printed", "typed",
"lithographed" and other adjectives relating to words reproduced in a tangible
visible form consistent with the preceding sentence and also include
electronic images and images stored on computer disks, magnetic tape and like
media.
(xii) "To Borrower's knowledge" means the actual knowledge of
the corporate officers of the Borrower whose offices are in Findlay, Ohio.
ARTICLE II. THE REVOLVING CREDIT LOANS.
2.1 Revolving Credit Commitment.
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2.1a Revolving Credit Loans. The Banks severally agree, subject to
the terms and conditions hereof and relying on the representations and
warranties set forth herein, that the Borrower shall have the right to borrow,
repay and reborrow from the date hereof until the Maturity Date in Dollars an
aggregate principal amount not to exceed $300,000,000 at any one time
outstanding. Each Bank from time to time from the date hereof to the Maturity
Date, severally will lend to the Borrower at the principal office of the Agent
in Pittsburgh, Pennsylvania, amounts not exceeding the amount or percentage
opposite such Bank's name on such Bank's signature page hereto; provided,
however, in no event shall any Bank be required to advance an amount in excess
of the Dollar amount set forth opposite such Bank's name on such Bank's
Signature page hereto; and provided, further, that if any Bank fails to
advance to the Borrower that Bank's Pro Rata share of any Disbursement, the
remaining Banks shall not be required to advance to the Borrower the
defaulting Bank's Pro Rata share of such Disbursement.
2.1b Individual Revolving Credit Commitments. Subject to the
provisions of Section 2.3 hereof, each Bank shall be individually committed to
the Borrower for each Bank's Revolving Credit Commitment Percentage as set
forth opposite such Bank's name on the signature page hereto for such Bank as
adjusted from time to time to reflect any assignment made pursuant to Section
9.12(a)(i).
2.1c Revolving Credit Notes. The obligation of the Borrower to repay
the aggregate unpaid principal amount of the Revolving Credit Loans and
interest thereon shall be evidenced by the Revolving Credit Notes, in
substantially the form of Exhibit "A" attached hereto drawn by the Borrower to
the order of each Bank in the maximum amount of such Bank's Revolving Credit
Commitment. The principal amount actually due and owing to a Bank at any one
time shall be the aggregate unpaid principal amount of all Disbursements made
by such Bank pursuant to the Revolving Credit Commitment, all as shown on the
Loan Account established pursuant to Subsection 2.12 hereof. Each Revolving
Credit Note shall be dated the date hereof and shall be delivered to the Agent
on behalf of the Banks on such date. The outstanding Revolving Credit Loans
shall bear interest in accordance with the provisions of Section 2.4.
2.1d Repayment. On the Maturity Date, the Borrower shall repay in
full all amounts outstanding under the Revolving Credit Commitment, together
with all interest thereon to the date of such repayment and all other fees and
costs due hereunder.
2.2 Disbursements and Repayments.
2.2a Borrowings. Each Disbursement of the Revolving Credit Loans,
repayment thereof and subsequent reborrowing shall be made from or to the
Banks ratably in proportion to their respective Commitments set forth in
Subsections 2.1b and shall be in an aggregate Dollar amount of $1,000,000 or
if in excess of $1,000,000 in integral multiples of $1,000,000; provided,
however, that if a Disbursement is to bear interest at the Euro-Rate Option
then such Disbursement must be in the amounts required by Subsection 2.4d.
2.2b Disbursement Request. Each request for a Disbursement under
Section 2.1 shall be made to the Agent by an Authorized Officer of the
Borrower orally or in writing pursuant to the execution and delivery by the
Borrower to the Agent of a Request for Disbursement, substantially in the form
of Exhibit "B" hereto, (A) by 10:00 A.M. (Pittsburgh, Pennsylvania time) on
the date of the proposed Disbursement if the Disbursement is initially to bear
interest at the Base Rate Option or (B) by 10:00 A.M. (Pittsburgh,
Pennsylvania time) at least three (3) Business Days prior to the proposed
Disbursement with respect to Revolving Credit Loans if the Disbursement or any
part thereof is to initially bear interest at the Euro-Rate Option, in each
case specifying the proposed borrowing date and the Dollar amount thereof,
selecting the interest rate Option therefor pursuant to Section 2.4 hereof, if
<continued>
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appropriate, selecting the Interest Period therefor. Any oral request for a
Disbursement hereunder shall be followed immediately by the Borrower's written
Request for Disbursement. A request from the Borrower pursuant to this
Section 2.2b with respect to a Disbursement or any part thereof which is
initially to bear interest at the Euro-Rate Option, shall irrevocably commit
the Borrower to accept such Disbursement on the date specified in such
request. Promptly upon receipt of such notice, the Agent shall notify each
Bank of the Borrower's request and the amount of such requested Disbursement
which is to be advanced by such Bank. Each such Bank shall make its Pro Rata
share of such Disbursement available at the Agent's principal office in
immediately available funds no later than 3:00 P.M. (Pittsburgh, Pennsylvania
time) on the date of the requested Disbursement.
2.2c Repayments. Each repayment of the Revolving Credit Loans (other
than a repayment which entirely repays all such Revolving Credit Loans then
outstanding, whether on the Maturity Date or otherwise) shall be in the Dollar
amount of $1,000,000 or if in excess of $1,000,000, in integral multiples of
$1,000,000; provided, however, if such repayment is to repay Revolving Credit
Loans bearing interest at the Euro-Rate Option then such repayment must be in
the amounts required by Subsection 2.4d; and provided, further, that any such
repayment shall require notice to the Agent in accordance with the provisions
of Section 9.5(ii), (A) by 10:00 A.M. (Pittsburgh, Pennsylvania time) on the
date of the proposed repayment if the repayment is for Revolving Credit Loans
bearing interest at the Base Rate Option or (B) by 10:00 A.M. (Pittsburgh,
Pennsylvania time) at least one (1) Business Day prior to the proposed
repayment if the repayment is for Revolving Credit Loans bearing interest at
the Euro-Rate Option.
2.3 Reduction of Revolving Credit Commitment. At any time and from
time to time upon at least five (5) Business Days' prior written notice to the
Agent, the Borrower may terminate, in whole or in part, without penalty, the
then unused portion of the Revolving Credit Commitment, thereby causing a
corresponding abatement of the Facility Fee; provided, however, that the
Revolving Credit Commitment shall terminate without the necessity for further
action on behalf of the Borrower, the Agent or the Banks if such commitment is
reduced to $0. Each such reduction shall be in a minimum principal amount of
$10,000,000 or, if in excess of $10,000,000, in integral multiples of
$1,000,000. The Facility Fee shall cease to accrue with respect to the
portion of the Revolving Credit Commitment so terminated five (5) Business
Days after receipt of such notice or the date of such reduction, whichever is
later. Notice of termination once given shall be irrevocable and the portion
of the Revolving Credit Commitment so terminated shall not be available for
borrowing once such notice has been given under the terms hereof. The Agent
shall promptly notify each Bank of its Pro Rata share of such terminated
unused portion and the date of each such termination.
2.4 Revolving Credit Loan Interest Rates.
2.4a Interest Rate Options. During the term hereof and prior to the
Maturity Date, in accordance with the provisions of Subsection 2.4c, the
Borrower shall have the option of electing from time to time one or more of
the interest rate formulas set forth below to be applied by the Banks to
amounts then outstanding under Revolving Credit Loans. The actual interest
rates hereunder shall also be adjusted in accordance with Section 2.4b hereof.
(i) Base Rate Option. Interest under this Option shall accrue
at a rate per annum equal to the Base Rate. The actual interest rate in
effect under this Option shall be adjusted on the effective date of any change
in the Base Rate.
(ii) Euro-Rate Option. Interest under this Option shall accrue
for any Euro-Rate Interest Period selected at a rate per annum equal to the
sum of the Euro-Rate plus the Applicable Margin, and shall be adjusted as of
the date of any change of Ratings, if necessary.
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2.4b Interest Rate Upon Default.
(i)(A) Upon the occurrence of an Event of Default under Section
7.1, and during the continuance of such Event of Default, or (B) upon the
acceleration of the Bank Indebtedness for any reason, interest under the Base
Rate Option and the Euro-Rate Option shall be 2% per annum (200 basis points)
in excess of the applicable interest rate then in effect.
(ii) Upon receipt by the Borrower of notice from the Agent of
the occurrence of an Event of Default under Section 7.2 and during the
continuance of such Event of Default, interest under the Base Rate Option and
the Euro-Rate Option shall be 2% per annum (200 basis points) in excess of the
applicable interest rate then in effect.
(iii) The provisions of the immediately preceding items (i) and
(ii) to the contrary notwithstanding, if (A) the Borrower has not given notice
to the Banks of an Event of Default in accordance with the provisions of
Section 9.5 and (B) the Banks, after becoming aware of such Event of Default
and based on such Event of Default, wish to impose the default rate of
interest in accordance with either of the preceding items (i) and (ii), such
default rate of interest shall be effective as of the first day on which such
default rate would have been in effect had the Borrower given such notice in
accordance with the provisions of Section 9.5.
2.4c Interest Rate Option Elections. The Borrower shall have the
option to elect to have all or any Portion of the Revolving Credit Loans bear
interest at either of the Base Rate Option or the Euro-Rate Option, subject,
however to the other provisions of this Agreement. Notice of the Borrower's
election shall be made to the Agent orally or in writing by 10:00 A.M.
(Pittsburgh, Pennsylvania time) (i) on the proposed effective date of such
election, if such election is the election of the Base Rate Option; and, (ii)
at least three (3) Business Days prior to the proposed effective date of such
election, if such election is the election of the Euro-Rate Option. Each such
notice of election shall specify the Option and the amount of the Revolving
Credit Loans to bear interest at such Option, and in the case of the selection
of the Euro-Rate Option, the Interest Period therefor. Upon receipt of each
such notice from the Borrower, the Agent shall promptly notify each of the
Banks. Any oral notice of election hereunder shall be followed immediately by
the Borrower's written confirmation of such interest rate election. Elections
of or conversions to the Base Rate Option shall continue in effect until
converted as herein set forth. Elections of, conversions to or renewals of
the Euro-Rate Option shall expire as to each such Option at the expiration of
the applicable Interest Period; provided, however, that no Interest Period for
the Euro-Rate Option may be elected, converted or renewed if such Interest
Period will extend beyond the Maturity Date or so long as an Event of Default
has occurred and is continuing. Any Segment of any Revolving Credit Loan
outstanding for which no Interest Rate Option election has been made shall
bear interest at the Base Rate Option. Any Segment of any Revolving Credit
Loan bearing interest at the Euro-Rate, for which no Euro-Rate Interest Period
has been made shall have a Euro-Rate Interest Period of one month.
2.4d Limitation on Election of Euro-Rate Options. Each election of
the Euro-Rate Option for a Portion of the Revolving Credit Loans bearing
interest at the Euro-Rate Option must be in the minimum principal amount of
$5,000,000 or, if in excess of $5,000,000, in integral multiples of
$1,000,000. Any minimum amount of an election of the Euro-Rate Option
hereunder may be comprised, in whole or in part, of (i) existing Revolving
Credit Loans bearing interest at the Base Rate Option or the Euro-Rate Option
(provided the Interest Period relating thereto shall expire immediately prior
to the commencement of the Interest Period), (ii) the previously undisbursed
portion of the Revolving Credit Commitment or (iii) any combination of the
amounts described in the immediately preceding items (i) and (ii). At no time
during the term hereof may there be more than six (6) separate Interest
Periods in effect relating to Revolving Credit Loans.
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2.5 Special Provisions Relating to Euro-Rate Options.
2.5a Euro-Rate Unascertainable. In the event that on any date on
which a Euro-Rate would otherwise be set, the Agent shall have determined in
good faith (which determination shall be final and conclusive) that by reason
of circumstances affecting the interbank Eurodollar market adequate and
reasonable means do not exist for ascertaining the Euro-Rate, the Agent shall
give prompt notice of such determination to the Borrower and the Banks, and
until the Agent notifies the Borrower and the Banks that the circumstances
giving rise to such determination no longer exist, the right of the Borrower
to borrow under or renew such affected Option shall be suspended. Any notice
of borrowing under or renewal of such affected Option which was to become
effective during the period of such suspension shall be treated as a request
to borrow under or renew the Base Rate Option with respect to the principal
amount therein specified.
2.5b Illegality of Offering Euro-Rate. If any Bank shall determine in
good faith (which determination shall be final and conclusive) that compliance
by such Bank with any applicable law, treaty or governmental rule, regulation,
guideline, order, request or directive (whether or not having the force of
law), or the interpretation or application thereof by any governmental or
monetary authority, adopted after the date hereof, has made it unlawful for
such Bank to make or maintain its Revolving Credit Loans under the Euro-Rate
Option, such Bank shall give notice of such determination to the Borrower and
the Agent. Notwithstanding any provision of this Agreement to the contrary,
unless and until such Bank shall have given notice that the circumstances
giving rise to such determination no longer apply:
(i) with respect to any Euro-Rate Interest Periods, as the
case may be, thereafter commencing, interest on such Bank's Pro Rata share of
the corresponding Euro-Rate Portion shall be computed and payable in Dollars
under the Base Rate Option; and
(ii) on such date, if any, as shall be required by law, such
Bank's Pro Rata share of any Euro-Rate Portions, as the case may be, then
outstanding shall be automatically renewed at the Base Rate Option in Dollars
and the Borrower shall pay to such Bank the accrued and unpaid interest on
such Portions to (but not including) such renewal date.
The Borrower shall pay any Bank any additional amounts reasonably
necessary to compensate such Bank (on an after-tax basis) for any
out-of-pocket costs incurred by such Bank as a result of any renewal pursuant
to clause (ii) above on a day other than the last day of the relevant Interest
Period, including, but not limited to, any interest or fees payable by such
Bank to lenders of funds obtained by it to loan or maintain the lending of the
Revolving Credit Loans so converted. Such Bank shall furnish to the Borrower
and the Agent a certificate showing the calculation of the amount necessary to
compensate such Bank (on an after-tax basis) for such costs (which
certificate, in the absence of manifest error, shall be conclusive), and the
Borrower shall pay such amount to such Bank, as additional consideration
hereunder, within ten (10) days of the Borrower's receipt of such certificate.
2.5c Inability to Offer Euro-Rate. In the event that any Bank shall
determine, in its reasonable discretion, that it is unable to obtain deposits
in the interbank eurodollar market in sufficient amounts and with maturities
related to such Euro-Rate Portions which would enable such Bank to fund such
Euro-Rate Portions, then such Bank shall immediately notify the Agent of such
inability. The Agent, upon receipt of such notice, shall notify the Borrower
that the right of the Borrower to borrow under, convert to or renew the
Euro-Rate Option from such Bank shall be suspended. Following notification of
the suspension of the Euro-Rate Option with respect to any Bank, the Borrower
agrees to negotiate with such Bank for a modified Euro-Rate which will allow
such Bank to realize its anticipated and bargained for yield. In the event
<continued>
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that the Borrower and the affected Bank cannot agree on a modified Euro-Rate,
any notice of borrowing under, conversion to or renewal of the Euro-Rate
Option which was to become effective during the period of suspension shall be
treated as a request to borrow under, convert to or renew the Base Rate Option
with respect to the principal amount specified therein attributable to the
affected Bank. The affected Bank shall notify the Agent as to whether such
Bank and the Borrower have agreed on a modified Euro-Rate.
2.5d Yield Protection. If any law, rule, regulation, treaty or
official directive or the interpretation or application thereof by any
Governmental Person charged with the administration thereof or the compliance
with any guideline or request from any central bank or other Governmental
Person, adopted after the date hereof, (whether or not having the force of
law):
(i) subjects any Bank to any tax, levy, impost, charge, fee,
duty, deduction or withholding of any kind hereunder (other than any tax
imposed or based upon the income of such Bank and payable to any governmental
or taxing authority in the United States of America or any state thereof or
any foreign jurisdiction) or changes the basis of taxation of such Bank with
respect to payments by the Borrower of principal, interest or other amounts
due from the Borrower hereunder (other than any change which affects, and to
the extent that it affects, the taxation by the United States or any state
thereof or any foreign jurisdiction of the total net income of such Bank), or
(ii) imposes, modifies or deems applicable any reserve, special
deposit, special assessment or similar requirements against assets held by,
deposits with or for the account of or credit extended by such Bank (other
than such requirements which are included in the determination of the
Euro-Rate hereunder), or
(iii) imposes upon such Bank any other condition with respect to
this Agreement,
and the result of any of the foregoing is to increase the cost to such Bank,
reduce the income receivable by such Bank, reduce the rate of return on such
Bank's capital, or impose any expense upon such Bank with respect to any
Euro-Rate Portion of the Revolving Credit Loans by an amount which such Bank
in its sole but reasonable discretion deems to be material, such Bank shall
from time to time notify the Borrower and the Agent of the amount determined
by such Bank (which determination, absent error, shall be conclusive) to be
reasonably necessary to compensate such Bank (on an after-tax basis) for such
increase in cost, reduction in income, reduction in rate of return, or
additional expense, setting forth the calculations therefor, and the Borrower
shall pay such amount to such Bank, as additional consideration hereunder,
within ten (10) days of the Borrower's receipt of such notice.
2.5e Breakage Costs. In addition to the provisions of Subsections
2.5b and 2.5d hereof, the Borrower hereby agrees to reimburse each Bank
against any loss or expense which such Bank may sustain or incur as a
consequence of any default by the Borrower (i) in failing to accept any
borrowing or renewal hereunder to bear interest at the Euro-Rate Option on the
scheduled date, or (ii) in failing to make when due (whether by declaration,
acceleration or otherwise) any payment of any Euro-Rate Portion of the
Revolving Credit Loans or (iii) in making any payment or prepayment of any
Euro-Rate Portion of the Revolving Credit Loans or any part thereof on any day
other than the last day of the relevant Interest Period; including, in each
case, but not limited to, any loss of profit, premium or penalty incurred by
such Bank in respect of funds borrowed by it for the purpose of making or
maintaining any Revolving Credit Loan or any Portion thereof as determined by
such Bank in the exercise of its sole but reasonable discretion. The affected
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Bank shall furnish to the Borrower and the Agent a certificate showing the
calculation of the amount of any such loss or expense (which certificate,
absent error, shall be conclusive), and the Borrower shall pay such amount in
the currency in which such Revolving Credit Loan was made to the affected Bank
within ten (10) days of the Borrower's receipt of such certificate.
2.5f Method of Calculation. In determining the amount due each Bank
hereunder by reason of the application of this Section 2.5, each Bank may use
any reasonable averaging or attribution method; provided, however, each Bank
must use reasonable efforts to minimize such losses and costs.
2.6 Capital Adequacy. If (i) any adoption of or any change in or in
the interpretation of any law, rule or regulation, or (ii) compliance with any
guideline, request or directive of any United States Governmental Person or
United States quasi-governmental authority exercising control over banks or
financial institutions generally, including but not limited to regulations set
forth at 12 C.F.R. Part 208 (Appendix A) and 12 C.F.R. Part 225 (Appendix A),
or any court requires that the Commitments of any Bank hereunder (including,
without limitation, commitments and obligations in respect of revolving loans)
be treated as an asset or otherwise be included for purposes of calculating
the appropriate amount of capital to be maintained by such Bank or any
corporation controlling such Bank (a "Change in Law"), the result of which is
to reduce the rate of return on such Bank's capital as a consequence of such
commitments to a level below that which such Bank could have achieved but for
such Change in Law, taking into consideration such Bank's policies with
respect to capital adequacy, by an amount which such Bank deems to be
material, such Bank shall deliver to the Borrower a statement of the amount
necessary to compensate such Bank for the reduction in the rate of return on
its capital attributable to such commitments (the "Capital Compensation
Amount"). Such Bank shall determine the Capital Compensation Amount in good
faith, using reasonable attribution and averaging methods. Such Bank shall
from time to time notify the Borrower of the amount so determined. Such
amount shall be due and payable by the Borrower to such Bank ten (10) Business
Days after such notice is given.
2.7 Method of Disbursements and Payments. All Disbursements under
the Revolving Credit Loans shall be made by the Agent (i) making a wire
transfer of such funds to the account designated in the Borrower's Request for
Disbursement or (ii) transferring such funds into such accounts maintained
with the Agent designated in the Borrower's Request for Disbursement. All
payments of principal, interest or other costs relating to the Revolving
Credit Loans and the Facility Fee shall be made by the Borrower to the Agent
at the Agent's principal office or at such location as the Agent may direct by
12:00 NOON (Pittsburgh, Pennsylvania time) on the due date. All funds shall
be immediately available funds when either transferred via wire transfer into
the account designated by the Borrower or delivered by the Borrower to the
Agent.
2.8 Interest Payment Dates. Interest due on all outstanding
Revolving Credit Loans hereunder shall be payable in arrears: (i) with respect
to each Base Rate Segment, (A) on the last Business Day of each March, June,
September and December, (B) at maturity whether by acceleration or otherwise
and (C) after maturity, on demand until paid in full; (ii) with respect to
each Euro-Rate Segment, (A) on the last day of each Euro-Rate Interest Period
(provided, however, if the Interest Period chosen for any Euro-Rate Segment
exceeds three (3) months, interest on that Euro-Rate Segment shall be due and
payable every three (3) months during such Interest Period and on the last day
of such Interest Period), (B) at maturity, whether by acceleration or
otherwise, (C) on the Maturity Date including amounts, if any, due pursuant to
Section 2.5e hereof and (D) after maturity, on demand until paid in full.
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2.9 Calculation of Interest and Facility Fee. The interest rate
calculated pursuant to the Base Rate Option shall be calculated on the basis
of the actual number of days elapsed using (i) a year of 365-366 days if the
Base Rate is calculated utilizing the Prime Rate or (ii) a year of 360 days if
the Base Rate is calculated utilizing the Federal Funds Effective Rate, as the
case may be. The interest rate calculated pursuant to the Euro-Rate Option
and the Facility Fee shall be calculated on the basis of the actual number of
days elapsed using a year of 360 days.
2.10 Loan Account. The Agent shall open and maintain on its books a
Loan Account in the name of the Borrower, with respect to Disbursements made,
repayments, the computation and payment of interest, the Facility Fee and the
computation of other amounts due and sums paid to the Banks and the Agent
pursuant to this Article II. Except in the case of manifest error in
computation, such Loan Account shall be conclusive and binding on the Borrower
as to the amount at any time due to the Banks and the Agent from the Borrower
pursuant to this Article II.
2.11 Facility Fee The Borrower shall pay to the Agent, for the
benefit of the Banks, on the last day of each Fiscal Quarter and on the
Maturity Date, the Facility Fee at the Facility Fee Rate on the entire amount
of the Revolving Credit Commitment. The first payment hereunder shall be only
for the actual number of days elapsed between the Closing Date and December
31, 1999.
2.12 Interbank Market Presumption. For all purposes of this Agreement
and each Revolving Credit Note with respect to any aspects of the Euro-Rate,
any Revolving Credit Loan under the Euro-Rate Option, each Bank and the Agent
shall be presumed to have obtained rates, funding, currencies, deposits, and
the like in the applicable interbank market regardless whether it did so or
not; and, each Bank's and the Agent's determination of amounts payable under,
and actions required or authorized by this Agreement shall be calculated, at
each Bank's and the Agent's option, as though each Bank and the Agent funded
each Segment of Revolving Credit Loans under the Euro-Rate Option through the
purchase of deposits of the types and maturities corresponding to the deposits
used as a reference in accordance with the terms hereof in determining the
Euro-Rate applicable to such Revolving Credit Loans, whether in fact that is
the case.
2.13 Taxes.
2.13a No Deductions. All payments made by the Borrower hereunder and
under each Revolving Credit Note shall be made free and clear of and without
deduction for any present or future taxes, levies, imposts, deductions,
charges, or withholdings, and all liabilities with respect thereto, excluding
taxes imposed on the net income of any Bank and all income and franchise taxes
applicable to any Bank organized and existing under the United States or any
state thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by Law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Revolving Credit Note,
(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 2.13a) each Bank receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall timely pay
the full amount deducted to the relevant tax authority or other authority in
accordance with applicable law.
2.13b Stamp Taxes. In addition, the Borrower agrees to 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 from
the execution, delivery, or registration of, or otherwise with respect to,
this Agreement or any Revolving Credit Note (hereinafter referred to as "Other
Taxes").
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2.13c Indemnification for Taxes Paid by a Bank. The Borrower shall
indemnify each Bank 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 any Bank and any liability
(including penalties, interest, and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within thirty (30) days
from the date a Bank makes written demand therefor.
2.13d Certificate. Within 30 days after the date of any payment of any
Taxes by the Borrower, the Borrower shall furnish to each Bank, at its address
referred to herein, the original or a certified copy of a receipt evidencing
payment thereof. If no Taxes are payable in respect of any payment by the
Borrower, the Borrower shall, if so requested by a Bank, provide a certificate
of an officer of the Borrower to that effect.
2.13e Survival. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.13 shall survive the payment in full of
principal and interest hereunder and under any instrument delivered hereunder.
ARTICLE III. REPRESENTATIONS AND WARRANTIES.
To induce the Banks to enter into this Agreement and to make the
Revolving Credit Loans herein provided for, the Borrower represents and
warrants to the Banks that:
3.1 Corporate Existence.
3.1a The Borrower's Corporate Existence. The Borrower is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and it is duly qualified and in good standing as
a foreign corporation, authorized to do business in each jurisdiction where,
because of the nature of its activities or properties, such qualification is
required.
3.1b Subsidiaries' Corporate Existence. Each Subsidiary, is a
corporation, partnership, limited liability company or business trust duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, is qualified or licensed as a foreign
corporation, partnership, limited liability company or business trust
authorized to do business in all jurisdictions in which the character of the
properties owned or the nature of the activities conducted makes such
qualification or licensing necessary, and has all requisite power and
authority to own and operate its properties and to carry on its business as
now conducted. All of the issued and outstanding shares of capital stock of
each Subsidiary are validly issued and outstanding and fully paid and
nonassessable.
3.2 Corporate Authority. The Borrower is duly authorized to execute
and deliver this Agreement and the Revolving Credit Notes; all necessary
corporate action to authorize the execution and delivery of this Agreement and
the Revolving Credit Notes has been properly taken; and it is and will
continue to be duly authorized to borrow hereunder and to execute and deliver
the Revolving Credit Notes and to perform all of the other terms and
provisions of this Agreement.
3.3 Validity of this Agreement and the Revolving Credit Notes. The
execution and delivery of this Agreement does not, and the borrowings under
this Agreement, the execution and delivery of the Revolving Credit Notes with
respect thereto, and the performance by the Borrower of its obligations under
this Agreement and the Revolving Credit Notes will not contravene any
provision of law, of the Borrower's Restated Certificate of Incorporation or
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Bylaws or the provisions of any agreement to which the Borrower is a party or
by which the Borrower is bound; this Agreement constitutes the legal, valid
and binding obligation of the Borrower enforceable in accordance with its
terms; and the Revolving Credit Notes, when duly executed on behalf of the
Borrower and delivered in accordance with this Agreement will constitute the
legal, valid and binding obligations of the Borrower enforceable in accordance
with their respective terms.
3.4 Financial Statements. Copies of the Borrower's consolidated
audited financial statements as at December 31, 1998, certified by independent
certified public accountants and prepared in conformity with GAAP applied on a
basis consistent with that of the preceding fiscal year and period, and its
unaudited consolidated financial statement as at June 30, 1999, have been
furnished to each of the Banks, and each statement presents fairly (a) the
consolidated financial condition of the Borrower and its Subsidiaries as at
such dates and the results of their operations for the period then ended and
(b) transactions in its Consolidated stockholders' equity accounts, including
changes in net unrealized appreciation for the period then ended. There are
no material liabilities, direct or indirect, fixed or contingent, of the
Borrower or its Subsidiaries as of December 31, 1998 which are not reflected
therein or noted thereon. Since December 31, 1998, there has been no material
adverse change in the financial condition of the Borrower.
3.5 Litigation; Title to Properties. Except as set forth in Forms
10-K, 10-Q, 8-K or S-4 most recently filed with the SEC and the Disclosure
Letter, to the Borrower's knowledge, after diligent inquiry, there is no
litigation or governmental proceedings pending or threatened against the
Borrower or any Subsidiary the results of which might materially affect the
Borrower's or such Subsidiary's financial condition or operations. The
Borrower and each Subsidiary has good title to its respective properties and
assets except for defects in title which taken as a whole are not material to
the Borrower or the Subsidiary. Other than any liability provided for or
disclosed in this Section 3.5 or in the financial statements referred to in
Section 3.4, neither the Borrower nor any Subsidiary has any material
contingent liabilities.
3.6 Encumbrances. None of the assets of the Borrower or any
Subsidiary is subject to any Encumbrance, except for (a) current taxes not
delinquent and (b) such mortgages, security interests and Encumbrances which
are listed on Schedule 3.6 hereto or permitted pursuant to Section 5.3 hereof.
3.7 ERISA Compliance. The Borrower and each ERISA Affiliate is in
compliance with the provisions of ERISA relating to minimum funding
requirements. Neither the Borrower nor any ERISA Affiliate has incurred any
liability to the PBGC with respect to any Plan. To the best of the Borrower's
knowledge, all Plans and trusts maintained by the Borrower and its ERISA
Affiliates are intended to qualify under Code Section 401(a) and Code Section
501(a) and to the best of the Borrower's knowledge, no event has occurred
which would cause them not to qualify. To the best of the Borrower's
knowledge, all Plans have been maintained in compliance with the requirements
of ERISA and the Code.
3.8 Tax Returns and Payments. The Borrower and its Subsidiaries have
filed all tax returns required by law to be filed and have paid all taxes,
assessments and other governmental charges levied upon the Borrower and its
Subsidiaries or any of their respective properties, assets, income or
franchises which are due and payable other than (a) those presently payable
without penalty or interest or (b) those which are deemed by it to be unlawful
or excessive in whole or in part which are being contested or will be, in a
timely manner, contested in good faith by appropriate proceedings or (c) those
which would not, in the aggregate, have a Material Adverse Effect on the
financial condition, business operations or assets of the Borrower and its
Subsidiaries; and as to which the Borrower or the affected Subsidiary shall
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have set aside on its books reserves for such claim as are determined to be
adequate by application of GAAP consistently applied. The Borrower has
disclosed all disputed items on tax returns filed by the Borrower or any of
its Subsidiaries which, if settled adversely to the Borrower or the affected
Subsidiary, would have a Material Adverse Effect upon the financial condition,
business operations or assets of the Borrower and its Subsidiaries to the date
hereof to the Banks. The Internal Revenue Service has examined and settled
the Federal income tax liability of the affiliated group of companies,
including that of the Borrower and its domestic Subsidiaries, for all taxable
years up to and including the taxable year ended December 31, 1995. The
charges, accruals and reserves on the books of the affiliated group of
companies, including the Borrower and its Subsidiaries, in respect of Federal
and state income taxes for all fiscal periods to date are adequate, and the
Borrower knows of no unpaid assessments for additional Federal or state income
taxes for any such fiscal period or any basis therefor.
3.9 Regulations T, U and X, Ineligible Securities. The Borrower's
execution and delivery of this Agreement and the Revolving Credit Notes do not
directly or indirectly violate or result in a violation of Regulations T, U
and X of the Board of Governors of the Federal Reserve System. The Borrower
is not engaged in the business of purchasing or selling Margin Stock or
extending credit to others for the purpose of purchasing or carrying Margin
Stock and no part of the proceeds of any borrowing hereunder will be used to
purchase or carry any Margin Stock or for any other purpose which would
violate any of the regulations of such Board of Governors. Neither the
Borrower nor any Subsidiary intends to use any portion of the proceeds of the
Revolving Credit Loans, directly or indirectly, to purchase during the
underwriting period, or for a period of thirty (30) days thereafter,
Ineligible Securities being underwritten by a Section 20 Subsidiary.
3.10 Investment Company Act; Public Utilities Holding Company Act.
The Borrower is not an "investment company" as that term is defined in the
Investment Company Act of 1940, as amended from time to time. The Borrower is
not a "holding company", or a "subsidiary company" of a "holding company", or
an "affiliate" of a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
3.11 Environmental Matters. To the Borrower's knowledge, except as
set forth in the Forms 10-K, 10-Q, 8-K or S-4 most recently filed by the
Borrower with the SEC, the Borrower and its Subsidiaries are in material
compliance with all Environmental Laws.
3.12 No Restrictions. Neither the execution and delivery of this
Agreement, the Revolving Credit Notes and the other Loan Documents to which it
is or will become a party, the consummation of the transactions herein
contemplated nor compliance with the terms and provisions hereof or of the
Revolving Credit Notes, will conflict with or result in a breach of any of the
terms, conditions or provisions of the certificate of incorporation or the
by-laws of the Borrower or of any law or of any regulation, order, writ,
injunction or decree of any court or governmental agency or of any agreement,
indenture or other instrument to which the Borrower is a party or by which any
of them is bound or to which it is subject, or constitute a default thereunder
or result in the creation or imposition of any Encumbrance of any nature
whatsoever upon any of the property or assets of the Borrower pursuant to the
terms of any agreement, indenture or other instrument.
3.13 Compliance with Applicable Laws. The Borrower and each
Subsidiary, to the best of the Borrower's knowledge, (i) is not in default
with respect to any order, writ, injunction or decree of any court or of any
Federal, state, municipal or other Governmental Person; and (ii) is
substantially complying with all applicable statutes and regulations of each
Governmental Person having jurisdiction over its activities; except for those
orders, writs, injunctions, decrees, statutes and regulations, non-compliance
with which would not reasonably be likely to have a Material Adverse Effect.
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3.14 Governmental Approval. No order, authorization, consent,
license, validation or approval of, or notice to, filing, recording, or
registration with, any Governmental Person, or exemption by any Governmental
Person, is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of this Agreement or the Revolving Credit
Notes or (ii) the legality, binding effect or enforceability of this Agreement
or the Revolving Credit Notes.
3.15 No Event of Default; Compliance with Instruments. No event has
occurred and is continuing and no condition exists or will exist after giving
effect to the borrowings to be made on the Closing Date under the Loan
Documents which constitutes an Event of Default. The Borrower is not in
violation of (i) any term of its certificate of incorporation, by-laws or
other organizational documents or (ii) any material agreement or instrument to
which it is a party or by which it or any of its properties may be subject or
bound where such violation would be reasonably likely to have a Material
Adverse Effect.
3.16 Employment Matters. The Borrower and each Subsidiary are in
compliance with all employee benefit plans, employment agreements, collective
bargaining agreements and labor contracts and all applicable federal, state
and local labor and employment laws including, but not limited to, those
related to equal employment opportunity and affirmative action, labor
relations, minimum wage, overtime, child labor, medical insurance
continuation, worker adjustment and relocation notices, immigration controls
and worker and unemployment compensation, except where the failure to comply
would not be reasonably likely to have a Material Adverse Effect. There are
no outstanding grievances, arbitration awards or appeals therefrom arising out
of the several agreements referred to above or current or, to the knowledge of
the Borrower, threatened strikes, picketing, handbilling or other work
stoppages or slowdowns at facilities of the Borrower or any Subsidiary which
in any case would reasonably be likely to have a Material Adverse Effect. All
payments due from the Borrower or any Subsidiary on account of employee health
and welfare insurance which could reasonably be expected to have a Material
Adverse Effect if not paid have been paid or accrued as a liability on the
books of the Borrower or such Subsidiary.
3.17 Patents, Trademarks, Copyrights, Licenses, Etc The Borrower and
each other Subsidiary of the Borrower owns or possesses all the material
patents, trademarks, service marks, trade names, copyrights, licenses,
registrations, franchises, permits and rights necessary to own and operate its
properties and to carry on its business as presently conducted and planned to
be conducted by the Borrower, without known alleged or actual conflict with
the rights of others, which conflict would be reasonably likely to result in a
Material Adverse Effect.
3.18 Year 2000 Problem. The Borrower and each Subsidiary have
reviewed areas within their business and operations which could be adversely
affected by, and have developed or are developing a program to address on a
timely basis, the risk that certain computer applications used by the Borrower
or its Subsidiaries may be unable to recognize and perform properly date-
sensitive functions involving certain dates prior to and after December 31,
1999 (the "Year 2000 Problem"). The Year 2000 Problem will not be reasonably
likely to result in a Material Adverse Effect.
3.19 Solvency. On the date hereof the Borrower is, on a Consolidated
basis, Solvent.
3.20 Material Contracts; Burdensome Restrictions. All material
contracts relating to the business operations of the Borrower and each
Subsidiary are valid, binding and enforceable upon such Person and each of the
other parties thereto in accordance with their respective terms, and there is
no default thereunder with respect to the Borrower or Subsidiary party thereto
<continued>
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which would be reasonably likely to have a Material Adverse Effect, and there
is no default thereunder, to the Borrower's knowledge, with respect to parties
other than the Borrower or Subsidiary party thereto which would be reasonably
likely to have a Material Adverse Effect. No contract, lease, agreement or
other instrument to which the Borrower or any Subsidiary is a party or is
bound and no provision of any applicable Law or governmental regulation would
reasonably be expected to have a Material Adverse Effect.
3.21 Disclosure. Neither this Agreement nor any other document,
certificate or statement furnished to the Banks by or on behalf of the
Borrower pursuant to this Agreement contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not misleading. There is no fact
known to the Borrower which materially and adversely affects or in the future
may (so far as the Borrower now foresees) materially and adversely affect the
business, operations, affairs, condition, prospects, properties or assets of
the Borrower or any of its Subsidiaries which has not been set forth in this
Agreement or in the other documents, certificates and statements (financial or
otherwise) furnished to the Banks by or on behalf of the Borrower prior to or
on the date hereof.
ARTICLE IV. AFFIRMATIVE COVENANTS.
From the date hereof and thereafter until the termination of the
Revolving Credit Commitment and until the Revolving Credit Notes and the other
liabilities of the Borrower hereunder are paid in full, the Borrower agrees
that:
4.1 Use of Proceeds. Proceeds of the Revolving Credit Loans will be
used by the Borrower solely to finance in part the All-Cash Acquisition of The
Standard Products Company either directly or by supporting the issuance by the
Borrower of short term notes in the commercial paper market.
4.2 Furnishing Information.
4.2a Quarterly Reports. The Borrower will furnish to each of the
Banks, as soon as practicable but in any event within sixty (60) days after
the end of each Fiscal Quarter its Form 10-Q filed with the SEC. Each such
report shall be certified, subject to ordinary and usual year end adjustments,
as true, complete and correct pursuant to a Compliance Certificate
substantially in the form of Exhibit "C" hereto.
4.2b Annual Report. The Borrower will furnish to each of the Banks,
as soon as practicable but in any event within ninety (90) days after the end
of each Fiscal Year, a copy of its Form 10-K filed with the SEC including
therein its Consolidated financial statements certified without qualification
by a nationally recognized independent public accountant selected by the
Borrower. Such annual audited financial statements shall be certified as
true, complete and correct pursuant to the Compliance Certificate,
substantially in the form of Exhibit "C" hereto.
In addition, the Borrower will cause to be delivered to each of
the Banks a statement by the independent certified public accountants made in
connection with the preparation of the annual audited consolidated financial
statements of the Borrower and its Subsidiaries stating (i) that the
examination has included a review of the terms of the Agreement and the Notes,
(ii) whether their examination has disclosed the existence, during the Fiscal
Year covered by such financial statements, of any condition or event which
constitutes an Event of Default hereunder, or under any of the instruments, as
executed, annexed as exhibits hereto, or which, after notice or the lapse of
time or both, would constitute an Event of Default, and, if their examination
has disclosed such an event or condition, specifying the nature and period of
existence thereof, and (iii) that they have examined such Compliance
Certificate delivered pursuant to the foregoing paragraph and confirm the
computations set forth therein.
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4.2c General Information. The Borrower will deliver to the Banks such
additional financial statements, reports and other information (which shall
include, without limitation, any commercial paper dealer arrangements, any
note purchase agreements or private placements or documents equivalent thereto
and all regular and periodic reports filed with the SEC) as the Agent shall
reasonably request. Borrower shall also deliver to the Agent, within ten (10)
days of the receipt of the same, any reports, including management letters,
submitted to the Borrower by an independent certified public accountant in
connection with any annual, interim or special audit. Further, Borrower will
maintain, and will cause its Subsidiaries to maintain, proper books of record
and account in accordance with sound accounting practice in which full, true
and correct entries shall be made of all of their respective properties and
assets and their respective dealings and business affairs. Borrower will
permit, and will cause its Subsidiaries to permit, each of the Banks to have
access, at any time and from time to time, upon reasonable notice and during
normal business hours to visit any of their respective properties, to examine
any of their respective books of record and account and such reports and
returns as Borrower or any of its Subsidiaries may file with any governmental
department or agency, and to discuss any of Borrower's or any Subsidiary's
affairs and accounts with, and be advised about them by, the officers of
Borrower or the Subsidiary as the case may be.
4.3 Preservation of Existence. At its own cost and expense, the
Borrower will do, and subject to the provisions of Section 5.4 hereof, the
Borrower will cause its Subsidiaries to do, all things necessary to preserve
and keep in full force and effect their respective existence and qualification
under the laws of the jurisdictions of their respective organization, except
that the corporate existence of any Subsidiary may be terminated, or any of
its rights or franchises abandoned if, in the good faith judgment of the Board
of Directors of the Borrower, such termination or abandonment is in the best
interest of the Borrower and is not disadvantageous to the Banks. Further,
the Borrower will substantially comply, and will cause each Subsidiary
incorporated or formed in the United States of America to substantially
comply, with all applicable laws, statutes and regulations of the United
States of America and of any state or municipality, or of any agency or
department of any of the above in respect of the conduct of their respective
businesses. The Borrower will further cause any Subsidiary not incorporated
or formed in the United States of America to comply, in all material respects,
with all laws, statutes and regulations of the nation in which such Subsidiary
is incorporated or formed or any nation which, due to the nature of its
business, is subject to the laws of or of any region, state or municipality or
of any agency or department of any of the foregoing in respect to the conduct
of such Subsidiary's Business.
4.4 Payment of Taxes and Fees. The Borrower will promptly pay, and
discharge, and the Borrower will cause each Subsidiary to promptly pay and
discharge, all taxes, assessments and governmental charges and levies upon
them or upon any of their respective income, profits or property; provided,
however, that, for purposes of this Agreement, the Borrower or the affected
Subsidiary shall not be required to pay any tax, assessment, charge or levy
(a) which it deems to be unlawful or excessive in whole or in part and the
payment of which is being contested or will be, in a timely manner, contested
in good faith by appropriate proceedings, and (b) as to which the Borrower or
the affected Subsidiary shall have set aside on its books reserves for such
claim as are determined to be adequate by the application of generally
accepted accounting principles consistently applied.
4.5 Insurance. The Borrower will keep and maintain, and the Borrower
will cause each Subsidiary to keep and maintain, insurance with responsible
insurance companies, satisfactory to the Agent, on such of their respective
properties, in such amounts and against such risks as is customarily
maintained by similar businesses similarly situated and owning, leasing or
operating similar properties. The Borrower will furnish to the Agent on
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December 31 of each year during the term hereof a certificate of the
Authorized Officer of the Borrower certifying that such insurance is in force,
is adequate in nature and amount and complies with the Borrower's and each
Subsidiary's obligations under this Section 4.5.
4.6 ERISA Reports. The Borrower will (a) notify the Agent as soon as
possible, and in any event no later than the date notification is sent to the
PBGC, of any Reportable Event and action which is proposed to be taken with
respect thereto, (b) send to the Agent, if so requested by the Agent, copies
of each annual and other report with respect to each Plan filed with the
United States Secretary of Labor or the PBGC, (c) send to the Agent,
concurrent with the filing thereof, a copy of any request to United States
Secretary of the Treasury for a waiver or variance of the minimum funding
standards of Section 302 of ERISA and Section 412 of the Code with respect to
any Plan, (d) send to the Agent, promptly, but in any event within ten (10)
calendar days after the date notification is sent to the PBGC, a copy of any
notice of failure to make a required installment or other payment, and (e)
send to the Agent promptly after receipt thereof, a copy of any notice the
Borrower or any ERISA Affiliate may receive from the PBGC relating to the
intention of the PBGC (i) to terminate any Plan, (ii) to appoint a trustee to
administer any such Plan or (iii) to assess withdrawal liability.
4.7 Environmental Matters. The Borrower shall and the Borrower shall
cause each Subsidiary to:
(i) comply in all material respects with all Environmental
Laws;
(ii) not place or permit to be placed any Hazardous Substances
on any of its business premises except as allowed pursuant to Environmental
Law;
(iii) employ appropriate technology as the Borrower determines
is reasonably necessary to comply with Environmental Law;
(iv) dispose of any and all Hazardous Substances only at
facilities and with carriers that maintain valid permits under applicable
Environmental Law;
(v) defend and indemnify the Banks and the Agent and hold the
Banks and the Agent harmless from and against all loss, liability, damage and
expense, claims, costs, fines, penalties, including any interest, assessments
or attorney's fees, suffered or incurred by the Agent or any Bank, which
arise, result from or in any way relate to a breach or violation of any
Environmental Law by the Borrower or any Subsidiary or any Person acting for
or on behalf of the Borrower or any Subsidiary. The Borrower's and the
Subsidiaries' obligation hereunder shall survive the termination of this
Agreement; and
(vi) provide to the Agent for redistribution to the Banks,
notice of: (A) any material reportable Release of Hazardous Substances; (B)
any notification that Borrower or any Subsidiary is alleged to be a
"potentially responsible party" under any Environmental Law; or (C) with
respect to Borrower's operations, any material noncompliance with the
Environmental Law; provided (A), (B) or (C) immediately above might materially
affect the Borrower's financial condition or operations. Such notice shall be
given within a reasonable period after an Authorized Officer receives
knowledge of such Release or noncompliance.
4.8 Senior Debt Status. The Bank Indebtedness shall rank at least
pari passu in priority of payment with all other Indebtedness of the Borrower,
except Indebtedness of the Borrower secured by Encumbrances pursuant to
Section 5.3.
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4.9 Y2K Preparedness. The Borrower shall cause its Subsidiaries
other than those acquired pursuant to the Merger to take all commercially
reasonable action necessary and appropriate so that they shall have developed
all programs necessary to address, on a timely basis, the Year 2000 Problem as
it affects their respective accounting, information services, sales and
manufacturing operations. The Borrower shall cause its Subsidiaries acquired
pursuant to the Merger to take all commercially reasonable action necessary
and appropriate so that they have developed all programs necessary to address,
on a timely basis, the year 2000 Problem as it affects their respective
accounting, information services, sales and manufacturing operations, except
where failure to do so would not have a Material Adverse Effect.
ARTICLE V. NEGATIVE COVENANTS.
From the date hereof and thereafter until the later of the
termination of the Revolving Credit Commitment and the payment in full of the
Bank Indebtedness and the other liabilities of the Borrower hereunder, the
Borrower agrees that:
5.1 Percentage of Consolidated Indebtedness to Consolidated
Capitalization. The Borrower shall not, at any time, allow its Consolidated
Indebtedness to be greater than fifty-five percent (55%) of the sum of (i)
Consolidated Indebtedness plus (ii) Consolidated Stockholder's Equity.
5.2 Fixed Charge Coverage Ratio. The Borrower shall not incur or
remain liable for Consolidated Indebtedness owing to any Person if (a) the
incurrence of such Consolidated Indebtedness (after giving effect thereto)
would cause the Borrower to be in violation of any provision of this Agreement
or (b) the Borrower's Consolidated Net Income Available for Fixed Charges for
the period of the four (4) Fiscal Quarters immediately preceding the Date of
Determination is equal to or less than two hundred percent (200%) of all Fixed
Charges payable in respect of such period.
5.3 Creation of Encumbrances. The Borrower shall not create, assume,
incur or suffer to exist, nor will the Borrower allow any Subsidiary to
create, assume, incur or suffer to exist, any Encumbrance upon any of their
respective properties, whether now owned or hereafter acquired, nor acquire
nor agree to acquire any kind of property subject to an Encumbrance; provided,
however, that the foregoing restrictions shall not prevent the Borrower or any
of its Subsidiaries from creating, assuming, incurring or suffering to exist
Encumbrances, including but not limited to the Encumbrances set forth on
Schedule 3.6 hereto, which secure Indebtedness or obligations which do not
exceed, in the aggregate, at any one time outstanding, twenty percent (20%) of
the Borrower's Consolidated Total Assets.
5.4 Limitation on Mergers. The Borrower will not, nor will the
Borrower allow any Subsidiary to, directly or indirectly, sell, lease or
otherwise dispose of all or substantially all of its properties or assets, or
consolidate with, or merge into any other entity or permit any entity to merge
into it; provided however,
(i) any Subsidiary may sell or otherwise transfer its assets
to the Borrower or to a Subsidiary;
(ii) any Subsidiary may merge into or consolidate with the
Borrower or any other Subsidiary so long as the affected Borrower or other
Subsidiary is the surviving entity; or
(iii) the Borrower may be consolidated with any other
corporation, or permit any other corporation to be merged into the Borrower,
if
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(A) the surviving corporation shall be the Borrower and
immediately after such consolidation or merger a majority of the Borrower's
properties and assets will be located, and a majority of its business will be
conducted, in North America,
(B) immediately after giving effect to such transaction,
no condition or event shall exist which constitutes an Event of Default or
which, after notice or lapse of time or both, would constitute an Event of
Default, and
(C) no proceeds of Revolving Credit Loans shall be used
to fund, directly or indirectly, in whole or in part, any acquisition of or
merger with another Person which is contested by such Person and which has not
been approved by such Person's board of directors or other governing body.
In addition, the Borrower will not, nor will the Borrower allow
any of its Subsidiaries to acquire all or a substantial part, of the assets or
capital stock of any other entity if, after giving effect to such acquisition,
a condition or event shall exist which constitutes an Event of Default or
which, after the giving of notice or the lapse of time or both, would
constitute an Event of Default.
5.5 Margin Stock. No proceeds of the Revolving Credit Loans will be
used for the purchase of or carrying of any Margin Stock which would cause the
Revolving Credit Loans then outstanding to be in violation of Regulation U of
the Board of Directors of the Federal Reserve.
ARTICLE VI. CONDITIONS PRECEDENT.
6.1 All Disbursements. In addition to the satisfaction of the
conditions precedent set forth in Section 6.2, the obligation of each Bank to
make each Disbursement under its Revolving Credit Commitment is subject to the
performance by the Borrower of all of its obligations under this Agreement and
to the satisfaction of each of the following conditions precedent:
(i) Receipt by the Agent of a Request for a Disbursement;
(ii) The fact that, at the time of each Disbursement, no Event
of Default and no event which, with the giving of notice or lapse of time or
both would become such an Event of Default, shall have occurred and be
continuing;
(iii) The fact that, at the time of each Disbursement, the
Borrower is in compliance with each of the financial covenants set forth in
Sections 5.1 and 5.2 then applicable; and
(iv) The fact that at the time of each Disbursement the
representations and warranties contained in this Agreement are true and
correct in all material respects on and as of the date of such Disbursement.
Each borrowing by the Borrower shall be deemed to be, as of the date of such
borrowing, a representation and warranty by the Borrower as to the facts
specified in items (ii), (iii) and (iv) of this Section 6.1.
6.2 Conditions Precedent for Closing. The obligation of each Bank to
accept delivery of the Revolving Credit Notes is subject to the satisfaction
of each of the following conditions precedent:
(i) Agreement. Receipt by the Agent for redelivery to the
Banks of fully executed counterpart originals of this Agreement.
(ii) Revolving Credit Notes. Receipt by the Agent for
redelivery to the Banks of a fully executed Revolving Credit Note made payable
to each Bank.
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(iii) Commitment Fee. Receipt by the Agent of the commitment
fee in accordance with the Fee Letter.
(iv) Fee Letter. Receipt by the Agent of the fully executed
Fee Letter.
(v) Closing Certificate. The Borrower shall have delivered to
the Agent for redelivery to each Bank a certificate stating (a) the
representations and warranties made by the Borrower are true and correct on
the Closing Date, (b) that as of the Closing Date the Borrower is in
compliance with the covenants set forth in Articles IV and V hereof, and (c)
as of the Closing Date no Event of Default or no event which, with the giving
of notice or passage of time would become an Event of Default, has occurred
and is continuing.
(vi) Material Adverse Effect. No event has occurred to the
Borrower which would reasonably be likely to have a Material Adverse Effect on
the Borrower.
(vii) Material Litigation. Except for those matters previously
disclosed to the Agent and the Banks pursuant to Section 3.5, no action or
proceeding has been instituted before any Governmental Person which, if
adversely determined, would reasonably be likely to have a Material Adverse
Effect on the Borrower.
(viii) Insurance. Receipt by the Agent of evidence that the
Borrower's insurance coverage, as required by Section 4.5, is in effect.
(ix) Borrower's Resolutions. The Borrower shall have delivered
to the Agent for redelivery to each Bank a copy, duly certified as of the date
hereof by the secretary or assistant secretary of the Borrower, of (a) the
organizational documents of the Borrower, (b) the Bylaws of the Borrower, (c)
the resolutions of the Borrower's Board of Directors authorizing the
borrowings hereunder and the execution and delivery of this Agreement and the
Revolving Credit Notes, (c) all documents evidencing other necessary corporate
action and (e) all approvals or consents, if any, with respect to this
Agreement and the Revolving Credit Notes.
(x) Borrower's Incumbency Certificate. The Borrower shall
have delivered to the Agent for redelivery to each Bank a certificate of its
secretary or assistant secretary, certifying the names and offices of the
officers of the Borrower authorized to sign this Agreement, the Revolving
Credit Notes and all other documents or certificates to be delivered
hereunder, together with the true signatures of such officers.
(xi) Disclosure Letter. The Borrower shall have delivered to
the Agent for redelivery to each Bank an executed copy of the Disclosure
Letter.
(xii) Opinion of Counsel. The Borrower shall have delivered to
the Agent for redelivery to each of the Banks the favorable opinion of Richard
D. Teeple, Esquire, General Counsel of the Borrower (a) as to the action which
has been taken to authorize the making and performance by the Borrower of this
Agreement and the Revolving Credit Notes issued under this Agreement, (b) as
to the due authorization, execution, delivery and validity of this Agreement
and the Revolving Credit Notes to be issued under this Agreement and (c) as to
such other matters as the Agent may reasonably require substantially in the
form of Exhibit "D" hereto.
ARTICLE VII. EVENTS OF DEFAULT.
7.1 Immediate Defaults. If one or more of the following Events of
Default occur:
7.1a Insolvency.
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(i) Involuntary Proceedings. A proceeding shall have been
instituted in a court having jurisdiction seeking a decree or order for relief
in respect of the Borrower or any Subsidiary in an involuntary case under
federal or foreign bankruptcy laws, or any other similar applicable federal,
state or foreign law, now or hereafter in effect, or for the appointment of a
receiver, liquidator, trustee, sequestrator or similar official for the
Borrower or the affected Subsidiary or for a substantial part of its property,
or for the winding up or liquidation of its affairs, and such shall result in
the entry of an order for relief or remain undismissed or unstayed and in
effect for a period of sixty (60) days; or
(ii) Voluntary Proceedings. The Borrower or any Subsidiary
shall institute proceedings to be adjudicated a voluntary bankrupt, or shall
consent to the filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking reorganization under federal or foreign
bankruptcy laws, or any other similar applicable federal, state or foreign law
now or hereinafter in effect, or shall consent or acquiesce in or to the
filing of any such petition or shall consent to or acquiesce in the
appointment of a receiver, liquidator, trustee, sequestrator or similar
official for the Borrower or any Subsidiary or for a substantial part of its
property, or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due,
or action shall be taken by the Borrower or any Subsidiary in furtherance of
any of the aforesaid purposes; or
7.1b Dissolution. Except as permitted by Section 5.4 hereof, the
existence of the Borrower or any Subsidiary is terminated;
then, upon the happening of an event described in this Section 7.1, the
Revolving Credit Commitment shall immediately terminate and all Revolving
Credit Notes, then outstanding shall automatically become immediately due and
payable without presentment, demand, protest or notice of any kind, all of
which are hereby waived, and the Agent shall not be under any obligation to
issue or amend a Letter of Credit; further during the sixty (60) day period
referred to in Section 7.1a (i) the Banks shall be under no obligations to
make Revolving Credit Loans. The Agent shall promptly advise the Borrower,
and each of the Banks, of the occurrence, and the consequences, of the Event
of Default; provided, however, that failure to give notice to the Borrower
shall not impair the effect of such Event of Default.
7.2 Defaults at Option of Banks. If one or more of the following
Events of Default occur:
7.2a Payment. Default in the payment of (i) principal of or interest
on any Revolving Credit Note, and continuance thereof for five (5) days, or
(ii) any Facility Fee or the underwriting fee described in the Fee Letter and
continuance thereof for ten (10) days; or
7.2b Agreements. Default in the performance of any of the Borrower's
agreements (including but not limited to those set forth in Articles IV and V
hereof) herein set forth (and not constituting an Event of Default under any
of the preceding subsections of this Article VII) and continuance of such
default for thirty (30) days after notice thereof to the Borrower from the
Agent or any Bank; or
7.2c Other Indebtedness. Default by the Borrower in the payment when
due of any obligation in an amount in excess of $10,000,000 (including without
limitation the Credit Agreement dated September 1, 1999, by and among the
Borrower, the financial institutions party thereto and PNC Bank in its
capacity as agent thereunder) for money borrowed or guaranteed, (whether by
acceleration or otherwise) or default by the Borrower in the performance of
any agreement (including without limitation the Credit Agreement dated
September 1, 1999, by and among the Borrower, the financial institutions party
<continued>
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thereto and PNC Bank, National Association in its capacity as agent
thereunder) under which any such obligation is created if the effect of such
default is to cause such obligation to become, or to permit the holder or
holders of such obligations to declare such obligation, due prior to its
expressed maturity; or
7.2d Misrepresentation. Any representation or warranty made by the
Borrower herein is untrue in any material respect, or any schedule, statement,
report, notice or writing furnished by the Borrower or on behalf of the
Borrower to the Agent or the Banks is untrue in any material respect on the
dates as of which the facts set forth are stated or certified; or
7.2e Monetary Judgments. A final uninsured judgment which, with other
outstanding final judgments against the Borrower and its Subsidiaries, exceeds
the aggregate amount of $10,000,000 shall be rendered against the Borrower or
any Subsidiary and if, within sixty (60) days after entry thereof, such
judgment shall not have been vacated or discharged, written agreement shall
not have been reached with the plaintiff in such action providing for the
payment of any monetary award set forth in such judgment, or execution thereof
shall not have been stayed pending appeal, or if, within sixty (60) days after
the expiration of any such stay, such judgment shall not have been discharged
or a written agreement shall not have been reached with the plaintiff in such
action providing for the payment of any monetary award set forth in such
judgment; or
7.2f Litigation. Notice is given to the Borrower by the Agent or any
Bank that, in the opinion of the Agent or such Bank, any litigation or
governmental proceeding which has been instituted against the Borrower or any
Subsidiary will reasonably be likely to have a Material Adverse Effect, and
within thirty (30) days after such notice (i) such litigation or proceeding is
not dismissed or (ii) an opinion of the Borrower's or the affected
Subsidiary's trial counsel shall not have been received by each Bank, in form
and substance satisfactory to each Bank, that the Borrower or the affected
Subsidiary has a meritorious position and will ultimately prevail in the
proceedings; or
7.2g Change of Control. Any Person or group of Persons (within the
meaning of Sections 13(d) or 14(d)(2) of the Securities and Exchange Act of
1934), other than the then current officers or directors of the Borrower or an
underwriter which obtains such ownership as a result of effecting a firm
commitment underwriting of a secondary offering of the Borrower's voting stock
on behalf of such officers or directors, shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under said Act) of twenty percent (20%) or more of the
voting stock of the Borrower;
then, if any such event described in this Section 7.2 shall be continuing, the
Agent may, and upon request of the Required Banks will, declare the Revolving
Credit Commitment to be terminated and all Revolving Credit Notes then
outstanding to be due and payable, whereupon the Revolving Credit Commitment
shall immediately terminate and all then outstanding Revolving Credit Notes
shall become immediately due and payable, all without presentment, demand,
protest or further notice of any kind, all of which are hereby waived.
7.3 Remedies upon Default. In case any one or more Events of Default
shall occur and be continuing, the Agent on behalf of the Banks may proceed to
protect and enforce its rights by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained herein in the Revolving Credit Notes held by it or in any Letter of
Credit, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or
by law. No right, power or remedy conferred by this Agreement or by any
Revolving Credit Note upon any Bank shall be exclusive of any other right,
power or remedy referred to herein or therein or now or hereafter available at
law, in equity, by statute or otherwise.
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ARTICLE VIII. AGENT.
8.1 Appointment and Grant of Authority. The Banks hereby appoint PNC
Bank, National Association, and PNC Bank, National Association hereby agrees
to act, as the Agent under this Agreement. The Agent shall have and may
exercise such powers under this Agreement as are specifically delegated to the
Agent by the terms hereof, together with such other powers as are incidental
thereto.
8.2 Non-Reliance on Agent. Each Bank agrees that it has,
independently and without reliance on the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis of the Borrower and decision to enter into this Agreement and
that it will, independently and without reliance upon the Agent, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under this Agreement. The Agent shall not be required to keep informed as to
the performance or observance by the Borrower of this Agreement or any other
document referred to or provided for herein or to inspect the properties or
books of the Borrower or any of its Subsidiaries. The Agent shall use its
best efforts to relay to each Bank any information pertaining to the Borrower
or its Subsidiaries which comes into the possession of the Agent's Corporate
Banking Division; provided however, that except for notices, reports and other
documents and information expressly required to be furnished to each Bank by
the Agent hereunder, the Agent, in the absence of negligence or willful
misconduct, shall not be liable to any Bank for its failure to relay or
furnish to any Bank any information.
8.3 Responsibility of the Agent and Other Matters.
8.3a Ministerial Nature of Duties. As between the Banks and itself,
the Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement and those duties and liabilities shall be subject to
the limitations and qualifications set forth in this Article VIII. The duties
of the Agent shall be ministerial and administrative in nature.
8.3b Limitation of Liability. As between the Banks and itself,
neither the Agent nor any of its directors, officers, employees or agents
shall be liable, except for negligence or willful misconduct, for any action
taken or omitted (whether or not such action taken or omitted is within or
without the Agent's responsibilities and duties expressly set forth in this
Agreement) under or in connection with this Agreement or any other instrument
or document in connection herewith. Without limiting the foregoing, neither
the Agent nor any of its directors, officers, employees or agents shall be
responsible for, or have any duty to examine (i) the genuineness, execution,
validity, effectiveness, enforceability, value or sufficiency of (A) this
Agreement or the Revolving Credit Notes or (B) any document or instrument
furnished pursuant to or in connection with this Agreement or the Revolving
Credit Notes, (ii) the collectibility of any amounts owed by the Borrower,
(iii) the truthfulness of any recitals or statements or representations or
warranties made to the Agent in connection with this Agreement or the
Revolving Credit Notes, (iv) any failure of any party to this Agreement to
receive any communication sent, including any telegram, telex, teletype,
facsimile transmission, bank wire, cable, radiogram or telephone message sent
or any writing, application, notice, report, statement, certificate,
resolution, request, order, consent letter or other instrument or paper or
communication entrusted to the mails or to a delivery service, or (v) the
assets or liabilities or financial condition or results of operations or
business or credit worthiness of the Borrower.
8.3c Reliance. The Agent shall be entitled to act, and shall be fully
protected in acting upon, any telegram, telex, telecopy, bank wire or cable or
any writing, application, notice, report, statement, certificate, resolution,
request, order, consent, letter or other instrument or paper or communication
<continued>
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believed by the Agent in good faith to be genuine and correct and to have been
signed or sent or made by a proper Person. The Agent may consult counsel and
shall be entitled to act, and shall be fully protected in any action taken in
good faith, in accordance with advice given by counsel. The Agent may employ
agents and attorneys-in-fact and shall not be liable for the default or
misconduct of any such agents or attorneys-in-fact selected by the Agent with
reasonable care. The Agent shall not be bound to ascertain or inquire as to
the performance or observance of any of the terms, provisions or conditions of
this Agreement or the Revolving Credit Notes on the part of the Borrower.
8.4 Action on Instructions. The Agent shall be entitled to act or
refrain from acting, and in all cases shall be fully protected in acting or
refraining from acting, under this Agreement or the Revolving Credit Notes or
any other instrument or document in connection herewith or therewith in
accordance with instructions in writing or by telegraph from the appropriate
number of Banks, as the case may be.
8.5 Action in Event of Default. If an Event of Default has occurred,
the Banks shall immediately consult with one another in an attempt to agree
upon a mutually acceptable course of conduct. Failing unanimous agreement
upon a course of conduct and if the appropriate number of Banks wish to
declare an Event of Default or exercise their rights hereunder, the Agent will
exercise the rights of the Banks hereunder as directed by the appropriate
number of Banks.
8.6 Indemnification. To the extent the Borrower does not reimburse
and save harmless the Agent according to the terms hereof for and from all
costs, expenses and disbursements in connection herewith, such costs, expenses
and disbursements, shall be borne by the Banks on a Pro Rata basis. Each Bank
hereby agrees on such basis (a) to reimburse Agent for all such costs,
expenses and disbursements on request and (b) to the extent of each such
Bank's pro rata share, to indemnify and save harmless the Agent against and
from any and all losses, obligations, penalties, actions, judgments and suits
and other costs, expenses and disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against the Agent, other than
as a consequence of actual negligence or willful misconduct on the part of the
Agent, arising out of or in connection with this Agreement or the Revolving
Credit Notes or any agreement, instrument or document in connection herewith
or therewith, or any request of the Banks. Such indemnification of the Agent
shall include, without limitation, reimbursement for the costs, expenses and
disbursements in connection with defending itself against any claim or
liability, or answering any subpoena, related to the exercise or performance
of any of its powers or duties under this Agreement or the taking of any
action under or in connection with this Agreement or the Revolving Credit
Notes.
8.7 Agent's Rights as a Bank. With respect to (a) the commitment of
the Agent as a Bank hereunder and any Revolving Credit Loans of the Agent
under this Agreement, (b) any Revolving Credit Note and any interest of the
Agent in any Revolving Credit Note, (c) any amount due the Agent pursuant to
Article II hereof not evidenced by a Revolving Credit Note and (d) other
amounts due the Agent hereunder, the Agent shall have the same rights and
powers under this Agreement and any such Revolving Credit Note as any other
Bank and may exercise the same as though it were not the Agent. The Agent may
accept deposits from, lend money to, and generally engage, and continue to
engage, in any kind of business with the Borrower and any of its Subsidiaries
as if it were not the Agent.
8.8 Loan Advances. Except as otherwise provided in Section 8.8
hereof, unless the officers of the Agent responsible for administering this
Agreement shall have been notified in writing by a Bank prior to the date of
any Disbursement that such Bank will not make the amount which would
constitute its Pro Rata share of the Disbursement available to the Agent on
<continued>
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the date of such Disbursement, the Agent may (but shall not be required to)
assume that such Bank has made such amount available to the Agent on the date
of such advance and the Agent, in reliance upon such assumption, may make
available to the Borrower a corresponding amount in the applicable currency.
If such Pro Rata share is made available to the Agent on a date after the date
of such Disbursement, such Bank shall pay to the Agent on demand an amount in
the applicable currency equal to the product of (i) during each day included
in the period referred to in (iii) below, for each Dollar funded Revolving
Credit Loan, the Federal Funds Effective Rate, multiplied by (ii) the amount
of such Bank's Pro Rata share of such Disbursement, multiplied by (iii) a
fraction, the numerator of which is the number of days that elapse from and
including the date of such Disbursement to the date on which such Pro Rata
share of such Disbursement shall become immediately available to the Agent and
the denominator of which is 360. A statement of the Agent submitted to such
Bank with respect to any amounts owing under this Section 8.8 shall be prima
facie evidence as to the amount owed by such Bank to the Agent. If such
Bank's Pro Rata share is not in fact made available to the Agent by such Bank
within three (3) Business Days of such borrowing date, the Agent shall be
entitled to recover such amount with interest thereon at the rate per annum
applicable to the Base Rate Option during such period, on demand, from such
Bank.
8.9 Payment to Banks. Upon receipt by the Agent of any payment from
the Borrower in respect of such Banks' obligations, the Agent shall promptly
deliver to each Bank its Pro Rata share of such payment. When possible, such
delivery shall be accomplished in such a manner so as to allow each Bank to
receive its Pro Rata share of such payment in immediately available funds on
the same day that the funds representing payment due from the Borrower are
collected funds in the possession of the Agent. It is understood that the
Borrower has no obligation to the Banks to ensure that the Agent forwards to
each Bank its Pro Rata share of any such payment.
8.10 Notice of Event of Default. Each Bank shall use its best efforts
to notify immediately in writing the other Banks of any Event of Default of
which it becomes aware.
8.11 Equalization of Banks. The Banks agree among themselves that,
with respect to all amounts received by any Bank for application on any
obligation hereunder, or on the Revolving Credit Notes, equitable adjustment
will be made in the manner stated in the next succeeding sentence so that, in
effect, all such amounts will be shared pro rata among the Banks, whether
received by realization upon security, by the exercise of the right of set-off
or banker's lien, by counterclaim or cross action or from any other non-pro
rata source. Any Bank receiving any such amount shall purchase for cash from
the other Banks an interest in their Revolving Credit Notes in such amount as
shall result in a pro rata participation by each of the Banks in the aggregate
unpaid amount of all outstanding Revolving Credit Notes then held by the
Banks; provided that if all or any portion of such amount is hereafter
recovered from such Bank, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery without interest except as
required by law or by any judgment or settlement relating to such recovery.
8.12 Successor Agent. The Agent may resign upon sixty (60) days'
prior notice to the Banks and the Borrower. If such notice shall be given,
the Agent shall use reasonable commercial efforts during such sixty (60) day
period to procure a successor satisfactory to the Banks and reasonably
satisfactory to the Borrower to serve as agent hereunder and under the
Revolving Credit Notes. If at the end of such sixty (60) day period, the
Agent shall be unable to procure such a successor, the Banks shall appoint
from among the Banks a successor agent for the Banks. Any such successor
agent shall succeed to the rights, powers and duties of the Agent. Upon the
appointment of such successor agent or upon the expiration of such sixty (60)
day period (or any longer period to which the Agent has agreed), the former
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Agent's rights, powers and duties as Agent shall be terminated, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement; provided, however, the retiring Agent shall
continue to hold as custodian any collateral in its possession until such time
as it can deliver such collateral to the successor agent. After any retiring
Agent's resignation hereunder, the provisions of this Article VIII shall inure
to the benefit of such retiring Agent as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
ARTICLE IX. GENERAL PROVISIONS.
9.1 Waiver of Rights of Set-Off. The Banks waive any and all rights
of banker's lien, counterclaim and recoupment and any and all right to set-off
against the unpaid balance of the Revolving Credit Notes or any participation
therein as to any debt owing to the Borrower by the Banks, including, without
limitation, any funds in any deposit account (general or special) maintained
by the Borrower with the Banks.
9.2 Amendments. No amendment or waiver of any provision of this
Agreement or the Revolving Credit Notes, nor consent to any departure there-
from by the Borrower shall be effective unless the same shall be in writing
and signed by the Borrower, the Agent and the Required Banks, and then such
amendment, 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, unless in writing and signed by the Agent and
all of the Banks, shall do any of the following: (a) increase the Revolving
Credit Commitment of any Bank or the maximum aggregate principal amount of the
Revolving Credit Notes, (b) reduce the principal of, alter the formulas for
calculating interest on, the Revolving Credit Notes or reduce any fees
hereunder, (c) postpone any date fixed for any payment of principal of, or
interest on, the Revolving Credit Notes, the Facility Fee or any of the
obligations of the Borrower set forth in Article II, (d) amend the definition
of Required Banks, (f) amend this Section 9.2 or (g) amend any section hereof
which by its terms requires consent of all of the Banks. No amendment,
modification or waiver which would adversely affect the interest, rights or
obligations of the Agent shall be made without consent of the Agent. In the
case of any waiver or consent relating to any provision of this Agreement, the
parties shall be restored to their former positions and rights hereunder
(unless otherwise expressly set forth therein), and the Event of Default so
waived or consented to shall be deemed to be cured and not continuing; but no
such waiver or consent shall extend to any subsequent or other Event of
Default or impair any right consequent thereon.
9.3 No Implied Waiver; Cumulative Remedies.
9.3a No Implied Waiver. No delay on the part of Agent or any Bank in
the exercise of any power or right shall operate as a waiver thereof, nor
shall any single or partial exercise of any power or right preclude other or
further exercise thereof, or the exercise of any other power or right.
9.3b Cumulative Remedies. No delay or failure of the Agent or the
Banks in exercising any right, power or remedy under this Agreement shall
operate as a waiver hereof; nor shall any single or partial exercise thereof
or any abandonment or discontinuance of steps to enforce such a right, power
or remedy preclude any other or further exercise thereof or the exercise of
any other right, power or remedy hereunder. The rights and remedies in this
Agreement are cumulative and not exclusive of any rights or remedies
(including, without limitation, the right of specific performance) which the
Agent or the Banks would otherwise have.
9.4 Certain Taxes. The Borrower agrees to pay, and save the Agent
and the Banks harmless from, all liability for any stamp or other taxes which
may be payable with respect to the execution or delivery of this Agreement,
the Revolving Credit Notes or any other documents, instruments or transactions
pursuant to or in connection herewith or therewith, which obligation shall
survive the termination of this Agreement.
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9.5 Notices.
(i) Notice to the Banks. All notices required to be sent to
the Banks shall be sent to the address set forth on each Bank's signature page
hereto, by hand delivery, overnight delivery, telex, telegram, telecopier or
by the United States Mail, first class postage prepaid. Such notices shall be
effective three (3) days after mailing or when received, whichever is earlier.
(ii) Notice to the Agent. All notices required to be sent to
the Agent shall be sent to the following address by hand delivery, overnight
delivery, telex, telegram, telecopier or by the United States Mail, first
class postage prepaid:
PNC Bank, National Association
Agency Services
One PNC Plaza - 22nd Floor
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222-2707
Attn: Arlene M. Ohler
Telex: 8666533
Telephone: (412) 762-3627
Telecopier: (412) 762-8672
Such notices shall be effective three (3) days after mailing or when received,
whichever is earlier.
(iii) Notice to the Borrower. All notices required to be sent
to the Borrower shall be sent to the following addresses, by hand delivery,
overnight delivery, telex, telegram, telecopier or by the United States Mail,
first class postage prepaid:
Cooper Tire & Rubber Company
Lima and Western Avenues
Findlay, Ohio 45840
Attn: Chief Financial Officer
Telex: 242422
(answerback COOPERTIRE FLY)
Telecopier: (419) 424-4212
Telephone: (419) 424-4320
All such notices shall be effective three (3) days after mailing or when
received, whichever is earlier.
The Borrower, each Bank and the Agent may each change the address
for service of notice upon it by a notice in writing to the other parties
hereto complying with the terms of this Section 9.5.
9.6 Costs. The Borrower will pay all reasonable out-of-pocket costs
and expenses of (i) the Agent (including without limitation the reasonable
fees and disbursements of the Agent and the Agent's special counsel) in
connection with the preparation of the Loan Documents, and waivers or
amendments thereto and (ii) the Agent and the Banks and their respective
counsel in connection with the enforcement of the Loan Documents.
9.7 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
enforceability without invalidating the remaining portions hereof or affecting
the validity or enforceability of such provision in any other jurisdiction.
9.8 Covenants to Survival. Until payment in full of the Bank
Indebtedness and the termination of the Revolving Credit Commitment, all
representations, warranties, covenants and agreements of the Borrower
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contained herein or made in writing in connection herewith shall survive the
advances of money made by the Banks to the Borrower hereunder and the delivery
of the Revolving Credit Notes and all such representations, warranties,
covenants and agreements shall inure to the benefit of the successors and
assigns of the Banks and the Agent, whether or not so expressed.
9.9 Investment. Each Bank represents that it is the present
intention of such Bank to acquire each Revolving Credit Note made to its order
for its own account for the purpose of investment and not with a view to the
distribution or sale thereof, subject, nevertheless, to the necessity that
such Bank remain in control at all times of the disposition of property held
by it for its own account; it being understood that the foregoing
representation shall not affect the character of the Revolving Credit Loans as
commercial lending transactions.
9.10 Holiday Payments. If any payments to be made by the Borrower
hereunder shall become due on a date not a Business Day, such payments shall
be made on the next succeeding Business Day and such extension of time shall
be included in computing any interest in respect of such payment.
9.11 Governing Law. This Agreement, each Revolving Credit Note shall
each be a contract made under and governed by the laws of the Commonwealth of
Pennsylvania.
9.12 Successors, Assigns and Participations.
9.12a Successors and Assigns.
(i) This Agreement shall be binding upon the Borrower, the
Banks and the Agent and their respective successors and assigns, and shall
inure to the benefit of the Borrower, the Banks and the Agent and the
successors and assigns of the Banks and the Agent. The foregoing sentence
notwithstanding, the Borrower may not, without the consent of all of the
Banks, nor shall any Bank without the consent of the Borrower and the Agent,
such consent not to be unreasonably withheld, assign or transfer its rights or
duties hereunder; provided, however, that at any time that an Event of Default
exists the Borrower's consent to any assignment by a Bank of its rights and
duties hereunder shall not be required. Further, no consent shall be required
for assignments to the Federal Reserve Bank of New York or for assignments
described in Section 9.12(a)(ii). Each assignment by a Bank (A) shall be in a
minimum amount of $5,000,000; and (B) shall be evidenced in a manner in form
and substance satisfactory to the Agent. The Agent shall be entitled to
receive, from the assigning Bank, a fee of $3,500.00 at the time of each
assignment for processing such assignment.
(ii) Notwithstanding anything to the contrary contained herein,
any Bank (a "Granting Bank") may grant to a special purpose funding Person (an
"SPC") the option to fund all or any part of any Revolving Credit Loan that
such Granting Bank would otherwise be obligated to fund pursuant to this
Agreement; provided, however, that (A) nothing herein shall constitute a
commitment by any SPC to fund any Revolving Credit Loan, and (B) if an SPC
elects not to exercise such option or otherwise fails to fund all or any part
of such Revolving Credit Loan, the Granting Bank shall be obligated to fund
such Revolving Credit Loan pursuant to the terms hereof; and, provided,
further, (A) all credit decisions relating to any such funding by the SPC
shall be made by the Granting Bank for and on behalf of the SPC, (B) the SPC
shall have no voting rights under any of the Loan Documents, and (C) except
for the payment of principal, interest and fees, if any, the Agent shall be
entitled to treat the Granting Bank as the Bank for all purposes hereunder as
if the SPC had made no funding of any Revolving Credit Loan. The funding of a
Revolving Credit Loan by an SPC hereunder shall utilize the Revolving Credit
Commitment of the Granting Bank to the same extent, and as if, such Revolving
Credit Loan were funded by such Granting Bank. Each party hereto hereby agrees
<continued>
36
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<PAGE>
that no SPC shall be liable for any indemnity or payment under this Agreement
for which a Bank would otherwise be liable for so long as, and to the extent,
the Granting Bank provides such indemnity or makes such payment.
Notwithstanding anything to the contrary contained in this Agreement, any SPC
may disclose on a confidential basis any non-public information relating to
its funding of Revolving Credit Loans to any rating agency, commercial paper
dealer or provider of any surety or guarantee to such SPC. This Section may
not be amended without the prior written consent of each Granting Bank, all or
any part of whose Revolving Credit Loan is being funded by an SPC at the time
of such amendment.
9.12b Participations. Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at any time
sell to one or more Participants participating interests in any Revolving
Credit Loan owing to such Bank, the interest of such Bank in any Revolving
Credit Note of such Bank, or any other interest of such Bank hereunder. In
the event of any such sale by a Bank of participating interests to a
Participant, such Bank's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof, such Bank shall remain the holder of
any such Revolving Credit Note for all purposes under this Agreement
(including voting rights hereunder), and the Borrower and the Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. As between any Bank and
its Participant, the Participant's ability to direct such Bank to vote shall
be limited to (i) an increase in the Revolving Credit Commitment, (ii) a
reduction in the interest rate or fees due the Banks, and (ii) a postponement
of the scheduled payments of principal or interest.
9.13 Counterparts. This Agreement may be executed in as many
identical counterparts as shall be convenient and by the different parties
hereto on separate counterparts. This Agreement shall become binding when
each of the Agent, the Banks and the Borrower has executed at least one
counterpart. Immediately after the execution of counterparts and solely for
the convenience of the parties hereto, the Agent, the Borrower and the Banks
will execute sufficient counterparts so that the Borrower shall have
counterparts executed by each of the Banks and the Agent and the Banks shall
have counterparts executed by the Borrower, the Agent, and the Banks. All
counterparts shall constitute but one and the same instrument.
9.14 Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. Each Bank shall have the right from time
to time, without notice to the Borrower, to deem any branch, Subsidiary or
Affiliate (which for the purposes of this Section 9.14 shall mean any
corporation or association which is directly or indirectly controlled by or is
under direct or indirect common control with any corporation or association
which directly or indirectly controls such Bank) of such Bank to have made,
maintained or funded any Revolving Credit Loan to which the Euro-Rate Option
applies at any time, provided that immediately following (on the assumption
that a payment was then due from the Borrower to such other office) and as a
result of such change the Borrower would not be under any greater financial
obligation than they would have been in the absence of such change. Notional
funding offices may be selected by each Bank without regard to the Bank's
actual methods of making, maintaining or funding the Revolving Credit Loans or
any sources of funding actually used by or available to such Bank.
(b) Actual Funding. Each Bank shall have the right from time to
time to make or maintain any Revolving Credit Loan by arranging for a branch,
Subsidiary or Affiliate of such Bank to make or maintain such Revolving Credit
Loan subject to the last sentence of this Section 9.14(b). If any Bank causes
a branch, Subsidiary or Affiliate to make or maintain any part of the
Revolving Credit Loans hereunder, all terms and conditions of this Agreement
<continued>
37
101
<PAGE>
shall, except where the context clearly requires otherwise, be applicable to
such part of the Revolving Credit Loans to the same extent as if such
Revolving Credit Loans were made or maintained by such Bank, provided that in
no event shall any Bank's use of such a branch, Subsidiary or Affiliate to
make or maintain any part of the Revolving Credit Loans hereunder cause such
Bank or such branch, Subsidiary or Affiliate to incur any cost or expenses
payable by the Borrower hereunder or require the Borrower to pay any other
compensation to any Bank which would otherwise not be incurred.
9.15 Tax Withholding Forms. Each Bank or assignee or participant of a
Bank that is not incorporated under the Laws of the United States of America
or a state thereof agrees that it will deliver to each of the Borrower and the
Agent two (2) duly completed copies of the following: (i) Internal Revenue
Service Form W-9, 4224 or 1001, or other applicable form prescribed by the
Internal Revenue Service, certifying that such Bank, assignee or participant
is entitled to receive payments under this Agreement and the other Loan
Documents without deduction or withholding of any United States federal income
taxes, or is subject to such tax at a reduced rate under an applicable tax
treaty, or (ii) Internal Revenue Service Form W-8 or other applicable form or
a certificate of the Bank, assignee or participant indicating that no such
exemption or reduced rate is allowable with respect to such payments. Each
assignee or participant shall deliver such form or certificate on or before
the effective date of such assignment or participation. Each Bank, assignee
or participant which so delivers a Form W-8, W-9, 4224 or 1001 further
undertakes to deliver to each of the Borrower and the Agent two (2) additional
copies of such form (or a successor form) on or before the date that such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be reasonably requested by the
Borrower or the Agent, either certifying that such Bank, assignee or
participant is entitled to receive payments under this Agreement and the other
Loan Documents without deduction or withholding of any United States federal
income taxes or is subject to such tax at a reduced rate under an applicable
tax treaty or stating that no such exemption or reduced rate is allowable.
The Agent shall be entitled to withhold United States federal income taxes at
the full withholding rate unless the Bank, assignee or participant establishes
an exemption or that it is subject to a reduced rate as established pursuant
to the above provisions.
38
102
<PAGE>
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 written above.
ATTEST/WITNESS: COOPER TIRE & RUBBER COMPANY
- -------------------------- By /S/
Name: ------------------------------
- -------------------------- Name:
Title: ------------------------------
- -------------------------- Title:
------------------------------
By /S/
------------------------------
Name:
------------------------------
Title:
------------------------------
PNC BANK, NATIONAL ASSOCIATION
as Agent
By /S/
------------------------------
Name:
------------------------------
Title:
------------------------------
39
103
<PAGE>
IN WITNESS WHEREOF, intending to be legally bound hereby, the
undersigned Bank has caused this Agreement by and among COOPER TIRE & RUBBER
COMPANY as the Borrower, the Financial Institutions Party thereto, as the
Banks, and PNC BANK, NATIONAL ASSOCIATION, as the Agent, to be executed by its
duly authorized officers as of the date first above written.
Maximum Dollar Amount of Revolving PNC BANK, NATIONAL ASSOCIATION
Credit Commitment
$300,000,000 By: /S/
Revolving Credit Commitment Percentage -------------------------------
100% Name: Joseph G. Moran
Title: Vice President
Address for notice purposes:
PNC Bank, N.A.
One PNC Plaza, 22nd Floor
249 Fifth Avenue
Pittsburgh, PA 15222
Attention: Arlene Ohler
Title: Vice President
Telephone: (412) 762-3627
Facsimile: (412) 762-8672
Address for Euro-Rate Funding if different from above:
- ------------------------------
- ------------------------------
- ------------------------------
Telephone:
--------------------
Facsimile:
--------------------
Telex:
------------------------
40
104
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S BALANCE SHEET AND STATEMENT OF INCOME FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 8,550
<SECURITIES> 31,752
<RECEIVABLES> 418,403
<ALLOWANCES> 5,855
<INVENTORY> 167,811
<CURRENT-ASSETS> 644,010
<PP&E> 1,611,413
<DEPRECIATION> 702,816
<TOTAL-ASSETS> 1,652,797
<CURRENT-LIABILITIES> 216,924
<BONDS> 205,119
0
0
<COMMON> 75,847
<OTHER-SE> 871,658
<TOTAL-LIABILITY-AND-EQUITY> 1,652,797
<SALES> 1,495,122
<TOTAL-REVENUES> 1,496,647
<CGS> 1,222,304
<TOTAL-COSTS> 1,222,304
<OTHER-EXPENSES> 99,125
<LOSS-PROVISION> 919
<INTEREST-EXPENSE> 11,209
<INCOME-PRETAX> 163,090
<INCOME-TAX> 59,143
<INCOME-CONTINUING> 103,947
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 103,947
<EPS-BASIC> 1.37
<EPS-DILUTED> 1.37
</TABLE>
