UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED) For the fiscal year ended December 31,
1994
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from
______________ to __________________
Commission file number 1-2227
Crown Cork & Seal Company, Inc.
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1526444
(State or other jurisdiction (Employer
of incorporation or organization) Identification No.)
9300 Ashton Road, Philadelphia, PA 19136
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 215-698-5100
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Title of each class Name of each exchange on which registered
Common Stock $5.00 Par Value New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
As of March 17, 1995, 89,966,519 shares of the Registrant's Common Stock,
excluding shares held in Treasury, were issued and outstanding, and the
aggregate market value of such shares held by non-affiliates of the Registrant
on such date was $3,913,543,577.
DOCUMENTS INCORPORATED BY REFERENCE
Notice of Annual Meeting and Proxy Statement dated March 24, 1995 is
incorporated by reference into Part III hereof. Only those specific portions so
incorporated are to be deemed filed as part of this Form 10-K Annual Report.
<PAGE>
1994 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
PART I
<TABLE>
<S> <C> <C>
Item 1 Business.....................................................................................1
Item 2 Properties...................................................................................5
Item 3 Legal Proceedings............................................................................7
Item 4 Submission of Matters to a Vote of Security Holders..........................................7
PART II
Item 5 Market for Registrant's Common Stock and Related Stockholder Matters.........................7
Item 6 Selected Financial Data......................................................................8
Item 7 Management's Discussion and Analysis of Financial Condition
and Results of Operations...............................................................9
Item 8 Financial Statements and Supplementary Data.................................................18
Item 9 Disagreements on Accounting and Financial Disclosure........................................42
PART III
Item 10 Directors and Executive Officers of the Registrant..........................................42
Item 11 Executive Compensation......................................................................42
Item 12 Security Ownership of Certain Beneficial Owners and Management..............................43
Item 13 Certain Relationships and Related Transactions..............................................43
PART IV
Item 14 Exhibits, Financial Statement Schedule and Reports
on Form 8-K............................................................................44
SIGNATURES....................................................................................................47
</TABLE>
<PAGE>
1
PART I
ITEM 1. BUSINESS
GENERAL
Crown Cork & Seal Company, Inc. (the "Company" and the "Registrant") is a
multinational manufacturer of metal and plastic packaging, including cans,
bottles, crowns and closures (metal and plastic) and machinery for filling,
packaging and handling. The Company is an international packaging producer and,
as such, benefits from, but is also exposed to, the fluctuations of world trade.
The Company recognizes that it must constantly review operations worldwide to
ensure that it maintains its competitive position. To achieve better
productivity, the Company closed or reorganized 31 facilities across nine
countries between 1991 and 1994 and is scheduled to close three plants and
reorganize three others during 1995. The Company continues to review all
operations so that it can determine the appropriate number, size and location of
plants, emphasizing service to customers and rate of return to investors.
Financial information about the Company's operations in its two industry
segments and within geographic areas is set forth in Part II of this Report on
page 38 under Note S of the Notes to the Consolidated Financial Statements
entitled "Segment Information by Industry and Geographic Areas".
The Company has grown substantially since December 1989 when it commenced a
series of acquisitions that have more than doubled its sales. The Company
believes that these acquisitions have enabled it to become a leader in North
American markets, to better penetrate important international markets, to
enhance product quality, to realize economies of scale and to improve its
technical and developmental capabilities while preserving the Company's
traditional focus on customer service. To further accommodate its expanded base
of operations, in 1992, the Company organized into four divisions by adding
Plastics to its previously established North American, International and
Machinery Divisions.
The Company, with its 1992 acquisition of CONSTAR International, Inc., now
conducts business in two separate industry segments within the Packaging
Industry, Metal and Plastic. Information about the Company's acquisitions over
the past three years appears in Part II hereof on pages 25 and 26 under Note C
of the Notes to the Consolidated Financial Statements.
DISTRIBUTION
The Company's products are manufactured in 82 plants within the United States
and 70 plants outside the U.S., spanning over 40 countries, and are sold through
the Company's sales organization to the food, citrus, brewing, soft drink, oil,
paint, toiletry, drug, antifreeze, chemical and pet food industries.
In 1994 and 1993, no one customer accounted for more than 10 percent of the
Company's net sales. In 1992, one customer accounted for approximately 10.6
percent of the Company's net sales.
RESEARCH AND DEVELOPMENT
With the acquisition of Continental Can International in 1991, the Company
acquired an international engineering group currently based at the Company's
Alsip Technical Center near Chicago. The technical center enables the Company to
enhance its technical and engineering services worldwide both within the Company
and to third parties. The Company's research and development expenditures of
$21.1 million, $23.3 million and $16.7 million in 1994, 1993, and 1992,
respectively, are expected to make a greater contribution to improving and
expanding the Company's product lines in the future.
<PAGE>
2
MATERIALS
The Company continues to pursue strategies which enable it to source its raw
materials with increasing effectiveness, and may consider vertical integration
into the production of certain raw materials, such as PET resin, used in plastic
bottle production, if it is advantageous to do so.
SEASONALITY
The Company's metal and plastic beverage container businesses are predominately
located in the Northern Hemisphere. Generally, beverage products are consumed in
greater amounts during warmer months of the year. As such, quarterly sales and
earnings of the Company have generally been higher and are expected to be higher
in the second and third quarters of the calendar year. The Company's other
businesses tend not to be affected by significant seasonal variations.
ENVIRONMENTAL MATTERS
The Company's operations, like those of others in the industry, generally are
subject to numerous laws and regulations governing the protection of the
environment, disposal of waste, discharges into water and emissions into the
atmosphere. The Company has a Corporate Environmental Protection Policy, and
environmental considerations are among the criteria by which the Company
evaluates projects, products, processes and purchases. Further discussion of the
Company's environmental matters is contained in Part II, Item 7 Management's
Discussion and Analysis , of this Report on page 16 under the caption
Environmental Matters .
WORKING CAPITAL
Information relating to the Company's liquidity and capital resources is set
forth in Part II, Item 7, "Management's Discussion and Analysis of Operations
and Financial Condition", of this Report on pages 13 through 17.
EMPLOYEES
At December 31, 1994, the Company employed 22,373 people throughout the world. A
significant number of the Company's employees are covered by collective
bargaining agreements of varying terms and expiration dates.
METAL PACKAGING
The Metal Packaging segment includes the North American, International and
Machinery Divisions of the Company. This segment in 1994 accounted for
approximately 78 percent of net sales and 73 percent of operating profits. This
segment manufactures and markets steel and aluminum cans as well as composite
cans, crowns (also known as bottle caps) and metal closures. Within the
Machinery Division, the Company manufactures filling, packaging and handling
machinery. All products are sold through the Company's sales organization to the
food, brewing, citrus, soft drink, oil, paint, toiletry, drug, chemical and pet
food industries.
The Company believes that price, quality and customer service are the principal
competitive factors affecting its business. Based upon sales, the Company
believes that it is a leader in the markets for metal packaging in which it
competes; however, the Company encounters competition from a number of companies
offering similar products.
The Company's basic raw materials for its Metal Packaging segment's products are
tinplate and aluminum. These metals are supplied by the major mills in the
countries within which the Company operates plants. Some plants in
less-developed countries, which do not have local mills, obtain their metal from
nearby
<PAGE>
3
more-developed countries. In 1994, the Company obtained more than 90% of its
tinplate requirements from ten suppliers with one supplier accounting for more
than 20% and obtained its aluminum requirements from ten suppliers of which two
suppliers account for 80%. Although sufficient quantities of tinplate and
aluminum have been available in the past there can be no assurance that
sufficient quantities will be available in the future.
Prior to 1994, the Company entered into annual agreements with its tinplate and
aluminum suppliers, pursuant to which the Company obtained price commitments for
its tinplate and aluminum requirements for the next calendar year. The Company
continues to contract for its tinplate requirements on this basis.
During 1994, the Company's suppliers of aluminum can and end sheet announced and
have implemented a new pricing formula for 1995. Pursuant to the new formula,
aluminum can and end sheet prices are now directly tied to the price of aluminum
ingot on the London Metal Exchange (LME). The formula price is generally the LME
spot price of aluminum ingot plus a charge for the cost of converting and
transporting aluminum. The Company believes that this new pricing formula is
primarily responsible for the significant increase in the cost of aluminum in
1995 as compared to 1994, and that the effect of this new pricing structure will
be to transfer the volatility in the commodity markets to the Company.
Historically, the Company has adjusted the prices for its products in response
to changes in the cost of tinplate and aluminum. In response to the new aluminum
pricing structure, the Company has announced price increases to its customers
based upon the price of aluminum ingot on the LME. There can be no assurance,
however, that the Company will be able to recover fully any increases or
fluctuations in metal prices from its customers. In 1994, consolidated aluminum
consumption, primarily for beverage cans and ends, accounted for 36% of the
Company's consolidated cost of sales.
The Company, based on net sales, is one of two leading producers of aluminum
beverage cans within the United States. This sector of its business, while
important to the Company, continues to contribute a decreasing proportion of
consolidated net sales (26% in 1994 from 30% in 1993 and 42% in 1991) as other
sectors develop and as lower aluminum costs have been passed on to customers.
Through 1994, beverage can prices in the United States had declined by more than
had been realized in lower aluminum costs. The Company is addressing this
situation through ongoing non-metal cost reductions and restructuring of
production processes. Beverage can capacity in North America is being redeployed
in emerging markets and, to a lesser extent, also is being retrofitted to
produce two-piece food cans.
In North America, based on net sales, the Company believes that, as well as
being a market leader in beverage cans, it is a market leader in the manufacture
and sale of metal packaging to the processed foods, aerosol and other
industries. The Company's customers include leading producers of soft drinks,
beer, juice, food and aerosol products.
In April 1993, the Company acquired the Van Dorn Company. Van Dorn provides the
Company with two piece (drawn) aluminum cans for processed foods and adds
additional manufacturing capacity for metal, plastic and composite cans for the
paint, chemical, automotive, food, pharmaceutical and household product
industries.
On June 27, 1994, the Company acquired the container division of Tri-Valley
Growers and signed a long-term supply agreement. This acquisition expands the
Company's food can business.
The Company's Canadian operations continued to improve. The Canadian economy has
shown some improvement and the Company is encouraged that a continued recovery
will result in a better market for its products in the future.
Over the next several years, the Company will review the possibility of reducing
the number of manufacturing lines used in North America to produce beverage cans
in favor of fewer, but faster and more
<PAGE>
4
efficient lines. Additional restructuring has also been directed towards U. S.
non-beverage metal operations. Information relating to the Company's 1994
restructuring program is set forth in Part II, Item 7, Management's Discussion
and Analysis , of this Report on pages 14 and 15 under the caption Provision for
Restructuring and in Part II, Item 8, on page 28 under Note H to the Notes to
the Consolidated Financial Statements.
Outside North America, the Company's metal packaging products consist of metal
crowns and closures as well as metal cans for food, beverage and aerosol
customers. Europe is the most significant crown market for the Company with
returnable bottles being a dominant form of beverage packaging in the region. In
1994, a joint venture project in Shanghai, China and a wholly-owned facility in
Buenos Aires, Argentina became operational. New projects in Beijing, China and
Hanoi, Vietnam, as well as expansion of the two-piece can facility in Argentina
were announced during 1994. In March 1995, the Company announced plans for a
joint venture in Brazil. The Company's non-U.S. beverage can capacity is
concentrated in Hong Kong, China, Argentina, the United Arab Emirates(UAE),
Korea, Saudi Arabia and Venezuela and consists of an additional 7 billion units
of capacity. The operations in the UAE, Hong Kong, China, Korea, Saudi Arabia
and Venezuela represent joint-venture operations. This action continues to
support the Company's current philosophy that the use of business partners in
many overseas locations presents another cost-effective means of entering these
new markets.
International margins have been sustained as a result of restructuring actions
commenced in 1992. Ongoing review and restructuring, as necessary, continued
through 1994.
The Machinery division, representing approximately 2 percent of consolidated net
sales, reported decreased sales in 1994 as a direct result of the downsizing of
its operations in Belgium due to competitive factors.
PLASTIC PACKAGING
The Plastic Packaging segment manufactures plastic containers and plastic
closures. With the Company's 1992 acquisition of CONSTAR International and the
1993 acquisition of the remaining 56 percent of CONSTAR'S affiliate in Europe,
Wellstar, the Company offers a wider product range to its worldwide customers.
The Plastic Packaging segment also includes plastic closure operations in
Virginia and Switzerland and the manufacture of plastic closures in Metal
Packaging plants in Belgium, Germany, Italy, Spain, Argentina, Thailand and the
United Arab Emirates. The Plastic Packaging segment now represents approximately
22 percent of the Company's net sales as compared to approximately 2 percent in
1991. The Company is actively integrating these operations into its organization
by installing its cost systems and controls.
The Company believes that price, quality and customer service are the principal
competitive factors affecting its business. Based upon sales, the Company
believes that it is a leader in the markets for plastic packaging in which it
competes; however, the Company encounters competition from a number of companies
offering similar products.
CONSTAR and Wellstar manufacture plastic containers for the beverage, food,
household, chemical and other industries. Wellstar, based on net sales, is one
of four leading European producers of polyethylene terephthalate (PET) preforms
and bottles, including PET returnable bottles. The Wellstar acquisition
strengthens the Company's plastics marketing base within Europe. CONSTAR, based
on net sales, is one of two leading producers of plastic containers produced
from PET and HDPE (High-Density Polyethylene) within the United States. Plastic
containers continued to increase their share of the packaging market during
1994.
The principal raw materials used in the manufacture of plastic containers and
closures are various types of resins which are purchased from several commercial
sources. Resins, which are petrochemical derivatives, are presently available in
quantities adequate for the Company's needs. The Company has
<PAGE>
5
experienced fluctuations in the cost of resins in the past and has periodically
adjusted its selling prices for plastic containers and closures to reflect these
movements in resin costs. There can be no assurance, however, that the Company
will be able to recover fully any increases or fluctuations in resin prices from
its customers.
Typically, the Company identifies market opportunities by working cooperatively
with customers and implementing commercially successful programs. The Company
will capitalize on both the conversions to plastic from other forms of packaging
and the new markets through its technical expertise, quality reputation and
customer service. The Company believes that its plastic container plant sites
are strategically located and sized to meet market requirements.
Capital expenditures for the Plastic Packaging segment were approximately 47
percent of total capital expenditures for the Company in 1994 as compared to
approximately 5 percent in 1991. The Company is committed to servicing its
global customers with plastic containers. Information relating to the Company's
capital expenditures is set forth in Part II, Item 7, Management's Discussion
and Analysis , of this report on page 15 under the caption Capital Expenditures
.
ITEM 2. PROPERTIES
The Company's manufacturing and support facilities are designed according to the
requirements of the products to be manufactured, and the type of construction
varies from plant to plant. In the design of each facility, particular emphasis
is placed on quality assurance in the finished products, safety in the
operations, and avoidance or abatement of pollution. The Company maintains its
own engineering staff, which aids in achieving close integration of research,
design, construction and manufacturing functions and facilitates the
construction of plants which will be best suited to their special purposes.
Warehouse and delivery facilities are provided at each of the manufacturing
locations; however, the Company does lease outside warehouses at some locations.
The plants of the Company and its subsidiaries are owned, with the exception of
those that have the word "leased", in brackets, after the location name. Joint
Ventures are indicated by the initials JV, in brackets, after the location name.
METAL PACKAGING LOCATIONS IN THE UNITED STATES
<TABLE>
<S> <C> <C>
Abilene, TX Kankakee, IL Pocatella, ID (Leased)
Alsip, IL La Crosse, WI Portage, IN (Leased)
Arden, NC Lakeville, MN Portland, OR (Leased)
Arlington, TX La Mirada, CA Pulaski Park, MD (Leased)
Atlanta, GA Lawrence, MA Salisbury, MD
Atlanta, GA (Leased) Los Angeles, CA (Leased) San Leandro, CA (Leased)
Batesville, MS Mankato, MN Seattle, WA
Cheraw, SC Massilon, OH (2) Shoreham, MI (Leased)
Cincinnati, OH Merced, CA Solon, OH
Conroe, TX Modesto, CA Spartanburg, SC
Covington, GA Olympia, WA (Leased) Suffolk, VA (Leased)
Crawfordsville, IN Omaha, NE Union City, CA
Dayton, OH Orlando, FL Van Nuys, CA
Decatur, IL Oshkosh, WI Walla Walla, WA
Faribault, MN Owatonna, MN Winchester, VA
Fort Bend, TX Perrysburg, OH Winter Garden, FL
Fremont, CA Philadelphia, PA Worland, WY
Hanover, PA Plymouth, FL York, PA
</TABLE>
<PAGE>
6
METAL PACKAGING LOCATIONS OUTSIDE THE UNITED STATES
<TABLE>
<S> <C> <C> <C>
* Buenos Aires (2) Argentina Hong Kong Hong Kong (JV)
Schwanenstadt Austria Cork Ireland
* Antwerp Belgium * Voghera Italy
Vinhedo Brazil Amman Jordan (JV)
Aracaju Brazil Nairobi Kenya (JV)
Montreal (3) Canada Seoul (2) Korea (JV)
Chatham Canada Johore Bahru Malaysia
Calgary Canada Guadalajara Mexico
Mississauga Canada (Leased) Mexico City (2) Mexico
Bolton Canada Casablanca Morocco
Toronto (3) Canada Lagos (2) Nigeria
Winnipeg Canada Lima Peru
Santiago Chile Lisbon Portugal
Beijing China (JV) Mayaguez Puerto Rico (Leased)
Shanghai China (JV) San Juan Puerto Rico
Foshan China (JV) Dammam Saudi Arabia (JV)
Medellin Colombia Jeddah Saudi Arabia (JV)
Barranguilla Colombia Jurong Singapore
San Jose Costa Rica Johannesburg (2) South Africa (JV)
Copenhagen Denmark Cape Town South Africa (JV)
Guayaquil Ecuador * Madrid Spain
London England Arima Trinidad & Tobago
Tredegar, Wales England * Bangkok Thailand
* Frankenthal Germany * Jebel Ali United Arab Emirates (JV)
Bedburg Germany Caracas Venezuela (JV)
Guatemala City Guatemala Hanoi Vietnam (JV)
Jakarta Indonesia Ndola Zambia (JV)
Mijdrecht Holland Harare Zimbabwe (JV)
<FN>
* Plastic Packaging manufactured within Metal Packaging locations
</FN>
</TABLE>
Some metal manufacturing locations are supported by locations that provide art
work for cans and crowns, coil shearing, coil coating, research, product
development and engineering. The support locations within the United States are
located in Alsip, IL, Fairless Hills, PA (Leased), Massilon, OH, Philadelphia,
PA, Plymouth, FL, Toledo, OH, Youngstown, OH (Leased); and outside the United
States in Rotterdam, Holland and Bilbao, Spain.
PLASTIC PACKAGING LOCATIONS IN THE UNITED STATES
<TABLE>
<S> <C> <C>
Baltimore, MD (2) Hollywood, FL (Leased) Orlando, FL (Leased)
Birmingham, AL (Leased) Houston, TX (Leased) Phillip Lee, GA
Charlotte, NC (Leased) Jackson, MS (Leased) Phoenix, AZ (Leased)
City of Industry, CA (Leased) Kansas City, KS (Leased) Reserve, LA (Leased)
Collierville, TN Leominster, MA (Leased) Salt Lake City, UT
Dallas, TX (leased) Mableton, GA (Leased) Sandston, VA
Fort Worth, TX (Leased) New Stanton, PA (Leased) West Chicago, IL
Greenville, SC (Leased) Newark, OH (Leased)
</TABLE>
<PAGE>
7
PLASTIC PACKAGING LOCATIONS OUTSIDE THE UNITED STATES
<TABLE>
<S> <C> <C> <C> <C> <C>
Montreal Canada Didam Holland Budapest Hungary (JV)
Sherburn England Dongen Holland (Leased) Reinach Switzerland
** Evry France (Leased) Iztapalapa Mexico (JV) Izmir Turkey (JV)
<FN>
** Metal Packaging Manufactured within Plastic Packaging Location
</FN>
</TABLE>
The Company manufactures bottle and can filling machinery and parts at locations
within the United States in Baltimore, MD and Titusville, FL; outside the United
States in Londerzeel, Belgium and San Luis Potosi, Mexico. The Company also
operates two machinery overhaul locations within the United States in Bartow, FL
and Philadelphia, PA.
The Company has four machine shop locations which manufacture tool and die parts
used within its own manufacturing locations and also sells to customers in the
packaging industry. The locations are within the United States, with two in
Philadelphia, PA, one in Wissota, WI and one in Wilkes Barre, PA.
The Company is directly involved in post-consumer plastic packaging recycling
and aluminum and steel can recycling through its subsidiary, Nationwide
Recyclers, Inc., located in Polkton, NC.
ITEM 3. LEGAL PROCEEDINGS
In management's opinion, there are no pending claims or litigation, the adverse
determination of which would have a material adverse effect on the consolidated
financial position of the Company. The Company has been identified by the
Environmental Protection Agency as a potentially responsible party (along with
others, in most cases) at a number of sites. Information on this is presented in
Part I, Item 1, entitled "Business" under the caption "Environmental Matters"
appearing on page 2 of this Report and in Part II Item 7, entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations" under
the caption "Environmental Matters" appearing on page 16 of this Report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The Registrant's Common Stock is listed on the New York Stock Exchange. On March
17, 1995, there were 6,101 registered shareholders of the Registrant's Common
Stock. The market price with respect to the Registrant's Common Stock is set
forth on page 37 in Note R of the Notes to the Consolidated Financial Statements
entitled "Quarterly Data (unaudited)".
<PAGE>
8
ITEM 6. SELECTED FINANCIAL DATA
FIVE YEAR SUMMARY OF SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
(in millions, except per share, ratios and
other statistics) 1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Summary of operations
Earnings per average common share
before cumulative effect of
accounting changes..........................(1) $ 1.47 $ 2.08 $ 1.79 $ 1.48 $ 1.24
Earnings per average common share .........(1)(3) 1.47 1.14 1.79 1.48 1.24
Net income before cumulative effect of
accounting changes............................. 131.0 180.9 155.4 128.1 107.1
% to net sales................................. 2.9% 4.3% 4.1% 3.4% 3.5%
Net Income....................................(3) 131.0 99.1 155.4 128.1 107.1
% to net sales................................. 2.9% 2.4% 4.1% 3.4% 3.5%
Net sales........................................ 4,452.2 4,162.6 3,780.7 3,807.4 3,072.1
Depreciation and amortization.................... 218.3 191.7 142.4 128.4 102.0
Selling and administrative....................... 135.4 126.6 112.1 105.4 86.2
% to net sales................................. 3.0% 3.0% 3.0% 2.8% 2.8%
Interest expense................................. 98.8 89.8 77.4 76.6 59.9
Interest income.................................. 7.2 10.1 13.5 10.0 8.3
Taxes on income.................................. 55.6 97.4 101.0 83.8 71.3
Return on average shareholders' equity........(3) 10.0% 8.3% 13.9% 12.6% 12.2%
Financial Position at December 31
Total assets..................................... $ 4,781.3 $ 4,236.3 $ 3,825.1 $ 2,963.5 $ 2,596.4
Working capital ratio............................ 1.1:1 1.0:1 1.1:1 1.4:1 1.3:1
Short-term debt plus current maturities.......... 735.8 474.8 379.4 184.4 128.4
Long-term debt................................... 1,089.5 891.5 939.9 585.0 484.3
Total debt to total capitalization.........(2)(3) 55.3% 50.1% 52.1% 40.5% 38.3%
Shareholders' equity............................. 1,365.2 1,251.8 1,143.6 1,084.4 950.8
Book value per common share................(1)(3) 15.28 14.09 13.24 12.45 10.99
Other Statistics
Capital expenditures............................. $ 439.8 $ 271.3 $ 150.6 $ 92.2 $ 128.0
Employees........................................ 22,373 21,254 20,378 17,763 17,205
Number of shareholders........................... 6,011 6,168 4,193 3,722 3,714
Number of shares - at year-end............(1) 89,360,040 88,814,533 86,348,180 87,088,179 86,549,730
- average................(1) 89,086,999 87,086,553 86,895,574 86,780,517 86,548,086
<FN>
(1) All data relating to common shares prior to 1992 have been
restated for comparative purposes to reflect the 3 for 1 common
stock split in 1992.
(2) Total capitalization includes total debt (net of cash and cash
equivalents), minority interests and shareholders' equity.
(3) Figures for 1994 and 1993 include after-tax adjustments for
restructuring, $73.2 or $.82 per share and the cumulative effect
of accounting changes of $81.8 or $.94 per share, respectively.
Without these adjustments, the return on average shareholders'
equity would have been 14.7% and 14.6%, respectively.
</FN>
</TABLE>
Certain reclassifications of prior years' data have been made to improve
comparability.
<PAGE>
9
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(in millions, except per share, employee, shareholder and statistical data)
Management's discussion and analysis should be read in conjunction with the
financial statements and the notes thereto.
Share data for prior years have been restated for the 3 for 1 common stock split
declared in 1992.
RESULTS OF OPERATIONS
NET INCOME AND EARNINGS PER SHARE BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGES
Net income for 1994 was $131.0, compared with $180.9 in 1993 and $155.4 in 1992.
Earnings per share for 1994 was $1.47, compared with $2.08 and $1.79 in 1993 and
1992, respectively. Excluding the provision for restructuring, net income
increased 12.9% to $204.2 and earnings per share increased 10.1% to $2.29. Net
income for 1993 and 1992 represents increases of 16.4% and 21.3%, respectively
over the preceding year. Earnings per share represents increases of 16.2% and
20.9%, respectively over the preceding year. The sum of per share earnings by
quarter does not equal earnings per share for the years ended December 31, 1994
and 1993 due to the effect of shares issued during 1994 and 1993.
NET SALES
Net sales during 1994 were $4,452.2, an increase of $289.6 or 7.0% versus 1993
net sales of $4,162.6. Net sales during 1992 were $3,780.7. Sales from domestic
operations increased 4.5% in 1994 compared with a 17.9% increase in 1993.
Foreign sales increased 12.3% in 1994 following a 3.6% decrease in 1993.
Domestic sales accounted for 66.7% of consolidated sales in 1994 and 68.3% in
1993. An analysis of net sales by operating division follows:
<TABLE>
<CAPTION>
% Increase/
Net Sales (Decrease)
DIVISION 1994 1993 1992 1994/1993 1993/1992
---- ---- ---- --------- ---------
<S> <C> <C> <C> <C> <C>
North American.............................. $2,654.6 $2,598.2 $2,703.7 2.2 (3.9)
International............................... 828.8 724.5 834.2 14.4 (13.2)
Plastics.................................... 880.9 736.7 150.2 19.6 390.5
Other....................................... 87.9 103.2 92.6 (14.8) 11.4
---- ----- ---- ----- ----
$4,452.2 $4,162.6 $3,780.7 7.0 10.1
======== ======== ======== === ====
</TABLE>
Included in the International Division are net sales of $77.0, $58.9 and $57.4
for the years ended December 31, 1994, 1993 and 1992, respectively, related to
plastic packaging products manufactured and sold by the International Division.
The increase in 1994 North American Division net sales is primarily the result
of a full year's sales from Van Dorn acquired in April 1993, and sales unit
volume increases in beverage and food cans; offset by (i) lower raw material
costs which were passed on to customers in the form of reduced selling prices,
(ii) continued competitive pricing in the North American beverage can market,
and (iii) the strengthening of the U.S. dollar against the Canadian dollar and
Mexican peso. The decrease in 1993 division net sales from 1992 was primarily a
result of (i) lower raw material costs which reduced selling prices, (ii)
competitive beverage can pricing, and (iii) the weakening of the Canadian
dollar; offset by the acquisition of Van Dorn and increased sales unit volume in
aerosol and composite cans. U.S. sales accounted for approximately 83% of
division net sales in both 1994 and 1993.
The increase in 1994 International Division net sales is primarily a result of
(i) the first full year of operations at the Company's operations in Buenos
Aires, Argentina and the United Arab Emirates, (ii)
<PAGE>
10
continued expansion into China through the Company's Hong Kong affiliate and
(iii) increased unit volumes in Europe across most product lines with plastic
closures up 21% and aerosol cans up 13%. The decrease in 1993 net sales was
primarily a result of (i) the recession in Europe and (ii) the strengthening of
the U.S. dollar against international currencies which reduced division sales by
$71.
As customers continue to convert to plastic for packaging their products, the
Company continues to invest to expand unit capacity and meet demand. The
increase in 1994 Plastic Division net sales is a result of sales unit volume
increases across most product lines in both the U.S. and Europe and increased
raw material prices passed on to customers. The increase in 1993 Division net
sales was primarily due to a full years sales of CONSTAR in 1993 versus 1992 and
the acquisition of Wellstar in 1993.
COST OF PRODUCTS SOLD
Cost of products sold, excluding depreciation and amortization for 1994 was
$3,699.5, a 6.5% increase from the $3,474.0 in 1993. This increase follows an
8.7% increase and a 2.8% decrease in 1993 and 1992, respectively. The increase
in 1994 and 1993 cost of products sold primarily reflects increased sales levels
as noted above offset by lower raw material costs and company-wide cost
containment programs. The 1992 decrease was primarily due to lower raw material
costs.
As a percent of net sales, cost of products sold was 83.1% in 1994 as compared
to 83.5% in 1993 and 84.6% in 1992.
SELLING AND ADMINISTRATIVE
Selling and administrative expenses for 1994 were $135.4, an increase of 7.0%
over 1993. This increase compares to increases of 12.9% for 1993 and 6.4% for
1992. Selling and administrative expenses have increased in recent years as a
result of businesses acquired and to a lesser extent, general inflation. As a
percent of net sales, selling and administrative expenses were 3.0% in 1994,
1993 and 1992.
OPERATING INCOME
The Company views operating income as the principal measure of performance
before interest costs and other non-operating expenses. Operating income in 1994
was $289.0 after restructuring charges. Operating income of $403.6 in 1994,
before the restructuring charge of $114.6, was $24.9, or 6.6% greater than in
1993. Operating income was $378.7 in 1993, an increase of 18.3% over 1992, and
$320.0 in 1992, an increase of 17.6% versus 1991. Operating income, before
restructuring, as a percent of net sales was 9.1% in 1994 as compared to 9.1% in
1993 and 8.5% in 1992. An analysis of operating income, before restructuring, by
operating division follows:
<TABLE>
<CAPTION>
% Increase/
Operating Income (Decrease)
DIVISION 1994 1993 1992 1994/1993 1993/1992
---- ---- ---- --------- ---------
<S> <C> <C> <C> <C> <C>
North American............................. $253.8 $260.1 $247.9 (2.4) 4.9
International............................... 74.1 50.4 48.0 47.0 5.0
Plastics.................................... 67.1 62.2 15.7 7.9 296.2
Other....................................... 8.6 6.0 8.4 43.3 (28.6)
--- --- --- ---- -----
$403.6 $378.7 $320.0 6.6 18.3
====== ====== ====== === ====
</TABLE>
Included in the International Division is operating income of $9.9, $8.0 and
$7.9 for the years ended December 31, 1994, 1993 and 1992, respectively, related
to plastic packaging products manufactured and sold by the International
Division.
Operating income in the North American Division was 9.6% of net sales in 1994
versus 10.0% and 9.2% in 1993 and 1992, respectively. The decrease in 1994
operating margins reflects the continued price pressures in the North American
beverage can market. This was offset, to some extent, by (i) sales volume
increases in most product lines, including beverage cans and ends and (ii) the
benefits associated with the
<PAGE>
11
Company's efforts in prior years to consolidate acquired plants into existing
plants. Operating income in 1993 increased over 1992 as a result of productivity
improvements and cost reduction programs. While 1994 operating income in the
division decreased from 1993 levels, the Company considered the result
satisfactory given the difficult beverage can pricing structure. Additionally,
the Company's suppliers of aluminum can and end sheet implemented a new pricing
structure for 1995 which, by formula, is directly tied to the price of ingot on
the London Metal Exchange (LME). The formula takes the LME spot price of
aluminum ingot and adds other costs to convert and transport aluminum, thereby
effectively transferring the volatility in the commodity markets to the Company.
While the Company has announced price increases to its customers based on LME
quotes, the Company may not always be able to fully recover movements in
commodity pricing.
International operating income was 8.9% as a percentage of net sales in 1994
compared to 7.0% in 1993, and 5.8% in 1992. The increased operating income in
1994 and 1993 primarily reflects the Company's efforts to restructure certain
European affiliates in 1993 and 1992 and the start-up of new operations in
Argentina and the United Arab Emirates. The Company expects operating margins to
improve as new operations increase capacity and mature through the learning
curve.
Increased sales volume is the primary reason for operating income increases in
the Plastic Division. As a percentage of net sales, operating profit was 7.6% in
1994 compared to 8.4% and 10.5% in 1993 and 1992, respectively. The substantial
capital investment program in the division over the past two years has resulted
in some temporary production inefficiencies. The Company expects margins to
improve as installations are completed. Product mix and increased raw material
costs have also contributed to lower operating margins.
NET INTEREST EXPENSE/INCOME
Net interest expense was $91.6 in 1994 an increase of $11.9 when compared to
1993 net interest of $79.7. Net interest expense was $63.9 in 1992. The increase
in 1994 and 1993 net interest expense is due primarily to (i) higher interest
rates, (ii) acquisition financing for recent companies acquired and (iii) the
substantial capital investment program the Company has entered into over the
last two years. Specific information regarding acquisitions is found in Note C
to the Consolidated Financial Statements, while information specific to Company
financing is presented in the Liquidity and Capital Resources section of this
discussion and Notes I and J to the Consolidated Financial Statements.
TAXES ON INCOME
The effective tax rates on income were 30.4%, 34.8% and 39.7% in 1994, 1993 and
1992, respectively. The lower effective rates for 1994 and 1993 were primarily a
result of lower effective tax rates in non-U.S. operations and higher non-U.S.
income as a percentage of consolidated income compared to 1993 and 1992. The
higher effective tax rate versus the U.S. statutory rate in 1992 is primarily
due to the effect of different tax rates in non-U.S. operations and the increase
in non-deductible amortization of goodwill and other intangibles, as a result of
recent acquisitions.
EQUITY IN EARNINGS OF AFFILIATES, NET OF MINORITY INTERESTS
Equity in earnings of affiliates was $16.3, $5.0 and $6.3 for 1994, 1993 and
1992, respectively. The increase in equity earnings in 1994 is due to improved
performance by the Company's non-consolidated affiliates in Saudi Arabia, Korea
and Venezuela. The decrease in 1993 equity earnings was a result of the Company
selling 30% of its interest in its joint venture in Saudi Arabia.
Minority interests were $12.4, $6.5 and $4.6 in 1994, 1993 and 1992,
respectively. The increase in minority interests relate to increased sales
volumes and earnings in Hong Kong, China, the United Arab Emirates and South
Africa.
As the Company continues to invest in projects in emerging overseas markets, the
Company stands to reap the rewards while being exposed to the risks of sometimes
volatile growth economies. These new markets
<PAGE>
12
provide excellent future growth potential for the Company's products and
services while at the same time introducing the Company to viable business
partners. The Company believes that the use of business partners in many
overseas locations presents another cost-effective means of entering new
markets.
The Company has presented earnings from equity affiliates, net of minority
interests (the components of which can be found in Notes F and P to the
Consolidated Financial Statements), as a separate component of net income.
Management believes that presenting such earnings as a component of pre-tax
income would distort the Company's effective tax rate, and as such, has
presented equity earnings after the provision for income taxes.
INDUSTRY SEGMENT PERFORMANCE
This section presents individual segment results for the last three years. The
after-tax charge of $73.2 or $.82 per share related to the restructuring charge
is included as an after-tax charge in Metal Packaging segment (Metals) and is
excluded in making comparisons of 1994 results. The after-tax charge of $81.8 or
$.94 per share related to adoption of SFAS 106, SFAS 109 and SFAS 112 in 1993 is
included as an after tax charge in Metals of $83.7 or $.96 per share and an
after-tax credit in the Plastics Packaging segment (Plastics) of $1.9 or $.02
per share, and is excluded in making comparisons of 1993 results.
Net sales for Metals in 1994 were $3,494.3, an increase of 3.8% compared to 1993
net sales $3,367.0. Net sales in 1992 were $3,573.1. Metals sales in 1994
increased over 1993 as a result of increased sales in operations in Argentina,
the United Arab Emirates, Hong Kong and most European operations. While unit
volume increased approximately 8% for beverage and food cans, North American
Division sales were up only 2.2% as lower raw material costs were passed on to
customers in the form of reduced selling prices. Sales in 1993 were lower than
1992 as a result of lower raw material costs which were passed on to customers.
Metals operating income in 1994 was $326.6, before restructuring charges of
$114.6, or 9.3% of net sales compared to $308.5 in 1993 which was 9.2% of net
sales. Operating income in 1992 was $296.4 or 8.3% of net sales. Despite
competitive price pressures, the Company continues its efforts to rationalize
and improve manufacturing efficiencies thereby achieving cost reductions and
increasing operating profits.
Net sales for Plastics increased $162.3 or 20.4% to $957.9 in 1994 from $795.6
in 1993. Net sales for 1993 increased $588.0 or 283.2% against 1992 net sales of
$207.6. The increase in 1994 is primarily a result of the increased unit
capacity in the Company's CONSTAR plants. The increased capacity has been
generated through significant capital investments in 1994 and 1993. The increase
in 1993 is primarily a result of the Company's October 1992 acquisition of
CONSTAR and the acquisition during 1993 of the remaining 56% interest in
Wellstar Holding B.V. ("Wellstar") by CONSTAR. The full year sales of CONSTAR
contributed approximately $600 in 1993 compared to two months sales in 1992 of
approximately $100. Wellstar from the date of acquisition contributed net sales
of $85 in 1993.
Plastics operating income in 1994 was 8.0% of net sales at $77.0 compared to
8.8% or $70.2 in 1993. Operating income in 1992 was $23.6 or 11.4% of net sales.
Increased competition and product sales mix have contributed to decreased
margins. The Company expects margins to improve as temporary production
inefficiencies from equipment installations in virtually every plant subside.
ACCOUNTING CHANGES
The Company adopted SFAS 106 and SFAS 109 on January 1, 1993. Additionally,
during the fourth quarter of 1993, the Company adopted SFAS 112 retroactive to
January 1, 1993. The after-tax effect of these accounting changes was a one-time
charge to 1993 earnings of $81.8 or $.94 per share, with an incremental charge
to 1993 earnings of $2.5 or $.03 per share. These accounting changes are more
fully described in Note B to the Consolidated Financial Statements.
Adoption of the above three statements did not and will not have any cash flow
impact on the Company.
<PAGE>
13
FINANCIAL POSITION
LIQUIDITY AND CAPITAL RESOURCES
The Company's financial position remains strong. Cash and cash equivalents
totaled $43.5 at December 31, 1994, compared to $54.2 and $26.9 at December 31,
1993 and 1992, respectively. The Company had working capital of $122.6 at
December 31, 1994. The Company's primary sources of cash in 1994 consisted of
(i) funds provided from operations $6.8; (ii) proceeds from short-term debt
borrowings $495.6; and, (iii) proceeds from long-term debt borrowings $154.8.
The Company's primary uses of cash in 1994 consisted of (i) payments on
long-term debt $186.5; (ii) acquisition of and investments in businesses, $65.7;
(iii) capital expenditures $439.8 and (iv) repurchases of common stock $12.7.
Funds provided from operations of $6.8 in 1994 decreased $344.4 as compared to
1993. This reduction is primarily due to strong customer demand in the fourth
quarter of 1994. Fourth quarter 1994 sales at $1,091.4 increased $156.2 compared
to fourth quarter 1993 sales of $935.2. The Company's accounts receivable
reflected this increased sales volume as receivables used cash of $185.5 during
1994 as compared to providing cash of $69.2 in 1993. The Company's inventory
levels also increased, using cash of $37.8 in 1994 as compared to providing cash
of $5.2 in 1993. Additionally, accounts payable was down in 1994 as compared to
1993 causing a use of cash of $153.5 as compared to a use of cash of $140.2 in
1993. The Company expects cash from operations in the first quarter of 1995 to
benefit from the collection of December 31, 1994 accounts receivable in
comparison to the first quarter of 1994.
The Company funds its working capital requirements on a short-term basis
primarily through issuances of commercial paper. The commercial paper program is
supported by a revolving bank credit agreement with several banks which was to
mature on December 20, 1995. Maximum borrowing capacity under the agreement was
$275 with borrowings of $40 outstanding as of December 31, 1994. In February
1995, the Company formalized a $1,000 multi-currency credit facility which bears
interest at variable market rates and matures in February, 2000. This facility
replaces the above lines of credit and the Company's use of this facility is not
restricted. Based on the Company's intention and ability to maintain its
revolving credit agreement beyond 1995, $235.0 of commercial paper borrowings
were classified as long-term at December 31, 1994. There was $660.6 and $324.0
in commercial paper outstanding at December 31, 1994 and 1993, respectively.
On December 20, 1994, the Company filed with the Securities and Exchange
Commission a shelf registration statement for the possible offering and sale of
up to $500 aggregate principal amount of debt securities of the Company. On
January 15, 1995, the Company sold $300 of public debt securities. This first
tranche of the shelf registration includes $300 of 8.38% notes due 2005, priced
at 99.79% to yield 8.4%. Net proceeds from the issue were used to pay down
short-term indebtedness.
In January 1993, the Company filed with the Securities and Exchange Commission a
shelf registration statement for the possible offering and sale of up to $600
aggregate principal amount of debt securities of the Company. On June 9, 1994,
the Company sold $100 of public debt securities. This transaction represents the
final tranche of the shelf registration. The tranche includes $100 of 7% notes
due 1999, priced at 99.71% to yield 7.02%. Net proceeds from the issue were used
to refinance outstanding short-term indebtedness.
On April 7, 1993 the Company sold $500 of public debt securities in three
tranches. The notes and debentures were issued pursuant to the above noted shelf
registration. These tranches include $100 of 5.875% notes due 1998, priced at
par; $200 of 6.75% notes due 2003, priced at 99.625% to yield 6.80%; and $200 of
8% debentures due 2023, priced at 99.625% to yield 8.03%. Net proceeds from the
issues were used to repay the bank facility which financed the acquisition of
CONSTAR International in October 1992. The Company's long-term debt securities
are rated Baa1 by Moody's Investors Service and BBB+ by Standard & Poor's
Corporation.
The Company has, when considered appropriate, hedged its currency exposures on
its foreign denominated debt through various agreements with lending
institutions. The Company also utilizes a
<PAGE>
14
corporate "netting" system which enables resources and liabilities to be pooled
and then netted, thereby mitigating the exposure. The Company enters into
limited interest rate and currency swaps and forward exchange contracts in its
management of interest rate and foreign currency exposure. At December 31, 1994,
the Company had entered into an interest rate swap agreement to convert 1,000.0
Belgian Francs ($31.4 at December 31, 1994) to a 6.53% fixed rate obligation.
The contract amount represents 66.7% of the total underlying debt, bears
interest at variable market rates and has a maturity which coincides with that
of the debt. These financial instruments are more fully described in Notes I and
J to the Consolidated Financial Statements.
The Company's ratio of total debt (net of cash and cash equivalents) to total
capitalization was 55.3%, 50.1% and 52.1% at December 31, 1994, 1993 and 1992,
respectively. Total capitalization is defined by the Company as total debt,
minority interests and shareholders' equity. The increase in the Company's total
debt in recent years is due to the significant capital expenditure program which
the Company has committed to in the last three years and businesses acquired
since December 29, 1989. As of December 31, 1994, $131.3 of long-term debt
matures within one year.
During the year, the Company repaid $50 private placement debt which carried an
interest rate of 8.49%. Additionally, the Company's Canadian subsidiary repaid
CDN $50 private placement debt which carried an interest rate of 11.75%.
Management believes that, in addition to current financial resources (cash and
cash equivalents and the Company's commercial paper program), adequate capital
resources are available to satisfy the Company's investment programs. Such
sources of capital would include, but not be limited to, bank borrowings.
Management believes that the Company's cash flow is sufficient to maintain its
current operations.
PROVISION FOR RESTRUCTURING
The Company recorded a pre-tax restructuring charge of $114.6 in the third
quarter of 1994 ($73.2 after-tax) related to a program announced on September
14, 1994. Affected by the restructuring are plants which produce three-piece
steel food and aerosol containers. The restructuring program is expected to
enable the Company to remain competitive in its core metal packaging business
and improve profitability. The program was implemented in the fourth quarter of
1994 with seven plants being closed as of December 31, 1994. Three plants will
be closed and an additional three plants will be reorganized during 1995. The
Company estimates that of the total restructuring charge of $114.6, $71.7 will
be non-cash charges primarily to reflect the write down of assets. Cash charges
related to the restructuring total $42.9 and are net of cash to be generated
from the sale of properties and equipment of $32.4. Approximately $10.0 had been
expended as of December 31, 1994. No properties or equipment were sold as of
December 31, 1994. Cash charges not paid by December 31, 1994 primarily relate
to future pension plan contributions and retiree medical benefits to be paid for
terminated employees.
The cost of providing severance pay and benefits for the reduction of
approximately 850 employees (approximately 360 positions eliminated by the end
of 1994) was approximately $58.4 and is primarily a cash expense. Actual
expenditures for severance pay and benefits through December 31, 1994 amounted
to approximately $4.4, with costs attributable to pension and other
post-retirement benefits not paid by December 31, 1994 being reclassified to
their respective liability accounts. See Note N to the Consolidated Financial
Statements. Employees terminated include most, if not all, employees at each
plant to be closed or reorganized including salaried employees and employees of
the respective unions represented at each plant site. The cost associated with
the write down of assets (property, equipment, inventory, etc.) was
approximately $50.4 and has been reflected as a reduction in the carrying value
of the Company's assets at December 31, 1994. Non-cash charges of $68.2 offset
by cash to be generated of $17.8 from the sale of equipment are the components
of the asset write down. No assets have been sold as of December 31, 1994. Costs
incurred in maintaining properties from the date of closure of the facilities to
the estimated sale date or lease termination date of the facilities approximated
$6.1 of the charge and is primarily a cash expense of which $.2 had been
expended as of December 31, 1994. Included in the charge are cash items
<PAGE>
15
for gains expected to be realized upon the sale of two facilities and estimated
operating losses to be incurred between the announcement date and closure date
of affected facilities. Details of the charge are also presented in Note H to
the Consolidated Financial Statements. As of December 31, 1994, the original
estimates related to the charge have remained unchanged.
The Company estimates that the restructuring, when complete, will generate cost
savings of approximately $36 after tax on a full year basis. While the
restructuring is being completed during 1995, the Company expects to realize an
after tax cost savings of approximately $24 in 1995. The Company expects that
the restructuring program will have positive effects on its liquidity and
sources and uses of capital resources.
During 1994, the Company acquired businesses for approximately $64, following
acquisitions in 1993 and 1992 of $222 and $539, respectively. The details of
such acquisitions are discussed in Note C to the Consolidated Financial
Statements. The Company has established reserves to restructure acquired
companies. At December 31, 1994 and 1993, these reserves totaled $22.2 and
$94.1, respectively. These reserves relate primarily to costs associated with
Company plans to combine acquired operations with pre-existing operations and
include severance costs, plant consolidations and lease terminations. The
Company expects these balances to be substantially liquidated during 1995. Cash
expenditures for acquired company restructuring efforts were $35, $81 and $30
for the years ended December 31, 1994, 1993 and 1992, respectively.
CAPITAL EXPENDITURES
Consolidated capital expenditures totaled $439.8 in 1994 as compared with $271.3
in 1993. Minority partner contributions to consolidated capital expenditures
were approximately $27 and $17 in 1994 and 1993, respectively.
During the past five years, capital expenditures totaled $1,081.9.
Expenditures in the North American Division totaled $170 with major spending for
ongoing projects to convert domestic beverage can and end lines to the 202
diameter from the 206 diameter, a new technical center and aerosol plant in
Alsip, Illinois and 2-Piece food cans in Owatonna, Minnesota.
Investments of $58 were made in the International Division. The Company began
construction of a beverage can plant in Beijing, China, continued construction
of a beverage can plant in Shanghai, China and began installation of beverage
end line equipment in Foshan, China. The Company continued its expansion of
existing plastic cap production in Europe and also began installation of a
second aerosol line in its dedicated Mijrecht, The Netherlands plant.
Spending in the Plastics Division for 1994 totaled $204 million as the Company
continued in its commitment to service global customers with plastic containers.
Major spending included the completion of both plant construction and equipment
installations in Salt Lake City, Utah and Izmir, Turkey and continued expansion
of existing products, specifically single-serve PET preform and bottle lines in
the United States, Holland, England, and Hungary.
The Company expects its capital expenditures in 1995 to approximate $400 with
minority partner contributions estimated at approximately $130 and capital
financed by non-recourse debt of joint ventures approximating $60. The Company
plans to continue capital expenditure programs designed to take advantage of
technological developments which enhance productivity and contain costs as well
as those that provide growth opportunities. Capital expenditures, exclusive of
potential acquisitions, during the five-year period 1995 through 1999 are
expected to approximate $2,000. Cash flow from operating activities will provide
support for these expenditures; however, depending upon the Company's evaluation
of growth opportunities and other existing market conditions, external financing
may be required from time to time.
<PAGE>
16
ENVIRONMENTAL MATTERS
The Company has adopted a Corporate Environmental Protection Policy. The
implementation of this Policy is a primary management objective and the
responsibility of each employee of the Company. The Company is committed to the
protection of human health and the environment, and is operating within the
increasingly complex laws and regulations of federal, state, and local
environmental agencies or is taking action aimed at assuring compliance with
such laws and regulations. Environmental considerations are among the criteria
by which the Company evaluates projects, products, processes and purchases and,
accordingly, does not expect compliance with these laws and regulations to have
a material effect on the Company's competitive position, financial condition,
results of operations or capital expenditures.
The Company is dedicated to a long-term environmental protection program and has
initiated and implemented many pollution prevention programs with the emphasis
on source reduction. The Company continues to reduce the amount of metal and
plastic used in the manufacture of steel, aluminum and plastic containers
through a "lightweighting" program. The Company not only recycles nearly 100
percent of scrap aluminum, steel, plastic and copper used in its manufacturing
processes, but through its Nationwide Recyclers subsidiary, is directly involved
in post-consumer aluminum, steel and plastics recycling. Additionally, the
Company has already exceeded the Environmental Protection Agency's (EPA) 1995
goals for its 33/50 program which calls for companies, voluntarily, to reduce
toxic air emissions by 33% by the end of 1992 and by 50% by the end of 1995,
compared to the base year of 1988. The Company, at the end of 1994, had achieved
a more than 65% reduction in the releases of such emissions from all U.S.
facilities. The cost to accomplish this reduction did not materially affect
operating results. Many of the Company's programs for pollution prevention lower
operating costs and improve operating efficiencies.
The Company has been identified by the EPA as a potentially responsible party
(along with others, in most cases) at a number of sites. Estimated remedial
expenses for active projects are recognized in accordance with generally
accepted accounting principles governing probability and the ability to
reasonably estimate future costs. Actual expenditures for remediation were $2.7
during 1994 and $2.2 in 1993. The Company's balance sheet reflects estimated
gross remediation liabilities of $25.6 and $30.7 at December 31, 1994 and 1993,
respectively and estimated recoveries related to indemnification from the
sellers of acquired companies and the Company's insurance carriers of $16.4 and
$19.4 at December 31, 1994 and 1993, respectively.
Environmental exposures are difficult to assess for numerous reasons, including
the identification of new sites, advances in technology, changes in
environmental laws and regulations and their application, the scarcity of
reliable data pertaining to identified sites, the difficulty in assessing the
involvement of and the financial capability of other potentially responsible
parties and the time periods (sometimes lengthy) over which site remediation
occurs. It is possible that some of these matters (the outcome of which are
subject to various uncertainties) may be decided unfavorably against the
Company. It is however, the opinion of Company management, after consulting with
counsel, that any unfavorable decision will not have a material adverse effect
on the Company's financial position.
COMMON STOCK AND OTHER SHAREHOLDERS' EQUITY
Shareholders' equity was $1,365.2 at December 31, 1994, as compared with
$1,251.8 at December 31, 1993. The increase in 1994 equity represents the
retention of $131.0 of earnings in the business and the issuance of 892,867
common shares for various stock purchase and savings plans offset by the effect
of 347,360 common shares repurchased, $1.8 minimum pension liability adjustment
as more fully described in Note N to the Consolidated Financial Statements and
equity adjustments for currency translation in non-U.S. subsidiaries of $19.4.
The book value of each share of common stock at December 31, 1994 was $15.28, as
compared to $14.09 at December 31, 1993.
In 1994, the return on average shareholders' equity, before restructuring, was
14.7% as compared to 1993, before the cumulative effect of accounting changes,
of 14.6%.
<PAGE>
17
The Company purchased 2,536,330 shares of its common stock from CCL Industries
Inc. ("CCL") on January 7, 1993 for approximately $84.8. The Company and CCL had
agreed to the share repurchase in August of 1992 at a then agreed purchase price
of $33.00 per share, plus an adjustment computed at a rate of 3.5% per annum.
The January 7, 1993 settlement was funded by cash flow from operations,
borrowings and cash received from CCL of approximately $21. The cash received
from CCL related to the settlement of guarantees made by CCL to the Company
regarding the value of certain properties in connection with the Company's 1989
acquisition of Continental Can Canada Inc. The Company issued to CCL a total of
7,608,993 shares in the 1989 acquisition of Continental Can Canada Inc. The
purchase of common stock from CCL was made pursuant to the Company's right of
first refusal to purchase common stock offered for sale by CCL. After giving
effect to the repurchase transaction, CCL held 2,536,331 shares or approximately
2.9% of the Company's shares then outstanding following the January 7, 1993
settlement date.
The Board of Directors has approved resolutions authorizing the Company to
repurchase shares of its common stock to meet the requirements for the Company's
various stock purchase and savings plans. The Company acquired 347,360,
2,580,982 and 1,747,774 shares of common stock in 1994, 1993, and 1992 for
$12.7, $86.5 and $61.4, respectively. These purchases included the purchase of
stock held by CCL in 1993.
The Company has traditionally not paid dividends and does not anticipate paying
dividends in the foreseeable future. At December 31, 1994, common shareholders
of record numbered 6,011 compared with 6,168 at the end of 1993.
INFLATION
General inflation has not had a significant impact on the Company over the past
three years due to strong cash flow from operations. The Company continues to
maximize cash flow through programs designed for cost containment, productivity
improvements, and capital spending. Management does not expect inflation to have
a significant impact on the results of operations or financial condition in the
foreseeable future.
<PAGE>
18
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS
Financial Statements
Report of Independent Accountants...............................19
Consolidated Statements of Income...............................20
Consolidated Balance Sheets.....................................21
Consolidated Statements of Cash Flows...........................22
Consolidated Statements of Shareholders' Equity.................23
Notes to Consolidated Financial Statements......................24
Financial Statement Schedule
Schedule II - Valuation and Qualifying Accounts
and Reserves................................................40
<PAGE>
19
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of Crown Cork & Seal Company, Inc.
In our opinion, the consolidated financial statements listed in the accompanying
index present fairly, in all material respects, the financial position of Crown
Cork & Seal Company, Inc. and its subsidiaries at December 31, 1994 and 1993,
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1994, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe our audits
provide a reasonable basis for the opinion expressed above.
As discussed in Note B, the Company changed its methods of accounting for income
taxes, postretirement benefits and postemployment benefits in 1993.
Price Waterhouse LLP
Thirty South Seventeenth Street
Philadelphia, Pennsylvania 19103
February 10, 1995
<PAGE>
20
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Net sales................................................. $4,452.2 $4,162.6 $3,780.7
-------- -------- --------
Costs, expenses and other income
Cost of products sold (excluding
depreciation and amortization) ................... 3,699.5 3,474.0 3,197.4
Depreciation and amortization......................... 218.3 191.7 142.4
Selling and administrative expense.................... 135.4 126.6 112.1
Provision for restructuring . . Note H................ 114.6
Interest expense...................................... 98.8 89.8 77.4
Interest income....................................... (7.2) (10.1) (13.5)
Translation and exchange adjustments ................. 10.1 10.8 10.2
---- ---- ----
4,269.5 3,882.8 3,526.0
------- ------- -------
Income before income taxes and cumulative
effect of accounting changes.......................... 182.7 279.8 254.7
Provision for income taxes . . Note O............. 55.6 97.4 101.0
---- ---- -----
Income from operations.................................... 127.1 182.4 153.7
----- ----- -----
Equity in earnings of affiliates, net of
minority interests . . Notes F and P.............. 3.9 (1.5) 1.7
--- ---- ---
Net income before cumulative effect of
accounting changes.................................... 131.0 180.9 155.4
----- ----- -----
Cumulative effect of accounting
changes . . Note B..................................... (81.8)
----- ----- -----
Net income............................................ $131.0 $99.1 $155.4
====== ===== ======
Average common share data:
Earnings before cumulative effect of
accounting changes.................................... $1.47 $2.08 $1.79
Cumulative effect of accounting
changes . . Note B.................................... (.94)
----- ----- -----
Earnings per average common share......................... $1.47 $1.14 $1.79
===== ===== =====
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
21
CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
<TABLE>
<CAPTION>
December 31 1994 1993
---- ----
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents..................................... $43.5 $54.2
Receivables . . Note D........................................ 738.0 532.9
Inventories . . Note E........................................ 767.5 699.7
Prepaid expenses and other current assets .................... 56.6 37.7
---- ----
Total current assets ................................. 1,605.6 1,324.5
------- -------
Long-term notes and receivables .................................. 70.4 67.9
Investments . . Note F ........................................... 47.7 42.6
Goodwill, net of amortization .................................... 1,122.4 1,119.1
Property, plant and equipment . . Note G ......................... 1,816.5 1,593.5
Other non-current assets ......................................... 118.7 88.7
----- ----
Total ................................................ $4,781.3 $4,236.3
======== ========
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities
Short-term debt . . Note I.................................... $604.5 $372.9
Current portion of long-term debt . . Note I ................. 131.3 101.9
Accounts payable and accrued liabilities . . Note K .......... 737.1 795.3
United States and foreign income taxes........................ 10.1 10.6
---- ----
Total current liabilities ............................ 1,483.0 1,280.7
------- -------
Long-term debt, excluding current maturities . . Note I........... 1,089.5 891.5
Other non-current liabilities . . Note L.......................... 128.8 135.6
Postretirement and pension liabilities . . Note N................. 639.4 623.0
Minority interests . . Note P..................................... 75.4 53.7
Shareholders' equity
Common stock with $5.00 par value;
120,000,000 shares authorized;
118,490,814 shares issued................................. 592.5 592.5
Additional paid-in capital.................................... 168.4 167.4
Retained earnings............................................. 974.1 843.1
Minimum pension liability adjustment . . Note N............... (48.1) (46.3)
Cumulative translation adjustment............................. (175.9) (156.5)
Treasury stock (1994 - 29,130,774 shares;
1993 - 29,676,281 shares)................................. (145.8) (148.4)
------ ------
Total shareholders' equity............................ 1,365.2 1,251.8
------- -------
Total................................................ $4,781.3 $4,236.3
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Certain reclassifications of prior years' data have been made to improve
comparability.
<PAGE>
22
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities
Net income ........................................... $131.0 $99.1 $155.4
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization..................... 218.3 191.7 142.4
Provision for restructuring....................... 73.2
Cumulative effect of accounting changes........... 81.8
Deferred income taxes............................. (23.3) 45.5 39.4
Minority interest in earnings of subsidiaries..... 12.4 6.5 4.6
Equity in earnings of joint ventures,
net of dividends.............................. (9.0) 2.1 (1.7)
Other, net........................................ (.3) 6.1 .7
Changes in assets and liabilities,
net of businesses acquired:
Receivables....................................... (185.5) 69.2 (.3)
Inventories....................................... (37.8) 5.2 (108.4)
Accounts payable and accrued liabilities.......... (153.5) (140.2) (2.1)
Other............................................. (18.7) (15.8) (12.4)
----- ----- -----
Net cash provided by
operating activities.......................... 6.8 351.2 217.6
--- ----- -----
Cash flows from investing activities
Capital expenditures.................................. (439.8) (271.3) (150.6)
Acquisition of businesses, net of cash acquired....... (65.7) (66.2) (538.5)
Proceeds from sale of property, plant
and equipment..................................... 7.7 11.9 13.9
Proceeds from sale of businesses...................... 83.6
Other, net............................................ (1.5) (.3) (.9)
---- --- ---
Net cash used for investing activities........ (499.3) (242.3) (676.1)
------ ------ ------
Cash flows from financing activities
Proceeds from long-term debt.......................... 154.8 548.3 532.7
Payments of long-term debt............................ (186.5) (715.0) (113.0)
Net change in short-term debt......................... 495.6 136.5 78.7
Common stock:
Repurchase for treasury........................... (12.7) (86.5) (61.4)
Issued under various employee benefit plans....... 16.3 30.0 17.1
Minority contributions, net of dividends paid ....... 9.0 7.0 21.0
--- --- ----
Net cash (used for)/provided by
financing activities......................... 476.5 (79.7) 475.1
----- ----- -----
Effect of exchange rate changes on cash
and cash equivalents.................................. 5.3 (1.9) (9.9)
--- ---- ----
Net change in cash and cash equivalents................... (10.7) 27.3 6.7
Cash and cash equivalents at January 1.................... 54.2 26.9 20.2
---- ---- ----
Cash and cash equivalents at December 31.................. $43.5 $54.2 $26.9
===== ===== =====
</TABLE>
The accompanying notes are an integral part of these financial statements.
Certain reclassifications of prior years' data have been made to improve
comparability.
<PAGE>
23
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in millions, except share data)
<TABLE>
<CAPTION>
Minimum Cumulative
Common Paid-In Retained Pension Translation Treasury
Stock Capital Earnings Liability Adjustment Stock Total
----- ------- -------- --------- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance December 31, 1991................. $197.5 $134.4 $880.1 $(75.3) $(52.3) $1,084.4
Net income - 1992..................... 155.4 155.4
Stock repurchased:
1,747,774 shares...................... (52.7) (8.7) (61.4)
Stock issued under stock option and
employee savings plans:
775,423 shares........................ 13.3 3.8 17.1
Three-for-one stock split................. 395.0 (291.5) (103.5)
Translation adjustments................... (51.9) (51.9)
----- ----- ----- ----- ------ ------ -------
Balance December 31, 1992................. 592.5 95.0 744.0 (127.2) (160.7) 1,143.6
Net income - 1993..................... 99.1 99.1
Stock repurchased:
2,580,982 shares ..................... 73.6) (12.9) (86.5)
Stock issued under stock option and
employee savings plans:
1,415,711 shares...................... 23.6 7.0 30.6
Stock issued in business combination:
3,631,624 shares...................... 122.4 18.2 140.6
Minimum pension liability adjustment...... (46.3) (46.3)
Translation adjustments................... (29.3) (29.3)
----- ----- ----- ----- ------ ------ -------
Balance December 31, 1993................. 592.5 167.4 843.1 (46.3) (156.5) (148.4) 1,251.8
Net income - 1994..................... 131.0 131.0
Stock repurchased:
347,360 shares ....................... (10.9) (1.8) (12.7)
Stock issued under stock option and
employee savings plans:
892,867 shares........................ 11.9 4.4 16.3
Minimum pension liability adjustment...... (1.8) (1.8)
Translation adjustments................... (19.4) (19.4)
----- ----- ----- ----- ------ ------ -------
Balance December 31, 1994................. $592.5 $168.4 $974.1 ($48.1) ($175.9) ($145.8) $1,365.2
====== ====== ====== ====== ======= ======= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Share data for prior years has not been restated for the 3 for 1 common stock
split declared in 1992.
Certain reclassifications of prior years' data have been made to improve
comparability.
<PAGE>
24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except per share, employee, shareholder and statistical data)
(share data for years prior to 1992 have been restated for the 3 for 1 common
stock split declared in 1992.)
A. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of Crown Cork & Seal
Company, Inc. and its wholly-owned and majority-owned subsidiary companies. All
significant intercompany accounts and transactions are eliminated in
consolidation. Investments in joint ventures and other companies in which Crown
does not have control, but has the ability to exercise significant influence
over operating and financial policies (generally greater than 20% ownership) are
accounted for by the equity method. Other investments are carried at cost.
Foreign Currency Translation
For non-U.S. subsidiaries which operate in a local currency environment, assets
and liabilities are translated into U.S. dollars at year-end exchange rates.
Income and expense items are translated at average rates prevailing during the
year. Translation adjustments for these subsidiaries are accumulated in a
separate component of Shareholders' Equity. For non-U.S. subsidiaries which
operate in U.S. dollars (functional currency) or whose economic environment is
highly inflationary, local currency inventories and plant and other property are
translated into U.S. dollars at approximate rates prevailing when acquired; all
other assets and liabilities are translated at year-end exchange rates.
Inventories charged to cost of sales and depreciation are remeasured at
historical rates; all other income and expense items are translated at average
exchange rates prevailing during the year. Gains and losses which result from
remeasurement are included in earnings.
Cash and Cash Equivalents
Cash equivalents represent investments with maturities of three months or less
from the time of purchase, and are carried at cost which approximates fair value
because of the short maturity of those instruments.
Inventory Valuation
Inventories are carried at the lower of cost or market, with cost for all
domestic metal, plastic container, crown and closure inventories determined
under the last-in, first-out (LIFO) method. Machinery Division and non-U.S.
inventories are principally determined under the average cost method.
Goodwill
Goodwill, representing the excess of the cost over the net tangible and
identifiable intangible assets of acquired businesses, is stated on the basis of
cost and is amortized, principally on a straight-line basis, over the estimated
future periods to be benefited (primarily 40 years). On a periodic basis the
Company reviews the recoverability of goodwill based primarily upon an analysis
of cash flows from the acquired businesses. Accumulated amortization amounted to
$86.9 and $62.7 at December 31, 1994 and 1993, respectively.
Property, Plant and Equipment
Property, plant and equipment (PP&E) is carried at cost and includes
expenditures for new facilities and those costs which substantially increase the
useful lives of existing PP&E. Maintenance, repairs and minor renewals are
expensed as incurred. When properties are retired or otherwise disposed, the
related costs and accumulated depreciation are eliminated from the respective
accounts and any profit or loss on disposition is reflected in income. Costs
assigned to PP&E of acquired businesses are based on estimated fair value at the
date of acquisition. Depreciation and amortization are provided on a
straight-line basis for financial reporting purposes and an accelerated basis
for tax purposes. The useful lives range between 40 years for buildings and 5
years for vehicles.
<PAGE>
25
Treasury Stock
Treasury stock is reported at par value and constructively retired. The excess
of fair value over par value is first charged to paid-in capital, if any, and
then to retained earnings.
Research and Development
Research, development and engineering expenditures which amounted to $21.1,
$23.3 and $16.7 in 1994, 1993 and 1992, respectively, are expensed as incurred.
Earnings Per Share
Earnings per share are computed based on the weighted average number of shares
actually outstanding during the period plus the shares that would be outstanding
assuming the exercise of dilutive stock options, which are considered to be
common stock equivalents. The number of equivalent shares that would be issued
from the exercise of stock options is computed using the treasury stock method.
Reclassifications
Certain reclassifications of prior years' data have been made to improve
comparability.
B. Accounting Changes
Effective January 1, 1993, the Company adopted SFAS No.106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions," and SFAS No. 109,
"Accounting for Income Taxes." In the fourth quarter of 1993, effective January
1, 1993, the Company adopted SFAS No. 112, "Employers' Accounting for
Postemployment Benefits." The incremental after-tax effect of these accounting
changes was a non-cash charge to 1993 earnings of $2.5 or $.03 per share.
SFAS No. 106 requires employers to recognize the costs and obligations for
postretirement benefits other than pensions over the employees' service lives.
Previously, such costs were generally recognized as an expense when paid. The
cumulative effect of implementing SFAS No. 106 as of January 1,1993 resulted in
a non-cash charge to net income, net of $46.0 tax benefit, of $89.2 or $1.03 per
share.
SFAS No. 109 establishes new accounting and reporting standards for income taxes
and requires adopting the liability method, which replaces the deferred method
required by Accounting Principles Board Opinion (APB) No. 11. The cumulative
effect of implementing SFAS No. 109 as of January 1, 1993 resulted in a non-cash
increase to net income of $23.5 or $.27 per share.
SFAS No. 112 requires employers to accrue the costs and obligations of
postemployment benefits (severance, disability, and related life insurance and
health care benefits) to be paid to inactive or former employees. Prior to
adoption, the Company had recognized expense for the cost of these benefits
either on an accrual or on an "as paid" basis, depending on the plan. The
cumulative effect of implementing SFAS No. 112 resulted in a non-cash charge to
net income, net of $8.5 tax benefit, of $16.1 or $.18 per share as of January 1,
1993.
C. Acquisitions
On June 27, 1994, the Company acquired the can manufacturing facilities of
Tri-Valley Growers for approximately $61 in cash, which was financed principally
through cash from operations. The Company also acquired the stock of a tooling
company in Pennsylvania for approximately $3 in cash.
On April 16, 1993, the Company's acquisition of the Van Dorn Company was
completed through the issuance of 3,631,624 shares of the Company's common stock
valued at approximately $140, and the payment in cash of approximately $37. The
cash portion was financed through cash from operations. Van Dorn's Plastic
Machinery Division was then sold on April 20, 1993 for approximately $81 in cash
to an
<PAGE>
26
affiliate of Mannesmann Demag, AG. During 1993, the Company through its
affiliate, CONSTAR International, also acquired, in separate transactions,
Wellman, Inc.'s 50% interest in Wellstar Acquisition, B.V., for consideration of
approximately $33 in cash, and the minority interest in Wellstar Acquisition's
affiliate, Wellstar Holding, B.V. The Company now owns 100% of Wellstar Holding.
During 1992, the Company acquired the outstanding stock of Constar
International, Inc. (CONSTAR) for approximately $519 in cash, which was financed
through bank borrowings. Additionally, during 1992, the Company acquired in
separate transactions with an aggregate cost of approximately $20, the stock of
a tooling and machine overhaul company in Wisconsin, the assets of a coil
coating facility in Ohio and the assets of a crown manufacturer in Texas. The
cost of these acquisitions was financed through cash from operations.
For financial reporting purposes, all of the acquisitions above were treated as
purchases. An excess purchase price of approximately $581 has been determined,
based upon the fair values of assets acquired and liabilities assumed in
connection with the above acquisitions. A final allocation of the purchase price
for 1994 acquisitions will be determined during 1995 when appraisals and other
studies are completed. The operating results of each acquisition are included in
consolidated net income from the date of acquisition.
The following represents the non-cash impact of the acquisitions noted above:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Fair value of assets acquired ................................ $89.1 $421.4 $749.5
Liabilities assumed .......................................... (25.1) (201.9) (210.9)
Issuance of common stock (3,631,624 shares) .................. (140.6)
----- ------ ------
Cash paid..................................................... $64.0 $78.9 $538.6
===== ===== ======
</TABLE>
The following represents the unaudited pro forma results of operations as if the
above noted business combinations had occurred at the beginning of the
respective year in which the companies were acquired as well as at the beginning
of the immediately preceding year:
<TABLE>
<CAPTION>
(unaudited) 1994 1993
---- ----
<S> <C> <C>
Net sales.............................................................. $4,501.7 $4,382.0
Income before income taxes and cumulative
effect of accounting changes......................................... 185.6 275.0
Net income before cumulative effect of accounting changes.............. 130.3 178.9
Earnings per average common share before cumulative
effect of accounting changes ........................................ $1.46 $2.05
</TABLE>
The pro forma operating results include each company's results of operations for
the indicated years with increased depreciation and amortization on property,
plant and equipment along with other relevant adjustments to reflect fair market
value. Interest expense on the acquisition borrowings has also been included.
The pro forma information given above does not purport to be indicative of the
results that actually would have been obtained if the operations were combined
during the periods presented, and is not intended to be a projection of future
results or trends.
<PAGE>
27
D. Receivables
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Accounts and notes receivable ......................................... $657.6 $482.3
Less: Allowance for possible losses.................................... (10.6) (6.2)
----- ----
Net trade receivables................................................ 647.0 476.1
Miscellaneous receivables.............................................. 91.0 56.8
---- ----
$738.0 $532.9
====== ======
</TABLE>
E. Inventories
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Finished goods and work in process .................................... $391.3 $329.7
Raw materials and supplies ............................................ 376.2 370.0
----- -----
$767.5 $699.7
====== ======
</TABLE>
Approximately 55% and 57% of worldwide inventories at December 31, 1994 and
1993, respectively, were stated on the last-in, first-out (LIFO) method of
inventory valuation. Had average cost (which approximates replacement cost) been
applied to such inventories at December 31, 1994 and 1993, total inventories
would have been $22.4 and $26.8 higher, respectively.
F. Investments
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
January 1.............................................................. $42.6 $55.6
Change in reporting entity ............................................ (6.5) (17.7)
Dividends received from equity affiliates.............................. (7.3) (7.1)
Equity in earnings of joint ventures................................... 16.3 5.0
Sale of investments.................................................... (2.8)
Change in cumulative translation on net assets of
equity affiliates.................................................... 0.1 (.3)
Acquisition of equity and investments in joint ventures................ 2.5 9.9
--- ---
December 31 ........................................................... $47.7 $42.6
===== =====
</TABLE>
G. Property, Plant and Equipment
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Buildings.............................................................. $470.0 $422.0
Machinery and equipment................................................ 2,080.1 1,781.9
------- -------
2,550.1 2,203.9
Less: Accumulated depreciation and amortization....................... (1,049.1) (889.1)
-------- ------
1,501.0 1,314.8
Land................................................................... 93.4 92.0
Construction in progress............................................... 222.1 186.7
----- -----
$1,816.5 $1,593.5
======== ========
</TABLE>
<PAGE>
28
H. Restructuring
On September 14, 1994 the Company announced its plans to restructure thirteen
metal packaging facilities. The balance of these reserves, (excluding the
writedown of assets which are reflected as a reduction of the related asset
account), are included within accounts payable and accrued liabilities and other
non-current liabilities. The components of restructuring are as follows:
<TABLE>
<CAPTION>
Original
Provision 1994 Activity Balance
--------- ------------- -------
<S> <C> <C> <C>
Employee costs................................................ $58.4 ($41.8) $16.6
Writedown of assets........................................... 50.4 (50.4)
Lease termination and property holding costs.................. 6.1 (0.2) 5.9
Anticipated gain from sale of properties...................... (11.1) (11.1)
Incremental operating losses.................................. 10.8 (5.4) 5.4
---- ---- ---
$114.6 ($97.8) $16.8
====== ====== =====
</TABLE>
Employee costs primarily include severance costs to be paid to terminated
employees and amounts necessary to reflect pension and retiree medical benefits,
as determined by the Company's actuary. Benefits provided to employees to be
terminated include only those predetermined benefits fully described in existing
union contracts or as described in the "Company's Salaried Employee's Benefits
handbook". The plan of restructuring only provides for the costs of employees
terminated involuntarily. Costs attributable to pension and other
post-retirement benefits not paid by December 31, 1994 have been reclassified to
their respective liability accounts at year-end. See Note N to the Consolidated
Financial Statements.
The consolidation of the Company's three-piece steel container business into a
reduced number of facilities resulted in certain equipment becoming excess. The
Company has written down these excess assets to their estimated realizable
values. The restructuring charge also includes the estimated losses on the
disposal of the related properties.
Costs provided for lease termination include remaining lease payments and other
costs to be incurred in maintaining the property between the closure date of the
facility and the lease termination date. Costs provided for property held for
sale include costs incurred in maintaining the property from the date of closure
of the facility to estimated sale date of the facility.
The Company has offset the cost of restructuring by gains expected to be
realized upon the sale of two facilities. Additionally, the Company has provided
for estimated operating losses to be incurred between the announcement date and
closure date for affected facilities.
Where applicable, the Company has also established reserves to restructure
acquired companies. These purchase accounting adjustments related primarily to
employee separation costs to be incurred upon plant closures, such as severance
and additional pension and retiree medical liabilities. As of December 31, 1994,
remaining balances from 1994 and 1993 acquisitions were $22.2. The Company
expects these balances to be substantially liquidated during 1995.
The Company, as appropriate, periodically charges operations in the current
period when non-recurring severance plans are announced. The Company charged
$4.9 and $11.1 to operations in 1994 and 1993, respectively. Those amounts are
also classified as restructuring and are included in accounts payable and
accrued liabilities.
<PAGE>
29
I. Short-Term Borrowings and Long-Term Debt
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Short-term Borrowings (1)
Commercial paper (6.1%, 3.5%, and 5.4%
weighted average interest rates at December 31,
1994, 1993 and 1992, respectively)................................... $660.6 $324.0
Notes payable to banks/overdrafts (6.5%, 8.5%, and 6.7%
weighted average interest rates at December 31, 1994, 1993
and 1992, respectively).............................................. 178.9 48.9
Commercial paper reclassified to long-term (2)......................... (235.0)
------
$604.5 $372.9
====== ======
Long-Term Debt
Commercial paper (2)................................................... $235.0
8.49% private placement due 1994 to 1996............................... 100.0 $150.0
Bank term loan, rates in 1994 ranging from 3.8% to
6.8%, due 1995-1997.................................................. 100.0 150.0
5.88% notes due 1998................................................... 100.0 100.0
7.00% notes due 1999................................................... 100.0
6.75% notes due 2003................................................... 200.0 200.0
8.00% notes due 2023................................................... 200.0 200.0
Belgian Franc notes due 1996 (3)....................................... 47.1 13.8
Other loans in various currencies,
rates in 1994 ranging from 4.5% to 11.5%,
due 1994-2002 (4).................................................... 138.7 179.6
----- -----
1,220.8 993.4
Less current maturities of long-term debt issuances.................... (131.3) (101.9)
------ ------
Total long-term debt................................................... $1,089.5 $891.5
======== ======
<FN>
(1) Domestic and Canadian operations working capital requirements are funded on
a short-term basis through the issuance of commercial paper. Short-term
funds for certain international operations are obtained through bank
overdrafts and short-term notes payable. The weighted average interest
rates for commercial paper outstanding during 1994, 1993 and 1992, were
4.8%, 3.6% and 5.0%, respectively. The weighted average interest rates for
notes and overdrafts outstanding during 1994, 1993 and 1992, were 6.9%,
9.2% and 11.3%, respectively. The weighted average amount of short-term
debt outstanding during the years 1994, 1993 and 1992 were $736.5, $529.5
and $255.7, respectively. Short-term borrowings did not exceed $915.5,
$651.1 and $342.6, during 1994, 1993 and 1992, respectively. At December
31, 1992, commercial paper was $154.0 and notes and overdrafts totaled
$39.4.
(2) At December 31, 1994, $235.0 of commercial paper was classified as
long-term, reflecting the Company's intent and ability to refinance these
borrowings on a long-term basis. At December 31, 1994 and 1993, the Company
had additional lines of credit amounting to $275.0 and $550.0,
respectively, available under formal borrowing arrangements with various
banks which expire in 1994 and 1995. At December 31, 1994, the Company had
drawn $40.0 related to these credit lines at a weighted average interest
cost of 6.3%. In February 1995, the Company formalized a $1,000.0
multi-currency credit facility which expires in February, 2000. This
facility, which is unrestricted, replaces the above lines of credit and
bears interest at variable market rates.
(3) This facility bears interest at variable market rates. The Company has
entered into an interest rate swap agreement to convert 1,000.0 Belgian
Francs ($31.4 at December 31, 1994) to a 6.53% fixed rate
<PAGE>
30
obligation. The contract amount represents 66.7% of the total underlying
debt and has a maturity which coincides with that of the debt.
(4) Approximately $24.6 and $15.7 is non-recourse to the Company at December
31, 1994 and 1993, respectively. An additional $28.8 of this indebtedness
becomes non-recourse to the Company upon project completion requirements
being met by an affiliate.
</FN>
</TABLE>
On December 20, 1994, the Company filed an S-3 Registration Statement to issue
up to $500.0 of debt securities. On January 15, 1995, $300.0, 8.38% notes due
2005 were issued with the proceeds used to pay down short-term indebtedness.
Aggregate maturities of total long-term debt for the five years subsequent to
December 31, 1994 are $131.3; $147.7; $53.5; $120.7 and $109.8, respectively.
Cash payments for interest were $107.1 (including capitalized interest of $5.5)
in 1994, $82.2 in 1993 and $78.4 in 1992.
The carrying value of total debt as of December 31, 1994 and 1993 does not
differ materially from its estimated market value.
J. Financial Instruments
It is the Company's policy to reduce its exposure to adverse fluctuations in
interest and foreign exchange rates.
The Company has a program to offset equivalent foreign currency assets and
liabilities, thereby minimizing net exposures. The Company uses only liquid
instruments from credit worthy financial institutions and does not enter into
leveraged, tiered or illiquid contracts. Further, the Company does not enter
into derivative financial instruments for trading purposes.
Complementary to this approach, the Company enters into forward exchange
contracts, primarily in European currencies, to hedge certain foreign currency
transactions for periods consistent with the terms of the underlying
transactions. As of December 31, 1994 and 1993, the Company had outstanding
foreign exchange contracts to buy or sell foreign currencies for an aggregate
notional amount of $126.1 and $59.8, respectively. Based on year-end exchange
rates and the maturity date of the various contracts, the aggregate contract
value of these items approximated fair value at December 31, 1994 and 1993,
respectively. Gains and losses resulting from contracts that are designated and
effective as hedges are recognized in the same period as the underlying hedged
transaction.
The Company also enters into interest rate swap and cap agreements to manage
interest rates on its underlying debt obligations. Costs associated with these
financial instruments are generally amortized over the lives of the instruments
and are not material to the Company's financial results. Differences in
interest, which are paid or received, are recognized as adjustments to interest
expense of the underlying debt obligation.
At December 31, 1994, the Company was party to one material interest rate
contract. See Note I to the Consolidated Financial Statements.
<PAGE>
31
K. Accounts Payable and Accrued Liabilities
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Trade accounts payable................................................. $440.1 $492.9
Interest............................................................... 10.9 11.5
Employee benefits...................................................... 130.8 136.2
Salaries, wages and other compensation................................. 33.1 23.2
Environmental.......................................................... 2.7 3.3
Restructuring.......................................................... 30.4 54.3
Deferred taxes......................................................... 6.0 11.9
Other.................................................................. 83.1 62.0
---- ----
$737.1 $795.3
====== ======
</TABLE>
L. Other Non-Current Liabilities
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Postemployment benefits................................................ $19.1 $17.3
Restructuring.......................................................... 13.5 50.9
Deferred taxes......................................................... 35.9 19.6
Environmental.......................................................... 22.9 27.4
Other.................................................................. 37.4 20.4
---- ----
$128.8 $135.6
====== ======
</TABLE>
Other non-current assets includes $16.4 and $19.4 at December 31, 1994 and 1993,
respectively, for estimated recoveries related to environmental liabilities.
M. Stock Options
All amounts below have been adjusted to reflect the 3 for 1 stock split to
shareholders of record as of May 12, 1992.
In accordance with the Stock Option Plans adopted in 1983 and 1984, options to
purchase 9,180,000 Common Shares have been granted to officers and key
employees. Options were granted at market value on the date of grant and are
exercisable beginning one to two years from date of grant and terminate from
five to ten years from date of grant.
<TABLE>
<CAPTION>
Transactions for 1994, 1993 and 1992 are as follows: 1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Options outstanding January 1................................. 99,000 538,290 976,275
Granted....................................................... 0 0 0
Exercised..................................................... (18,000) (422,790) (427,485)
Canceled...................................................... 0 (16,500) (10,500)
------ ------- -------
Options outstanding at December 31............................ 81,000 99,000 538,290
====== ====== =======
Options price range at December 31............................ $10.44 $10.44 $10.44
to
$14.25
Options exercisable at December 31 ........................... 9,000 9,000 215,790
Options available for grant at December 31.................... 0 0 0
</TABLE>
In accordance with the 1990 Stock-Based Incentive Compensation Plan, options to
purchase 6,000,000 common shares can be granted to officers and key employees.
Options were granted at market value on
<PAGE>
32
the date of grant and are exercisable beginning one to two years from date of
grant and terminate up to ten years from date of grant. Certain options granted
to employees of acquired companies, which are included in the table below, do
not reduce the shares available for grant under the 1990 plan.
<TABLE>
<CAPTION>
Transactions for 1994, 1993 and 1992 are as follows: 1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Options outstanding January 1................................. 3,523,315 4,005,300 4,513,500
Granted ...................................................... 357,196 765,854 283,800
Exercised..................................................... (818,286) (971,589) (585,375)
Canceled...................................................... (173,000) (276,250) (206,625)
-------- -------- --------
Options outstanding at December 31............................ 2,889,225 3,523,315 4,005,300
========= ========= =========
Options price range at December 31 ........................... $16.96 $16.96 $16.96
to to to
$40.00 $40.00 $38.50
Options exercisable at December 31............................ 810,790 572,436 384,375
Options available for grant at December 31.................... 860,725 919,721 1,409,325
</TABLE>
N. Pensions and Other Retirement Benefits
Pensions
The Company sponsors various pension plans, covering substantially all U.S.,
Canadian and some non-U.S. and non-Canadian employees and participates in
certain multi-employer pension plans. The company-sponsored plans are currently
funded. The benefits for these plans are based primarily on years of service and
the employees' remuneration near retirement. Contributions to multi-employer
plans in which the Company and its non-U.S. and non-Canadian subsidiaries
participate are determined in accordance with the provisions of negotiated labor
contracts or applicable local regulations.
Plan assets of company-sponsored plans of $1,119.7 consist principally of common
stocks and fixed income securities, including $216.6 of the Company's common
stock.
Pension expense amounted to $1.3 (including expense of $7.2 for non-company
sponsored plans) in 1994, income of $18.6 (including expense of $5.7 for
non-company sponsored plans) in 1993 and income of $4.8 (including expense of
$6.0 for non-company sponsored plans) in 1992. Pension cost for non-U.S. and
non-Canadian plans in 1994, 1993 and 1992 was determined under statutory
accounting principles which are not considered materially different from U.S.
generally accepted accounting principles.
The 1994, 1993 and 1992 components of pension cost for company-sponsored plans
were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Service cost - benefits earned during the year................ $14.1 $11.4 $12.6
Interest cost on projected benefit obligations ............... 94.6 99.3 100.7
Return on assets:
-actual.................................................. 31.0 (133.5) (134.1)
-deferred (loss)/gain.................................... (163.5) 4.7 13.4
Amortization of net unrecognized (gain)/loss
at January 1, 1986....................................... .1 (.7) (.7)
Amortization of net unrecognized loss/(gain) ................. .7 (5.5) (3.9)
Cost attributable to plant closings........................... 17.1 1.2
---- ------ ------
Total pension (income)........................................ ($5.9) ($24.3) ($10.8)
===== ====== ======
</TABLE>
<PAGE>
33
Cost attributable to plant closings is included within the restructuring charge
as more fully described in Note H to the Consolidated Financial Statements.
The funded status of company-sponsored plans, including the assets and
liabilities assumed in connection with acquisitions, at December 31, 1994 and
1993 was as follows:
<TABLE>
<CAPTION>
Plans in which
Accumulated Assets Exceeded
Benefits Accumulated
Exceeded Assets Benefits
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Actuarial present value of:
Vested benefit obligation..................... ($925.8) ($1,058.2) ($236.7) ($236.5)
Non-vested benefits........................... (18.0) (13.2) (2.2) (2.6)
----- ----- ---- ----
Accumulated benefit obligation............ ($943.8) ($1,071.4) ($238.9) ($239.1)
======= ========= ======= =======
Actuarial present value of projected benefit
obligation.................................... ($961.4) ($1,085.4) ($258.5) ($261.9)
Plan assets at fair value.......................... 767.8 901.8 351.9 351.6
----- ----- ----- -----
Plan assets in excess of (less than) projected
benefit obligation ........................... (193.6) (183.6) 93.4 89.7
Unrecognized (gain) loss at January 1, 1986........ 12.8 .5 (5.3) (6.0)
Unrecognized net (gain) loss since 1986 ........... 98.9 96.6 (20.1) (32.6)
Unrecognized prior service cost.................... 2.8 1.7 2.0 1.6
Minimum liability.................................. (96.4) (84.8)
----- ----- ----- -----
(Accrued)/Prepaid pension cost at
December 31................................... ($175.5) ($169.6) $70.0 $52.7
======= ======= ===== =====
</TABLE>
The Company recognizes a minimum pension liability for underfunded plans. The
minimum liability is equal to the excess of the accumulated benefit obligation
over plan assets. A corresponding amount is recognized as either an intangible
asset, to the extent of previously unrecognized prior service cost and
previously unrecognized transition obligation, or a reduction of shareholders'
equity. The Company had recorded additional liabilities of $96.4 and $84.8 as of
December 31, 1994 and 1993, respectively. An intangible asset of $10.6 and $1.5
and a shareholders' equity reduction, net of income taxes, of $48.1 and $46.3
was recorded as of December 31, 1994 and 1993, respectively.
The weighted average actuarial assumptions for the Company's pension plans are
as follows:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Discount rate................................................. 8.6% 7.1% 8.8%
Compensation increase......................................... 5.2% 5.2% 5.2%
Long-term rate of return...................................... 11.0% 11.0% 11.0%
</TABLE>
Other Postretirement Benefit Plans
The Company and certain subsidiaries sponsor unfunded plans to provide health
care and life insurance benefits to pensioners and survivors. Generally, the
medical plans pay a stated percentage of medical expenses reduced by deductibles
and other coverages. Life insurance benefits are generally provided by insurance
contracts. The Company reserves the right, subject to existing agreements, to
change, modify or discontinue the plans.
<PAGE>
34
The net postretirement benefit cost was comprised of the following components:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Service cost for benefits earned during the year.................. $5.5 $3.6
Interest cost on accumulated postretirement benefit obligation.... 39.1 45.0
Cost attributable to plant closings .............................. 10.8
---- -----
Net postretirement benefit cost .............................. $55.4 $48.6
===== =====
</TABLE>
Cost attributable to plant closings is included within the restructuring charge
as more fully described in Note H to the Consolidated Financial Statements.
Health care claims and life insurance benefits paid totaled $36.3 in 1994, $41.6
in 1993 and $35.2 in 1992.
The following provides a reconciliation of the accumulated postretirement
benefit obligation to the liabilities recognized in the Company's balance sheet
as of December 31:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Retirees.......................................................... ($401.1) ($461.2)
Fully eligible active plan participants........................... (38.9) (96.7)
Other active plan participants.................................... (46.1) (79.2)
----- -----
Total accumulated obligation...................................... ($486.1) (637.1)
Unrecognized net (gain) loss...................................... (79.1) 89.1
----- ----
Accrued postretirement benefit obligation......................... ($565.2) ($548.0)
======= =======
</TABLE>
The health care accumulated postretirement benefit obligation was determined at
December 31, 1994 and 1993 using health care trend rates of 10.1% and 12.5%,
respectively, decreasing to 5.1% over ten years and 7% over fifteen years,
respectively. The assumed long-term rate of compensation increase used for life
insurance was 5%. The discount rate was 8.5% and 7.1% at December 31, 1994 and
1993, respectively. Changing the assumed health care cost trend rate by one
percentage point in each year would change the accumulated postretirement
benefit obligation by $42.0 and the net postretirement benefit cost by $4.6.
Employee Savings Plan and Employee Stock Purchase Plan
The Company sponsors a Savings Investment Plan which covers all domestic
salaried employees who are 21 years of age with one or more years of service.
The Company matches with equivalent value of Company stock, up to 1.5% of a
participant's compensation. The Company's contributions were approximately $.9
in each of the respective years ending December 31, 1994, 1993 and 1992.
The Company, commencing in 1994, sponsors an Employee Stock Purchase Plan which
covers all domestic employees with one or more years of service who are
non-officers and non-highly compensated as defined by the Internal Revenue Code.
Eligible participants contribute 85% of the quarter ending market price towards
the purchase of each common share. The Company's contribution is equivalent to
15% of the quarter-ending market price. Total shares purchased under the plan in
1994 were 65,437 and the Company's contribution was $.4 .
<PAGE>
35
O. Income Taxes
Pretax income before cumulative effect of accounting changes for the years ended
December 31 was taxed under the following jurisdictions:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Domestic.................................................. $88.5 $214.0 $222.3
Foreign................................................... 94.2 65.8 32.4
---- ---- ----
$182.7 $279.8 $254.7
====== ====== ======
The provision for income taxes consists of the following: 1994 1993 1992
---- ---- ----
Current tax provision:
U.S. Federal......................................... $50.9 $6.0
State and foreign.................................... 18.7 $17.8 26.3
---- ----- ----
69.6 17.8 32.3
---- ---- ----
Deferred tax provision:
U.S. Federal ........................................ (17.7) 74.5 73.5
State and foreign.................................... 3.7 5.1 (4.8)
--- --- ----
(14.0) 79.6 68.7
----- ---- ----
$55.6 $97.4 $101.0
===== ===== ======
</TABLE>
The provision for income taxes differs from the amount of income tax determined
by applying the applicable U.S. statutory federal income tax rate to pretax
income as a result of the following differences:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
U.S. Statutory rate....................................... 35.0% 35.0% 34.0%
Non-U.S. operations @ different rates..................... (8.4%) (1.1%) 1.7%
Amortization of acquisition adjustments................... 4.7% 2.9% 2.3%
Other items, net.......................................... (0.9%) (2.0%) 1.7%
---- ---- ---
Effective income tax rate............................ 30.4% 34.8% 39.7%
==== ==== ====
</TABLE>
The Company paid federal, state, local and foreign (net) income taxes of $88.9
for 1994, $11.7 for 1993 and $38.7 for 1992.
The components of deferred tax assets and liabilities at December 31, follow:
<TABLE>
<CAPTION>
1994 1993
Asset Liability Asset Liability
----- --------- ----- ---------
<S> <C> <C> <C> <C>
Depreciation.............................................. $230.7 $219.2
Postretirement and postemployment benefits................ $206.7 $197.2
Pensions.................................................. 16.9 2.4
Inventories............................................... 40.4 47.2
Tax loss carryforwards.................................... 38.6 37.2
Restructuring............................................. 23.1 34.2
Accruals and other........................................ 43.7 12.3 30.6 10.0
---- ---- ---- ----
329.0 283.4 299.2 278.8
Valuation allowance........................................ (29.2) (31.3)
----- -----
$299.8 $283.4 $267.9 $278.8
====== ====== ====== ======
</TABLE>
<PAGE>
36
Prepaid expenses and other current assets includes $9.2 of deferred tax assets
at December 31, 1994. Other non-current assets includes $49.1 and $20.6 of
deferred tax assets at December 31, 1994 and 1993, respectively.
Approximately $38.6 of deferred tax assets relating to net operating losses and
tax basis differences were available in various foreign tax jurisdictions at
December 31, 1994. Deferred tax assets of $12.1 must be utilized within the next
five years and $26.5 can be utilized over an indefinite period. The Company
believes that it is more likely than not that $9.4 of these benefits are
expected to be realized by achieving future profitable operations based on
actions taken by the Company.
No net benefit has been recorded for the remaining items. Future recognition of
these carryforwards will be made either when the benefit is realized or when it
has been determined that it is more likely than not that the benefit will be
realized against future earnings. No other tax operating loss or credit
carryforwards exist for which the Company has recognized a net financial
benefit.
The cumulative amount of the Company's share of undistributed earnings of
non-U.S. subsidiaries for which no deferred taxes have been provided was $432.2,
$401.2 and $385.2 as of December 31, 1994, 1993 and 1992, respectively.
Management has no plans to distribute such earnings in the foreseeable future.
P. Minority Interests
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
January 1.................................................................. $53.7 $45.6
Formation of new jointly-owned subsidiaries................................ 8.4 7.7
Minority interest in net income of consolidated subsidiaries............... 12.4 6.5
Change in cumulative translation adjustment................................ 5.3 (5.4)
Dividends paid to minority shareholders.................................... (1.3) (1.3)
Investment by minority holders............................................. 1.9 .6
--- --
December 31................................................................ $75.4 $53.7
===== =====
</TABLE>
Q. Leases
Minimum rental commitments under all noncancelable operating leases, primarily
real estate, in effect at December 31, 1994 are:
<TABLE>
<S> <C>
Years ending December 31
1995.................................................................. $22.8
1996.................................................................. 16.0
1997.................................................................. 12.2
1998.................................................................. 9.9
1999.................................................................. 6.9
Thereafter............................................................ 14.5
----
Total minimum payments................................................ 82.3
Less: Total minimum sublease rentals.................................. (6.8)
----
Net minimum rental commitments........................................ $75.5
=====
</TABLE>
Operating lease rental expense (net of sublease rental income of $1.1 in 1994
and $1.0 in 1993 and 1992) was $19.6 in 1994, $21.9 in 1993 and $10.2 in 1992.
<PAGE>
37
R. Quarterly Data (unaudited)
<TABLE>
<CAPTION>
1994 1993
-------------------------------------- --------------------------------------
First Second Third Fourth First Second Third Fourth
----- ------ ----- ------ ----- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales........................ $943.0 $1,134.5 $1,283.3 $1,091.4 $913.1 $1,168.6 $1,145.7 $935.2
Cost of products sold............ 832.4 987.4 1,127.5 970.5 813.9 1,023.0 997.3 831.5
Net income (loss) before
cumulative effect of
accounting changes............. 33.6 64.8 (7.5) 40.1 29.4 56.6 59.7 35.2
Cumulative effect of
accounting changes............. (81.8)
Net income (loss)................ 33.6 64.8 (7.5) 40.1 (52.4) 56.6 59.7 35.2
Per share
Earnings (loss) before
cumulative effect of
accounting changes........... .38 .73 (.08) .45 .35 .65 .68 .40
Cumulative effect of
accounting changes........... (.96)
Earnings (loss) per
average common
share........................ .38 .73 (.08) .45 (.61) .65 .68 .40
Market Price
High........................... 41 7/8 39 3/4 39 1/2 40 7/8 40 7/8 40 38 1/8 41 7/8
Low............................ 36 5/8 33 3/4 33 1/2 35 7/8 35 36 33 1/4 35 1/4
</TABLE>
The closing price of the Company's common stock at December 31, 1994 and 1993
was $37.75 and $41.88, respectively.
Third quarter 1994 includes pre-tax restructuring charges of $114.6, $73.2 after
taxes or $.82 per share. Excluding the effects of the restructuring charge, net
income for the third quarter was $65.7 and earnings per share was $.74.
Restatement of previously reported 1993 quarterly data to reflect accounting
changes resulted in an increase in the net loss of $16. 1 and an increase in the
net loss per share of $.18 for the first quarter of 1993. The restatement does
not have a material effect on net income for the second and third quarters of
1993.
The sum of the quarters' earnings per share does not equal the year-to-date
earnings per share due to changes in average share calculations.
<PAGE>
38
S. Segment Information by Industry and Geographic Area
A. Industry Segment
<TABLE>
<CAPTION>
Net Operating % To Identifiable Depreciation Capital
1994 Sales Profit Net Sales Assets & Amortization Expenditures
----- ------ --------- ------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Metal Packaging & Other . .(2).......... $3,494.3 $212.0(3) 6.1 $3,453.3 $152.9 $232.7
Plastic Packaging....................... 957.9 77.0 8.0 1,284.5 65.4 207.1
----- ---- ------- ---- -----
Consolidated . . (6).................... $4,452.2 $289.0(5) 6.5 4,737.8(6) 218.3 439.8
======== ====== ======= ===== =====
1993
Metal Packaging & Other . .(2).......... $3,367.0 $308.5 9.2 $3,158.7 $140.0 $152.3
Plastic Packaging....................... 795.6 70.2 8.8 1,023.4 51.7 119.0
----- ---- ------- ---- -----
Consolidated . . (6).................... $4,162.6 $378.7(5) 9.1 $4,182.1(6) $191.7 $271.3
======== ====== ======= ===== ======
1992
Metal Packaging & Other . . (2)......... $3,573.1 $296.4 8.3 $3,014.0 $128.5 $133.2
Plastic Packaging....................... 207.6 23.6 11.4 784.2 13.9 17.4
----- ---- ----- ---- ----
Consolidated . . (6).................... $3,780.7 $320.0(5) 8.5 $3,798.2(6) $142.4 $150.6
======== ====== ======= ===== ======
B. Geographic Area
1994
United States........................... $2,969.6 $179.4(3) 6.0 $3,291.1 $150.1 $335.1
Europe.................................. 640.0 48.1 7.5 571.8 31.4 54.8
North and Central America............... 466.6 17.7(3) 3.8 517.7 24.3 10.6
Other Non-U.S........................... 376.0 43.8 11.6 357.2 12.5 39.3
----- ---- ----- ---- ----
Consolidated . . (6).................... $4,452.2(1) $289.0(5) 6.5 $4,737.8(6) $218.3 $439.8
======== ====== ======= ===== ======
1993
United States........................... $2,842.0 $290.2 10.2 $2,909.6 $133.2 $139.8
Europe.................................. 569.1 32.4 5.7 461.1 25.4 57.0
North and Central America............... 464.0 23.3 5.0 528.8 24.0 14.2
Other Non-U.S........................... 287.5 32.8 11.4 282.6 9.1 60.3
----- ---- ----- --- ----
Consolidated . . (6).................... $4,162.6(1) $378.7(5) 9.1 $4,182.1(6) $191.7 $271.3
======== ====== ======= ===== ======
1992
United States........................... $2,411.1 $252.8 10.5 $2,668.3 $90.7 $87.5
Europe................................. 580.2 28.4(4) 4.9 325.7 19.0 21.6
North and Central America............... 497.1 9.1(4) 1.8 599.0 24.7 15.9
Other Non-U.S........................... 292.3 29.7 10.2 205.2 8.0 25.6
----- ---- ----- --- ----
Consolidated . . (6).................... $3,780.7(1) $320.0(5) 8.5 $3,798.2(6) $142.4 $150.6
======== ====== ======= ===== ======
</TABLE>
(1) Transfers between Geographic Areas are not material.
(2) Within "Metal Packaging and Other" is the Company's machinery operation
which along with other non-metal packaging domestic affiliates is not
significant.
(3) Operating profit for 1994 included restructuring charges of $102.3 for U.S.
Metal Packaging and $12.3 for Canadian Metal Packaging.
(4) Operating profit for 1992 in Europe and North and Central America includes
charges made during the year relating to the Company's continuing efforts
to restructure its businesses in these regions.
<PAGE>
39
(5) The following reconciles operating profit to pre-tax income:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Operating profit.......................................... $289.0 $378.7 $320.0
Interest and other corporate
income (expense)*....................................... (106.3) (98.9) (65.3)
------ ----- -----
Pre-tax income............................................ $182.7 $279.8 $254.7
====== ====== ======
</TABLE>
* Includes interest income and expense along with other corporate income and
expense items, such as exchange gains and losses and goodwill amortization.
(6) The following reconciles identifiable assets to total assets:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Identifiable assets....................................... $4,737.8* $4,182.1** $3,798.2
Corporate assets.......................................... 43.5 54.2 26.9
---- ---- ----
Total assets.............................................. $4,781.3 $4,236.3 $3,825.1
======== ======== ========
</TABLE>
* Included in identifiable assets for 1994 is $85.5 relating to the
acquisition of Tri-Valley Growers.
** Included in identifiable assets for 1993 is:
(a) "United States," $96, relating to the acquisition of the Van Dorn
Company.
(b) "Europe," $42, relating to the acquisition of the remaining interest
in CONSTAR International's affiliate, Wellstar Acquisition, B.V. and
its affiliate Wellstar Holdings, B.V.
(7) For the years ended December 31, 1994 and 1993 no one customer accounted
for more than 10% of the Company's net sales. For 1992, one customer
accounted for approximately 10.6% of the Company's net sales.
Included in "Other Non-U.S." are affiliates in South America, Africa, Asia and
the Middle East. Figures for the United States are not comparable due to the
April 1993 acquisition of the Van Dorn Company. Figures for Europe are not
comparable due to the 1993 acquisitions of Wellman's interest in Wellstar
Acquisition, B.V. and the minority interest in Wellstar Acquisition's affiliate,
Wellstar Holding, B.V.
Total non-U.S. liabilities were $777.7, $637.0 and $640.7 at December 31, 1994,
1993 and 1992, respectively.
Certain reclassifications of prior years' data have been made to improve
comparability.
<PAGE>
40
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
1 OF 2
(In millions) For the year Ended December 31, 1994
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- ---------
Balance at Additions Charged Balance at
Beginning to Costs and Deductions - End of
of Period Expenses Write - Offs Period
<S> <C> <C> <C> <C>
Reserves deducted from assets
to which they apply:
Allowance for losses
on accounts receivable $6.2 $4.6 $.2 $10.6
==== ==== ==== =====
</TABLE>
(In millions) For the year Ended December 31, 1993
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- ---------
Balance at Additions Charged Balance at
Beginning to Costs and Deductions - End of
of Period Expenses Write - Offs Period
<S> <C> <C> <C> <C>
Reserves deducted from assets
to which they apply:
Allowance for losses
on accounts receivable $6.7 $4.7 $5.2 $6.2
==== ==== ==== ====
</TABLE>
(In millions) For the year Ended December 31, 1992
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- ---------
Balance at Additions Charged Balance at
Beginning to Costs and Deductions - End of
of Period Expenses Write - Offs Period
<S> <C> <C> <C> <C>
Reserves deducted from assets
to which they apply:
Allowance for losses
on accounts receivable $6.6 $8.4 $8.3 $6.7
==== ==== ==== ====
</TABLE>
<PAGE>
41
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
2 OF 2
(In millions) For the year Ended December 31, 1994
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- ---------
Balance at Additions Charged Balance at
Beginning to Costs and Deductions - End of
of Period Expenses Write - Offs Period
<S> <C> <C> <C> <C>
Reserves deducted from assets
to which they apply:
Accumulated Amortization
of Intangibles including
goodwill $68.5 $32.3 $100.8
===== ===== ======
</TABLE>
(In millions) For the year Ended December 31, 1993
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- ---------
Balance at Additions Charged Balance at
Beginning to Costs and Deductions - End of
of Period Expenses Write - Offs Period
<S> <C> <C> <C> <C>
Reserves deducted from assets
to which they apply:
Accumulated Amortization
of Intangibles including
goodwill $37.8 $30.4 ($.3) $68.5
===== ===== ==== =====
</TABLE>
(In millions) For the year Ended December 31, 1992
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- ---------
Balance at Additions Charged Balance at
Beginning to Costs and Deductions - End of
of Period Expenses Write - Offs Period
<S> <C> <C> <C> <C>
Reserves deducted from assets
to which they apply:
Accumulated Amortization
of Intangibles including
goodwill $24.4 $17.6 4.2 $37.8
===== ===== === =====
</TABLE>
<PAGE>
42
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information called for by this Item, Directors and Executive Officers of the
Registrant is set forth on pages 3, 4 and 5 of the Company's 1995 definitive
Proxy Statement in the section entitled "Election of Directors" and on page 13
in the section entitled "Section 16 Requirements" and is incorporated herein by
reference.
The following table sets forth certain information concerning the principal
executive officers of the Company, including their ages and positions as of
December 31, 1994.
<TABLE>
<CAPTION>
Name Age Present Title
<S> <C> <C>
William J. Avery 54 Chairman of the Board of Directors,
President & Chief Executive Officer
John W. Conway 49 Executive Vice President,
President International Division
Mark W. Hartman 57 Executive Vice President,
Corporate Technologies
Richard L. Krzyzanowski 62 Executive Vice President,
Secretary and General Counsel
Hans J. Loliger 51 Executive Vice President,
President Plastics Division
Michael J. McKenna 60 Executive Vice President,
President North American Division
Alan W. Rutherford 51 Executive Vice President,
Chief Financial Officer
Ronald R. Thoma 60 Executive Vice President,
Procurement and Traffic
Craig R. L. Calle 35 Vice President and Treasurer
Timothy J. Donahue 32 Financial Controller
Richard Donohue 60 Manufacturing Controller
</TABLE>
ITEM 11. EXECUTIVE COMPENSATION
The information set forth on pages 6 through 12 of the Company's 1995 definitive
Proxy Statement in the section entitled "Executive Compensation" is incorporated
herein by reference.
<PAGE>
43
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is set forth on pages 2 through 5 of the
Company's 1995 definitive Proxy Statement in the sections entitled "Proxy
Statement - Meeting, April 27, 1995" and "Election of Directors" and is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is set forth on pages 3, 4 and 5 of the
Company's 1995 definitive Proxy Statement in the section entitled "Election of
Directors" and is incorporated herein by reference.
<PAGE>
44
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
a) The following documents are filed as part of this report:
(1) All Financial Statements:
Crown Cork & Seal Company, Inc. and Subsidiaries (see Part II pages 20
through 39 of this Report).
(2) Financial Statement Schedule:
Schedule Number
II.- Valuation and Qualifying Accounts and Reserves (see pages 40 and
41 of this Report).
All other schedules have been omitted because they are not applicable
or the required information is included in the Consolidated Financial
Statements or Notes thereto.
(3) Exhibits
3.a Articles of Incorporation of the Registrant (incorporated by
reference to Exhibit 4.1 of the Company's Registration
Statement on Form S-4 filed with the Securities and Exchange
Commission on March 9, 1993 (Registration No. 33-59286)).
3.b By-laws of the Registrant (incorporated by reference to
Exhibit 3(b) of the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1991 (File No. 1-2227)).
4.a Form of the Company's 5-7/8% Notes Due 1998 (incorporated by
reference to Exhibit 22 of Registrant's Current Report on Form
8-K dated April 12, 1993 (File No. 1-2227)).
4.b Form of the Company's 6-3/4% Notes Due 2003 (incorporated by
reference to Exhibit 23 of Registrant's Current Report on Form
8-K dated April 12, 1993 (File No. 1-2227)).
4.c Form of the Company's 8% Debentures Due 2023 (incorporated by
reference to Exhibit 24 of Registrant's Current Report on Form
8-K dated April 12, 1993 (File No. 1-2227)).
4.d Officers' Certificate of the Company (incorporated by
reference to Exhibit 4.3 of the Registrant's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1993 (File No.
1-2227)).
4.e Indenture dated as of April 1, 1993 between the Company and
Chemical Bank, as Trustee (incorporated by reference to
Exhibit 26 of the Registrant's Current Report on Form 8-K
dated April 12, 1993 (File No 1-2227)).
4.f Terms Agreement dated March 31, 1993 (incorporated by
reference to Exhibit 27 of the Registrant's Current Report on
Form 8-K dated April 12, 1993 (File No. 1-2227)).
4.g Form of the Company's 7% Notes Due 1999 (incorporated by
reference to Exhibit 99.1 of Registrant's Current Report on
Form 8-K dated June 16, 1994 (File No. 1-2227)).
<PAGE>
45
4.h Officers' Certificate of the Company (incorporated by
reference to Exhibit 99.2 of the Registrant's Current Report
on Form 8-K dated June 16, 1994 (File No. 1-2227)).
4.i Terms Agreement dated June 9, 1994 (incorporated by reference
to Exhibit 99.3 of Registrant's Current Report on Form 8-K
dated June 16, 1994 (File No. 1-2227)).
4.j Indenture dated as of January 15, 1995 between the Company and
Chemical Bank, as Trustee (incorporated by reference to
Exhibit 4 of the Registrant's Current Report on Form 8-K dated
January 25, 1995 (File No. 1-2227)).
4.k Form of the Company's 8 % Notes Due 2005 (incorporated by
reference to exhibit 99a of the Registrant's Current Report on
Form 8-K dated January 25, 1995 (File No. 1-2227)).
4.l Officers' Certificate of the Company dated January 25, 1995
(incorporated by reference to Exhibit 99b of the Registrant's
Current Report on Form 8-K dated January 25, 1995 (File No.
1-2227)).
4.m Terms Agreement dated January 18, 1995 (incorporated by
reference to Exhibit 99c of the Registrant's Current Report on
Form 8-K dated January 25, 1995 (File No. 1-2227)).
4.n Revolving Credit and Competitive Advance Facility Agreement
dated as of February 10, 1995 among the Registrant, the
Subsidiary Borrowers referenced to therein, the Lenders
referenced to therein and Chemical Bank, as Administrative
Agent.
Other long-term agreements of the Registrant are not filed
pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K and the
Registrant agrees to furnish copies of such agreements to the
Securities and Exchange Commission upon its request.
10.a Crown Cork & Seal Company, Inc. Executive Deferred
Compensation Plan (incorporated by reference to Exhibit 10 of
the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1991 (No. 1-2227)).
10.b 1990 Stock-Based Incentive Compensation Plan (incorporated by
reference to Exhibit 10.2 of the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1992 (File No.
1-2227)).
10.c Crown Cork & Seal Company, Inc. Restricted Stock Plan for
Non-Employee Directors. (incorporated by the reference to
Exhibit 10.3 of the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1992 (File No. 1-2227)).
10.d Crown Cork & Seal Company, Inc. 1984 Non-Qualified Stock
Option Plan (incorporated by reference to Exhibit 28 of
Registrant's Registration Statement on Form S-8 (No.
33-06261)).
10.e Crown Cork & Seal Company, Inc. Retirement Thrift Plan
(incorporated by reference to Exhibit 4.3 of the Registrant's
Registration Statement on Form S-8 (No. 33-50369)).
10.f Crown Cork & Seal Company, Inc. Stock Purchase Plan
(incorporated by reference to Exhibit 4.3 of the Registrant's
Registration Statement on Form S-8, filed March 16, 1994 (No.
33-52699)).
10.g 1994 Stock-Based Incentive Compensation Plan.
Exhibits 10.a through 10.g, inclusive, are management
contracts or compensatory plans or arrangements required to be
filed as exhibits pursuant to Item 14(c) of this Report.
<PAGE>
46
12. Computation of ratio of earning to fixed charges
21. Subsidiaries of Registrant.
23. Consent of Independent Accountants.
27. Financial Data Schedule.
b) Reports on Form 8-K
There were no reports on Form 8-K by the Registrant during the fourth
quarter of calendar year 1994.
<PAGE>
47
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Crown Cork & Seal Company, Inc.
Registrant
Date March 31, 1995
By: /s/ Timothy J. Donahue
--------------------------
Timothy J. Donahue
Financial Controller
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:
SIGNATURE TITLE
/s/ William J. Avery 3/31/95
-----------------------------------
William J. Avery Chairman of the Board, President
and Chief Executive Officer
/s/ Alan W. Rutherford 3/31/95
-----------------------------------
Alan W. Rutherford Director, Executive Vice President
and Chief Financial Officer
DIRECTORS
/s/ Henry E. Butwel 3/31/95 /s/ Owen A. Mandeville, Jr. 3/31/95
----------------------------------- -----------------------------------
Henry E. Butwel Owen A. Mandeville, Jr.
/s/ Charles F. Casey 3/31/95 /s/ Michael J. McKenna 3/31/95
----------------------------------- -----------------------------------
Charles F. Casey Michael J. McKenna
/s/ Francis X. Dalton 3/31/95 /s/ J. Douglass Scott 3/31/95
----------------------------------- -----------------------------------
Francis X. Dalton J. Douglass Scott
/s/ Francis J. Dunleavy 3/31/95 /s/ Robert J. Siebert 3/31/95
----------------------------------- -----------------------------------
Francis J. Dunleavy Robert J. Siebert
/s/ Chester C. Hilinski 3/31/95 /s/ Harold A. Sorgenti 3/31/95
----------------------------------- -----------------------------------
Chester C. Hilinski Harold A. Sorgenti
/s/ Richard L. Krzyzanowski 3/31/95 /s/ Edward P. Stuart 3/31/95
----------------------------------- -----------------------------------
Richard L. Krzyzanowski Edward P. Stuart
/s/ Josephine C. Mandeville 3/31/95
------------------------------------
Josephine C. Mandeville
EXHIBIT 4.n
===============================================================================
REVOLVING CREDIT AND
COMPETITIVE ADVANCE FACILITY AGREEMENT
Dated as of February 10, 1995
Among
CROWN CORK & SEAL COMPANY, INC.
THE SUBSIDIARY BORROWERS REFERRED TO HEREIN,
THE LENDERS REFERRED TO HEREIN
and
CHEMICAL BANK,
as Administrative Agent
===============================================================================
(CS&M Ref. No. 6700-292)
<PAGE>
CONFORMED COPY
CREDIT AGREEMENT dated as of February 10, 1995,
among CROWN CORK & SEAL COMPANY, INC., a Pennsylvania
corporation ("CCSC"); each of the Subsidiary
Borrowers referred to herein (the Subsidiary
Borrowers and CCSC being collectively called the
"Borrowers"); the financial institutions listed on
Schedule 2.01 the ("Lenders"); CHEMICAL BANK, a New
York banking corporation, as administrative agent (in
such capacity, the "Administrative Agent") for the
Lenders, and CHEMICAL BANK DELAWARE, a Delaware
banking corporation, as issuing bank (in such
capacity, the "Issuing Bank").
The Borrowers have requested the Lenders to extend credit in
the form of Revolving Loans (such term and each other capitalized term used but
not defined herein having the meaning given it in Article I) at any time and
from time to time prior to the Revolving Credit Maturity Date, in an aggregate
principal amount at any time outstanding not in excess of $1,000,000,000. The
Borrowers have also requested the Lenders to provide a procedure pursuant to
which the Borrowers may invite the Lenders to bid on an uncommitted basis on
short-term borrowings by the Borrowers. The Borrowers have also requested the
Swingline Lenders to extend credit in the form of Swingline Loans. CCSC has
requested the Issuing Bank to issue letters of credit to support payment
obligations incurred by CCSC and its Subsidiaries. The Borrowers have also
requested certain Lenders to commit to extend credit in various foreign
currencies. The proceeds of the Loans are to be used for general corporate
purposes, and such Letters of Credit are to be used in the ordinary course of
business.
The Lenders are willing to extend such credit to the Borrowers
and the Issuing Bank is willing to issue letters of credit for the account of
CCSC on the terms and
<PAGE>
2
subject to the conditions set forth herein. Accordingly, the parties hereto
agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at the
Alternate Base Rate in accordance with the provisions of Article II.
"Adjusted Available Revolving Credit Commitment" shall mean as
to any Lender, at any time of determination, an amount equal to such Lender's
Available Revolving Credit Commitment minus such Lender's L/C Exposure.
"Adjusted CD Rate" shall mean, with respect to any CD
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/100 of 1%) equal to the sum of (a) the product of
(i) the Fixed CD Rate in effect for such Interest Period and (ii) a fraction,
the numerator of which is one and the denominator of which is one minus the
Statutory Reserve Percentage, plus (b) the Assessment Rate.
"Adjusted Swingline Commitment Percentage" shall mean, as to
any Swingline Lender, at any time of determination, the percentage which such
Swingline Lender's Available Swingline Commitment then constitutes of the
aggregate Available Swingline Commitments of all Swingline Lenders.
"Administrative Agent Fees" shall have the meaning assigned to
such term in Section 2.11.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit A.
"Affiliate" of any Person means any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person (excluding any trustee under, or any committee with
responsibility for
<PAGE>
3
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power
(a) to vote 25% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or
managing general partners; or
(b) to direct or cause the direction of the
management and policies of such Person whether by
contract or otherwise;
provided, however, that notwithstanding the foregoing, for purposes of Section
11.04, an "Affiliate" shall be a Person engaged in the business of banking who
is controlled by, or under common control with, a Lender.
"Aggregate Outstanding US$ Revolving Extensions of Credit"
shall mean, as to any Lender at any time, the aggregate principal amount of all
Revolving Loans and Swingline Loans made by such Lender then outstanding plus
the aggregate L/C Exposure of such Lender.
"Aggregate Revolving Credit Exposure" shall mean the aggregate
amount of the Lenders' Revolving Credit Exposures.
"Agreement Currency" shall have the meaning assigned to such
term in Section 11.16(b).
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. If for any reason the Administrative Agent shall have
determined (which determination shall be conclusive absent manifest error) after
using its good faith efforts that it is unable to ascertain the Base CD Rate or
the Federal Funds Effective Rate or both for any reason, including the inability
or failure of the Administrative Agent to obtain sufficient quotations in
accordance with the terms thereof, the Alternate Base Rate shall be determined
without regard to clause (b) or (c), or both, of the preceding sentence, as
appropriate, until the circumstances giving rise to such inability or failure no
longer exist. Any change in the
<PAGE>
4
Alternate Base Rate due to a change in the Prime Rate, the Base CD Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively.
"Applicable Creditor" shall have the meaning assigned to such
term in Section 11.16(b).
"Applicable Percentage" shall mean, with respect to any
Eurodollar Loan (other than any Eurodollar Competitive Loan) or CD Loan, or with
respect to the Facility Fees, as the case may be, the applicable percentage set
forth below under the caption "Eurodollar Spread", "CD Spread" or "Fee
Percentage", as the case may be, based upon the ratings by S&P and Moody's,
respectively, applicable on such date to the Index Debt:
<TABLE>
<CAPTION>
Eurodollar CD Fee
Spread Spread Percentage
<S> <C> <C> <C>
Category 1
S&P: A or better .1200% .2450% .0800%
Moody's: A2 or better
Category 2
S&P: A- to BBB .2000% .3250% .1000%
Moody's: A3 to Baa2
Category 3
S&P: BBB- or below .2625% .3850% .1875%
Moody's: Baa3 or below
</TABLE>
For purposes of the foregoing, (i) if either Moody's or S&P
shall not have in effect a rating for the Index Debt (other than by reason of
the circumstances referred to in the last sentence of this definition), then
such rating agency shall be deemed to have established a rating in Category 3;
(ii) if the ratings established or deemed to have been established by Moody's
and S&P for the Index Debt shall fall within different Categories, the
<PAGE>
5
Applicable Percentage shall be based on the higher of the two ratings; and (iii)
if the ratings established or deemed to have been established by Moody's and S&P
for the Index Debt shall be changed (other than as a result of a change in the
rating system of Moody's or S&P), such change shall be effective as of the date
on which it is first announced by the applicable rating agency. Each change in
the Applicable Percentage shall apply during the period commencing on the
effective date of such change and ending on the date immediately preceding the
effective date of the next such change. If the rating system of Moody's or S&P
shall change, or if either such rating agency shall cease to be in the business
of rating corporate debt obligations, or if the Index Debt shall be unrated by
Moody's or S&P as a result of a reasonable business decision of CCSC, CCSC and
the Lenders shall negotiate in good faith to amend this definition to reflect
such changed rating system or the non-availability of ratings from such rating
agency and, pending the effectiveness of any such amendment, the Applicable
Percentage most recently in effect shall continue in effect.
"Assessment Rate" shall mean, for any date, the annual rate
(rounded upwards, if necessary, to the next 1/100 of 1%) determined by the
Administrative Agent to be the then current net annual assessment rate to be
payable by the Administrative Agent to the Federal Deposit Insurance Corporation
(or any successor) for insurance by such Corporation (or such successor) of time
deposits made in dollars at the Administrative Agent's domestic offices.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the
Administrative Agent, in the form of Exhibit B or such other form as shall be
approved by the Administrative Agent.
"Auction Fees" shall mean the fees described in the Fee
Letter.
"Authorized Officer" shall mean, with respect to CCSC, those
of its officers whose signature and incumbency shall have been certified to the
Administrative Agent and the Lenders pursuant to Section 5.02(c) or any
successor thereto.
"Available Revolving Credit Commitment" shall mean as to any
Lender, at any time of determination, an amount equal to such Lender's Revolving
Credit Commitment at such
<PAGE>
6
time minus such Lender's Revolving Credit Exposure at such time.
"Available Swingline Commitment" shall mean, as to any
Swingline Lender, at any time of determination, an amount equal to the lesser of
(a) such Swingline Lender's Swingline Commitment at such time minus the
aggregate principal amount of all Swingline Loans made by such Swingline Lender
and then outstanding and (b) such Swingline Lender's Revolving Credit Commitment
at such time minus such Swingline Lender's Aggregate Outstanding US$ Revolving
Extensions of Credit at such time.
"Base CD Rate" shall mean the sum of (a) the product of (i)
the Three-Month Secondary CD Rate and (ii) a fraction, the numerator of which is
one and the denominator of which is one minus the Statutory Reserve Percentage
and (b) the Assessment Rate.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrowing" shall mean a Loan or group of Loans of a single
Type made (including through a conversion or continuation) by the Lenders (or,
in the case of a Competitive Borrowing, by the Lender or Lenders whose
Competitive Bids have been accepted pursuant to Section 2.03) on a single date
and as to which a single Interest Period is in effect.
"Borrowing Date" shall mean any Business Day specified in a
notice pursuant to Section 2.02, 2.04 or 2.07 as a date on which the relevant
Borrower requests Loans to be made hereunder or Letters of Credit to be issued
hereunder and, for the purposes of Article III, any other date on which the
relevant Borrower requests Local Currency Loans to be made.
"Business Day" shall mean a day other than a Saturday, Sunday
or other day on which commercial banks in New York City are authorized or
required by law to close, except that, when used in connection with a Eurodollar
Loan, "Business Day" shall exclude any day on which dealings in foreign
currencies and exchange between banks may not be carried on in London, England
or New York, New York.
<PAGE>
7
"Calculation Date" shall mean the last Business Day of each
calendar week.
"Capitalized Lease Liabilities" shall mean all monetary
obligations of CCSC and its Subsidiaries under any leasing or similar
arrangement conveying the right to use real or personal property, or a
combination thereof, which, in accordance with GAAP, would be classified and
accounted for as capital leases, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP and the stated
maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date on which such lease may be
terminated by the lessee without payment of a penalty.
"CD Borrowing" shall mean a Borrowing comprised of CD Loans.
"CD Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Adjusted CD Rate in accordance with the
provisions of Article II.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"CERCLIS" shall mean the Comprehensive Environmental Response,
Compensation and Liability Information System List.
"Change in Control" shall mean the acquisition by any Person,
or two or more Persons acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended) of (i) more than 50% of the
outstanding shares of voting stock of CCSC or (ii) 30% or more of the total
voting power of CCSC (a "30% Stockholder") followed by any change in the
composition of the Board of Directors of CCSC, which shall include one or more
designees of such 30% Stockholder, unless any such change in the composition of
the Board of Directors does not result in a majority of the members of the Board
of Directors consisting of designees of such 30% Stockholder.
"Charges" shall have the meaning assigned to such term in
Section 11.09.
<PAGE>
8
"Closing Date" shall mean the date hereof.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Commitment" shall mean, with respect to any Lender, such
Lender's Revolving Credit Commitment and Swingline Commitment, any commitments
to make Local Currency Loans under any Local Currency Facility (which shall not
exceed the amount set forth opposite each Lender's name in Schedule 2.01A with
respect to any Local Currency) and, with respect to the Issuing Bank, its L/C
Commitment.
"Commitment Letter" shall mean the Commitment Letter dated
December 7, 1994, between CCSC, Chemical Securities Inc. and the Administrative
Agent.
"Commitment Percentage" shall mean, with respect to any Lender
at any time, the percentage of the Total Revolving Credit Commitments
represented by such Lender's Revolving Credit Commitment.
"Competitive Bid" shall mean an offer by a Lender to make a
Competitive Loan pursuant to Section 2.07.
"Competitive Bid Request" shall mean a request made pursuant
to Section 2.07 in the form of Exhibit C.
"Competitive Borrowing" shall mean a Borrowing consisting of a
Competitive Loan or concurrent Competitive Loans from the Lender or Lenders
whose Competitive Bids for such Borrowing have been accepted by any Borrower
under the bidding procedure described in Section 2.07.
"Competitive Loan" shall mean a Loan from a Lender to any
Borrower pursuant to the bidding procedure described in Section 2.07.
"Competitive Loan Borrowing Period" shall mean the period from
and including the Closing Date until the last day of the Revolving Credit
Commitment Period.
"Competitive Loan Confirmation" shall mean each confirmation
by the relevant Borrower of its acceptance of Competitive Bids, which
Competitive Loan Confirmation shall be substantially in the form of Exhibit D
and shall be delivered to the Administrative Agent in writing or by
facsimile transmission.
<PAGE>
9
"Competitive Loan Exposure" shall mean the sum of the
aggregate principal amount of all outstanding Competitive Loans denominated in
Dollars and the US$ Equivalent of all outstanding Competitive Loans denominated
in Local Currencies. The Competitive Loan Exposure of any Lender at any time
shall mean the portion of the aggregate Competitive Loan Exposure attributable
to Competitive Loans made by it.
"Competitive Loan Maturity Date" shall mean, as to any
Competitive Loan, the maturity date specified in the Competitive Bid with
respect to such Competitive Loan selected by the relevant Borrower pursuant to
Section 2.7(d)(ii).
"Compliance Certificate" shall mean a certificate of a
Financial Officer of CCSC substantially in the form of Exhibit J.
"Contingent Liability" shall mean any agreement, undertaking
or arrangement by which any Person guarantees, endorses or otherwise becomes or
is contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the
Indebtedness, obligation or any other liability of any other Person (other than
by endorsements of instruments in the course of deposit or collection), or
guarantees the payment of dividends or other distributions upon the shares of
any other Person. The amount of any Person's obligation under any Contingent
Liability shall (subject to any limitation set forth therein) be deemed to be
the outstanding principal amount (or maximum principal amount, if larger) of the
debt, obligation or other liability guaranteed thereby. Notwithstanding the
foregoing, for purposes of this Agreement, "Contingent Liability" shall not
include any liability (i) for which CCSC or any of its Subsidiaries has received
a full and unconditional indemnity or "hold harmless" agreement from another
Person with respect to environmental liabilities associated with real property
purchased by CCSC or such Subsidiary from such Person, and (ii) to the extent
supported by a "back-to-back" guaranty delivered in connection with the issuance
of industrial development bonds.
"Control" shall mean 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, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto.
<PAGE>
10
"Controlled Group" shall mean all members of a controlled
group of corporations and all members of a controlled group of trades or
businesses (whether or not incorporated) under common control which, together
with CCSC, are treated as a single employer under Section 414(b) or 414(c) of
the Code or Section 4001 of ERISA.
"Credit Event" shall have the meaning assigned to such term in
Section 5.01.
"Default" shall mean any event or condition which upon notice,
lapse of time or both would constitute an Event of Default.
"Dollars" or "$" shall mean lawful money of the United States
of America.
"EBIT" shall mean, for any period, the sum for such period of
all amounts which, in accordance with GAAP, would be included on the
consolidated financial statements of CCSC and its Subsidiaries as
(a) Net Income (excluding any extraordinary gains and losses,
and any net income (or net loss) attributable to the write-up (or
write-down, as the case may be) in value of any assets),
plus
(b) Net Interest Expense,
plus
(c) to the extent deducted in determining Net
Income, provisions for income taxes.
"environment" shall mean ambient air, surface water and
groundwater (including potable water, navigable water and wetlands), the land
surface or subsurface strata, or as otherwise defined in any Environmental Law.
"Environmental Claim" shall mean any written accusation,
allegation, notice of violation, claim, demand, order, directive, cost recovery
action or other cause of action by, or on behalf of, any Governmental Authority
or any person for damages, injunctive or equitable relief, personal injury
(including sickness, disease or death), Remedial Action costs, tangible or
intangible property
<PAGE>
11
damage, natural resource damages, nuisance, pollution, any adverse effect on the
environment caused by any Hazardous Material, or for fines, penalties or
restrictions, resulting from or based upon: (a) the existence, or the
continuation of the existence, of a Release (including sudden or non- sudden,
accidental or non-accidental Releases); (b) exposure to any Hazardous Material;
(c) the presence, use, handling, transportation, storage, treatment or disposal
of any Hazardous Material; or (d) the violation or alleged violation of any
Environmental Law or Environmental Permit.
"Environmental Laws" shall mean any and all applicable
treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
Release or threatened Release of any Hazardous Material or to health and safety
matters.
"Environmental Permit" means any permit, approval,
authorization, certificate, license, variance, filing or permission required by
or from any Governmental Authority pursuant to any Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) that, together with CCSC, is treated as a single employer
under Section 414 of the Code.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Competitive Borrowing" shall mean a Borrowing
comprised of Eurodollar Competitive Loans.
"Eurodollar Competitive Loan" shall mean any Competitive Loan
bearing interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"Eurodollar Loan" shall mean any Eurodollar Revolving Loan or
Eurodollar Competitive Loan.
<PAGE>
12
"Eurodollar Revolving Credit Borrowing" shall mean a Borrowing
comprised of Eurodollar Revolving Loans.
"Eurodollar Revolving Loan" shall mean any Revolving Loan
bearing interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned to such
term in Article VIII.
"Event of Termination" shall mean the occurrence of any event
described in Section 8.01 at a time when no Loans or Obligations are
outstanding.
"Exchange Rate" shall mean with respect to any Local Currency
on a particular date, the rate at which such Local Currency may be exchanged
into Dollars, as set forth on such date on the relevant Reuters currency page.
In the event that such rate does not appear on any Reuters currency page, the
Exchange Rate with respect to such Local Currency shall be determined by
reference to such other publicly available service for displaying exchange rates
as may be agreed upon by the Administrative Agent and CCSC or, in the absence of
such agreement, such Exchange Rate shall instead be the Administrative Agent's
spot rate of exchange in the interbank market where its foreign currency
exchange operations in respect of such Local Currency are then being conducted,
at or about 10:00 A.M., local time, at such date for the purchase of Dollars
with such Local Currency, for delivery two Business Days later; provided, that
if at the time of any such determination, for any reason, no such spot rate is
being quoted, the Administrative Agent may use any reasonable method it deems
applicable to determine such rate, and such determination shall be conclusive
absent manifest error.
"Existing Agreement" shall mean the US $150,000,000 Revolving
Credit Agreement, dated as of December 20, 1991, among CCSC, the Lenders named
therein and The Toronto-Dominion Bank Trust Company as Agent, as in effect on
the date hereof.
"Facility Fee" shall have the meaning assigned to such term in
Section 2.11.
"Federal Funds Effective Rate" shall mean, for any day, the
weighted average of the rates on overnight Federal
<PAGE>
13
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter" shall mean the Fee Letter dated January 30, 1995,
between CCSC and the Administrative Agent.
"Fees" shall mean the Facility Fees, the Administrative Agent
Fees, the L/C Participation Fees, the Issuing Bank Fees and the Auction Fees.
"Financial Officer" of any corporation shall mean the chief
financial officer, principal accounting officer, Treasurer or Controller of such
corporation.
"Fiscal Quarter" shall mean any quarter of a Fiscal Year.
"Fiscal Year" shall mean any period of twelve consecutive
calendar months ending on December 31; references to a Fiscal Year with a number
corresponding to any calendar year (e.g. the "1994 Fiscal Year") refer to the
Fiscal Year ending on December 31 occurring during such calendar year.
"Fixed CD Rate" shall mean, with respect to any CD Borrowing,
the arithmetic average (rounded upwards, if necessary, to the next 1/100 of 1%)
of the prevailing rates per annum bid at or about 10:00 a.m., New York City
time, to the Administrative Agent on the first Business Day of the Interest
Period applicable to such CD Borrowing by three New York City negotiable
certificate of deposit dealers of recognized standing selected by the
Administrative Agent for the purchase at face value of negotiable certificates
of deposit of major United States money center banks in a principal amount
approximately equal to the Administrative Agent's portion of such CD Borrowing
and with a maturity comparable to such Interest Period.
"Fixed Rate Borrowing" shall mean a Borrowing comprised of
Fixed Rate Loans.
<PAGE>
14
"Fixed Rate Loan" shall mean any Competitive Loan bearing
interest at a fixed percentage rate per annum (expressed in the form of a
decimal to no more than four decimal places) specified by the Lender making such
Loan in its Competitive Bid.
"Funded Debt" shall mean (a) all Loans and (b) all other
Indebtedness of CCSC and its Subsidiaries (including, without duplication,
Contingent Liabilities relating to such Indebtedness) on a consolidated basis,
which by its terms:
(i) matures or is payable more than one year from the
date on which it was created, or
(ii) matures within one year from the date on which it
was created, but is renewable or extendible under terms such
that under GAAP such Indebtedness would be treated as
long-term indebtedness.
"GAAP" shall mean generally accepted accounting principles
applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Hazardous Materials" shall mean all explosive or radioactive
substances or wastes, hazardous or toxic substances or wastes, pollutants,
solid, liquid or gaseous wastes, including petroleum or petroleum distillates,
asbestos or asbestos containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, infectious or medical wastes and all
other substances or wastes of any nature regulated pursuant to any Environmental
Law.
"Impermissible Qualification" shall mean, relative to the
opinion or certification of any independent public accountant as to any
financial statement of CCSC, any qualification or exception to such opinion or
certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement; or
<PAGE>
15
(c) which relates to the treatment or classification of any
item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause CCSC to be in default of any of its obligations
under Section 6.01.
"Indebtedness" of any Person shall mean, without duplication:
(a) all obligations of such Person for borrowed money, all
obligations of such Person as account party under letters of credit in
respect of borrowed money and all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments;
(b) all obligations of such Person as lessee under leases
which have been or should be, in accordance with GAAP, recorded as
Capitalized Lease Liabilities;
(c) whether or not so included as liabilities in accordance
with GAAP, all obligations of such Person to pay the deferred purchase
price of property or services (provided, however, that Indebtedness
shall not include open accounts extended by suppliers on normal trade
terms in connection with purchases of goods and services or obligations
relating to employee benefits (including post-retirement medical
benefits), pension, health and life insurance (and other similar
benefits) and provided, further, that for purposes of calculating
compliance with the provisions of Section 7.04(a), Indebtedness shall
include obligations to pay the deferred purchase price of property or
services only to the extent that such obligations are reflected on the
consolidated balance sheet of CCSC and its consolidated Subsidiaries),
and indebtedness (excluding prepaid interest thereon) secured by a Lien
on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed
by such Person or is limited in recourse; provided, however, that the
amount of such indebtedness which is limited in recourse shall be
included in an amount equal to the lesser of (i) the amount of such
Indebtedness or (ii) the amount of the Lien; and
<PAGE>
16
(d) all Contingent Liabilities of such Person in respect of
any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership in which such Person is a general partner.
"Index Debt" shall mean the senior, unsecured, non-externally
credit enhanced, long-term indebtedness for borrowed money of CCSC.
"Interest Coverage Ratio" means, for any period of four
consecutive Fiscal Quarters (calculated on the basis of the most recent Fiscal
Quarter ended and the three immediately preceding Fiscal Quarters), the ratio of
(a) EBIT
to
(b) Net Interest Expense for such period.
"Interest Payment Date" shall mean, with respect to any Loan,
the last day of the Interest Period applicable to the Borrowing of which such
Loan is a part and, in the case of a Eurodollar Borrowing or Fixed Rate
Borrowing with an Interest Period of more than three months' duration or a CD
Borrowing with an Interest Period of more than 90 days' duration, each day that
would have been an Interest Payment Date had successive Interest Periods of
three months' duration or 90 days' duration, as the case may be, been applicable
to such Borrowing, and, in addition, the date of any refinancing of such
Borrowing with a Borrowing of a different Type.
"Interest Period" shall mean (a) as to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing (including any
date on which such Borrowing shall have been converted from a Borrowing of a
different Type) or on the last day of the immediately preceding Interest Period
applicable to such Borrowing, as the case may be, and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is (i) in the case of a Eurodollar Revolving
Credit Borrowing, 1, 2, 3, 6 or, if available from all Lenders, 12 months
thereafter, as the relevant Borrower may elect, or (ii) in the case of a
Eurodollar Competitive Borrowing, any whole number of months
<PAGE>
17
(but not more than 12 months) thereafter, as shall be specified in the
Competitive Bids in which the offers to make the Eurodollar Loans comprising
such Borrowing were extended, (b) as to any CD Borrowing, a period of 30, 60,
90, 180, 270 or 360 days' duration, as the relevant Borrower may elect,
commencing on the date of such Borrowing (including any date on which such
Borrowing shall have been converted from a Borrowing of a different Type) or on
the last day of the immediately preceding Interest Period applicable to such
Borrowing, as the case may be, (c) as to any ABR Borrowing (other than a
Swingline Borrowing), the period commencing on the date of such Borrowing
(including any date on which such Borrowing shall have been converted from a
Borrowing of a different Type) or on the last day of the immediately preceding
Interest Period applicable to such Borrowing, as the case may be, and ending on
the earliest of (i) the next succeeding March 31, June 30, September 30 or
December 31, (ii) the Revolving Credit Maturity Date and (iii) the date such
Borrowing is prepaid in accordance with Section 2.05 or converted in accordance
with Section 2.03, (d) as to any Fixed Rate Borrowing, the period commencing on
the date of such Borrowing and ending on the date specified in the Competitive
Bids in which the offers to make the Fixed Rate Loans comprising such Borrowing
were extended, which shall not be earlier than seven days after the date of such
Borrowing or later than 360 days after the date of such Borrowing and (e) as to
any Swingline Loan, a period commencing on the date of such Loan and ending on
the earliest of (i) the fifth Business Day thereafter, (ii) the Revolving Credit
Maturity Date and (iii) the date such Loan is repaid in accordance with Section
2.04; provided, however, that if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day. Interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.
"Issuing Bank" shall mean, as the context may require, the
Issuing Bank specified in the recitals to this Agreement and/or each Lender
which shall from time to time be party to an Issuing Bank Agreement with any
Borrower.
"Issuing Bank Agreement" shall mean an agreement substantially
in the form of Exhibit E.
<PAGE>
18
"Issuing Bank Fees" shall have the meaning assigned to such
term in Section 2.11.
"Judgment Currency" shall have the meaning assigned to such
term in Section 11.16(b).
"L/C Commitment" shall mean the commitment of each Issuing
Bank to issue Letters of Credit pursuant to Section 2.21, as set forth in the
applicable Issuing Bank Agreement.
"L/C Disbursement" shall mean a payment or disbursement made
by any Issuing Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum at such time of
(a) the aggregate undrawn amount of all outstanding Letters of Credit plus (b)
the aggregate principal amount of all L/C Disbursements that have not yet been
reimbursed. The L/C Exposure of any Lender at any time shall mean its Pro Rata
Percentage of the aggregate L/C Exposure at such time.
"L/C Participation Fee" shall have the meaning assigned to
such term in Section 2.11.
"Letter of Credit" shall mean any Letter of Credit issued
pursuant to Section 2.21.
"Leverage Ratio" means, as of the last day of any
Fiscal Quarter, the ratio of
(a) Funded Debt (other than Funded Debt which is nonrecourse
to CCSC and its Subsidiaries and giving effect only to CCSC's or its
Subsidiaries' pro-rata share of consolidated Indebtedness of joint
ventures)
to
(b) Long-Term Capitalization.
"LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing, (a) the per annum rate (rounded upwards, if necessary, to the next
1/16 of 1%) at which Dollar deposits approximately equal in principal amount to
(i) in the case of a Revolving Credit Borrowing, the Administrative Agent's
portion of such Borrowing and (ii) in the case of a Competitive Borrowing, a
principal amount that
<PAGE>
19
would have been the Administrative Agent's portion of such Borrowing had such
Borrowing been a Revolving Credit Borrowing, and for a maturity comparable to
such Interest Period are offered to the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period multiplied by (b) a fraction, the numerator
of which is one and the denominator of which is one minus the Statutory Reserve
Percentage.
"Lien" shall mean, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest
in or on such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"Loan Documents" shall mean this Agreement, the Fee Letter,
the Letters of Credit and the Local Currency Facility Agreements.
"Loans" shall mean the Revolving Loans, the Local Currency
Loans, the Swingline Loans and the Competitive Loans.
"Local Currency" shall mean any currency other than Dollars as
to which an Exchange Rate may be calculated.
"Local Currency Credit Event" shall mean each Borrowing under
a Local Currency Facility, including each Swingline Borrowing thereunder.
"Local Currency Equivalent" shall mean, on any date of
determination, with respect to any amount in Dollars, the equivalent in the
relevant Local Currency of such amount, determined by the Administrative Agent
using the Exchange Rate with respect to such Local Currency then in effect as
determined pursuant to Article III.
"Local Currency Facility" shall mean any credit facility
providing for borrowings in a Local Currency pursuant to any Local Currency
Facility Agreement.
<PAGE>
20
"Local Currency Facility Agreement" shall mean a local
currency facility agreement between a Borrower and one or more Lenders,
substantially in the form of Exhibit F.
"Local Currency Facility Maximum Borrowing Amount" shall have
the meaning assigned to such term in Section 3.01(b).
"Local Currency Lender" shall mean any Lender (or, if
applicable, any Affiliate, branch or agency thereof) party to a Local Currency
Facility Agreement.
"Local Currency Lender Maximum Borrowing Amount" shall have
the meaning assigned to such term in Section 3.01(b).
"Local Currency Loan" shall mean any Competitive Loan made in
a currency other than Dollars and any loan made pursuant to a Local Currency
Facility.
"Local Currency Loans (US$ Equivalent)" shall mean the US$
Equivalent of the relevant Local Currency Loans.
"Long-Term Capitalization" shall mean, on any date of
determination, the sum of (i) Funded Debt of CCSC and its Subsidiaries on a
consolidated basis and (ii) the amount, determined on a consolidated basis, in
the capital stock account plus (or minus in the case of a deficit) the
additional paid-in capital and retained earnings of CCSC and its Subsidiaries,
and in any event, net of the value of treasury stock in such capital stock
account, plus accounting liabilities for post-retirement benefits (FAS 106) and
post-employment benefits (FAS 112), net of changes for income tax (FAS 109).
"Margin" shall mean, as to any Eurodollar Competitive Loan,
the margin (expressed as a percentage rate per annum in the form of a decimal to
no more than four decimal places) to be added to or subtracted from the LIBO
Rate in order to determine the interest rate applicable to such Loan, as
specified in the Competitive Bid relating to such Loan.
"Margin Stock" shall have the meaning assigned to such term in
Regulation U.
"Material Adverse Effect" shall mean any event which will have
a materially adverse effect on the financial
<PAGE>
21
condition or results of operations of CCSC and its Subsidiaries taken as a
whole.
"Maximum Rate" shall have the meaning assigned to such term in
Section 11.09.
"Moody's" shall mean Moody's Investors Service, Inc.
"Net Income" means, for any period, the net income of CCSC and
its Subsidiaries for such period on a consolidated basis.
"Net Interest Expense" means, for any period, the aggregate
amount of interest expense of CCSC and its Subsidiaries for such period which,
in accordance with GAAP, would be included on the consolidated financial
statements of CCSC and its Subsidiaries, including without limitation the
portion of any rent paid on Capitalized Lease Liabilities which is allocable to
interest expense in accordance with GAAP, minus the amount of interest income
received by CCSC and its Subsidiaries for such period.
"Obligations" means all obligations (monetary or otherwise) of
the Borrowers arising under or in connection with this Agreement and each other
Loan Document.
"Organic Document" means, relative to each Borrower, its
charter, its by-laws and all shareholder agreements, voting trusts and similar
arrangements applicable to any of its authorized shares of capital stock.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"Pension Plan" shall mean a "pension plan", as such term is
defined in section 3(2) of ERISA, which is subject to Title IV of ERISA (other
than a multiemployer plan as defined in section 4001(a)(3) of ERISA) and to
which CCSC or any ERISA Affiliate, may have liability, including any liability
by reason of having been a substantial employer within the meaning of section
4063 of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under section 4069 of ERISA.
"Permitted Investments" shall mean:
<PAGE>
22
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within six months from the date of acquisition
thereof;
(b) without limiting the provisions of paragraph (d) below,
investments in commercial paper maturing within six months from the
date of acquisition thereof and having, at such date of acquisition,
the highest credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits (including eurodollar time deposits)
maturing within six months from the date of acquisition thereof issued
or guaranteed by or placed with, and money market deposit accounts
issued or offered by, (i) any domestic office of the Administrative
Agent or any Lender party hereto as of the Closing Date or (ii) any
domestic office of any other commercial bank of recognized standing
organized under the laws of the United States America or any state
thereof that has a combined capital and surplus and undivided profits
of not less than $100,000,000;
(d) investments in commercial paper maturing within six months
from the date of acquisition thereof and issued by (i) the holding
company of the Administrative Agent or any Lender party hereto as of
the Closing Date or (ii) the holding company of any other commercial
bank of recognized standing organized under the laws of the United
States of America or any state thereof that has (A) a combined capital
and surplus in excess of $100,000,000 and (B) commercial paper rated as
least A-2 or the equivalent thereof by S&P or at least P-2 or the
equivalent thereof by Moody's, or carrying an equivalent rating by
another nationally recognized rating agency, if neither of the two
rating agencies shall rate such commercial paper;
"Person" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership or government, or any
agency or political subdivision thereof.
"Plan" shall mean any Pension Plan or Welfare Plan.
<PAGE>
23
"Prime Rate" shall mean the rate of interest per annum
publicly announced from time to time by the Administrative Agent as its prime
rate in effect at its principal office in New York City; each change in the
Prime Rate shall be effective on the date such change is publicly announced as
being effective.
"Pro Rata Percentage" of any Lender at any time shall mean the
percentage of the aggregate Available Revolving Credit Commitments represented
by such Lender's Available Revolving Credit Commitment.
"Register" shall have the meaning given such term in Section
11.04(d).
"Regulation G" shall mean Regulation G of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation U" shall mean Regulation U of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing, depositing, dispersing, emanating or migrating of any Hazardous
Material in, into, onto or through the environment.
"Remedial Action" means (a) "remedial action" as such term is
defined in CERCLA, 42 USC. Section 9601(24), and (b) all other actions required
by any Governmental Authority or voluntarily undertaken to: (i) cleanup, remove,
treat, abate or in any other way address any Hazardous Material in the
environment; (ii) prevent the Release or threat of Release, or minimize the
further Release of any Hazardous Material so it does not migrate or endanger or
threaten to endanger public health, welfare or the environment; or (iii) perform
studies and investigations in connection with, or as a precondition to, (i) or
(ii) above.
"Reportable Event" shall mean any reportable event as defined
in Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate that is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Code Section 414).
<PAGE>
24
"Required Lenders" shall mean, at any time, Lenders having
Revolving Credit Commitments representing more than 50% of the sum of all
Revolving Credit Commitments or, for purposes of acceleration pursuant to
Section 8.03, Lenders having Revolving Credit Exposures and Competitive Loan
Exposures representing more than 50% of the aggregate Revolving Credit Exposures
and Competitive Loan Exposures.
"Requirement of Law: shall mean, as to any Person, any law,
treaty, rule or regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or assets or to which such Person or any of its property
or assets is subject.
"Reset Date" shall have the meaning assigned to such term in
Section 3.02(a).
"Responsible Officer" of any corporation shall mean any
executive officer or Financial Officer of such corporation and any other officer
or similar official thereof responsible for the administration of the
obligations of such corporation in respect of this Agreement.
"Revolving Credit Borrowing" shall mean a Borrowing comprised
of Revolving Loans.
"Revolving Credit Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make Revolving Loans hereunder in an
aggregate principal amount at any time outstanding not to exceed the amount set
forth opposite such Lender's name on Schedule 2.01, as the same may be reduced
from time to time pursuant to the provisions of this Agreement.
"Revolving Credit Commitment Period" shall mean the period
from and including the date hereof to but not including the Revolving Credit
Maturity Date or any earlier date on which the Revolving Credit Commitments
shall terminate as provided herein.
"Revolving Credit Exposure" shall mean, with respect to any
Lender at any time, the aggregate principal amount at such time of all
outstanding Revolving Loans and Swingline Loans of such Lender plus the
aggregate US$ Equivalent of the principal amount of all outstanding Local
Currency Loans (other than Competitive Loans) of such Lender.
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25
"Revolving Credit Maturity Date" shall mean February 10, 2000.
"Revolving Loans" shall mean the revolving loans
made by the Lenders to the Borrowers pursuant to Section 2.01. Each Revolving
Loan shall be a Eurodollar Revolving Loan, a CD Loan or an ABR Loan.
"S&P" shall mean Standard & Poor's Ratings Group, a division
of McGraw-Hill, Inc.
"Significant Subsidiary" shall mean each Subsidiary of CCSC
that has assets which represent at least 2%, or, during the effectiveness of a
Significant Subsidiary Election Notice, 5% of the consolidated assets of CCSC
and its Subsidiaries as of the last day of the Fiscal Year of CCSC preceding the
date as of which any such determination is made, as reflected on the financial
statements of CCSC, and each Subsidiary of CCSC designated by CCSC as a
Significant Subsidiary pursuant to Section 6.07.
"Significant Subsidiary Election Notice" shall mean a notice
delivered by CCSC to the Administrative Agent substantially in the form of
Exhibit G.
"Statutory Reserve Percentage" shall mean, for any day, that
percentage (expressed as a decimal), established by the Board or any successor
Governmental Authority for determining the maximum reserve requirement
(including any marginal, special, emergency or supplemental reserves)(a) with
respect to the Base CD Rate (as such term is used in the definition of the term
"Alternate Base Rate") or the Adjusted CD Rate, for new negotiable nonpersonal
time deposits in dollars of over $100,000 with maturities approximately equal to
three months or the applicable Interest Period, respectively, and (b) with
respect to the LIBO Rate, for Eurocurrency Liabilities (as defined in Regulation
D). Statutory Reserves shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Subsidiary" means, with respect to any Person, any
corporation of which more than 50% of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency) is at the time directly or indirectly owned
by such Person, by such Person and one or more other Subsidiaries of such
Person, or by one or more other Subsidiaries of such Person.
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26
Unless otherwise indicated, when used in this Agreement, the term "Subsidiary"
shall refer to a Subsidiary of CCSC.
"Subsidiary Borrower" shall mean each Subsidiary (i) which
shall at any time be a party to a Local Currency Facility Agreement, (ii) which
has been designated as such by CCSC in a Subsidiary Borrower Notice and
Designation and (iii) whose designation as a Subsidiary Borrower has not been
terminated pursuant to Section 5.01(d). A Subsidiary may also become a
Subsidiary Borrower for purposes of this Agreement (but not under any Local
Currency Facility) by the delivery to the Administrative Agent of a Subsidiary
Borrower Notice and Designation, executed by such Subsidiary and acknowledged by
CCSC, under which it shall undertake the obligations of a Borrower hereunder.
"Subsidiary Borrower Notice and Designation" shall mean a
notice and designation, substantially in the form of Exhibit H, delivered by
CCSC, and received and consented to by the Administrative Agent, and which shall
identify a Subsidiary Borrower.
"Subsidiary Borrower Obligations" shall mean, with respect to
each Subsidiary Borrower, the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans made to such Subsidiary
Borrower and interest accruing after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to such Subsidiary Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the US$ Loans and Local
Currency Loans made to such Subsidiary Borrower, reimbursement obligations of
such Subsidiary Borrower in connection with L/C Disbursements and all other
obligations and liabilities of such Subsidiary Borrower to the Administrative
Agent or to any Lender, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, this Agreement, any Local Currency Facility or
any other document made, delivered or given in connection herewith or therewith,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs or expenses (including, without limitation, all fees, charges
and disbursements of counsel (including the allocated costs of internal counsel)
that are required to be paid by such Subsidiary Borrower to the Administrative
Agent or to any Lender pursuant to this Agreement or any Local Currency
Facility) or otherwise.
"Swingline Borrower" shall mean any Borrower to which
Swingline Loans are made.
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27
"Swingline Borrowing Share" shall mean for any borrowing of
Swingline Loans, with respect to any Swingline Lender at any time, an amount
equal to such Swingline Lender's Adjusted Swingline Commitment Percentage of
such borrowing.
"Swingline Commitment" shall mean, with respect to any Lender,
the commitment of such Lender to make loans pursuant to Section 2.04, as set
forth in Schedule 2.01 or in the Assignment and Acceptance pursuant to which
such Lender assumed its Swingline Commitment, as applicable, as the same may be
reduced from time to time pursuant to the terms of this Agreement and pursuant
to assignments by such Lender pursuant to Section 11.04.
"Swingline Lender" shall mean a Lender with a Swingline
Commitment.
"Swingline Loan" shall mean any loan made by a Lender pursuant
to its Swingline Commitment.
"Three-Month Secondary CD Rate" shall mean, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical Release
H.15(519) during the week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of major
money center banks in New York City received at approximately 10:00 a.m., New
York City time, on such day (or, if such day shall not be a Business Day, on the
next preceding Business Day) by the Administrative Agent from three New York
City negotiable certificate of deposit dealers of recognized standing selected
by it.
"Total Capitalization" shall mean, on any date of
determination, the sum of (i) all Indebtedness of CCSC and its Subsidiaries on a
consolidated basis and (ii) the amount, determined on a consolidated basis, in
the capital stock account plus (or minus in the case of a deficit) the
additional paid-in capital and retained earnings of CCSC and its Subsidiaries,
and in any event, net of the value of treasury stock in such capital stock
account, plus accounting liabilities for post-retirement benefits (FAS 106) and
post-employment benefits (FAS 112) net of changes for income tax (FAS 109).
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28
"Total Revolving Credit Commitment" shall mean, at any time,
the aggregate amount of the Revolving Credit Commitments, as in effect at such
time.
"Transactions" shall mean the execution, delivery and
performance by each Borrower of each of the Loan Documents and the borrowings
hereunder.
"Type", when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall
include the LIBO Rate, the Adjusted CD Rate, the Alternate Base Rate and the
fixed percentage rate per annum applicable to any Fixed Rate Loan.
"Unrefunded Swingline Loans" shall have the meaning assigned
hereto in Section 2.04(c).
"Unrestricted Subsidiary" shall mean any Subsidiary designated
as an Unrestricted Subsidiary by CCSC at the time of delivery of the Compliance
Certificate pursuant to Section 6.01(c) (it being understood that any such
designation may be changed in respect of subsequent Fiscal Quarters) (i) which
is incorporated under the laws of any foreign country and (ii) the assets of
which, together with the assets of all other Unrestricted Subsidiaries, comprise
not more than 50% of all assets of CCSC and its Subsidiaries.
"US$ Equivalent" shall mean, on any date of determination,
with respect to any amount in any Local Currency, the equivalent in Dollars of
such amount, determined by the Administrative Agent using the Exchange Rate with
respect to such Local Currency then in effect as determined pursuant to Section
3.02(a).
"US$ Facility Overage" shall mean an amount equal to the
excess of (a) the aggregate Revolving Credit Commitments over (b) the aggregate
amount of all Local Currency Facility Maximum Borrowing Amounts (determined, if
applicable, after giving effect to any reduction therein made pursuant to
Section 3.02(c)).
"US$ Loan" shall mean any Loan denominated in Dollars.
"US$ Revolving Credit Overage" shall mean, with respect to any
Lender, an amount equal to the excess, if any, of (a) such Lender's Revolving
Credit Commitment over (b) the aggregate Local Currency Lender Maximum Borrowing
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29
Amounts with respect to all Local Currency Facilities to which such Lender is a
party.
"Welfare Plan" means a "welfare plan", as such term is defined
in section 3(1) of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any Loan
Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided, however, that for purposes of determining compliance
with the covenants contained in Article VII, all accounting terms herein shall
be interpreted and all accounting determinations hereunder shall be made in
accordance with GAAP as in effect on the date of this Agreement and applied on a
basis consistent with the application used in the financial statements referred
to in Section 4.05.
ARTICLE II. THE CREDITS
SECTION 2.01. Revolving Credit Commitments. (a) Subject to the
terms and conditions hereof, each Lender severally agrees to make Revolving
Loans in Dollars to any of CCSC or any Subsidiary Borrower from time to time
during the Revolving Credit Commitment Period. During the Revolving Credit
Commitment Period each Borrower may use the Revolving Credit Commitments by
borrowing, prepaying the Revolving Loans in whole or in part, and reborrowing,
all in accordance with the terms and conditions hereof. Notwithstanding anything
to the contrary contained in this Agreement, in no event may Revolving Loans be
borrowed under this Article II if, after giving effect thereto (and to any
concurrent repayment or prepayment of Loans), (i) the sum of the Aggregate
Revolving Credit Exposure, the L/C Exposure and the aggregate Competitive Loan
Exposure would exceed the Total Revolving Credit Commitment then in effect or
(ii) the sum of the Revolving Credit Exposure of any Lender and the
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30
L/C Exposure of such Lender then outstanding would exceed such Lender's
Revolving Credit Commitment.
(b) The Revolving Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans, (iii) CD Loans or (iv) a combination thereof,
as determined by the relevant Borrower and notified to the Administrative Agent
in accordance with Sections 2.02 and 2.03, provided that no Revolving Loan shall
be made as a Eurodollar Loan or as a CD Loan after the day that is one month or
30 days, respectively, prior to the Revolving Credit Maturity Date.
SECTION 2.02. Procedure for Revolving Credit Borrowing. (a)
Each Borrower may borrow under the Revolving Credit Commitments during the
Revolving Credit Commitment Period on any Business Day; provided that such
Borrower shall give the Administrative Agent notice (which notice must be
received by the Administrative Agent prior to (a) 11:00 a.m., London time, three
Business Days prior to the requested Borrowing Date, if all or any part of the
requested Revolving Loans are to be initially Eurodollar Loans, (b) 10:00 a.m.,
New York City time, on the Business Day of a requested Borrowing Date, if all or
any part of the requested Revolving Loans are to be ABR Loans or (c) 10:00 a.m.,
New York City time, two Business Days prior to the requested Borrowing Date, if
all or any part of the requested Revolving Loans are to be CD Loans), specifying
(i) the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether
the Borrowing is to be of Eurodollar Loans, ABR Loans or CD Loans and (iv) if
the Borrowing is to be of Eurodollar Loans or CD Loans, the length of the
initial Interest Period therefor. Each Borrowing under the Revolving Credit
Commitments shall be in a minimum aggregate principal amount of the lesser of
(i) $5,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii)
the aggregate amount of the then Adjusted Available Revolving Credit
Commitments. Upon receipt of any such notice from any Borrower, the
Administrative Agent shall promptly notify each Lender of the aggregate amount
of such Borrowing and of the amount of such Lender's pro rata
portion (if any) thereof, which shall be based on the respective Available
Revolving Credit Commitments of all the Lenders. Each Lender will make the
amount of its pro rata portion of each such Borrowing available to the
Administrative Agent for the account of the relevant Borrower at the office of
the Administrative Agent specified in Section 11.01 prior to 1:00 p.m., New York
City time, on the Borrowing Date requested by such Borrower in funds immediately
available to the Administrative Agent. Amounts so received by the Administrative
Agent will promptly be made available to the relevant Borrower by the
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31
Administrative Agent crediting the account of such Borrower on the books of such
office with the aggregate of the amounts made available to the Administrative
Agent by the Lenders and in like funds as received by the Administrative Agent;
provided that if on the Borrowing Date of any Revolving Loans to be made to any
Borrower, any Swingline Loans made to such Borrower shall be then outstanding,
the proceeds of such Revolving Loans shall first be applied to pay in full such
Swingline Loans, with any remaining proceeds to be made available to such
Borrower as provided above.
(b) If the Issuing Bank has not received from the applicable
Borrower the payment required by Section 2.21(e) by the time specified therein,
the Issuing Bank will promptly notify the Administrative Agent of the L/C
Disbursement and the Administrative Agent will promptly notify each Lender of
such L/C Disbursement and its Pro Rata Percentage thereof. Each Lender will pay
to the Administrative Agent not later than 4:00 p.m., New York City time, on the
date of such notice (or, if the Lenders shall have received such notice later
than 2:00 p.m., New York City time, on any day, not later than 10:00 a.m., New
York City time, on the immediately following Business Day) an amount equal to
such Lender's Pro Rata Percentage of such L/C Disbursement (it being understood
that such amount shall be deemed to constitute an ABR Revolving Loan of such
Lender), and the Administrative Agent will promptly pay such amount to the
Issuing Bank. The Administrative Agent will promptly remit to each Lender such
Pro Rata Percentage (determined as of the date of such payment) of any amounts
subsequently received by the Administrative Agent from the applicable Borrower
in respect of such L/C Disbursement. If any Lender shall not have made its Pro
Rata Percentage of such L/C Disbursement available to the Issuing Bank as
provided above, such Lender agrees to pay interest on such amount, for each day
from and including the date such amount is required to be paid in accordance
with this subsection to but excluding the date an amount equal to such amount is
paid to the Administrative Agent for prompt payment to the Issuing Bank at, for
the first such day, the Federal Funds Effective Rate, and for each day
thereafter, the Alternate Base Rate.
SECTION 2.03. Conversion and Continuation Options for
Revolving Loans. (a) Each Borrower may elect from time to time to convert (i)
Eurodollar Loans or CD Loans to ABR Loans, by giving the Administrative Agent
prior notice of such election not later than 10:00 a.m., New York City time, on
the Business Day of a requested conversion; (ii) ABR Loans or CD Loans to
Eurodollar Loans by giving the
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32
Administrative Agent prior notice of such election not later than 11:00 a.m.,
London time, three Business Days prior to a requested conversion; or (iii) ABR
Loans or Eurodollar Loans to CD Loans by giving the Administrative Agent prior
notice of such election not later than 10:00 a.m., New York City time, two
Business Days prior to a requested conversion; provided that if any such
conversion of Eurodollar Loans or CD Loans is made other than on the last day of
an Interest Period with respect thereto, such Borrower shall pay any amounts due
to the Lenders pursuant to Section 2.18 as a result of such conversion. Any such
notice of conversion to Eurodollar Loans or CD Loans shall specify the length of
the initial Interest Period or Interest Periods therefor. Upon receipt of any
such notice the Administrative Agent shall promptly notify each Lender thereof.
All or any part of the outstanding Eurodollar Loans, CD Loans or ABR Loans may
be converted as provided herein; provided that (i) no Loan may be converted into
a Eurodollar Loan or CD Loan when any Event of Default has occurred and is
continuing and the Administrative Agent or the Required Lenders have determined
that such a conversion is not appropriate and (ii) no Loan may be converted into
a Eurodollar Loan after the date that is one month prior to the Revolving Credit
Maturity Date or into a CD Loan after the date that is 30 days prior to the
Revolving Credit Maturity Date.
(b) Any Eurodollar Loans or CD Loans may be continued as such
upon the expiration of the then current Interest Period with respect thereto by
the relevant Borrower giving prior notice to the Administrative Agent, not later
than 11:00 a.m., London time, three Business Days prior to a requested
continuation, in the case of Eurodollar Loans, and not later than 10:00 a.m.,
New York City time, two Business Days prior to a requested continuation, in the
case of CD Loans, in each case setting forth the length of the next Interest
Period to be applicable to such Loans; provided that no Eurodollar Loan or CD
Loan may be continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent or the Required Lenders have determined
that such a continuation is not appropriate, (ii) if, after giving effect
thereto, Section 2.04 would be contravened or (iii) after the date that is one
month, in the case of Eurodollar Loans, or 30 days, in the case of CD Loans,
prior to the Revolving Credit Maturity Date and provided, further, that if such
Borrower shall fail to give any required notice as described above in this
Section 2.03 or if such continuation is not permitted pursuant to the preceding
proviso such Loans shall automatically be converted to ABR Loans on the last day
of such then expiring Interest Period.
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SECTION 2.04. Swingline Loans. (a) Subject to the terms and
conditions hereof, each Swingline Lender severally agrees to make swingline
loans in Dollars (individually, a "Swingline Loan" and collectively, the
"Swingline Loans") to any Borrower from time to time during the Revolving Credit
Commitment Period in accordance with the procedures set forth in this Section
2.04, provided, that (i) the aggregate principal amount of all Swingline Loans
shall not exceed $100,000,000 at any one time outstanding, (ii) the principal
amount of any borrowing of Swingline Loans may not exceed the aggregate amount
of the Adjusted Available Revolving Credit Commitments of all Lenders
immediately prior to such borrowing or result in the sum of the Aggregate
Revolving Credit Exposure, the L/C Exposure and the Competitive Loan Exposure
then outstanding exceeding the aggregate Revolving Credit Commitments then in
effect, (iii) in no event may Swingline Loans be borrowed hereunder if, after
giving effect thereto, the aggregate principal amount of Swingline Loans made by
any Swingline Lender then outstanding would exceed the lesser of (1) the
Swingline Commitment of such Swingline Lender or (2) the Adjusted Available
Revolving Credit Commitment of such Swingline Lender and (iv) in no event may
Swingline Loans be borrowed hereunder if (x) an Event of Default shall have
occurred and be continuing and (y) such Event of Default shall not have been
subsequently cured or waived. Amounts borrowed by any Swingline Borrower under
this Section 2.04 may be repaid and, up to but excluding the Revolving Credit
Maturity Date, reborrowed. All Swingline Loans shall at all times be ABR Loans.
The relevant Swingline Borrower shall give the Administrative Agent notice of
any Swingline Loans requested hereunder (which notice must be received by the
Administrative Agent prior to 11:00 a.m., New York City time, on the requested
Borrowing Date) specifying (A) the amount to be borrowed, and (B) the requested
Borrowing Date. Upon receipt of such notice, the Administrative Agent shall
promptly notify each Swingline Lender of the aggregate amount of such borrowing
and of the amount of such Swingline Lender's Swingline Borrowing Share (if any)
thereof. Not later than 1:00 p.m., New York City time, on the Borrowing Date
specified in such notice each Swingline Lender shall make its Swingline
Borrowing Share of such Swingline Loans available to the Administrative Agent
for the account of the relevant Swingline Borrower at the office of the
Administrative Agent set forth in Section 11.01 in funds immediately available
to the Administrative Agent. Amounts so received by the Administrative Agent
will promptly be made available to the relevant Swingline Borrower by the
Administrative Agent crediting the account of such Swingline Borrower on the
books of such office with the aggregate of the amounts made available to the
Administrative Agent by
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34
the Swingline Lenders and in like funds as received by the Administrative Agent.
Each borrowing pursuant to this Section 2.04 shall be in a minimum aggregate
principal amount of the lesser of (i) $1,000,000 or an integral multiple of
$100,000 in excess thereof and (ii) the aggregate amount of the then available
Swingline Commitments.
(b) Notwithstanding the occurrence of any Event of Default or
noncompliance with the conditions precedent set forth in Article V or the
minimum borrowing amounts specified in Section 2.02, if any Swingline Loans
shall remain outstanding at 10:00 a.m., New York City time, on the fifth
Business Day following the Borrowing Date thereof and if by such time on such
fifth Business Day the Administrative Agent shall have received neither (i) a
notice of borrowing delivered by the relevant Swingline Borrower pursuant to
Section 2.02 requesting that Revolving Loans be made pursuant to Section 2.01 on
the immediately succeeding Business Day in an amount at least equal to the
aggregate principal amount of such Swingline Loans, nor (ii) any other notice
satisfactory to the Administrative Agent indicating such Swingline Borrower's
intent to repay all such Swingline Loans on the immediately succeeding Business
Day with funds obtained from other sources, the Administrative Agent shall be
deemed to have received a notice from such Swingline Borrower pursuant to
Section 2.02 requesting that ABR Loans be made pursuant to Section 2.01 on such
immediately succeeding Business Day in an amount equal to the aggregate amount
of such Swingline Loans, and the procedures set forth in Section 2.02 shall be
followed in making such ABR Loans, provided, that for the purposes of
determining each Lender's Pro Rata Percentage with respect to such borrowing,
the outstanding principal amount of Swingline Loans shall be deemed to be zero.
The proceeds of such ABR Loans shall be applied to repay such Swingline Loans.
(c) If, for any reason, ABR Loans may not be, or are not, made
pursuant to paragraph (b) of this Section 2.04 to repay Swingline Loans as
required by such paragraph, effective on the date such ABR Loans would otherwise
have been made, each Lender severally, unconditionally and irrevocably agrees
that it shall, without regard to the occurrence of any Default or Event of
Default, purchase a participating interest in such Swingline Loans ("Unrefunded
Swingline Loans") in an amount equal to the amount of ABR Loans which would
otherwise have been made by such Lender pursuant to paragraph (b) of this
Section 2.04. Each Lender will immediately transfer to the Administrative Agent,
in immediately available funds, the amount of its
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35
participation, and the proceeds of such participation shall be distributed by
the Administrative Agent to each Swingline Lender in such amount as will reduce
the amount of the participating interest retained by such Swingline Lender in
its Swingline Loans to the amount of the ABR Loans which were to have been made
by it pursuant to paragraph (b) of this Section 2.04. All payments by the
Lenders in respect of Unrefunded Swingline Loans and participations therein
shall be made in accordance with Section 2.14.
SECTION 2.05. Optional Prepayments of Loans. Each Borrower may
at any time and from time to time prepay the Loans (subject, in the case of
Eurodollar Loans, CD Loans and Fixed Rate Loans, to compliance with the terms of
Section 2.18), in whole or in part, without premium or penalty, upon irrevocable
notice to the Administrative Agent not later than 12:00 noon, New York City
time, on the date of such prepayment, specifying the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans, CD Loans, ABR
Loans, Fixed Rate Loans or a combination thereof, (including in the case of
Eurodollar Loans, CD Loans or Fixed Rate Loans, the Borrowing to which such
prepayment is to be applied) and, if of a combination thereof, the amount
allocable to each, provided, that notice of any prepayment of Swingline Loans
may be delivered to the Administrative Agent as late as, but no later than, 1:00
p.m., New York City time, on the date of such prepayment. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with accrued interest
to such date on the amount prepaid. Partial prepayments of Revolving Loans shall
be in an aggregate principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof (or, if less, the remaining outstanding principal
amount thereof). Partial prepayments of Swingline Loans shall be in an aggregate
principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof
(or, if less, the remaining outstanding principal amount thereof).
SECTION 2.06. The Competitive Loans. (a) Subject to the terms
and conditions of this Agreement, each Borrower may borrow Competitive Loans in
Dollars from time to time during the Competitive Loan Borrowing Period on any
Business Day, provided, that in no event may Competitive Loans be borrowed
hereunder if, after giving effect thereto, the sum of the Aggregate Revolving
Credit Exposure and the aggregate Competitive Loan Exposure and the L/C Exposure
then outstanding would exceed the aggregate Revolving Credit Commitments then in
effect. Within the limits and on the
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36
conditions hereinafter set forth with respect to Competitive Loans, each
Borrower from time to time may borrow, repay and reborrow Competitive Loans.
(b) Competitive Loans may be made in Local Currencies, under
procedures established by CCSC and the Administrative Agent at the time
Competitive Bids for such Loans are requested.
SECTION 2.07. Procedure for Competitive Loan Borrowing. (a)
The relevant Borrower shall request Competitive Loans by delivering a
Competitive Bid Request to the Administrative Agent, not later than 12:00 noon
(New York City time) four Business Days prior to the proposed Borrowing Date (in
the case of a Eurodollar Competitive Borrowing), and not later than 10:00 a.m.
(New York City time) one Business Day prior to the proposed Borrowing Date (in
the case of a Fixed Rate Borrowing). Each Competitive Bid Request may solicit
bids for Competitive Loans in an aggregate principal amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof and having not more than three
alternative Interest Periods. The Administrative Agent shall notify each Lender
promptly by facsimile transmission of the contents of each Competitive Bid
Request received by the Administrative Agent.
(b) In the case of a Eurodollar Competitive Bid Request, upon
receipt of notice from the Administrative Agent of the contents of such
Competitive Bid Request, each Lender may elect, in its sole discretion, to offer
irrevocably, subject to Article V, to make one or more Competitive Loans at the
LIBO Rate plus or minus the Margin determined by such Lender in its sole
discretion for each such Competitive Loan. Any such irrevocable offer shall be
made by delivering a Competitive Bid to the Administrative Agent, before 10:30
a.m. (New York City time) on the day that is three Business Days before the
proposed Borrowing Date, setting forth:
(i) the maximum amount of Competitive Loans for each Interest
Period and the aggregate maximum amount of Competitive Loans for all
Interest Periods which such Lender would be willing to make (which
amounts may, subject to Section 2.06, exceed such Lender's Revolving
Credit Commitment); and
(ii) the Margin above or below the LIBO Rate at which such
Lender is willing to make each such Competitive Loan.
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37
The Administrative Agent shall advise the relevant Borrower before 11:00 a.m.
(New York City time) on the date which is three Business Days before the
proposed Borrowing Date of the contents of each such Competitive Bid received by
it. If the Administrative Agent, in its capacity as a Lender, shall elect, in
its sole discretion, to make any such Competitive Bid, it shall advise the
relevant Borrower of the contents of its Competitive Bid before 10:15 a.m. (New
York City time) on the date which is three Business Days before the proposed
Borrowing Date.
(c) In the case of a Competitive Bid Request for Fixed Rate
Borrowings, upon receipt of notice from the Administrative Agent of the contents
of such Competitive Bid Request, each Lender may elect, in its sole discretion,
to offer irrevocably, subject to Article V, to make one or more Competitive
Loans at a rate of interest determined by such Lender in its sole discretion for
each such Competitive Loan. Any such irrevocable offer shall be made by
delivering a Competitive Bid to the Administrative Agent before 9:30 a.m. (New
York City time) on the proposed Borrowing Date, setting forth:
(i) the maximum amount of Competitive Loans for each Interest
Period, and the aggregate maximum amount for all Interest Periods,
which such Lender would be willing to make (which amounts may, subject
to Section 2.06, exceed such Lender's Revolving Credit Commitment); and
(ii) the rate of interest at which such Lender is willing to
make each such Competitive Loan.
The Administrative Agent shall advise the relevant Borrower before 10:00 a.m.
(New York City time) on the proposed Borrowing Date of the contents of each such
Competitive Bid received by it. If the Administrative Agent, in its capacity as
a Lender, shall elect, in its sole discretion, to make any such Competitive Bid,
it shall advise the relevant Borrower of the contents of its Competitive Bid
before 9:15 a.m. (New York City time) on the proposed Borrowing Date.
(d) Before 11:30 a.m. (New York City time,) three Business
Days before the proposed Borrowing Date (in the case of Eurodollar Competitive
Loans) and before 10:30 a.m. (New York City time) on the proposed Borrowing Date
(in the case of Fixed Rate Competitive Loans), the relevant Borrower, in its
absolute discretion, shall:
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(i) cancel (without fee or penalty) such Competitive Bid
Request by giving the Administrative Agent telephone notice to that
effect; or
(ii) by giving telephone notice to the Administrative Agent
(immediately confirmed by delivery to the Administrative Agent of a
Competitive Loan Confirmation in writing or by facsimile
transmission)(1) subject to the provisions of Section 2.07(e), accept
one or more of the offers made by any Lender or Lenders pursuant to
Section 2.07(b) or Section 2.07(c), as the case may be, of the amount
of Competitive Loans for each relevant maturity date and (2) reject any
remaining offers made by Lenders pursuant to Section 2.07(b) or Section
2.07(c), as the case may be.
(e) Each Borrower's acceptance of Competitive Loans in
response to any Competitive Bid Request shall be subject to the following
limitations:
(i) the amount of Competitive Loans accepted for each Interest
Period specified by any Lender in its Competitive Bid shall not exceed
the maximum amount for such Interest Period specified in such
Competitive Bid;
(ii) the aggregate amount of Competitive Loans accepted for all
Interest Periods specified by any Lender in its Competitive Bid shall
not exceed the aggregate maximum amount specified in such Competitive
Bid for all such Interest Periods;
(iii) a Borrower may not accept offers for Competitive Loans for
any Interest Period in an aggregate principal amount in excess of the
maximum principal amount requested in the related Competitive Bid
Request; and
(iv) if a Borrower accepts any of such offers, (1) it must
accept such offers based solely upon pricing for such relevant Interest
Period (including any amounts which shall be payable to the relevant
Lender in respect of the relevant Competitive Loans pursuant to Section
2.16) and upon no other criteria whatsoever and (2) if (x) two or more
Lenders submit offers for any Interest Period at identical pricing and
such Borrower accepts any of such offers but does not wish to (or by
reason of the limitations set forth in Section 2.06 or in this Section
2.07, cannot) borrow the total amount offered by such Lenders with such
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39
identical pricing, such Borrower shall accept offers from all of such
Lenders in amounts allocated among them pro rata according to the
amounts offered by such Lenders (or as nearly pro rata as shall be
practicable after giving effect to the requirement that made by a
Lender on a Borrowing Date for each relevant Interest Period shall be
in a principal amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof) or (y) a Lender submits offers for
multiple Interest Periods specifying a maximum aggregate principal
amount for all Interest Periods, and the relevant Borrower accepts
offers from such Lender for more than one Interest Period, then such
Borrower shall instruct the Administrative Agent how to apportion such
Borrower's acceptances among such offers for different Interest Periods
to the extent, if any, necessary to provide for acceptance of offers
from such Lender equal to but not exceeding such specified maximum
aggregate amount.
(f) If the relevant Borrower notifies the Administrative Agent
that a Competitive Bid Request is canceled pursuant to Section 2.07(d)(i), the
Administrative Agent shall give prompt telephone notice thereof to the
Lenders.
(g) If the relevant Borrower accepts pursuant to Section
2.07(d)(ii) one or more of the offers made by any one or more Lenders, the
Administrative Agent promptly shall notify each Lender which has made such a
Competitive Bid of (i) the aggregate amount of such Competitive Loans to be made
on such Borrowing Date for each Interest Period and (ii) the acceptance or
rejection of any offers to make such Competitive Loans made by such Lender, and
before 12:00 noon (New York City time) on the Borrowing Date specified in the
applicable Competitive Bid Request, each Lender whose Competitive Bid has been
accepted shall make available to the Administrative Agent at its office set
forth in Section 11.01 the amount of Competitive Loans to be made by such
Lender, in immediately available funds. The Administrative Agent will make such
funds available to the relevant Borrower as soon as practicable on such date at
the Administrative Agent's aforesaid address. As soon as practicable after each
Borrowing Date, the Administrative Agent shall notify each Lender of the
aggregate amount of Competitive Loans advanced on such Borrowing Date, the
respective Interest Periods thereof and the respective interest rates applicable
thereto.
SECTION 2.08. Repayment of Revolving, Swingline and
Competitive Loans; Evidence of Debt. (a) Each Borrower hereby unconditionally
promises to pay to the Administrative
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40
Agent for the account of the relevant Lenders (i) on the Revolving Credit
Maturity Date (or such earlier date as the Loans become due and payable pursuant
to Section 2.05 or Article VIII), the unpaid principal amount of each Revolving
Loan and Swingline Loan made to it by each such Lender and (ii) on the
Competitive Loan Maturity Date in respect thereof, the unpaid principal amount
of each Competitive Loan made to it by each such Lender. Each Borrower hereby
further agrees to pay interest in immediately available funds at the office of
the Administrative Agent on the unpaid principal amount of the Revolving Loans,
Swingline Loans and Competitive Loans from time to time from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in Section 2.09.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of each Borrower to
the appropriate lending office of such Lender resulting from each Revolving
Loan, Swingline Loan and Competitive Loan made by such lending office of such
Lender from time to time, including the amounts of principal and interest
payable and paid to such lending office of such Lender from time to time under
this Agreement.
(c) The Administrative Agent shall maintain the Register
pursuant to Section 11.04, and a subaccount for each Lender, in which Register
and subaccounts (taken together) shall be recorded (i) the amount of each
Revolving Loan, Swingline Loan or Competitive Loan made hereunder, the Type of
each such Loan and the Interest Period or maturity date (if any) applicable
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from each Borrower to each Lender hereunder in respect of
each such Loan and (iii) the amount of any sum received by the Administrative
Agent hereunder from each Borrower in respect of each such Loan and each
Lender's share thereof.
(d) The entries made in the Register and accounts maintained
pursuant to paragraphs (b) and (c) of this Section 2.08 shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of each Borrower therein recorded; provided, however,
that the failure of any Lender or the Administrative Agent to maintain such
account, such Register or such subaccount, as applicable, or any error therein,
shall not in any manner affect the obligation of any Borrower to repay (with
applicable interest) the Loans made to such Borrower by such Lender in
accordance with the terms of this Agreement.
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41
SECTION 2.09. Interest Rates and Payment Dates. (a) Each
Eurodollar Revolving Loan shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) for each day during each
Interest Period with respect thereto at a rate per annum equal to the LIBO Rate
determined for such Interest Period plus the Applicable Percentage. Interest in
respect of Eurodollar Revolving Loans shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest Period.
(b) Each ABR Loan (including each Swingline Loan) shall bear
interest (computed on the basis of the actual number of days elapsed over a year
of 365 or 366 days, as the case may be, when the Alternate Base Rate is
determined by reference to the Prime Rate and over a year of 360 days at all
other times) at a rate per annum equal to the Alternate Base Rate.
(c) Each CD Loan shall bear interest (computed on the basis of
the actual number of days elapsed over a year of 360 days) for each day during
each Interest Period at a rate per annum equal to the Adjusted CD Rate
determined for such Interest Period plus the Applicable Percentage.
(d) Each Competitive Loan shall bear interest for each day
from the applicable Borrowing Date to (but excluding) the applicable Competitive
Loan Maturity Date at the Margin over the LIBO Rate, or at the fixed rate of
interest, specified in the Competitive Bid accepted by the relevant Borrower in
connection with such Competitive Loan.
(e) If all or a portion of (i) the principal amount of any
Loan, (ii) any interest payable thereon or (iii) any facility fee or other
amount payable hereunder shall not be paid when due (whether at the stated
maturity thereof or by acceleration or otherwise), such overdue amount shall
bear interest at a rate per annum which is (x) in the case of overdue principal
(except as otherwise provided in clause (y) below), the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
Section 2.09 plus 2% per annum or (y) in the case of principal of any
Competitive Loan which remains overdue past the stated maturity date thereof, or
any overdue interest, Facility Fee or other amount, the rate described in
Section 2.09(b) plus 2% per annum, in each case from the date of such nonpayment
to (but excluding) the date on which such amount is paid in full (after as well
as before judgment).
(f) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing
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42
pursuant to Section 2.09(e) shall be payable from time to time on demand.
SECTION 2.10. Computation of Interest. Each determination of
an interest rate by the Administrative Agent pursuant to any provision of this
Agreement shall be conclusive and binding on the Borrowers and the Lenders in
the absence of manifest error.
SECTION 2.11. Fees. (a) CCSC agrees to pay to each Lender,
through the Administrative Agent, on the last day of March, June, September and
December in each year in arrears, and on the date on which the Commitment of
such Lender shall be terminated as provided herein, a facility fee (a "Facility
Fee") equal to the Applicable Percentage per annum on the average daily amount
of the Revolving Credit Commitment of such Lender (whether used or unused)
during the preceding quarter (or shorter period commencing with the date hereof
or ending with the Revolving Credit Maturity Date or the date on which the
Revolving Credit Commitment of such Lender shall be terminated). All Facility
Fees shall be computed on the basis of the actual number of days elapsed in a
year of 360 days. The Facility Fee due to each Lender shall commence to accrue
on the date of this Agreement and shall cease to accrue on the date on which the
Revolving Credit Commitment of such Lender shall be terminated as provided
herein.
(b) CCSC agrees to pay to the Administrative Agent, for its
own account, the administrative fees referred to in the Commitment Letter and
the fees separately agreed upon by CCSC and the Administrative Agent in the Fee
Letter (collectively, the "Administrative Agent Fees").
(c) CCSC agrees to pay (i) to each Lender, through the
Administrative Agent, on the last day of March, June, September and December of
each year and on the date on which the Revolving Credit Commitment of such
Lender shall be terminated as provided herein, a fee (an "L/C Participation
Fee") calculated on such Lender's average daily aggregate L/C Exposure
(excluding the portion thereof attributable to unreimbursed L/C Disbursements)
during the preceding quarter (or shorter period commencing with the date hereof
or ending with the Revolving Credit Maturity Date or the date on which the
Revolving Credit Commitment of such Lender shall be terminated) at a rate equal
to the Applicable Percentage from time to time applicable for purposes of
determining the interest rate on Revolving Credit Borrowings comprised of
Eurodollar Loans pursuant to Section 2.09, and (ii) to each Issuing Bank with
respect to each Letter of Credit issued by it the fees agreed upon by
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43
CCSC and such Issuing Bank in the relevant Issuing Bank Agreement plus, in
connection with the issuance, amendment or transfer of any Letter of Credit or
any L/C Disbursement, such Issuing Bank's customary documentary and processing
charges (collectively, the "Issuing Bank Fees"). All L/C Participation Fees and
Issuing Bank Fees shall be computed on the basis of the actual number of days
elapsed in a year of 360 days.
(d) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders, except that the Issuing Bank Fees shall be paid
directly to the relevant Issuing Bank. Once paid, none of the Fees shall be
refundable.
SECTION 2.12. Termination or Reduction of Revolving Credit
Commitments. (a) CCSC shall have the right, upon one Business Day's notice to
the Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, to reduce the amount of the Revolving Credit Commitments; provided
that no such termination or reduction of Revolving Credit Commitments shall be
permitted if, after giving effect thereto and to any repayments of the Loans
made on the effective date thereof, (i) the sum of the Aggregate Revolving
Credit Exposure, the L/C Exposure and the aggregate Competitive Loan Exposure
then outstanding would exceed the Total Revolving Credit Commitments then in
effect or (ii) the sum of the Revolving Credit Exposure and the L/C Exposure of
any Lender then outstanding would exceed such Lender's Revolving Credit
Commitment. Any such reduction shall be in an amount equal to $5,000,000 or a
whole multiple of $1,000,000 in excess thereof and shall reduce permanently the
Revolving Credit Commitments then in effect.
(b) CCSC shall pay to the Administrative Agent for the account
of the Lenders, on the date of such termination or reduction, the Facility Fee
on the amount of the Revolving Credit Commitments so terminated or reduced
accrued to the date of such termination or reduction.
(c) Each reduction in the Revolving Credit Commitments shall
reduce the Swingline Commitment by an equal percentage. Such reduction of the
Swingline Commitment shall be made ratably among the Swingline Lenders in
accordance with their Adjusted Swingline Commitment Percentages.
SECTION 2.13. Inability to Determine Interest Rate. If prior
to the first day of any Interest Period:
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44
(a) the Administrative Agent shall have determined in good
faith (which determination shall be conclusive and binding upon the
Borrowers) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Adjusted CD Rate or the LIBO Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Required Lenders that the Adjusted CD Rate or the LIBO Rate
determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected
Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrowers and the Lenders as soon as practicable thereafter. If such notice is
given (x) any CD Loans or Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as ABR Loans and (y) any Loans that, on
the first day of such Interest Period, were to have been converted to or
continued as CD Loans or Eurodollar Loans shall be continued as or converted to
ABR Loans. The Administrative Agent shall promptly withdraw such notice upon
becoming aware that the circumstances giving rise thereto shall no longer exist.
Until such notice has been withdrawn by the Administrative Agent, no further CD
Loans or Eurodollar Loans shall be made or continued as such, nor shall any
Borrower have the right to convert ABR Loans to CD Loans or Eurodollar Loans.
SECTION 2.14. Pro Rata Treatment and Payments. (a) Each
reduction of the Revolving Credit Commitments of the Lenders shall be made pro
rata according to the amounts of the Lenders' Commitment Percentages. Each
payment (including each prepayment other than any prepayment made pursuant to
Section 3.02(f)) by a Borrower on account of principal of and interest on
Revolving Loans which are ABR Loans shall be made pro rata according to the
respective outstanding principal amounts of such ABR Loans then held by the
Lenders. Each payment (including each prepayment other than any prepayment made
pursuant to Section 3.02(f)) by a Borrower on account of principal of and
interest on Revolving Loans which are Eurodollar Loans designated by a Borrower
to be applied to a particular Eurodollar Borrowing shall be made pro rata
according to the respective outstanding principal amounts of such Eurodollar
Loans then held by the Lenders. Each payment (including each prepayment other
than any prepayment made pursuant to Section 3.02(f)) by any Borrower on account
of principal of
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45
and interest on Swingline Loans shall be made pro rata according to the
respective outstanding principal amounts of the Swingline Loans or participating
interests therein, as the case may be, then held by the relevant Lenders. All
payments (including prepayments) to be made by a Borrower hereunder, whether on
account of principal, interest, fees or otherwise, shall be made without set off
or counterclaim and shall be made prior to 12:00 noon, New York City time, on
the due date thereof to the Administrative Agent, for the account of the
Lenders, at the Administrative Agent's office specified in Section 11.01, in
Dollars and in immediately available funds. The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on Eurodollar Loans or
Eurodollar Competitive Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day, and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any payment on a
Eurodollar Loan or a Eurodollar Competitive Loan becomes due and payable on a
day other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day (and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension) unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day. In the event that (i) an Event of Default
shall have occurred pursuant to Section 8.01(i), or (ii) the Commitments shall
have been terminated and/or the Loans shall have been declared immediately due
and payable pursuant to Article VIII, then, if after giving effect to all
actions, if any, required to be taken and transactions to be effected pursuant
to Section 3.03, the respective Revolving Loans and L/C Exposures of the Lenders
shall not be held pro rata according to the amounts of the Lenders' Commitment
Percentages, the Lenders shall simultaneously purchase from and sell to one
another at face value, and shall promptly pay to one another the purchase price
for, participations in the respective Revolving Loans and L/C Exposures of the
Lenders so that the aggregate unpaid principal amount of all Revolving Loans and
L/C Exposures shall be held by the Lenders pro rata according to the amounts of
the Lenders' Commitment Percentages.
(b) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume
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46
that such Lender is making such amount available to the Administrative Agent,
and the Administrative Agent may, in reliance upon such assumption, make
available to the relevant Borrower a corresponding amount. If such amount is not
made available to the Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Administrative Agent, on demand,
such amount with interest thereon at a rate equal to the daily average Federal
Funds Effective Rate for the period until such Lender makes such amount
immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this Section 2.14(b) shall be conclusive in the absence of manifest error.
If such Lender's share of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days of such Borrowing
Date, the Administrative Agent shall also be entitled to recover such amount
with interest thereon at the rate per annum applicable to ABR Loans hereunder,
on demand, from the relevant Borrower, but without prejudice to any right or
claim that such Borrower may have against such Lender.
SECTION 2.15. Illegality. Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of Law, or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert ABR Loans or CD Loans to Eurodollar Loans
shall forthwith be suspended until such time as the making or maintaining of
Eurodollar Loans shall no longer be unlawful, (b) such Lender's Loans then
outstanding as Eurodollar Loans, if any, shall be converted automatically to ABR
Loans on the respective last days of the then current Interest Periods with
respect to such Loans or within such earlier period as required by law.
SECTION 2.16. Requirements of Law. (a) The Borrowers agree to
reimburse each Lender and Issuing Bank for any increase in the cost to such
Lender or Issuing Bank of, or any reduction in the amount of any sum receivable
by such Lender or Issuing Bank in respect of, making, continuing or maintaining
(or of its obligation to make, continue or maintain) any Loans as, or of
converting (or of its obligation to convert) any Loans into, Eurodollar Loans,
CD Loans or Fixed Rate Loans or issuing (or its obligation to issue) Letters of
Credit including, without limitation, by reason of any requirements imposed by
the Board upon the making or funding of Eurodollar Loans, CD Loans or Fixed Rate
Loans or the issuance of Letters of Credit. Such
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Lender or Issuing Bank shall promptly notify the Administrative Agent and CCSC
in writing of the occurrence of any such event, such notice to state, in
reasonable detail, the reasons therefor and the additional amount required fully
to compensate such Lender or Issuing Bank for such increased cost or reduced
amount. Such additional amounts shall be payable directly to such Lender or
Issuing Bank within five days of CCSC's receipt of such notice, and such notice
shall, in the absence of manifest error, be conclusive and binding on the
Borrowers.
(b) If any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase-in of, any law or
regulation, directive, guideline, decision or request (whether or not having the
force of law) of any court, central bank, regulator or other governmental
authority after the date hereof affects or would affect the amount of capital
required or expected to be maintained by any Lender or Issuing Bank, and such
Lender or Issuing Bank determines (in its sole and absolute discretion) that the
rate of return on its capital as a consequence of its Commitment or the Loans
made or the Letters of Credit issued by it is reduced to a level below that
which such Lender or Issuing Bank could have achieved but for the occurrence of
any such circumstance, then, in any such case upon notice from time to time by
such Lender or Issuing Bank to CCSC, the Borrowers shall immediately pay
directly to such Lender or Issuing Bank additional amounts sufficient to
compensate such Lender or Issuing Bank for such reduction in rate of return. A
statement of such Lender or Issuing Bank as to any such additional amount or
amounts (including calculations thereof in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding on the Borrowers. In
determining such amount, such Lender or Issuing Bank may use any method of
averaging and attribution that it (in its sole and absolute discretion) shall
deem applicable.
(c) No Lender or Issuing Bank shall be entitled to
compensation under this Section 2.16 for any costs incurred or reductions
suffered with respect to any date that it has such costs unless it shall have
notified CCSC that it will demand compensation for such costs or reductions
under paragraph (a) or (b) above, as applicable, not more than 120 days after
the later of (i) such date and (ii) the date on which it shall have become aware
of such costs or reductions; provided that the foregoing shall in no way operate
in derogation of the undertaking contained in the last sentence of this
paragraph (c). Notwithstanding any other provision of this Section 2.16, no
Lender or Issuing Bank shall demand compensation for any increased
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48
cost or reduction referred to above if it shall not at the time be the general
policy or practice of such Lender or Issuing Bank to demand such compensation in
similar circumstances under comparable provisions of other credit agreements. In
the event that any Lender or Issuing Bank determines that any event or
circumstance that will lead to a claim under this Section 2.16 has occurred or
will occur, such Lender or Issuing Bank will use its best efforts to so notify
CCSC; provided, that any failure to provide such notice shall in no way impair
the rights of any Lender or Issuing Bank to demand and receive compensation
under this Section 2.16, but without prejudice to CCSC.
SECTION 2.17. Taxes. All payments by each Borrower of
principal of, and interest on, the Loans and L/C Disbursements and all other
amounts payable hereunder shall be made free and clear of and without deduction
for any present or future income, excise, stamp or franchise taxes and other
taxes, fees, duties, withholdings or other charges of any nature whatsoever
imposed by any taxing authority on the Administrative Agent, any Lender, or any
Issuing Bank (or any assignee of such Lender or Issuing Bank, or a participation
holder or a change in designation of the lending office of a Lender or Issuing
Bank (a "Transferee")), but excluding franchise taxes and taxes imposed on or
measured by the recipient's net income or receipts (such non-excluded items
being called "Taxes"). In the event that any withholding or deduction from any
payment to be made by any Borrower hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then such Borrower will
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Administrative Agent an official
receipt or other documentation satisfactory to the Administrative Agent
evidencing such payment to such authority; and
(c) pay to the Administrative Agent for the account of the
Lenders or Issuing Banks such additional amount or amounts as is
necessary to ensure that the net amount actually received by each
Lender or Issuing Bank will equal the full amount such Lender or
Issuing Bank would have received had no such withholding or deduction
been required.
Moreover, if any Taxes are directly asserted against the Administrative Agent or
any Lender or Issuing Bank with respect to any payment received by the
Administrative Agent
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49
or such Lender or Issuing Bank hereunder, the Administrative Agent or such
Lender or Issuing Bank may pay such Taxes and the applicable Borrower will
promptly pay such additional amounts (including any penalties, interest or
expenses) as shall be necessary in order that the net amount received by such
person after the payment of such Taxes (including any Taxes on such additional
amount) shall equal the amount such person would have received had such Taxes
not been asserted.
If the Borrowers fail to pay any Taxes when due to the
appropriate taxing authority or fail to remit to the Administrative Agent, for
the account of the respective Lenders and Issuing Banks, the required receipts
or other required documentary evidence, the Borrowers shall indemnify the
Lenders and Issuing Banks for any incremental Taxes, interest or penalties that
may become payable by any Lender or Issuing Bank as a result of any such
failure. For purposes of this Section 2.17, a distribution hereunder by the
Administrative Agent to or for the account of any Lender or Issuing Bank shall
be deemed a payment by a Borrower.
Each Lender, Issuing Bank or Transferee that is organized
under the laws of a jurisdiction other than the United States shall, on or prior
to the date hereof (in the case of each Lender and Issuing Bank that is a party
hereto on the date hereof) or on or prior to the date of any assignment or
participation hereunder (in the case of a Transferee) and thereafter as
reasonably requested from time to time by CCSC or the Administrative Agent,
execute and deliver, if legally able to do so, to CCSC and the Administrative
Agent one or more (as CCSC or the Administrative Agent may reasonably request)
United States Internal Revenue Service Forms 4224 or Forms 1001 and Form W-8 or
Form W-9 or such other forms or documents (or successor forms or documents),
appropriately completed, as may be applicable to establish the extent, if any,
to which a payment to such Lender or Issuing Bank or Transferee is exempt from
or entitled to a reduced rate of, withholding or deduction of Taxes.
With respect to Obligations other than those specified in the
immediately following paragraph, the Borrowers shall not be required to
indemnify or to pay any additional amounts to any Lender, Issuing Bank or
Transferee with respect to any Taxes pursuant to this Section 2.17 to the extent
that (i) any obligation to withhold, deduct or pay amounts with respect to such
tax existed on the date such Lender, Issuing Bank or Transferee became a party
to this Agreement (and, in such case, Borrowers may deduct and withhold such tax
from payments to such Lender, Issuing Bank or Transferee), or (ii) any
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Lender, Issuing Bank or Transferee fails to comply in full with the provisions
of the immediately preceding paragraph (and, in such case, Borrowers may deduct
and withhold all Taxes required by law as a result of such noncompliance from
payments to such Lender, Issuing Bank or Transferee).
With respect to Local Currency Loans, Loans made to non-U.S.
subsidiaries or Letters of Credit made or issued upon request of a non-U.S.
Subsidiary, each relevant Lender, Issuing Bank or Transferee shall determine the
extent to which obligations to withhold, deduct or pay amounts with respect to
Taxes would exist on the date such Lender, Issuing Bank or Transferee would
become a party to each Local Currency Facility Agreement, make Loans or issue
Letters of Credit, as the case may be, and shall disclose to CCSC such
determination. Based on such determination, the applicable Borrower shall either
agree (i) to indemnify or pay any such additional amounts to each such Lender,
Issuing Bank or Transferee pursuant to this Section 2.17 or (ii) that such
Lender, Issuing Bank or Transferee shall not be obligated to become a party to
such Local Currency Facility Agreement, make Loans or issue Letters of Credit,
as the case may be; provided, however, that in the event of a change in law or
regulation such additional amounts shall be adjusted to reflect such change.
Notwithstanding anything to the contrary in this Section 2.17,
if the Internal Revenue Service determines that a Lender or Issuing Bank (or
Transferee) is a conduit entity participating in a conduit financing arrangement
as defined in Section 7701(l) of the Code and the regulations thereunder and the
Borrower was not a participant to such arrangement (other than as Borrower under
this Agreement) (a "Conduit Financing Arrangement"), then (i) the Borrower shall
have no obligation to pay additional amounts or indemnify the Lender, Issuing
Bank or Transferee for any Taxes with respect to any payments hereunder to the
extent the amount of such Taxes exceeds the amount that would have otherwise
been withheld or deducted had the Internal Revenue Service not made such a
determination and (ii) such Lender, Issuing Bank or Transferee shall indemnify
the Borrowers in full for any and all taxes for which a Borrower is held
directly liable under Section 1461 of the Code by virtue of such Conduit
Financing Arrangement provided that the Borrower (i) promptly forwards to the
indemnitor an official receipt or other documentation satisfactorily evidencing
such payment, (ii) shall contest such tax upon the reasonable request of the
indemnitor and at such indemnitor's cost and (iii) pay to such indemnitor within
30 days any refund of such taxes (including interest thereon). Each Lender,
Issuing Bank or Transferee
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51
represents that it is not participating in a Conduit Financing Arrangement.
No Lender or Issuing Bank shall be entitled to payment under
this Section 2.17 unless it shall have notified the applicable Borrower that it
will demand such payment not more than 120 days after the date on which it shall
have become aware that it was entitled to such payment; provided, that the
foregoing shall in no way operate in derogation of the undertaking contained in
the last sentence of this Section 2.17. Notwithstanding any other provision of
this Section 2.17, no Lender or Issuing Bank shall demand any payment referred
to above if it shall not at the time be the general policy or practice of such
Lender or Issuing Bank to demand such compensation in similar circumstances
under comparable provisions of other credit agreements. In the event that any
Lender or Issuing Bank determines that any event or circumstance that will lead
to a claim by it under this Section 2.17 has occurred or will occur, such Lender
or Issuing Bank will use its best efforts to so notify CCSC; provided, that any
failure to provide such notice shall in no way impair the rights of any Lender
or Issuing Bank to demand and receive compensation under this Section 2.17, but
without prejudice to any claims of CCSC for failure to observe this undertaking.
SECTION 2.18. Indemnity. In the event any Lender shall incur
any loss or expense (including any loss (other than lost profit) or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to make, continue or maintain any portion of the
principal amount of any Loan as, or to convert any portion of the principal
amount of any Loan into, a Eurodollar Loan, CD Loan or Fixed Rate Loan) as a
result of any repayment or prepayment of the principal amount of any Local
Currency Loan, Eurodollar Loan, CD Loan or Fixed Rate Loan on a date other than
the scheduled last day of the Interest Period applicable thereto, whether
pursuant to Section 2.05, 2.08 or 2.16 or otherwise, or any failure to borrow or
convert any Local Currency Loan, Eurodollar Loan, CD Loan or Fixed Rate Loan
after notice thereof (it being understood that such notice in respect of Local
Currency Loans shall be the notice provided for in the Local Currency Facility
Agreement governing such Local Currency Loans) shall have been given hereunder,
whether by reason of any failure to satisfy a condition to such borrowing or
otherwise; then, upon the written notice of such Lender to the applicable
Borrower (with a copy to the Administrative Agent), such Borrower shall, within
five days of its receipt thereof, pay directly to such Lender such amount as
will (in the reasonable determination of such
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52
Lender) reimburse such Lender for such loss or expense. Such written notice
(which shall include calculations in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on such Borrower.
SECTION 2.19. Change of Lending Office. Each Lender, Issuing
Bank (or Transferee) agrees that, upon the occurrence of any event giving rise
to the operation of Section 2.15, 2.16 or 2.17 with respect to such Lender,
Issuing Bank (or Transferee), it will, if requested by CCSC, use reasonable
efforts (subject to overall policy considerations of such Lender, Issuing Bank
(or Transferee)) to designate another lending office for any Loans or L/C
Disbursements affected by such event with the object of avoiding the
consequences of such event, provided, that such designation is made on terms
that, in the sole judgment of such Lender or Issuing Bank, cause such Lender or
Issuing Bank and their respective lending offices to suffer no material
economic, legal or regulatory disadvantage, and provided, further, that nothing
in this Section 2.19 shall affect or postpone any of the obligations of any
Borrower or the rights of any Lender, Issuing Bank (or Transferee) pursuant to
Section 2.15, 2.16 and 2.17.
SECTION 2.20. Sharing of Setoffs. Each Lender agrees that if
it shall, through the exercise of a right of banker's lien, setoff or
counterclaim against the Borrower, or pursuant to a secured claim under Section
506 of Title 11 of the United States Code or other security or interest arising
from, or in lieu of, such secured claim, received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any
other means, obtain payment (voluntary or involuntary) in respect of any Loan or
Loans or L/C Disbursement which at the time shall be due and payable as a result
of which the unpaid principal portion of its Loans and participations in L/C
Disbursements which at the time shall be due and payable shall be
proportionately less than the unpaid principal portion of such Loans and
participations in L/C Disbursements of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and shall
promptly pay to such other Lender the purchase price for, a participation in
such Loans and the L/C Exposure in respect of such L/C Disbursements of such
other Lender, so that the aggregate unpaid principal amount of such Loans and
L/C Exposure and participations in such Loans and L/C Exposure held by each
Lender shall be in the same proportion to the aggregate unpaid principal amount
of all such Loans and L/C Exposure as prior to such exercise of banker's lien,
setoff or counterclaim or other event; provided, however, that, if any such
purchase or purchases or adjustments shall be made
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53
pursuant to this Section and the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall be rescinded to the
extent of such recovery and the purchase price or prices or adjustment restored
without interest. Each Borrower expressly consents to the foregoing arrangements
and agrees that any Lender holding a participation in a Loan or L/C Disbursement
deemed to have been so purchased may exercise any and all rights of banker's
lien, setoff or counterclaim with respect to any and all moneys owing by such
Borrower to such Lender by reason thereof as fully as if such Lender had made a
Loan directly to such Borrower in the amount of such participation.
SECTION 2.21. Letters of Credit. (a) General. Any Borrower may
request the issuance of a Letter of Credit, denominated in Dollars, in a form
reasonably acceptable to the Administrative Agent and the Issuing Bank,
appropriately completed, for its account, at any time and from time to time
while the Revolving Credit Commitments remain in effect. Each Issuing Bank
agrees, subject to the terms and conditions set forth herein and in its Issuing
Bank Agreement, to issue Letters of Credit requested by the Borrowers in an
aggregate amount at any time outstanding not to exceed the amount of its L/C
Commitment. This Section shall not be construed to impose an obligation upon the
Issuing Bank to issue any Letter of Credit that is inconsistent with the terms
and conditions of this Agreement or its Issuing Bank Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of Credit (or to amend,
renew or extend an existing Letter of Credit), the relevant Borrower shall hand
deliver or telecopy to the Issuing Bank and the Administrative Agent (reasonably
in advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) below), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare such Letter of Credit. Following
receipt of such notice and prior to the issuance of the requested Letter of
Credit or the applicable amendment, renewal or extension, the Administrative
Agent shall notify the Borrowers and the Issuing Bank of the amount of the
Aggregate Revolving Credit Exposure and the L/C Exposure after giving effect to
(i) the issuance, amendment, renewal
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54
or extension of such Letter of Credit, (ii) the issuance or expiration of any
other Letter of Credit that is to be issued or will expire prior to the
requested date of issuance of such Letter of Credit and (iii) the borrowing or
repayment of any Revolving Loans or Swingline Loans that (based upon notices
delivered to the Administrative Agent by the Borrowers) are to be borrowed or
repaid prior to the requested date of issuance of such Letter of Credit. A
Letter of Credit shall be issued, amended, renewed or extended only if, and upon
issuance, amendment, renewal or extension of each Letter of Credit the relevant
Borrower shall be deemed to represent and warrant that, after giving effect to
such issuance, amendment, renewal or extension (A) the L/C Exposure shall not
exceed $250,000,000, and (B) the sum of (x) the Aggregate Revolving Credit
Exposure, (y) the L/C Exposure and (z) the aggregate Competitive Loan Exposure
shall not exceed the Total Revolving Credit Commitment.
(c) Expiration Date. Each Letter of Credit shall expire at the
close of business on the earlier of the date one year after the date of the
issuance of such Letter of Credit and the date that is five Business Days prior
to the Revolving Credit Maturity Date, unless such Letter of Credit
expires by its terms on an earlier date.
(d) Participations. By the issuance of a Letter of Credit and
without any further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank hereby grants to each Lender, and each such Lender hereby acquires
from the Issuing Bank, a participation in such Letter of Credit equal to such
Lender's Pro Rata Percentage from time to time of the aggregate amount available
to be drawn under such Letter of Credit, effective upon the issuance of such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Lender hereby absolutely and unconditionally agrees to pay to the Administrative
Agent, for the account of the Issuing Bank, such Lender's Pro Rata Percentage as
of the due date provided in paragraph (e) below (or any earlier date on which
the Commitments shall be terminated pursuant to Article VIII) of each L/C
Disbursement made by the Issuing Bank and not reimbursed by the relevant
Borrower (or, if applicable, another party pursuant to its obligations under any
other Loan Document) forthwith on the date due as provided in paragraph (e)
below. Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or an Event of
Default (or any termination of the Commitments pursuant to
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55
Article VIII), and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, the applicable Borrower shall
reimburse the Administrative Agent for the full amount thereof not later than
10:00 a.m., New York City time, on the second Business Day following the date of
such L/C Disbursement. If the applicable Borrower shall fail to pay any amount
required to be paid under this paragraph on or prior to the time specified in
the preceding sentence, then (i) such unpaid amount shall bear interest, for
each day from and including the date specified for payment of such L/C
Disbursement in the preceding sentence, to but excluding the date of payment, at
a rate per annum equal to the interest rate applicable to overdue ABR Loans
pursuant to Section 2.09, (ii) the Administrative Agent shall notify the Issuing
Bank and the Lenders thereof, (iii) each Lender shall comply with its obligation
under paragraph (d) above by wire transfer of immediately available funds, in
the same manner as provided in Section 2.02(a) with respect to Loans made by
such Lender (and Section 2.02(a) shall apply, mutatis mutandis, to the payment
obligations of the Lenders) and (iv) the Administrative Agent shall promptly pay
to the Issuing Bank amounts so received by it from the Lenders. The
Administrative Agent shall promptly pay to the Issuing Bank any amounts received
by it from the applicable Borrower pursuant to this paragraph prior to the time
that any Lender makes any payment pursuant to paragraph (d) above; any such
amounts received by the Administrative Agent thereafter shall be promptly
remitted by the Administrative Agent to the Lenders that shall have made such
payments and to the Issuing Bank, as their interests may appear.
(f) Obligations Absolute. Each Borrower's obligations to
reimburse L/C Disbursements as provided in paragraph (e) above shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under any and all circumstances
whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure
from all or any of the provisions of any Letter of Credit or any Loan
Document;
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(iii) the existence of any claim, setoff, defense or other
right that any Borrower, any other party guaranteeing, or otherwise
obligated with, any Borrower, any Subsidiary or other Affiliate thereof
or any other person may at any time have against the beneficiary under
any Letter of Credit, the Issuing Bank, the Administrative Agent or any
Lender or any other person, whether in connection with this Agreement,
any other Loan Document or any other related or unrelated agreement or
transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(v) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of
the Issuing Bank, the Lenders, the Administrative Agent or any other
person or any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of any
Borrower's obligations hereunder.
Without limiting the generality of the foregoing, it is
expressly understood and agreed that the absolute and unconditional obligation
of the Borrowers hereunder to reimburse L/C Disbursements will not be excused by
the gross negligence or wilful misconduct of the Issuing Bank. However, the
foregoing shall not be construed to excuse the Issuing Bank from liability to
any Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrowers to the
extent permitted by applicable law) suffered by any Borrower that are caused by
such Issuing Bank's gross negligence or wilful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof; it is understood that the Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary and, in
making any payment under any Letter of Credit (i) the Issuing Bank's exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein,
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including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute wilful misconduct or gross negligence of
the Issuing Bank.
(g) Disbursement Procedures. An Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit to determine whether such documents
appear on their face to conform to the terms and conditions of such Letter of
Credit. Such Issuing Bank shall also as promptly as possible give telephonic
notification, confirmed by telecopy, to the Administrative Agent and the
relevant Borrower of such demand for payment and whether such Issuing Bank has
made or will make an L/C Disbursement thereunder; provided that any failure to
give or delay in giving such notice shall not relieve the relevant Borrower of
its obligation to reimburse such Issuing Bank and the Lenders with respect to
any such L/C Disbursement. The Administrative Agent shall promptly give each
Lender notice thereof.
(h) Interim Interest. If an Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the relevant
Borrower shall reimburse such L/C Disbursement in full on the date of such L/C
Disbursement, the unpaid amount thereof shall bear interest for the account of
such Issuing Bank, for each day from and including the date of such L/C
Disbursement, to but excluding the earlier of the date of payment or the date on
which interest shall commence to accrue thereon as provided in paragraph (e)
above, at the rate per annum that would apply to such amount if such amount were
an ABR Loan.
(i) Resignation or Removal of the Issuing Bank. An Issuing
Bank may resign at any time by giving 180 days' prior written notice to the
Administrative Agent, the Lenders and the Borrowers, and may be removed at any
time by the Borrowers by notice to such Issuing Bank, the Administrative Agent
and the Lenders. Subject to the next
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succeeding paragraph, upon the acceptance of any appointment as an Issuing Bank
hereunder by a successor Issuing Bank, such successor shall succeed to and
become vested with all the interests, rights and obligations of the retiring
Issuing Bank and the retiring Issuing Bank shall be discharged from its
obligations to issue additional Letters of Credit hereunder. At the time such
removal or resignation shall become effective, the Borrowers shall pay all
accrued and unpaid fees pursuant to Section (ii). The acceptance of any
appointment as an Issuing Bank hereunder by a successor Lender shall be
evidenced by an Issuing Bank Agreement entered into by such successor, and, from
and after the effective date of such agreement, (i) such successor Lender shall
have all the rights and obligations of the previous Issuing Bank under this
Agreement and the other Loan Documents and (ii) references herein and in the
other Loan Documents to the term "Issuing Bank" shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor and all previous
Issuing Banks, as the context shall require. After the resignation or removal of
an Issuing Bank hereunder, the retiring Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement and the other Loan Documents with respect to Letters of
Credit issued by it prior to such resignation or removal, but shall not be
required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall
occur and be continuing, CCSC and the Borrowers shall, on the Business Day CCSC
receives notice from the Administrative Agent or the Required Lenders (or, if
the maturity of the Loans has been accelerated, Lenders holding participations
in outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit) thereof and the amount to
be deposited, deposit in an account with the Administrative Agent, for the
benefit of the Lenders, an amount in cash equal to the undrawn portion of the
L/C Exposure as of such date. Such deposit shall be held by the Administrative
Agent as collateral for the payment and performance of the Obligations. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits in Permitted Investments, which investments
shall be made at the option and sole discretion of the Administrative Agent,
such deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall (i)
automatically be applied by the Administrative Agent to reimburse the Issuing
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Bank for L/C Disbursements from time to time for which it shall not have been
reimbursed in accordance with paragraph (e) above, (ii) be held for the
satisfaction of the portion of the reimbursement obligations of the Borrowers
for the L/C Exposure at such time and (iii) if the maturity of the Loans has
been accelerated (but subject to the consent of Lenders holding participations
in outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit), be applied to satisfy the
Obligations. If CCSC is required to provide an amount of cash collateral
hereunder as a result of the occurrence and continuance of an Event of Default,
such amount (to the extent not applied as aforesaid) shall be returned to CCSC
or the Borrower depositing the same within three Business Days (i) after all
Events of Default have been cured or waived or (ii) to the extent such amount is
attributable to any Letter of Credit that expires undrawn or that is drawn in
full and the L/C Disbursements in respect of which are reimbursed in accordance
with paragraph (e) above.
(k) Termination or Reduction of LC Commitment. CCSC may
permanently terminate, or from time to time in part permanently reduce, the L/C
Commitment, in each case upon at least one Business Day's prior written or
facsimile notice to the Administrative Agent and each Issuing Bank; provided
that, after giving effect to such termination or reduction, the aggregate L/C
Commitment shall not be less than the L/C Exposure at such time.
SECTION 2.22. Assignment of Commitments Under Certain
Circumstances. In the event that any Lender shall have delivered a notice or
certificate pursuant to Section 2.15 or 2.16, or the Borrowers shall be required
to make additional payments to any Lender under Section 2.17, CCSC shall have
the right, but not the obligation, at its own expense, upon notice to such
Lender and the Administrative Agent, (a) to replace such Lender with an assignee
(in accordance with and subject to the restrictions contained in Section 11.04)
approved by the Administrative Agent and each Issuing Bank and Swingline Lender
(which approval shall not be unreasonably withheld), and such Lender hereby
agrees to transfer and assign without recourse (in accordance with and subject
to the restrictions contained in Section 11.04) all its interests, rights and
obligations under this Agreement to such assignee; provided, however, that no
Lender shall be obligated to make any such assignment unless (i) such assignment
shall not conflict with any law or any rule, regulation or order of any
Governmental Authority and (ii) such assignee or the Borrowers shall pay to the
affected Lender in immediately
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available funds on the date of such assignment the principal of and interest
accrued to the date of payment on the Loans made by such Lender hereunder and
all other amounts accrued for such Lender's account or owed to it hereunder or
(b) to terminate the right or obligation of such Lender to make Loans and reduce
the Total Revolving Credit Commitment by the amount of such Lender's Revolving
Credit Commitment, so long as the amount of the remaining Revolving Credit
Commitments after giving effect to such termination exceeds the sum of (i) the
Aggregate Revolving Credit Exposure and (ii) the L/C Exposure.
ARTICLE III. LOCAL CURRENCY FACILITIES
SECTION 3.01. Terms of Local Currency Facilities. (a) Subject
to the provisions of this Article III, each Lender hereby agrees that CCSC may
in its discretion from time to time designate any credit facility to which any
one or more Borrowers and any one or more Lenders is a party as a Local Currency
Facility, with the consent of each such Lender in its sole discretion in
accordance with the terms of this Agreement, by delivering a Local Currency
Facility Agreement to the Administrative Agent and the Lenders (through the
Administrative Agent) executed by CCSC, each such Borrower and each such Lender,
provided, that on the effective date of such designation (i) an Exchange Rate
with respect to each Local Currency covered by such Local Currency Facility
shall be determinable by reference to the Reuters currency pages (or comparable
publicly available screen) and (ii) no Default or Event of Default shall have
occurred and be continuing. The documentation governing each Local Currency
Facility shall contain an express acknowledgment that such Local Currency
Facility shall be subject to the provisions of this Article III. Each of CCSC
and, by agreeing to any Local Currency Facility designation as contemplated
hereby, each relevant Local Currency Lender (if any) which is an affiliate,
branch or agency of a Lender, acknowledges and agrees that each reference in
this Agreement to any Lender shall, to the extent applicable, be deemed to be a
reference to such Local Currency Lender. In the event of any inconsistency
between the terms of this Agreement and the terms of any Local Currency
Facility, the terms of this Agreement shall prevail.
(b) The documentation governing each Local Currency Facility
shall set forth (i) the maximum amount (expressed in Dollars and without
duplication) available to be borrowed from all Local Currency Lenders under such
Local Currency Facility (as the same may be reduced from time to time pursuant
to Section 3.02(c) or (d), a "Local Currency
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Facility Maximum Borrowing Amount") and (ii) with respect to each Local Currency
Lender party to such Local Currency Facility, the maximum amount (expressed in
Dollars and without duplication) available to be borrowed from such Local
Currency Lender thereunder (as the same may be reduced from time to time
pursuant to Section 3.02(c) or (d), a "Local Currency Lender Maximum Borrowing
Amount"). In no event shall the aggregate of all Local Currency Lender Maximum
Borrowing Amounts in respect of any Local Currency Lender at any time exceed
such Lender's Revolving Credit Commitment. Except as provided in Section
3.01(c), the making of Local Currency Loans by a Local Currency Lender under a
Local Currency Facility shall under no circumstances reduce the amount available
to be borrowed from such Lender under any other Local Currency Facility to which
such Lender is a party.
(c) Except as otherwise required by applicable law, in no
event shall the Local Currency Lenders party to a Local Currency Facility have
the right to accelerate the Local Currency Loans outstanding thereunder, or to
terminate their Commitments (if any) to make such Loans prior to the stated
termination date in respect thereof, except that such Local Currency Lenders
shall, in each case, have such rights upon an acceleration of the Loans and a
termination of the Commitments pursuant to Article VIII, respectively. No Local
Currency Loan may be made under a Local Currency Facility if (i) an Event of
Default shall have occurred and be continuing or would result therefrom or (ii)
after giving effect thereto, (x) the sum of the aggregate principal amount of
the US$ Loans and Local Currency Loans (US$ Equivalent) then outstanding and the
aggregate L/C Exposure would exceed the aggregate Revolving Credit Commitments
then in effect or (y) the sum of the aggregate principal amount of the US$ Loans
and Local Currency Loans (US$ Equivalent) (other than Competitive Loans) of any
Lender then outstanding and the L/C Exposure of such Lender would exceed such
Lender's Revolving Credit Commitment.
(d) The relevant Local Currency Lenders, or, if so specified
in the relevant Local Currency Facility Agreement, an agent acting on their
behalf, shall furnish to the Administrative Agent, immediately upon its request,
a statement setting forth the outstanding Local Currency Loans made under such
Local Currency Facility and the amount and terms of any pending prepayment
notices or borrowing requests received by such Lenders or agent through the date
of the Administrative Agent's request.
(e) The relevant Borrower shall furnish to the Administrative
Agent copies of any amendment, supplement or
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other modification (including any change in commitment amounts or in the Lenders
participating in any Local Currency Facility) to the terms of any Local Currency
Facility Agreement promptly after the effectiveness thereof (together with, if
applicable, an English translation thereof).
(f) CCSC may terminate its designation of a facility as a
Local Currency Facility, with the consent of each Local Currency Lender party
thereto in its sole discretion, by written notice to the Administrative Agent,
which notice shall be executed by CCSC, the relevant Borrower and each Lender
party to such Local Currency Facility (or any agent acting on their behalf).
Once notice of such termination is received by the Administrative Agent, such
Local Currency Facility and the loans and other obligations outstanding
thereunder shall immediately cease to be subject to the terms of this Agreement
(including the guarantee of CCSC contained in Article X). Notwithstanding
anything to the contrary in this Agreement, any loans made under a Local
Currency Facility at any time when an exchange rate with respect to the relevant
Local Currency cannot be calculated by the Administrative Agent in accordance
with the definition of "Exchange Rate" contained in Article I shall be deemed
not to constitute "Local Currency Loans" for the purposes of this Agreement
unless and until an exchange rate with respect to such loans may be so
calculated.
(g) Nothing in this Article III shall be deemed to limit the
ability of CCSC or any of the Subsidiaries to enter into credit facilities which
do not constitute Local Currency Facilities.
SECTION 3.02. Currency Fluctuations, etc. (a) Not later than
2:00 p.m., New York City time, on each Calculation Date, the Administrative
Agent shall (i) determine the Exchange Rate as of such Calculation Date with
respect to each Local Currency covered by a Local Currency Facility and each
Local Currency in which any outstanding Competitive Loan is denominated and (ii)
give notice thereof to the Lenders, CCSC and the relevant Subsidiary Borrowers.
Except as otherwise provided in Section 3.03, the Exchange Rates so determined
shall become effective on the first Business Day immediately following the
relevant Calculation Date (a "Reset Date") and shall remain effective until the
next succeeding Reset Date.
(b) Not later than 2:00 p.m., New York City time, on each
Reset Date and each Borrowing Date, the Administrative Agent shall (i) determine
the US$ Equivalent of the Local Currency Loans then outstanding under each
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63
Local Currency Facility (after giving effect to any Local Currency Loans to be
made or repaid on such date) and of each Competitive Loan denominated in a Local
Currency and (ii) notify the Lenders, CCSC and the relevant Borrowers of the
results of such determination.
(c) If, on any Reset Date or any Borrowing Date (after giving
effect to (i) any Loans to be made or repaid on such date, (ii) any increase in
or reduction of the L/C Exposure to be made on such date and (iii) any
amendment, supplement or other modification to any Local Currency Facility
effective on such date of which the Administrative Agent has received notice),
the Aggregate Outstanding US$ Revolving Extensions of Credit of any Lender
exceeds the US$ Revolving Credit Overage of such Lender (the amount of such
excess, the "US$ Revolving Credit Excess"), then such Lender's Local Currency
Lender Maximum Borrowing Amount under each Local Currency Facility to which such
Lender is a party shall be reduced on such date by an amount equal to the
product of such US$ Revolving Credit Excess times a fraction the numerator of
which shall equal the Local Currency Lender Maximum Borrowing Amount under such
Local Currency Facility and the denominator of which shall equal the aggregate
of the Local Currency Lender Maximum Borrowing Amounts under all Local Currency
Facilities to which such Lender is a party. After giving effect to any such
reduction in Local Currency Lender Maximum Borrowing Amounts, the Local Currency
Facility Maximum Borrowing Amount with respect to each Local Currency Facility
shall in turn be reduced to an amount equal to the aggregate of the Local
Currency Lender Maximum Borrowing Amounts of all Lenders party to such Local
Currency Facility. Reductions in Local Currency Facility Maximum Borrowing
Amounts and Local Currency Lender Maximum Borrowing Amounts pursuant to this
paragraph (c) shall be effective until the amount thereof shall be recalculated
by the Administrative Agent on the next succeeding Reset Date or Credit Event,
and shall not be deemed to reduce the stated amount of any Commitment of any
Local Currency Lender in respect of any Local Currency Facility.
(d) If, on any Reset Date or Borrowing Date (after giving
effect to (i) any Loans to be made or repaid on such date, (ii) any increase in
or reduction of the L/C Exposure to be made on such date and (iii) any
amendment, supplement or other modification to any Local Currency Facility
effective on such date of which the Administrative Agent has received notice),
the sum of (x) the Aggregate Outstanding US$ Revolving Extensions of Credit of
all the Lenders and (y) the Competitive Loan Exposure exceeds the US$ Facility
Overage (the amount of
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such excess, the "US$ Facility Excess"), then the Local Currency Facility
Maximum Borrowing Amount under each Local Currency Facility shall be reduced on
such date by an amount equal to the product of such US$ Facility Excess times a
fraction the numerator of which shall equal the Local Currency Facility Maximum
Borrowing Amount under such Local Currency Facility and the denominator of which
shall equal the aggregate of the Local Currency Facility Maximum Borrowing
Amounts with respect to all Local Currency Facilities. Each such reduction in
the Local Currency Facility Maximum Borrowing Amount under a Local Currency
Facility shall in turn reduce the respective Local Currency Lender Maximum
Borrowing Amounts of each Local Currency Lender party to such Local Currency
Facility, pro rata on the basis of the respective Local Currency Lender Maximum
Borrowing Amounts of such Lenders. Reductions in Local Currency Facility Maximum
Borrowing Amounts and Local Currency Lender Maximum Borrowing Amounts pursuant
to this paragraph (d) shall be effective until the amount thereof shall be
recalculated by the Administrative Agent on the next succeeding Reset Date or
Borrowing Date, and shall not be deemed to reduce the stated amount of any
Commitment of any Local Currency Lender in respect of any Local Currency
Facility.
(e) If, on any Reset Date, the US$ Equivalent of the Local
Currency Loans outstanding under a Local Currency Facility exceeds an amount
equal to 105% of the Local Currency Facility Maximum Borrowing Amount with
respect thereto (after giving effect to any reductions therein effected pursuant
to Section 3.02(c) or (d) on such date), then the relevant Borrower shall,
within three Business Days after notice thereof from the Administrative Agent,
(i) increase the Local Currency Facility Maximum Borrowing Amount with respect
to such Local Currency Facility in accordance with Section 3.01(e) and/or (ii)
prepay Local Currency Loans in accordance with the terms of the relevant Local
Currency Facilities in an aggregate amount such that, after giving effect
thereto, (x) the US$ Equivalent of all such Local Currency Loans shall be equal
to or less than such Local Currency Facility Maximum Borrowing Amount and (y)
the US$ Equivalent of the Local Currency Loans of each relevant Local Currency
Lender shall be equal to or less than such Local Currency Lender's Local
Currency Lender Maximum Borrowing Amount with respect to such Local Currency
Facility.
(f) If, on any Reset Date, the Revolving Credit Exposure of
any Lender exceeds an amount equal to 105% of such Lender's Revolving Credit
Commitment, then, within three Business Days after notice thereof from the
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Administrative Agent, CCSC shall prepay and/or cause the Subsidiary Borrowers to
prepay the Loans in accordance with this Agreement or the relevant Local
Currency Facilities, as the case may be, in an aggregate amount such that, after
giving effect thereto, the Revolving Credit Exposure of such Lender shall be
equal to or less than such Lender's Revolving Credit Commitment.
(g) The Administrative Agent shall promptly notify the
relevant Lenders of the amount of any reductions in Local Currency Facility
Maximum Borrowing Amounts or Local Currency Lender Maximum Borrowing Amounts,
and the amount of any prepayments, required pursuant to paragraph (c), (d), (e)
or (f) of this Section 3.02.
SECTION 3.03. Refunding of Local Currency Loans. (a)
Notwithstanding noncompliance with the conditions precedent set forth in Article
V, if there are outstanding any Local Currency Loans on (i) any date on which an
Event of Default pursuant to Section 8.01(i) shall have occurred with respect to
CCSC, or (ii) any date (the "Acceleration Date") on which the Commitments shall
have been terminated and/or the Loans shall have been declared immediately due
and payable pursuant to Article VIII, then, at 10:00 a.m., New York City time,
on the second Business Day immediately succeeding (x) the date on which such
Event of Default occurs (in the case of clause (i) above), or (y) such
Acceleration Date (in the case of clause (ii) above), the Administrative Agent
shall be deemed to have received a notice from CCSC (or any one or more
Subsidiary Borrowers designated by the Administrative Agent after consultation
with CCSC provided, that any Subsidiary Borrower so designated shall in each
case be the relevant Subsidiary Borrower party to the relevant Local Currency
Facility unless otherwise agreed by the requisite Local Currency Lenders party
to such Local Currency Facility) pursuant to Section 2.02 requesting that ABR
Loans be made pursuant to Section 2.01 on such second Business Day in an
aggregate amount equal to the US$ Equivalent of the aggregate amount of all
Local Currency Loans outstanding under Local Currency Facility Agreements
(calculated on the basis of Exchange Rates determined by the Administrative
Agent on the Business Day immediately preceding such second Business Day), and
the procedures and limitations set forth in Sections 2.01 and 2.02 shall be
followed in making such ABR Loans, provided, that (x) for the purpose of
determining each Lender's pro rata portion of such borrowing, the outstanding
principal amount of Local Currency Loans outstanding under Local Currency
Facility Agreements shall be deemed to be zero and (y) each Lender's pro rata
portion of such borrowing shall be reduced to the extent (if any) necessary to
prevent the
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Revolving Credit Exposure of such Lender after giving effect to such borrowing
from exceeding its Revolving Credit Commitment. The proceeds of such ABR Loans
shall be applied to repay such Local Currency Loans; it being understood,
however, that CCSC (or such designated Borrower or Borrowers) shall have the
right to make payment through the original Borrower or Borrowers of such Local
Currency Loans and become a creditor of such original Borrower or Borrowers to
the extent of such proceeds.
(b) If, for any reason, ABR Loans may not be made pursuant to
paragraph (a) of this Section 3.03 to repay Local Currency Loans as required by
such paragraph, effective on the date such ABR Loans would otherwise have been
made, (i) the principal amount of each relevant Local Currency Loan shall be
converted into Dollars (calculated on the basis of Exchange Rates determined by
the Administrative Agent as of the immediately preceding Business Day)
("Converted Local Currency Loans") and (ii) each Lender severally,
unconditionally and irrevocably agrees that it shall purchase in Dollars a
participating interest in such Converted Local Currency Loans in an amount equal
to the amount of ABR Loans which would otherwise have been made by such Lender
pursuant to paragraph (a) of this Section 3.03. Each Lender will immediately
transfer to the Administrative Agent, in immediately available funds, the amount
of its participation, and the proceeds of such participation shall be
distributed by the Administrative Agent to each relevant Lender in such amounts
as will adjust the amount of the participating interest retained by each Lender
in the Converted Local Currency Loans to the amounts that would have been in
effect after the making of the ABR Loans which were to have been made pursuant
to paragraph (a) of this Section 3.03. All Converted Local Currency Loans shall
bear interest at the rate which would otherwise be applicable to ABR Loans. Each
Lender shall share on a pro rata basis (calculated by reference to its
participating interest in such Converted Local Currency Loans) in any interest
which accrues thereon and in all repayments thereof.
(c) If, for any reason, ABR Loans may not be made pursuant to
paragraph (a) of this Section 3.03 to repay Local Currency Loans as required by
such paragraph and the principal amount of any Local Currency Loans may not be
converted into Dollars in the manner contemplated by paragraph (b) of this
Section 3.03, (i) the Administrative Agent shall determine the US$ Equivalent of
such Local Currency Loans (calculated on the basis of Exchange Rates determined
by the Administrative Agent as of the Business Day immediately preceding the
date on which ABR Loans would otherwise have been made pursuant to said
paragraph (a)) and
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(ii) effective on the date on which ABR Loans would otherwise have been made
pursuant to said paragraph (a), each Lender severally, unconditionally and
irrevocably agrees that it shall purchase in Dollars a participating interest in
such Local Currency Loans in an amount equal to the amount of ABR Loans which
would otherwise have been made by such Lender pursuant to paragraph (a) of this
Section 3.03. Each Lender will immediately transfer to the Administrative Agent,
in immediately available funds, the amount of its participation and the proceeds
of such participation shall be distributed by the Administrative Agent to each
relevant Lender or deposited in accounts with the Administrative Agent in
respect of Letters of Credit as contemplated by paragraph (a) above in such
amounts as will reduce the US$ Equivalent as of such date of the amount of the
participating interest retained by such Lender in such Local Currency Loans in
an amount equal to the amounts that would have been in effect after the making
of the ABR Loans which were to have been made pursuant to paragraph (a) of this
Section 3.03. Each Lender shall share on a pro rata basis (calculated by
reference to its participation interest in such Local Currency Loans) in any
interest which accrues thereon (which shall be payable in Dollars) and in all
repayments of principal thereof and in the benefits of any collateral furnished
in respect thereof and the proceeds of such collateral.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders, the Issuing Banks and the
Administrative Agent to enter into this Agreement and to extend credit hereunder
and under the other Loan Documents, CCSC represents and warrants as follows:
SECTION 4.01. Organization, etc. CCSC and each of its
Subsidiaries is a corporation validly organized and existing and in good
standing under the laws of the jurisdiction of its incorporation, is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the nature of its business requires such qualification,
except where the failure to so qualify will not have a Material Adverse Effect,
and has full power and authority and holds all requisite material governmental
licenses, permits and other approvals to enter into and perform its Obligations
under this Agreement and each other Loan Document to which it is a party and to
own or hold under lease its property and to conduct its business substantially
as currently conducted by it.
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SECTION 4.02. Due Authorization, Non- Contravention, etc. The
execution, delivery and performance by each Borrower of this Agreement and each
other Loan Document executed or to be executed by it are within each Borrower's
corporate powers, have been duly authorized by all necessary corporate action,
and do not
(a) contravene the Organic Documents of CCSC;
(b) contravene any contractual restriction, law or
governmental regulation or court decree or order binding on or
affecting CCSC; or
(c) result in, or require the creation or imposition of, any
material Lien on any of CCSC properties.
SECTION 4.03. Government Approval, Regulation, etc. No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or other Person is required for
the due execution, delivery or performance by CCSC or the Subsidiary Borrowers
of this Agreement or any other Loan Document. Neither CCSC nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
SECTION 4.04. Validity, etc. This Agreement constitutes, and
each other Loan Document executed by each Borrower will, on the due execution
and delivery thereof, constitute, the legal, valid and binding obligation of
such Borrower enforceable in accordance with its respective terms, subject to
the effect of bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforceability of creditors' rights generally and by general
principles of equity.
SECTION 4.05. Financial Information. The consolidated balance
sheets of CCSC and its Subsidiaries as at December 31, 1993, and September 30,
1994, and the related consolidated statements of earnings and cash flow of CCSC
and its Subsidiaries, copies of which have been furnished to the Agent and each
Lender, have been prepared in accordance with GAAP consistently applied, and
present fairly in all material respects the consolidated financial condition of
CCSC and its Subsidiaries as at the dates thereof and the results of their
operations for the periods
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then ended (subject, in the case of the financial statements as of and for the
period ended September 30, 1994, to normal year-end adjustments and to the
absence of notes).
SECTION 4.06. No Material Adverse Change. Since the date of
the later of the financial statements described in Section 4.05 there has been
no material adverse change in the financial condition or results of operations
of CCSC and its Subsidiaries taken as a whole.
SECTION 4.07. Litigation, Labor Controversies, etc. There is
no pending or, to the knowledge of any Borrower, threatened litigation, action,
proceeding, or labor controversy affecting CCSC or any of its Subsidiaries, or
any of their respective properties, businesses, assets or revenues, which will
result in a Material Adverse Effect or which purports to affect the legality,
validity or enforceability of this Agreement or any other Loan Document or the
transactions contemplated hereby.
SECTION 4.08. Subsidiaries. As of the date hereof, CCSC has no
Significant Subsidiaries, except those Significant Subsidiaries which are
identified on Schedule 4.08.
SECTION 4.09. Ownership of Properties. CCSC and each of its
Subsidiaries has good and marketable title to all of its properties and assets,
real and personal, tangible and intangible, of any nature whatsoever (including
patents, trademarks, trade names, service marks and copyrights), free and clear
of all Liens, charges or claims (including infringement claims with respect to
patents, trademarks, copyrights and the like) except as permitted pursuant to
Section 7.03 or Liens, charges or claims that will not have a Material Adverse
Effect.
SECTION 4.10. Taxes. CCSC and each of its Subsidiaries has
filed all federal and all other material income tax returns and reports required
by law to have been filed by it and has paid all taxes and governmental charges
due, except (i) any such taxes or charges which are being diligently contested
in good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books and (ii) any such
taxes or charges that would not, individually or in the aggregate, result in a
Material Adverse Effect.
SECTION 4.11. Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement, no Pension Plan has been terminated, or has been subject to
the commencement
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of any termination, that could reasonably be expected to result in a material
liability to CCSC or any ERISA Affiliate, and no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a Lien
under section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which might result in the incurrence
by CCSC or any ERISA Affiliate of any liability, fine or penalty which will have
a Material Adverse Effect. Except for the post-retirement benefits described in
Schedule 4.11, CCSC has no contingent liability with respect to post-retirement
benefits provided by CCSC and its Subsidiaries under a Welfare Plan, other than
(i) liability for continuation coverage described in Part 6 of Subtitle B of
Title I of ERISA and (ii) liabilities which will not, individually or in the
aggregate, have a Material Adverse Effect.
SECTION 4.12. Environmental Warranties. (a) All facilities and
property owned or leased by CCSC or any of its Subsidiaries have been, and
continue to be, owned or leased by CCSC and its Subsidiaries in compliance with
all Environmental Laws, except for such noncompliance which, singly or in the
aggregate, will not have a Material Adverse Effect;
(b) there have been no past unresolved, and there are no
pending or threatened (in writing)
(i) claims, complaints, notices or requests for information
received by CCSC or any of its Subsidiaries with respect to any alleged
violation of any Environmental Law, or
(ii) complaints, written notices or inquiries to CCSC or any
of its Subsidiaries regarding potential liability under any
Environmental Law,
which violation or potential liability singly or in the aggregate will have a
Material Adverse Effect;
(c) there have been no Releases of Hazardous Materials at, on
or under any property now or, to any Borrower's knowledge, previously owned or
leased by CCSC or any of its Subsidiaries that, singly or in the aggregate, have
or will have a Material Adverse Effect;
(d) CCSC and its Subsidiaries have been issued and are in
compliance with all permits, certificates, approvals, licenses and other
authorizations relating to environmental matters and necessary or desirable for
their businesses, except for such permits, approvals, licenses and other
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authorizations which, if not so obtained or as to which CCSC and its
Subsidiaries are not in compliance (in each case singly or in the aggregate),
will not have a Material Adverse Effect;
(e) no property now or, to any Borrower's knowledge,
previously owned or leased by CCSC or any of its Subsidiaries is listed or
proposed for listing (with respect to owned property only) on the CERCLIS or on
any similar state list of sites requiring investigation or clean-up, or on the
National Priorities List pursuant to CERCLA, in each case, other than properties
as to which any such listing will not result in a Material Adverse Effect;
(f) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any property now or,
to any Borrower's knowledge, previously owned or leased by CCSC or any of its
Subsidiaries that, singly or in the aggregate, have, or will have, a Material
Adverse Effect;
(g) to any Borrower's knowledge, neither CCSC nor any
Subsidiary has directly transported or directly arranged for the transportation
of any Hazardous Material to any location which is listed or proposed for
listing on the National Priorities List pursuant to CERCLA, on the CERCLIS or on
any similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which will lead to claims against
CCSC or such Subsidiary thereof for any remedial work, damage to natural
resources or personal injury, including claims under CERCLA, which will have a
Material Adverse Effect; and
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property owned or leased by CCSC or any Subsidiary that, singly
or in the aggregate, have, or will have, a Material Adverse Effect.
SECTION 4.13. Regulations G, U and X. The Loans, the use of
the proceeds thereof, this Agreement and the transactions contemplated hereby
will not result in a violation of or be inconsistent with any provision of
Regulation G, U or X.
SECTION 4.14. Accuracy of Information. To the best of CCSC's
knowledge, neither this Agreement nor any other document, certificate or
statement furnished to the Administrative Agent or any Lender by or on behalf of
CCSC in connection herewith 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
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not misleading, in light of the circumstances under which they were made.
ARTICLE V. CONDITIONS OF LENDING
SECTION 5.01. Conditions to Each Loan. The agreement of each
Lender to make any Loan (excluding continuations and conversions of Loans)
requested to be made by it and of each Issuing Bank to issue any Letter of
Credit (each such event being called a "Credit Event"), on any date is subject
to the satisfaction of the following conditions:
(a) The Administrative Agent shall have received a notice of
such Borrowing as required by Section 2.02 or 2.04, as applicable (or
such notice shall have been deemed given in accordance with the last
paragraph of Section 2.04(a)), or, in the case of the issuance of a
Letter of Credit, the Issuing Bank and the Administrative Agent shall
have received a notice requesting the issuance of such Letter of Credit
as required by Section 2.21(b).
(b) The representations and warranties set forth in Article IV
hereof (other than the representations and warranties set forth in
Section 4.06) shall be true and correct with the same effect as if then
made (unless stated to relate to an earlier date, in which case such
representations and warranties shall be true and correct as of such
earlier date).
(c) At the time of and immediately after such Credit Event, no
Event of Default or Default shall have occurred and be continuing.
(d) If the relevant Borrower is a Subsidiary Borrower, CCSC
shall have delivered to the Administrative Agent a Subsidiary Borrower
Notice and Designation for such Subsidiary Borrower. CCSC may from time
to time deliver a subsequent Subsidiary Borrower Notice and Designation
with respect to such Subsidiary Borrower, countersigned by such
Subsidiary Borrower, for the purpose of terminating such Subsidiary
Borrower's designation as such, as long as on the effective date of
such termination, all Subsidiary Borrower Obligations in respect of
such Subsidiary Borrower shall have been paid in full. In addition, if
on any date a Subsidiary Borrower shall cease to be a Subsidiary all
Subsidiary Borrower Obligations in respect of such Subsidiary Borrower
shall automatically become due and payable on such date
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and no further Loans may be borrowed by such Subsidiary Borrower
hereunder or under any Local Currency Facility.
(e) If the relevant Borrower is a Subsidiary Borrower, the
Administrative Agent shall have received, as promptly as reasonably
practicable after the effective date of the relevant Subsidiary
Borrower Notice and Designation and prior to the date of such Loan, a
certificate of such Subsidiary Borrower, substantially in the form of
Exhibit I, with appropriate insertions and attachments, satisfactory in
form and substance to the Administrative Agent executed by the
President, any Vice President, the Treasurer or any other senior
officer and the Secretary or any Assistant Secretary (or, in either
case, comparable officers) of such Subsidiary Borrower.
Each Credit Event shall be deemed to constitute a representation and warranty by
the applicable Borrower on the date of such Credit Event, as to the matters
specified in paragraphs (b) and (c) of this Section 5.01.
SECTION 5.02. First Credit Event. On the Closing Date:
(a) The Administrative Agent shall have received, on behalf of
itself, the Lenders and each Issuing Bank, favorable written opinions
of Dechert Price & Rhoads, counsel for the Borrowers, and Richard J.
Krzyzanowski, Esq., Executive Vice President, Secretary and General
Counsel of CCSC, substantially to the effect set forth in Exhibits J-1
and J-2, respectively, (A) dated the Closing Date, and (B) addressed to
the Issuing Banks, the Administrative Agent and the Lenders.
(b) All documents executed or submitted in connection with
this Agreement, the borrowings and extensions of credit hereunder and
the other Loan Documents shall be reasonably satisfactory to the
Lenders, to each Issuing Bank and to Cravath, Swaine & Moore, counsel
for the Administrative Agent.
(c) The Administrative Agent shall have received (i) a copy of
the certificate or articles of incorporation, including all amendments
thereto, of CCSC, certified as of a recent date by the Secretary of
State of the state of its organization, and a certificate as to the
good standing of CCSC as of a recent date, from such Secretary of
State; (ii) a certificate of the Secretary or Assistant Secretary of
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CCSC dated the Closing Date and certifying (A) that attached thereto is
a true and complete copy of the by-laws of CCSC as in effect on the
Closing Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto is
a true and complete copy of resolutions duly adopted by the Board of
Directors of CCSC authorizing the execution, delivery and performance
of the Loan Documents and the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are in
full force and effect, (C) that the certificate or articles of
incorporation of CCSC have not been amended since the date of the last
amendment thereto shown on the certificate of good standing furnished
pursuant to clause (i) above, and (D) as to the incumbency and specimen
signature of each officer executing any Loan Document or any other
document delivered in connection herewith on behalf of CCSC; (iii) a
certificate of another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (ii) above; and (iv) such other documents as
the Lenders, the Issuing Bank or Cravath, Swaine & Moore, counsel for
the Administrative Agent, may reasonably request.
(d) The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by a Financial Officer
of CCSC, confirming compliance with the conditions precedent set forth
in paragraphs (b) and (c) of Section 5.01.
(e) The Administrative Agent shall have received all invoiced
Fees and other amounts due and payable pursuant to the Loan Documents
on or prior to the Closing Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by the Borrowers hereunder or under any other Loan
Document.
(f) The Existing Agreement shall have been terminated or shall
have expired by its terms, and the principal of and interest accrued on
all loans, and all other obligations, outstanding thereunder shall have
been paid in full.
ARTICLE VI. AFFIRMATIVE COVENANTS
SECTION 6.01. Financial Information, Reports, Notices, etc.
CCSC will furnish, or will cause to be
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furnished, to each Lender and the Administrative Agent copies of the following
financial statements, reports, notices and information:
(a) as soon as available and in any event within 60 days after
the end of each of the first three Fiscal Quarters of each Fiscal Year
of CCSC, a consolidated balance sheet of CCSC and its Subsidiaries as
of the end of such Fiscal Quarter and consolidated statements of
earnings and cash flow of CCSC and its Subsidiaries for such Fiscal
Quarter and for the period commencing at the end of the previous Fiscal
Year and ending with the end of such Fiscal Quarter, certified by a
Financial Officer of CCSC, it being understood and agreed that the
delivery of CCSC's Form 10-Q (as filed with the Securities and Exchange
Commission) shall satisfy the requirements set forth in this clause);
(b) as soon as available and in any event within 120 days
after the end of each Fiscal Year of CCSC, a copy of the annual audit
report for such Fiscal Year for CCSC and its Subsidiaries, including
therein a consolidated balance sheet of CCSC and its Subsidiaries as of
the end of such Fiscal Year and consolidated statements of earnings and
cash flow of CCSC and its Subsidiaries for such Fiscal Year, in each
case certified (without any Impermissible Qualification) in a manner
acceptable to the Administrative Agent and the Required Lenders by
Price Waterhouse or other independent public accountants reasonably
acceptable to the Administrative Agent and the Required Lenders (it
being understood and agreed that the delivery of CCSC's Form 10-K (as
filed with the Securities and Exchange Commission) shall satisfy such
delivery requirement in this clause) together with a certificate from a
Financial Officer of CCSC containing a computation in reasonable detail
of, and showing compliance with, each of the financial ratios and
restrictions contained in Section 7.04 and to the effect that, in
making the examination necessary for the signing of such certificate,
such Financial Officer has not become aware of any Default or Event of
Default that has occurred and is continuing, or, if such Financial
Officer has become aware of such Default or Event of Default,
describing such Default or Event of Default and the steps, if any,
being taken to cure it;
(c) as soon as available and in any event within 60 days after
the end of each Fiscal Quarter, a Compliance Certificate, executed by a
Financial Officer of CCSC, showing (in reasonable detail and with
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appropriate calculations and computations in all respects satisfactory
to the Administrative Agent) compliance with the financial covenants
set forth in Section 7.04 and representing as to the absence of any
Default;
(d) as soon as possible and in any event within three Business
Days after becoming aware of the occurrence of each Default, a
statement of a Financial Officer of CCSC setting forth details of such
Default and the action which CCSC has taken and proposes to take with
respect thereto;
(e) as soon as possible and in any event within five Business
Days after (i) the occurrence of any adverse development with respect
to any litigation, action, proceeding, or labor controversy described
in Section 4.07 which will result in a Material Adverse Effect or (ii)
the commencement of any labor controversy, litigation, action or
proceeding of the type described in Section 4.07, notice thereof and
copies of all documentation relating thereto, which will result in a
Material Adverse Effect;
(f) promptly after the sending or filing thereof, copies of
all reports which CCSC sends to any of its security holders, and all
reports, registration statements (other than on Form S-8 or any
successor form) or other materials which CCSC or any of its
Subsidiaries files with the Securities and Exchange Commission or any
national securities exchange;
(g) immediately upon becoming aware of the taking of any
specific actions by CCSC or any other Person to terminate any Pension
Plan (other than a termination pursuant to Section 4041(b) of ERISA
which can be completed without CCSC or any ERISA Affiliate having to
provide more than $1,000,000 in addition to the normal contribution
required for the plan year in which termination occurs to make such
Pension Plan sufficient), or the failure to make a required
contribution to any Pension Plan if such failure is sufficient to give
rise to a Lien under section 302(f) of ERISA, or the taking of any
action with respect to a Pension Plan which could result in the
requirement that CCSC furnish a bond or other security to the PBGC or
such Pension Plan, or the occurrence of any event with respect to any
Pension Plan which could result in the incurrence by CCSC of any
liability, fine or penalty which will have a Material Adverse Effect,
or any increase in the contingent liability of CCSC with
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respect to any post-retirement Welfare Plan benefit if the increase in
such contingent liability will result in a Material Adverse Effect,
notice thereof and copies of all documentation relating thereto; and
(h) such other information respecting the condition or
operations, financial or otherwise, of CCSC or any of its Subsidiaries
as any Lender through the Administrative Agent may from time to time
reasonably request.
SECTION 6.02. Compliance with Laws, etc. CCSC will, and will
cause each of its Subsidiaries to, comply in all respects with all applicable
laws, rules, regulations and orders, except where such non-compliance would not
have a Material Adverse Effect, such compliance to include, subject to the
foregoing (without limitation):
(a) the maintenance and preservation of its corporate
existence and qualification as a foreign corporation, and
(b) the payment, before the same become delinquent, of all
taxes, assessments and governmental charges imposed upon it or upon its
property except to the extent being diligently contested in good faith
by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.
SECTION 6.03. Maintenance of Properties. CCSC will, and will
cause each of its Subsidiaries to, maintain, preserve, protect and keep its
material properties in good repair, working order and condition, and make
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times unless
CCSC determines in good faith that the continued maintenance of any of its
properties is no longer economically desirable.
SECTION 6.04. Insurance. CCSC will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained with responsible insurance
companies insurance with respect to its properties material to the business of
CCSC and its Subsidiaries against such casualties and contingencies and of such
types and in such amounts as is customary in the case of similar businesses and
will, upon request of the Administrative Agent, furnish to each Lender at
reasonable intervals a certificate of an Authorized Officer of CCSC setting
forth the nature and extent of all insurance maintained by CCSC and its
Subsidiaries in
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accordance with this Section; provided that CCSC and its Subsidiaries may
self-insure to the extent customary for similarly situated corporations engaged
in the same or similar business.
SECTION 6.05. Books and Records. CCSC will, and will cause
each of its Subsidiaries to, keep books and records which accurately reflect all
of its business affairs and material transactions and permit the Administrative
Agent and each Lender or any of their respective representatives, at reasonable
times and intervals, to visit all of its offices, to discuss its financial
matters with its officers and independent public accountant and, upon the
reasonable request of the Administrative Agent or a Lender, to examine (and, at
the expense of the relevant Borrower, photocopy extracts from) any of its books
or other corporate records.
SECTION 6.06. Environmental Covenant. CCSC will, and will
cause each of its Subsidiaries to
(a) use and operate all of its facilities and properties in
compliance with all Environmental Laws except for such noncompliance
which, singly or in the aggregate, will not have a Material Adverse
Effect, keep all necessary permits, approvals, certificates, licenses
and other authorizations relating to environmental matters in effect
and remain in compliance therewith, except where the failure to keep
such permits, approvals, certificates, licenses or other
authorizations, or any noncompliance with the provisions thereof, will
not have a Material Adverse Effect, and handle all Hazardous Materials
in compliance with all applicable Environmental Laws, except for any
noncompliance that will not have a Material Adverse Effect;
(b) promptly notify the Administrative Agent and provide
copies of all written inquiries from any local, state or Federal
governmental agency, claims, complaints or notices relating to the
condition of its facilities and properties or compliance with
Environmental Laws which will have a Material Adverse Effect, and
promptly cure and have dismissed with prejudice or contest in good
faith any actions and proceedings relating to material non-compliance
with Environmental Laws; and
(c) provide such information and certifications which the
Administrative Agent may reasonably request
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from time to time to evidence compliance with this Section 6.06.
SECTION 6.07. Significant Subsidiaries. In the event that more
than 10% of the consolidated assets of CCSC and its Subsidiaries shall at any
time following the delivery by CCSC, and during the effectiveness, of a
Significant Subsidiary Election Notice be held by Subsidiaries of CCSC other
than Significant Subsidiaries, CCSC shall deliver to the Administrative Agent
written notice designating one or more Subsidiaries as Significant Subsidiaries
such that, after giving effect to such designation, no more than 10% of the
consolidated assets of CCSC and its Subsidiaries shall be held by Subsidiaries
other than Significant Subsidiaries. CCSC may, following delivery of a
Significant Subsidiary Election Notice, deliver to the Administrative Agent
written notice terminating the effectiveness of such Significant Subsidiary
Election Notice (a "Significant Subsidiary Termination Notice"), provided that
CCSC shall not deliver any Significant Subsidiary Election Notice at any time
after a Significant Subsidiary Termination Notice has been so delivered.
ARTICLE VII. NEGATIVE COVENANTS
SECTION 7.01. Transactions with Affiliates. CCSC will not, and
will not permit any of its Significant Subsidiaries to, enter into, or cause,
suffer or permit to exist, any arrangement or contract with any of its other
Affiliates (other than other Subsidiaries and joint ventures) unless such
arrangement or contract is fair and equitable to CCSC or such Significant
Subsidiary based upon the good faith judgment of CCSC's Board of Directors.
SECTION 7.02. Indebtedness. CCSC will not, and will not permit
any of its Subsidiaries (other than Unrestricted Subsidiaries) to, create,
incur, assume or suffer to exist or otherwise become or be liable in respect of
any Indebtedness, other than, without duplication, the following:
(a) Indebtedness in respect of the Loans and other
Obligations;
(b) Indebtedness existing as of the Effective Date which is
identified in Schedule 7.02 and all refinancing and replacements
thereof (provided, that after giving effect to any such refinancing or
replacements, CCSC shall be in compliance with the
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Leverage Ratio set forth in clause (a) of Section 7.04);
(c) unsecured Indebtedness incurred by the Subsidiaries
payable to Persons other than CCSC or a Subsidiary in an aggregate
amount not to exceed the greater of $1,150,000,000 and 35% of Total
Capitalization at any time; provided, however, that Indebtedness
incurred by a special purpose, wholly-owned Subsidiary of CCSC that
purchases accounts receivable from CCSC shall be excluded as
Indebtedness under this clause (c) to the extent that such Indebtedness
is nonrecourse to CCSC and each Subsidiary and is not required to be
reflected on the consolidated balance sheet of CCSC;
(d) Indebtedness of CCSC to its Subsidiaries or joint ventures
and Indebtedness of any Subsidiary or joint venture of CCSC to CCSC or
any other Subsidiary or joint venture of CCSC;
(e) Indebtedness incurred in the ordinary course of business
(excluding Indebtedness incurred through the borrowing of money);
(f) Indebtedness of a Person existing on the date CCSC or any
of its Subsidiaries acquires such Person which CCSC intends to (i)
thereafter assume as its own obligation, or (ii) refinance in a
transaction in which CCSC becomes the direct obligor of such
Indebtedness; provided that CCSC does in fact assume, or become the
direct obligor of, such Indebtedness, and such Person (and any
Subsidiary which shall have become liable in respect of such
Indebtedness) is released from any and all liability, direct or
contingent, in connection with such Indebtedness, within 180 days
following such acquisition and after giving effect thereto, CCSC is in
compliance with clause (h) of this Section 7.02; and
(g) Indebtedness of a Person existing on the date CCSC or any
of its Subsidiaries acquires such Person if (i) more than 50% in value
of the consideration paid, directly or indirectly, by CCSC and its
Subsidiaries in connection with such acquisition shall have consisted
of equity securities of CCSC or (ii) CCSC shall have caused such Person
to guarantee the Obligations on terms reasonably satisfactory to the
Administrative Agent (and in connection with such guarantee shall have
delivered such evidence of authority, legal opinions, evidence of
solvency and other documents and
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information as the Administrative Agent shall have reasonably
requested); and
(h) other Indebtedness of CCSC; provided that after giving
effect to the incurrence of any such Indebtedness, and the Indebtedness
otherwise permitted by this Section, CCSC shall be in compliance with
the Leverage Ratio set forth in clause (a) of Section 7.04;
provided, however, that, notwithstanding anything to the contrary set forth
above in this Section, the unsecured Indebtedness otherwise permitted by this
Section may be secured by the assets of CCSC and its Subsidiaries to the extent
that the Indebtedness so secured does not exceed, in the aggregate an amount
equal to the greater of $655,000,000 and 20% of Total Capitalization as of the
end of the most recently completed Fiscal Quarter.
SECTION 7.03. Liens. CCSC will not, and will not permit any of
its Significant Subsidiaries to, create, incur, assume or suffer to exist any
Lien upon any of its property, revenues or assets, whether now owned or
hereafter acquired, except:
(a) Liens granted prior to the Closing Date to secure payment
of Indebtedness of the type permitted and described in clause (b) of
Section 7.02;
(b) Liens for taxes, assessments or other governmental charges
or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(c) Liens of carriers, warehousemen, mechanics, materialmen
and landlords incurred in the ordinary course of business for sums not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(d) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance
of tenders, statutory obligations, leases and contracts (other than for
borrowed money) entered into in the
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ordinary course of business or to secure obligations on surety or
appeal bonds;
(e) judgment Liens in existence less than 30 days after the
entry thereof or with respect to which execution has been stayed or the
payment of which is covered in full (subject to a customary deductible)
by insurance maintained with responsible insurance companies;
(f) Liens arising in favor of sellers or lessors with respect
to Indebtedness and obligations incurred to purchase or lease fixed or
capital assets; provided, however, that such Liens secure only the
Indebtedness and obligations created thereunder and are limited to the
assets purchased or leased pursuant thereto;
(g) other Liens incidental to the conduct of CCSC's or any of
its Subsidiaries' businesses (including without limitation, Liens on
goods securing trade letters of credit issued in respect of the
importation of goods in the ordinary course of business, or the
ownership of any of CCSC's or any Subsidiary's property and assets
which were not incurred in connection with the borrowing of money or
the obtaining of advances or credit and which do not in the aggregate
materially detract from the value of CCSC's or any of its Subsidiaries'
property or assets or materially impair the use thereof in the
operation of CCSC's or any of its Subsidiaries' businesses);
(h) Liens in favor of CCSC on assets of its Subsidiaries, and
Liens in favor of Subsidiaries of the Borrower on assets of CCSC;
(i) Liens consisting of capitalized leases;
(j) Liens existing on any real or personal property of any
corporation or other Person at the time it becomes a Subsidiary, or
existing at the time of acquisition upon any real or personal property
acquired by CCSC or any of its Subsidiaries through purchase, merger,
consolidation or otherwise, whether or not assumed by CCSC or such
Subsidiary, or placed upon real or personal property being acquired by
CCSC or any Subsidiary to secure all or a portion of the purchase price
thereof or any Indebtedness incurred to finance all or any portion of
such purchase price; provided that (x) such property is not and shall
not thereby become encumbered in any amount in excess of the lesser of
the cost thereof and the fair value thereof (as
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determined in good faith by the Board of Directors, President or chief
financial Authorized Officer of CCSC), and (y) any such Lien shall not
encumber any other property of CCSC or such Subsidiary; and
(k) Liens that secure the payment of Indebtedness in an
aggregate amount not to exceed the greater of $655,000,000 and 20% of
Total Capitalization, determined as of the end of the most recently
completed Fiscal Quarter; provided that Liens permitted by this clause
(k) shall be inclusive of (and not in addition to) other Liens that
secure the payment of Indebtedness specifically permitted in this
Section and the last sentence of Section 7.02.
SECTION 7.04. Financial Condition. CCSC will not permit:
(a) its Leverage Ratio to be greater than 0.60:1;
or
(b) its Interest Coverage Ratio to be less than 2.0:1.
SECTION 7.05. Consolidation, Merger, etc. CCSC will not
liquidate or dissolve or consolidate with, or merge into or with, any other
corporation, except that CCSC may consolidate or merge with any other Person;
provided that (i) CCSC is the surviving corporation of such merger, and (ii)
both before and after giving effect to such consolidation or merger, no Event of
Default shall have occurred and be continuing.
SECTION 7.06. Restrictive Agreements. CCSC will not, and will
not permit any of its Significant Subsidiaries to, enter into any agreement
(excluding this Agreement, any other Loan Document and any agreement governing
any Indebtedness permitted by clause (b) of Section 7.02 as in effect on the
Effective Date) prohibiting
(a) the ability of CCSC to amend or otherwise modify this
Agreement or any other Loan Document; or
(b) the ability of Subsidiaries the aggregate Net Income of
which equals or exceeds 50% of the consolidated Net Income of CCSC and
its Subsidiaries, taken as a whole, to make any payments to CCSC by way
of dividends, advances, repayments of loans or advances, reimbursements
of management and other intercompany charges, expenses and accruals or
other returns on investments.
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ARTICLE VIII. EVENTS OF DEFAULT
SECTION 8.01. Listing of Events of Default. Each of the
following events or occurrences described in this Section 8.01 shall constitute
(i) an "Event of Default", if any Loans or Letters of Credit or Obligations in
respect of Loans or Letters of Credit are outstanding, and (ii) an "Event of
Termination", if no Loans or Letters of Credit or Obligations in respect of
Loans or Letters of Credit are outstanding.
(a) Any Borrower shall default in the payment when due of any
principal of any Loan or any L/C Disbursement or any Borrower shall default (and
such default shall continue unremedied for a period of three Business Days) in
the payment when due of any interest on any Loan or L/C Disbursement, or any
Borrower shall default after notice (including, without limitation, notice
delivered by way of submission of an invoice) (and such default shall continue
unremedied for a period of five days) in the payment when due of any fee
described in Section 2.11 or of any other Obligation.
(b) Any representation or warranty of CCSC or any Borrower
made or deemed to be made hereunder or in any other Loan Document or any other
writing or certificate furnished by or on behalf of CCSC or any Borrower to the
Administrative Agent or any Lender for the purposes of or in connection with
this Agreement or any such other Loan Document is or shall be incorrect when
made in any material respect.
(c) CCSC shall default in the due performance and observance
of any of its obligations under clause (a) of Section 6.02 (with respect to the
maintenance and preservation of CCSC's corporate existence) or Article VII and,
with respect to any default by CCSC in the performance of its obligations under
Article VII, any such default (if capable of being remedied within such period)
shall not be remedied within five Business Days after any officer of CCSC
obtains actual knowledge thereof.
(d) CCSC or any Borrower shall default in the due performance
and observance of any other agreement contained herein or in any other Loan
Document, and such default shall continue unremedied for a period of 30 days
after notice thereof shall have been given to CCSC or such Borrower by the
Administrative Agent or any Lender.
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(e) A default shall occur (i) in the payment when due (subject
to any applicable grace period), whether by acceleration or otherwise, of any
Indebtedness (other than Indebtedness described in paragraph (a) above) of the
Borrower or any of its Subsidiaries having a principal amount, individually or
in the aggregate, in excess of $75,000,000 or (ii) in the performance or
observance of any obligation or condition with respect to such Indebtedness if
the effect of such default referred to in this clause (ii) is to accelerate the
maturity of any such Indebtedness; provided, that this clause (ii) shall not
apply to any default under any such Indebtedness of a Subsidiary existing at the
time it is acquired by CCSC or another Subsidiary (or by virtue of such
acquisition) to the extent that (A) such Indebtedness is repaid or prepaid in
full promptly following such acquisition (provided that, in any event and
notwithstanding clause (i) above, such Indebtedness may remain outstanding for
up to 180 days following such acquisition so long as the holders thereof shall
not have exercised remedies, other than acceleration, with respect thereto) or
(B) such Indebtedness is in an aggregate principal amount not in excess of
$75,000,000.
(f) Any judgment or order for the payment of money in excess
of $75,000,000 shall be rendered against CCSC or any of its Subsidiaries and
either
(i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order and not stayed, or
(ii) there shall be any period (after any applicable statutory
grace period) of 10 consecutive days during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect and (i) such judgment is not fully insured
against by a policy or policies of insurance (with reasonable or
standard deductible provisions) issued by an insurer other than an
Affiliate of CCSC, or (ii) CCSC does not have sufficient cash reserves
to pay in full such judgment.
(g) Any of the following events shall occur with respect to
any Pension Plan:
(i) the taking of any specific actions by CCSC, any member of
its Controlled Group or any other Person to terminate a Pension Plan
if, as a result of such termination, CCSC or any such member could be
required to make a contribution to such Pension Plan, or could
reasonably expect to incur a liability or obligation to
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such Pension Plan, in excess of $75,000,000; provided, that, if CCSC or
a Subsidiary of CCSC acquires another Person, then such amount shall be
net of the amount of any reduction in the purchase price of such Person
that is specifically allocable to the assumption by CCSC or such
Subsidiary of liability under such Person's Pension Plan as a result of
the acquisition, or
(ii) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under Section 302(f) of ERISA
which is not cured within 20 days from the date that such contribution
was due.
(h) Any Change in Control shall occur.
(i) CCSC or any of its Significant Subsidiaries shall
(i) become insolvent or generally fail to pay debts as they
become due;
(ii) apply for, consent to, or acquiesce in, the appointment of
a trustee, receiver, sequestrator or other custodian for CCSC or any of
its Significant Subsidiaries or substantially all of the property of
any thereof, or make a general assignment for the benefit of creditors;
(iii) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for CCSC or any of its Significant
Subsidiaries or for a substantial part of the property of any thereof,
and such trustee, receiver, sequestrator or other custodian shall not
be discharged or stayed within 60 days, provided that CCSC and each
Significant Subsidiary hereby expressly authorizes the Administrative
Agent and each Lender to appear in any court conducting any relevant
proceeding during such 60-day period to preserve, protect and defend
their rights under the Loan Documents;
(iv) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution,
winding up or liquidation proceeding, in respect of CCSC or any of its
Significant Subsidiaries, and, if any such case or proceeding is not
commenced by CCSC or such Significant
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Subsidiary, such case or proceeding shall be consented to or acquiesced
in by CCSC or such Significant Subsidiary or shall result in the entry
of an order for relief or shall remain for 60 days undismissed and
unstayed, provided that CCSC and each Significant Subsidiary hereby
expressly authorizes the Administrative Agent and each Lender to appear
in any court conducting any such case or proceeding during such 60-day
period to preserve, protect and defend their rights under the Loan
Documents; or
(v) take any corporate action authorizing, or in furtherance
of, any of the foregoing.
(j) The obligations of CCSC under Article X shall cease to be
in full force and effect or CCSC shall repudiate its obligations thereunder, if
at the time of or at any time following such cessation or repudiation, any
Subsidiary Borrower Obligation is outstanding.
SECTION 8.02. Action if Bankruptcy. If any Event of Default
described in clauses (i) through (iv) of Section 8.01(i) shall occur, the
Commitments (if not theretofore terminated) shall automatically terminate and
the outstanding principal amount of all outstanding Loans and all other
Obligations shall automatically be and become immediately due and payable,
without notice or demand.
SECTION 8.03. Action if Other Event of Default. If any Event
of Default (other than any Event of Default described in clauses (i) through
(iv) of Section 8.01(i)) shall occur for any reason, whether voluntary or
involuntary, and be continuing, the Administrative Agent, upon the direction of
the Required Lenders, shall by written notice to CCSC and each Lender declare
all or any portion of the outstanding principal amount of the Loans and other
Obligations to be due and payable and/or the Commitments (if not theretofore
terminated) to be terminated, whereupon the full unpaid amount of such Loans and
other Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment
and/or, as the case may be, the Commitments shall terminate.
SECTION 8.04. Action if Event of Termination. Upon the
occurrence and continuation of any Event of Termination, the Required Lenders
may, by notice from the Administrative Agent to the Borrower (except if an Event
of Default described in clauses (i) through (v) of Section 8.01(i) shall have
occurred, in which case the Commitment (if not theretofore terminated) shall,
without notice of any kind, automatically terminate) declare their Commitments
terminated, and upon such declaration the
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Lenders and the Issuing Banks shall have no further obligation to make any Loans
(other than pursuant to Section 2.21) or issue any Letter of Credit hereunder.
Upon such termination of the Commitments, all accrued fees and expenses shall be
immediately due and payable.
ARTICLE IX. THE ADMINISTRATIVE AGENT
In order to expedite the transactions contemplated by this
Agreement, Chemical Bank is hereby appointed to act as Administrative Agent on
behalf of the Lenders and the Issuing Bank. Each of the Lenders and each
assignee of any such Lender, hereby irrevocably authorizes the Administrative
Agent to take such actions on behalf of such Lender or assignee or the Issuing
Bank and to exercise such powers as are specifically delegated to the
Administrative Agent by the terms and provisions hereof and of the other Loan
Documents, together with such actions and powers as are reasonably incidental
thereto. The Administrative Agent is hereby expressly authorized by the Lenders
and the Issuing Bank, without hereby limiting any implied authority, (a) to
receive on behalf of the Lenders and the Issuing Bank all payments of principal
of and interest on the Loans, all payments in respect of L/C Disbursements and
all other amounts due to the Lenders hereunder, and promptly to distribute to
each Lender or the Issuing Bank its proper share of each payment so received;
(b) to give notice on behalf of each of the Lenders to the Borrowers of any
Event of Default specified in this Agreement of which the Administrative Agent
has actual knowledge acquired in connection with its agency hereunder; and (c)
to distribute to each Lender copies of all notices, financial statements and
other materials delivered by the Borrowers pursuant to this Agreement as
received by the Administrative Agent.
Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall be liable to the Lenders as such for any
action taken or omitted by any of them except for its or his own gross
negligence or wilful misconduct, or be responsible for any statement, warranty
or representation herein or the contents of any document delivered in connection
herewith, or be required to ascertain or to make any inquiry concerning the
performance or observance by the Borrower of any of the terms, conditions,
covenants or agreements contained in any Loan Document. The Administrative Agent
shall not be responsible to the Lenders for the due execution, genuineness,
validity, enforceability or effectiveness of this Agreement or any other Loan
Documents or other instruments or agreements. The Administrative Agent shall in
all cases be fully
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protected in acting, or refraining from acting, in accordance with written
instructions signed by the Required Lenders and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders. The Administrative Agent
shall, in the absence of knowledge to the contrary, be entitled to rely on any
instrument or document believed by it in good faith to be genuine and correct
and to have been signed or sent by the proper person or persons. Neither the
Administrative Agent nor any of its directors, officers, employees or agents
shall have any responsibility to the Borrowers on account of the failure of or
delay in performance or breach by any Lender or the Issuing Bank of any of its
obligations hereunder or to any Lender or the Issuing Bank on account of the
failure of or delay in performance or breach by any other Lender or the Issuing
Bank or the Borrower of any of their respective obligations hereunder or under
any other Loan Document or in connection herewith or therewith. The
Administrative Agent may execute any and all duties hereunder by or through
agents or employees and shall be entitled to rely upon the advice of legal
counsel selected by it with respect to all matters arising hereunder and shall
not be liable for any action taken or suffered in good faith by it in accordance
with the advice of such counsel.
The Lenders hereby acknowledge that the Administrative Agent
shall be under no duty to take any discretionary action permitted to be taken by
it pursuant to the provisions of this Agreement unless it shall be requested in
writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may resign at
any time by notifying the Lenders and the Borrowers. Upon any such resignation,
the Required Lenders shall have the right to appoint a successor. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent which shall be a
bank with an office in New York, New York, having a combined capital and surplus
of at least $500,000,000 or an Affiliate of any such bank. Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
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hereunder. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 11.05 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
With respect to the Loans made by it hereunder, the
Administrative Agent in its individual capacity and not as Administrative Agent
shall have the same rights and powers as any other Lender and may exercise the
same as though it were not the Administrative Agent, and the Administrative
Agent and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with CCSC or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent.
Each Lender agrees (i) to reimburse the Administrative Agent,
on demand, in the amount of its Commitment Percentage of any expenses incurred
for the benefit of the Lenders by the Administrative Agent, including counsel
fees and compensation of agents and employees paid for services rendered on
behalf of the Lenders, which shall not have been reimbursed by the Borrowers and
(ii) to indemnify and hold harmless the Administrative Agent and any of its
directors, officers, employees or agents, on demand, in the amount of such
Commitment Percentage, from and against any and all liabilities, taxes,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against it in its capacity as the Administrative
Agent or any of them in any way relating to or arising out of this Agreement or
any other Loan Document or any action taken or omitted by it or any of them
under this Agreement or any other Loan Document, to the extent the same shall
not have been reimbursed by the Borrowers; provided that no Lender shall be
liable to the Administrative Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or wilful
misconduct of the Administrative Agent or any of its directors, officers,
employees or agents.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any
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other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement or any other Loan Document, any
related agreement or any document furnished hereunder or thereunder.
ARTICLE X. GUARANTEE
SECTION 10.01. Guarantee. In order to induce the
Administrative Agent and the Lenders to execute and deliver this Agreement and
to make or maintain the Loans, and in consideration thereof, CCSC hereby
unconditionally and irrevocable guarantees, as primary obligor and not merely as
surety, to the Administrative Agent, for the ratable benefit of the Lenders, the
prompt and complete payment and performance by each Subsidiary Borrower when due
(whether at stated maturity, by acceleration or otherwise) of the Subsidiary
Borrower Obligations, and CCSC further agrees to pay any and all reasonable
expenses (including, without limitation, all reasonable fees, charges and
disbursements of counsel) which may be paid or incurred by the Administrative
Agent or by the Lenders in enforcing any of their rights under the guarantee
contained in this Article X. The guarantee contained in this Article X, subject
to Section 10.04, shall remain in full force and effect until the Subsidiary
Borrower Obligations are paid in full and the Commitments are terminated,
notwithstanding that from time to time prior thereto any Subsidiary Borrower may
be free from any Subsidiary Borrower Obligations.
CCSC agrees that whenever, at any time, or from time to time,
it shall make any payment to the Administrative Agent or any Lender on account
of its liability under this Article X, it will notify the Administrative Agent
and such Lender in writing that such payment is made under the guarantee
contained in this Article X for such purpose. No payment or payments made by any
Subsidiary Borrower or any other Person or received or collected by the
Administrative Agent or any Lender from any Subsidiary Borrower or any other
Person by virtue of any action or proceeding or any setoff or appropriation or
application, at any time or from time to time, in reduction of or in payment of
the Subsidiary Borrower Obligations shall be deemed to modify, reduce, release
or otherwise affect the liability of CCSC under this Article X which,
notwithstanding any such payment or payments, shall remain liable for the unpaid
and outstanding Subsidiary Borrower Obligations until, subject to Section 10.04,
the Subsidiary
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Borrower Obligations are paid in full and the Commitments are terminated.
SECTION 10.02. Amendments, etc. with respect to the Subsidiary
Borrower Obligations. CCSC shall remain obligated under this Article X
notwithstanding that, without any reservation of rights against CCSC, and
without notice to or further assent by CCSC, any demand for payment of or
reduction in the principal amount of any of the Subsidiary Borrower Obligations
made by the Administrative Agent or any Lender may be rescinded by the
Administrative Agent or such Lender, and any of the Subsidiary Borrower
Obligations continued, and the Subsidiary Borrower Obligations, or the liability
of any other party upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
Lender, and this Agreement and any other documents executed and delivered in
connection herewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Lenders (or the Required Lenders, as the case may be)
may deem advisable from time to time, and any collateral security, guarantee or
right of offset at any time held by the Administrative Agent or any Lender for
the payment of the Subsidiary Borrower Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Administrative Agent nor any Lender
shall have any obligation to protect, secure, perfect or insure any lien at any
time held by it as security for the Subsidiary Borrower Obligations or for the
guarantee contained in this Article X or any property subject thereto.
SECTION 10.03. Guarantee Absolute and Unconditional. CCSC
waives any and all notice of the creation, renewal, extension or accrual of any
of the Subsidiary Borrower Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon the guarantee contained in this Article
X or acceptance of the guarantee contained in this Article X; the Subsidiary
Borrower Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Article X, and all dealings
between CCSC or the Subsidiary Borrowers, on the one hand, and the
Administrative Agent and the Lenders, on the other, shall likewise be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Article X. The Administrative Agent will, to the
extent permitted by applicable law, request payment of any Subsidiary Borrower
Obligation from the applicable
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Subsidiary Borrower before making any claim against CCSC under this Article X,
but will have no further obligation to proceed against a Subsidiary Borrower or
to defer for any period a claim against CCSC hereunder. Except as expressly
provided in the preceding sentence, CCSC waives diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or upon CCSC or any
Subsidiary Borrower with respect to the Subsidiary Borrower Obligations. The
guarantee contained in this Article X shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of this Agreement, any Local Currency Facility, any
of the Subsidiary Borrower Obligations or any collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Administrative Agent or any Lender, (b) the legality under
applicable laws of repayment by the relevant Subsidiary Borrower of any
Subsidiary Borrower Obligations or the adoption of any applicable laws
purporting to render any Subsidiary Borrower Obligations null and void, (c) any
defense, setoff or counterclaim (other than a defense of payment or performance)
which may at any time be available to or be asserted by CCSC or the applicable
Subsidiary Borrower against the Administrative Agent or any Lender, or (d) any
other circumstance whatsoever (with or without notice to or knowledge of CCSC or
any Subsidiary Borrower) which constitutes, or might be construed to constitute,
an equitable or legal discharge of any Subsidiary Borrower for any Subsidiary
Borrower Obligations, or of CCSC under the guarantee contained in this Article
X, in bankruptcy or in any other instance. When the Administrative Agent or any
Lender is pursuing its rights and remedies under this Article X against CCSC,
the Administrative Agent or any Lender may, but shall be under no obligation to,
pursue such rights and remedies as it may have against any Subsidiary Borrower
or any other Person or against any collateral security or guarantee for the
Subsidiary Borrower Obligations or any right of offset with respect thereto, and
any failure by the Administrative Agent or any Lender to pursue such other
rights or remedies or to collect any payments from any Subsidiary Borrower or
any such other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of any
Subsidiary Borrower or any such other Person or of any such collateral security,
guarantee or right of offset, shall not relieve CCSC of any liability under this
Article X, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent
and the Lenders against CCSC.
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SECTION 10.04. Reinstatement. The guarantee contained in this
Article X shall continue to be effective, or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the Subsidiary Borrower
Obligations is rescinded or must otherwise be restored or returned by the
Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Subsidiary Borrower or upon or as a result
of the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, any Subsidiary Borrower or any substantial part of its
property, or otherwise, all as though such payments had not been made.
SECTION 10.05. Payments. CCSC hereby agrees that any payments
in respect of the Subsidiary Borrower Obligations pursuant to Article X will be
paid without setoff or counterclaim in Dollars (in the case of Subsidiary
Borrower Obligations arising under this Agreement) or, at the option of the
relevant Local Currency Lender(s), in Dollars or in the relevant Local Currency
(in the case of Subsidiary Borrower Obligations arising under any Local Currency
Facility), at (a) the office of the Administrative Agent specified in Section
11.01 (in the case of Subsidiary Borrower Obligations arising under this
Agreement) or (b) at the office specified for payments under the relevant Local
Currency Facility or such other office as shall have been specified by the
relevant Local Currency Lender(s) in each case to the extent permitted by
applicable law (in the case of Subsidiary Borrower Obligations arising under any
Local Currency Facility).
SECTION 10.06. Independent Obligations. The obligations of
CCSC under the guarantee contained in this Article X are independent of the
obligations of each Subsidiary Borrower, and a separate action or actions may be
brought and prosecuted against CCSC whether or not the relevant Subsidiary
Borrower be joined in any such action or actions. CCSC waives, to the full
extent permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the relevant
Subsidiary Borrower or other circumstance which operates to toll any statute of
limitations as to such Subsidiary Borrower shall operate to toll the statute of
limitations as to CCSC.
ARTICLE XI. MISCELLANEOUS
SECTION 11.01. Notices. Notices and other communications
provided for herein shall be in writing and
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shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to CCSC, to it at 9300 Ashton Road, Philadelphia,
Pennsylvania 19136, attention of Mr. Craig R. L. Calle; (Telecopy No.
215-676-6011);
(b) if to any Borrower other than CCSC, to it at the address
set forth in the applicable Local Currency Facility Agreement, with a
copy to CCSC at the address set forth above;
(c) if to the Administrative Agent, to Chemical Bank Agency
Services Group, Grand Central Tower, 140 East 45th Street, New York,
New York 10017, Attention of Ms. Sandra Miklave (Telecopy No. (212)
622-0002), with a copy to Chemical Bank, at 270 Park Avenue, New York
10017, Attention of Mr. Theodore Swimmer (Telecopy No. 212-270-2112);
and
(d) if to a Lender, to it at its address (or telecopy number)
set forth in Schedule 2.01 or in the Assignment and Acceptance pursuant
to which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 11.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 11.01.
SECTION 11.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by the Borrowers herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any investigation made by the Lenders or the Issuing
Bank or on their behalf, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any Fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid or any Letter of Credit
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is outstanding and so long as the Commitments have not been terminated.
SECTION 11.03. Binding Effect. This Agreement shall become
effective when it shall have been executed by CCSC and the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof which,
when taken together, bear the signatures of each of the other parties hereto,
and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective permitted successors and assigns.
SECTION 11.04. Successors and Assigns. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the permitted successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of the Borrowers, the
Administrative Agent, the Issuing Bank or the Lenders that are contained in this
Agreement shall bind and inure to the benefit of their respective successors and
assigns.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans at the time owing to it);
provided, however, that (i) except in the case of an assignment to a Lender or
an Affiliate of such Lender, CCSC and the Administrative Agent (and, in the case
of any assignment of a Revolving Credit Commitment, the Issuing Bank and the
Swingline Lenders) must give their prior written consent to such assignment
(which consent shall not, unless the amount of such Lender's Commitment after
giving effect to such assignment shall be zero, be unreasonably withheld, it
being agreed that CCSC will not be deemed to act unreasonably if it shall
withhold consent on the basis of concerns relating to a proposed assignee's
creditworthiness or reputation), (ii) the amount of the Commitment of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $10,000,000 and the amount of such
Lender's Commitment after giving effect to such assignment shall not be less
than $24,000,000 (unless such amount shall be zero), (iii) except in the case of
the assignment to a branch of such Lender, the parties to each such assignment
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500 and (iv)
the assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire. Upon
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acceptance and recording pursuant to paragraph (e) of this Section 11.04, from
and after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the execution thereof,
(A) the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, provided that the Borrowers shall
not be required to reimburse such assignee pursuant to Section 2.16, 2.17 or
2.18 in an amount which exceeds the amount that would have been payable
thereunder to such assigning Lender, and (B) the assigning Lender thereunder
shall, to the extent of the interest assigned by such Assignment and Acceptance,
be released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.16, 2.17, 2.18 and 11.05, as well as to any Fees accrued for its account and
not yet paid).
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Revolving Credit Commitment, and the outstanding balances of its Revolving
Loans and Competitive Loans, in each case without giving effect to assignments
thereof which have not become effective, are as set forth in such Assignment and
Acceptance, (ii) except as set forth in (i) above, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto, or the financial condition of
CCSC or any Subsidiary or the performance or observance by CCSC or any
Subsidiary of any of its obligations under this Agreement, any other Loan
Document or any other instrument or document furnished pursuant hereto; (iii)
such assignee represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies of the most recent
financial statements, if any, delivered pursuant to Section 6.01 and such other
documents and information as it
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has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (v) such assignee will independently and
without reliance upon the Administrative Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (vi) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms of
this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an
agent of the Borrowers, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive and the Borrowers, the Administrative Agent, the Issuing
Bank and the Lenders may treat each person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above and, if required, the written consent of CCSC, the
Swingline Lenders, the Issuing Bank and the Administrative Agent to such
assignment, the Administrative Agent shall (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Lenders, the Issuing Bank and the
Swingline Lenders. No assignment shall be effective unless it has been recorded
in the Register as provided in this paragraph (e).
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(f) Each Lender may without the consent of CCSC, the Swingline
Lenders, the Issuing Bank or the Administrative Agent sell participations to one
or more banks or other entities in all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participating banks or other entities shall be
entitled to the benefit of the cost protection provisions contained in Sections
2.16, 2.17 and 2.18 and the provisions of Section 6.01 to the same extent as if
they were Lenders (provided that no participant shall be entitled to receive any
greater amount pursuant to such Sections than the Lender would have been
entitled to receive in respect of the interest transferred had no such transfer
occurred) and (iv) the Borrowers, the Administrative Agent, the Issuing Bank and
the Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
such Lender shall retain the sole right (which each Lender agrees will not be
limited by the terms of any participation agreement or other agreement with a
participant) to enforce the obligations of the Borrowers relating to the Loans
or L/C Disbursements and to approve any amendment, modification or waiver of any
provision of this Agreement (other than amendments, modifications or waivers
decreasing any fees payable hereunder or the amount of principal of or the rate
at which interest is payable on the Loans, extending any scheduled principal
payment date or date fixed for the payment of interest on the Loans or changing
or extending the Commitments).
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 11.04, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Borrowers furnished to such
Lender by or on behalf of the Borrowers; provided that, prior to any such
disclosure of information designated by any Borrower as confidential, each such
assignee or participant or proposed assignee or participant shall execute an
agreement whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information.
(h) Any Lender may at any time assign as collateral all or any
portion of its rights under this
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Agreement to a Federal Reserve Bank to secure extensions of credit by such
Federal Reserve Bank to such Lender; provided that no such assignment shall
release a Lender from any of its obligations hereunder or substitute any such
Bank for such Lender as a party hereto. In order to facilitate such an
assignment to a Federal Reserve Bank, each Borrower shall, at the request of the
assigning Lender, duly execute and deliver to the assigning Lender a promissory
note or notes evidencing the Loans made to such Borrower by the assigning Lender
hereunder.
(i) The Borrowers shall not assign or delegate any of their
rights or duties hereunder without the prior written consent of the
Administrative Agent, the Issuing Bank and each Lender, and any attempted
assignment without such consent shall be null and void; provided that any
Subsidiary Borrower may assign and delegate any of its rights or obligations
hereunder to one or more other Subsidiary Borrowers which shall assume the same
upon notice and the delivery of a reasonably satisfactory assignment and
assumption agreement to the Administrative Agent but without any prior consent.
SECTION 11.05. Expenses; Indemnity. (a) The Borrowers agree to
pay all reasonable out-of-pocket expenses incurred by the Administrative Agent
in connection with the preparation and administration of this Agreement and the
other Loan Documents or in connection with any amendments, modifications or
waivers of the provisions hereof or thereof requested by the Borrowers (whether
or not the transactions hereby contemplated shall be consummated) or incurred by
the Administrative Agent or any Lender in connection with the enforcement or
protection of their rights in connection with this Agreement, the other Loan
Documents or the Loans made or Letters of Credit issued hereunder, including the
reasonable fees, charges and disbursements of Cravath, Swaine & Moore, counsel
for the Administrative Agent, and, in connection with any such enforcement or
protection, the reasonable fees, charges and disbursements of any other counsel
for the Administrative Agent or any Lender, provided, however, that the
Borrowers shall not be obligated to pay for expenses incurred by the
Administrative Agent or a Lender in connection with the assignment of Loans to
an assignee Lender or the sale of Loans to a participant pursuant to Section
11.04.
(b) The Borrowers agree to indemnify the Administrative Agent,
each Lender and the Issuing Bank, each Affiliate of any of the foregoing persons
and each of their respective directors, officers, employees and agents (each
such person being called an "Indemnitee") against, and to
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hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related reasonable expenses, including reasonable counsel fees,
charges and disbursements, incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of (i) the execution
or delivery of this Agreement or any other Loan Document or any agreement or
instrument contemplated thereby, the performance by the parties thereto of their
respective obligations thereunder or the consummation of the Transactions and
the other transactions contemplated thereby, (ii) the use of the proceeds of the
Loans or issuance of Letters of Credit, (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto, or (iv) any actual or alleged presence or Release
of Hazardous Materials on any property owned or operated by the Borrower or any
of the Subsidiaries, or any Environmental Claim related in any way to CCSC or
the Subsidiaries; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
related reasonable expenses arise (a) in connection with any action by any
stockholder or creditor of the Indemnitee (in its capacity as such), (b) in
connection with any action by any Borrower, by reason of the Indemnitee's
negligence or (c) in connection with any action not brought by any Borrower or
any stockholder or creditor of the Indemnitee (in its capacity as such), by
reason of the Indemnitee's gross negligence or wilful misconduct.
(c) The provisions of this Section 11.05 shall remain
operative and in full force and effect regardless of the expiration of the term
of this Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the expiration
of any Letter of Credit, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent, any Lender or the Issuing
Bank. All amounts due under this Section 11.05 shall be payable on written
demand therefor.
SECTION 11.06. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of any Borrower against any of and all the
obligations of such Borrower now or hereafter existing under
<PAGE>
102
this Agreement and other Loan Documents held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement or
such other Loan Document and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have. Each
Lender agrees promptly to notify CCSC after making any such setoff.
SECTION 11.07. Applicable Law. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER
LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF
COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT
GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.
SECTION 11.08. Waivers; Amendment. (a) No failure or delay of
the Administrative Agent, any Lender or the Issuing Bank in exercising any power
or right hereunder or under any Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Issuing
Bank and the Lenders hereunder and under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies which they would otherwise have.
No waiver of any provision of this Agreement or any other Loan Document or
consent to any departure by the Borrowers therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on any Borrower in any case
shall entitle such Borrower to any other or further notice or demand in similar
or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrowers and the Required Lenders; provided,
however, that no such agreement shall (i) decrease the principal amount of, or
extend the maturity of or any scheduled principal
<PAGE>
103
payment date or date for the payment of any interest on any Loan or any date for
reimbursement of an L/C Disbursement, or waive or excuse any such payment or any
part thereof, or decrease the rate of interest on any Loan or L/C Disbursement,
without the prior written consent of each Lender affected thereby, (ii) change
or extend the Commitment or decrease the Facility Fee or L/C Participation Fee
of any Lender without the prior written consent of such Lender, (iii) amend or
modify the provisions of Section 2.14, the provisions of this Section or the
definition of "Required Lenders", without the prior written consent of each
Lender, or (iv) release the guarantee contained in Article X or modify the
provisions of Article X in a manner deemed by the Administrative Agent to be
material, without the prior written consent of each Lender; provided further
that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent, the Issuing Bank or any Swingline Lender
hereunder or under any other Loan Document without the prior written consent of
the Administrative Agent, the Issuing Bank or such Swingline Lender.
SECTION 11.09. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan or participation in any L/C Disbursement, together with all fees,
charges and other amounts which are treated as interest on such Loan or
participation in such L/C Disbursement under applicable law (collectively the
"Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") which may
be contracted for, charged, taken, received or reserved by the Lender holding
such Loan or participation in accordance with applicable law, the rate of
interest payable in respect of such Loan or participation hereunder, together
with all Charges payable in respect thereof, shall be limited to the Maximum
Rate and, to the extent lawful, the interest and Charges that would have been
payable in respect of such Loan or participation but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or participations or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender.
SECTION 11.10. Entire Agreement. This Agreement and the other
Loan Documents constitute the entire contract between the parties relative to
the subject matter hereof. Any previous agreement among the parties with respect
to the subject matter hereof is superseded by this Agreement and
<PAGE>
104
the other Loan Documents. Nothing in this Agreement or in the other Loan
Documents, expressed or implied, is intended to confer upon any party other than
the parties hereto and thereto any rights, remedies, obligations or liabilities
under or by reason of this Agreement or the other Loan Documents.
SECTION 11.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.11.
SECTION 11.12. Severability. In the event any one or more of
the provisions contained in this Agreement or in any other Loan Document should
be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 11.13. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together shall
constitute a single contract, and shall become effective as provided in Section
11.03. Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
SECTION 11.14. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be taken
into consideration in interpreting, this Agreement.
<PAGE>
105
SECTION 11.15. Jurisdiction; Consent to Service of Process.
(a) Each Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against any Borrower or its properties in
the courts of any jurisdiction.
(b) Each Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this agreement or the other
Loan Documents in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 11.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
(d) Each Subsidiary Borrower hereby designates and directs
CCSC at its offices at 9300 Ashton Road, Philadelphia, Pennsylvania, as its
agent to receive service of any and all process and documents on its behalf in
any legal action or proceeding referred to in paragraph (a) of this Section
11.15 in the State of New York and agrees that service upon such agent shall
constitute valid and effective service upon such Subsidiary Borrower and that
failure of CCSC to give any notice of such service to any such party shall not
affect or impair in any way the validity of such service or of any judgment
rendered in any action or proceeding based thereon.
<PAGE>
106
(e) Each Subsidiary Borrower, to the extent that such
Subsidiary Borrower has or hereafter may acquire any immunity (sovereign or
otherwise) from any legal action, suit or proceeding, from jurisdiction of any
court or from set-off or any legal process (whether service of notice,
attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or otherwise) with respect to itself or any of its
property or assets, hereby waives and agrees not to plead or claim such immunity
in respect of its obligations under this Agreement (it being understood that the
waivers contained in this paragraph (d) shall have the fullest extent permitted
under the Foreign Sovereign Immunities Act of 1976, as amended, and are intended
to be irrevocable and not subject to withdrawal for the purposes of such Act).
SECTION 11.16. Judgments Relating to Subsidiary Borrowers. (a)
If, for the purpose of obtaining judgment in any court, it is necessary to
convert a sum owing hereunder in one currency into another currency, each party
hereto agrees, to the fullest extent that it may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking
procedures in the relevant jurisdiction the first currency could be purchased
with such other currency on the Business Day immediately preceding the day on
which final judgment is given.
(b) The obligations of each Borrower in respect of any sum due
to any party hereto or any holder of the obligations owing hereunder (the
"Applicable Creditor") shall, notwithstanding any judgment in a currency (the
"Judgment Currency") other than the currency in which such sum is stated to be
due hereunder (the "Agreement Currency"), be discharged only to the extent that,
on the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss provided that if the amount of the
Agreement Currency so purchased exceeds the sum originally due to the Applicable
Creditor, the Applicable Creditor agrees to remit such excess to such Borrower.
The obligations of the Borrowers contained in this Section 11.16
<PAGE>
107
shall survive the termination of this Agreement and the payment of all other
amounts owing hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
CROWN CORK & SEAL COMPANY,
INC.,
by
/s/ Craig R. L. Calle
Name: Craig R. L. Calle
Title: Vice President and
Treasurer
Attest:
[Corporate Seal]
by
/s/ Wilhelmina C. Curtis
Name: Wilhelmina C. Curtis
Title: Attorney, Member of
Legal Department
<PAGE>
108
CHEMICAL BANK, individually
and as Administrative Agent,
by
/s/ Robert P. Kellas
Name: Robert P. Kellas
Title: Vice President
<PAGE>
109
CHEMICAL BANK DELAWARE, as
Issuing Bank,
by
/s/ Michael P. Handago
Name: Michael P. Handago
Title: Vice President
<PAGE>
110
ABN AMRO BANK N.V.,
by
/s/ John F. Lacey
Name: John F. Lacey
Title: Senior Vice President
by
/s/ James B. Sieger
Name: James B. Sieger
Title: Vice President
<PAGE>
111
BANK BRUSSELS LAMBERT, New York
Branch,
by
/s/ Edgar Lorch
Name: Edgar Lorch
Title: Senior Vice President
by
/s/ Dominick H.J. Vangaever
Name: Dominick H.J. Vangaever
Title: Vice President
<PAGE>
112
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
by
/s/ George Poon
Name: George Poon
Title: Vice President
<PAGE>
113
[RESERVED]
<PAGE>
114
THE BANK OF NEW YORK,
by
/s/ Peter H. Abdill
Name: Peter H. Abdill
Title: Assistant Vice
President
<PAGE>
115
CIBC INC.,
by
/s/ Christopher P. Kleczkowski
Name: Christopher P. Kleczkowski
Title: Vice President
<PAGE>
116
COMMERZBANK
AKTIENGESELLSCHAFT,
by
/s/ Juergen Boysen
Name: Juergen Boysen
Title: Senior Vice President
by
/s/ Werner Niemeyer
Name: Werner Niemeyer
Title: Vice President
<PAGE>
117
CORESTATES BANK, N.A.,
by
/s/ Joseph M. Finley
Name: Joseph M. Finley
Title: Vice President
<PAGE>
118
CREDIT SUISSE,
by
/s/ Eileen O'Connell Fox
Name: Eileen O'Connell Fox
Title: Member of Senior Management
by
/s/ Adrian Germann
Name: Adrian Germann
Title: Associate
<PAGE>
119
DEUTSCHE BANK AG, New York Bank
and/or Cayman Islands Branch,
by
/s/ Ross A. Howard
Name: Ross A. Howard
Title: Assistant Vice President
by
/s/ David J. Cybulski
Name: David J. Cybulski
Title: Assistant Vice President
<PAGE>
120
THE FIRST NATIONAL BANK OF CHICAGO,
by
/s/ Juan J. Duarte
Name: Juan J. Duarte
Title: Corporate Banking
Officer
<PAGE>
121
MELLON BANK, N.A.,
by
/s/ John R. Fell, III
Name: John R. Fell, III
Title: Vice President
<PAGE>
122
THE MORGAN GUARANTY TRUST COMPANY OF
NEW YORK,
by
/s/ Laura E. Reim
Name: Laura E. Reim
Title: Vice President
<PAGE>
123
THE INDUSTRIAL BANK OF JAPAN, LTD.,
by
/s/ Robert W. Ramage, Jr.
Name: Robert W. Ramage, Jr.
Title: Senior Vice President
<PAGE>
124
ISTITUTO BANCARIO SAN PAOLO DI
TORINO SpA,
by
/s/ Gerard M. McKenna
Name: Gerard M. McKenna
Title: Vice President
<PAGE>
125
SOCIETE GENERALE,
by
/s/ Bruce Drossman
Name: Bruce Drossman
Title: Vice President
<PAGE>
126
TRUST COMPANY BANK,
by
/s/ Ruth E. Whitner
Name: Ruth E. Whitner
Title: Banking Officer
by
/s/ Raymond B. King
Name: Raymond B. King
Title: Vice President
<PAGE>
EXHIBIT A
ADMINISTRATIVE QUESTIONNAIRE
CROWN CORK & SEAL COMPANY, INC.
Please accurately complete the following information and return via FAX to the
attention of Sandra Miclave at Chemical Bank Agency Services Corporation as soon
as possible.
FAX Number: 212-270-0002
LEGAL NAME OF YOUR INSTITUTION TO APPEAR IN DOCUMENTATION:
_________________________________________________________________
GENERAL INFORMATION - ALTERNATE BASE RATE LENDING OFFICE:
Institution Name: ______________________________________________
Street Address: ________________________________________________
City, State, Zip Code: _________________________________________
GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:
Institution Name: ______________________________________________
Street Address: ________________________________________________
City, State, Zip Code: _________________________________________
CREDIT CONTACTS/NOTIFICATION METHODS:
Primary Contact: _______________________________________________
Street Address: ________________________________________________
City, State, Zip Code: _________________________________________
Phone Number: __________________________________________________
FAX Number: ____________________________________________________
Backup Credit Contact: _________________________________________
Street Address: ________________________________________________
City, State, Zip Code: _________________________________________
Phone Number: __________________________________________________
FAX Number: ____________________________________________________
<PAGE>
TAX WITHHOLDING:
UNITED STATES
Non-Resident Alien or Foreign Corporation or Other Foreign
Entity
__________ YES __________ NO
If yes, please enclose Form 4224, 1001 or W-8. If no, please
enclose Form W-9.
Tax ID Number _________________________________
UNITED KINGDOM
Non-Resident Alien or Foreign Corporation or other Foreign
Entity
__________ YES __________ NO
Please enclose relevant tax forms.
Tax ID Number _________________________________
CONTACTS/NOTIFICATION METHODS:
ADMINISTRATIVE CONTACTS - BORROWINGS, PAYDOWNS, INTEREST, FEES,
ETC.
Contact: _______________________________________________________
Street Address: ________________________________________________
City, State, Zip Code: _________________________________________
Phone Number: __________________________________________________
FAX Number: ____________________________________________________
Telex & Answer Back: ___________________________________________
PAYMENT INSTRUCTIONS:
Name of Bank where funds are to be transferred:
______________________________________________________________
Routing Transit/ABA number of Bank where funds are to be transferred:
______________________________________________________________
Name of Account, if applicable:
______________________________________________________________
Account Number: ________________________________________________
Additional Information: ________________________________________
______________________________________________________________
MAILINGS:
Please specify who should receive financial information:
Name: __________________________________________________________
Street Address: ________________________________________________
City, State, Zip Code: _________________________________________
It is very important that all of the above information is accurately filled in
and returned promptly. If there is someone other than yourself who should
receive this questionnaire, please notify us of their name and FAX number and we
will FAX them a
<PAGE>
copy of the questionnaire. If you have any questions, please call Sandra Miclave
on (212) 622-0005.
<PAGE>
EXHIBIT B
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Revolving Credit and Competitive
Advance Facility Agreement dated as of February 10, 1995 (as amended and in
effect at the date hereof, the "Credit Agreement"), among Crown Cork & Seal
Company, Inc. ("CCSC"), certain subsidiaries of CCSC, the Lenders named therein,
and Chemical Bank, as Administrative Agent. Terms defined in the Credit
Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to
the Assignee, and the Assignee hereby purchases and assumes, without recourse,
from the Assignor, effective as of the Assignment Date set forth on the reverse
hereof, the interests set forth on the reverse hereof (the "Assigned Interest")
in the Assignor's rights and obligations under the Credit Agreement, including,
without limitation, the interests set forth on the reverse hereof in the
Commitments of the Assignor on the Assignment Date and the Loans owing to the
Assignor which are outstanding on the Assignment Date. Each of the Assignor and
the Assignee hereby makes and agrees to be bound by all the representations,
warranties and agreements set forth in Section 11.04(c) of the Credit Agreement,
a copy of which has been received by each such party. From and after the
Assignment Date (i) the Assignee shall be a party to and be bound by the
provisions of the Credit Agreement and, to the extent of the interests assigned
by this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the Credit Documents and (ii) the Assignor shall, to the
extent of the interests assigned by this Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Credit Agreement.
2. This Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) if the Assignee is organized under the
laws of a jurisdiction outside the United States, the forms specified in Section
2.17 of the Credit Agreement, duly completed and executed by such Assignee, (ii)
if the Assignee is not already a Lender under the Credit Agreement, an
Administrative Questionnaire in the form of Exhibit A to the Credit Agreement
and (iii) a processing and recordation fee of $3,500.
<PAGE>
3. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Assignment Date (may not be fewer than
5 Business Days after the Date of
Assignment):
Percentage Assigned
of Credit Facility
(set forth, to at
least 8 decimals, as
a percentage of the
Credit Facility and
the aggregate
Commitments of all
Principal Amount Lenders
Credit Facility Assigned thereunder)
Revolving Credit
Commitment: $ %
Outstanding Loans
(including
description): $
<PAGE>
4. This Assignment and Acceptance shall become effective when
counterparts hereof have been executed on behalf of each of the parties required
pursuant to Section 11.04(b) of the Credit Agreement.
The terms set forth above and
on the reverse side hereof are
hereby agreed to:
Accepted: */
_________________, as Assignor CROWN CORK & SEAL COMPANY, INC.
By: __________________________ By: __________________________
Name: Name:
Title: Title:
_________________, as Assignee
By: __________________________ Accepted: */
Name:
Title:
By: __________________________ CHEMICAL BANK, as
Name: Administrative Agent
Title:
By:_______________________
Name:
Title:
----------------------
*/ To be completed only if consents are required under Section 11.04(b) of the
Credit Agreement. If such consents are required, consents also must be obtained
from the Issuing Banks and Swingline Lenders.
<PAGE>
EXHIBIT C
FORM OF COMPETITIVE BID REQUEST
Chemical Bank,
as Administrative Agent for
the Lenders referred to below
270 Park Avenue
New York, N.Y. 10017
Attention:
[Date]
Dear Sirs:
The undersigned, [SPECIFY BORROWER] (the "Borrower"), refers
to the $1,000,000,000 Revolving Credit and Competitive Advance Facility
Agreement dated as of February 10, 1995 (as amended, modified, extended or
restated from time to time, the "Credit Agreement"), among Crown Cork & Seal
Company, Inc. ("CCSC"), certain subsidiaries of CCSC, the Lenders named herein
and Chemical Bank, as Administrative Agent. Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to such terms in
the Credit Agreement. The Borrower hereby gives you notice pursuant to Section
2.07(a) of the Credit Agreement that it requests a Competitive Borrowing under
the Credit Agreement, and in connection therewith sets forth below the terms on
which such Competitive Borrowing is requested to be made:
(A) Date of Competitive Borrowing
(which is a Business Day) ______________________
(B) Principal Amount of
Competitive Borrowing1 ______________________
(C) Interest rate basis2 ______________________
(D) Interest Period and the last
day thereof3 ______________________
Upon acceptance of any or all of the Loans offered by the
Lenders in response to this request, the Borrower shall be deemed to have
--------
1/ Not less than $5,000,000 (and in integral multiples of $1,000,000) or
greater than the Total Revolving Credit Commitment then available.
2/ Eurodollar Loan or Fixed Rate Loan.
3/ Which shall be subject to the definition of "Interest Period" and end
not later than the Maturity Date.
<PAGE>
represented and warranted that the conditions to lending specified in Section
5.01(b) and (c) of the Credit Agreement have been satisfied.
Very truly yours,
[BORROWER NAME],
by
--------------------------
Title: [Responsible
officer]
<PAGE>
EXHIBIT D
FORM OF COMPETITIVE LOAN CONFIRMATION
[Date]
Chemical Bank,
as Administrative Agent for
the Lenders referred to below
270 Park Avenue
New York, N.Y. 10017
Attention: [ ]
Dear Sirs:
The undersigned, [specify borrower] (the "Borrower"), refers
to the $1,000,000,000 Revolving Credit and Competitive Advance Facility
Agreement dated as of February 10, 1995 (as amended, modified, extended or
restated from time to time, the "Credit Agreement"), among Crown Cork & Seal
Company, Inc. ("CCSC"), certain subsidiaries of CCSC, the Lenders named therein
and Chemical Bank, as Administrative Agent. Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to such terms in
the Credit Agreement.
In accordance with Section 2.07(c) of the Credit Agreement, we
have received a summary of bids in connection with our Competitive Bid Request
dated ____________________ and in accordance with Section 2.07(d) of the Credit
Agreement, we hereby accept the following bids for maturity on [date]:
Principal Amount Fixed Rate/Margin Lender
$ [%]/[+/-. %]
$
We hereby reject the following bids:
Principal Amount Fixed Rate/Margin Lender
$ [%]/[+/-. %]
$
The $ should be deposited in Chemical Bank
account number [ ] on [date].
Very truly yours,
[Specify Borrower]
by
---------------------------
Name:
Title:
<PAGE>
Exhibit E
[FORM OF ISSUING BANK AGREEMENT]
ISSUING BANK AGREEMENT dated as of [ ]
between CROWN CORK & SEAL COMPANY, INC., a
Pennsylvania corporation ("CCSC") and the financial
institution identified on Schedule I hereto as the
Issuing Bank (the "Issuing Bank").
Reference is made to the Revolving Credit and Competitive
Advance Facility Agreement dated as of February 10, 1995 (as amended, modified,
extended or restated from time to time, the "Credit Agreement"), among CCSC,
certain subsidiaries of CCSC, the Lenders named therein and Chemical Bank, as
Administrative Agent. CCSC and the Issuing Bank desire to enter into this
Agreement in order to provide for Letters of Credit to be issued by the Issuing
Bank as contemplated by the Credit Agreement. Accordingly, the parties hereto
agree as follows:
SECTION 1. Defined Terms. Capitalized terms used herein and
not otherwise defined herein shall have the respective meanings specified in the
Credit Agreement. The provisions of Section 1.02 of the Credit Agreement shall
apply to this Agreement as though set forth herein.
SECTION 2. Letter of Credit Commitment. The Issuing Bank
hereby agrees to be an "Issuing Bank" under, and, subject to the terms and
conditions hereof and of the Credit Agreement, to issue Letters of Credit under,
the Credit Agreement; provided, however, that Letters of Credit issued by the
Issuing Bank hereunder shall be subject to the limitations, if any, set forth on
Schedule I hereto, in addition to the limitations set forth in the Credit
Agreement.
SECTION 3. Issuance Procedure. In order to request the
issuance of a Letter of Credit hereunder, the Borrower (or CCSC on behalf of the
Borrower) shall hand deliver or telecopy a notice (specifying the information
required by Section 2.21(b) of the Credit Agreement) to the Issuing Bank, at its
address or telecopy number specified on Schedule I hereto (or such other address
or telecopy number as the Issuing Bank may specify by notice to CCSC), not later
than the time of day (local time at such address) specified on Schedule I hereto
prior to the proposed date of
<PAGE>
issuance of such Letter of Credit. A copy of such notice shall be sent,
concurrently, by the Borrower (or CCSC on behalf of the Borrower) to the
Administrative Agent in the manner specified for borrowing requests under the
Credit Agreement. Upon receipt of such notice, the Issuing Bank shall consult
the Administrative Agent by telephone in order to determine (i) whether the
conditions specified in the last sentence of Section 2.21(b) of the Credit
Agreement will be satisfied in connection with the issuance of such Letter of
Credit and (ii) whether the requested expiration date for such Letter of Credit
complies with Section 2.21(c) of the Credit Agreement.
SECTION 4. Issuing Bank Fees, Interest and Payments. The
Issuing Bank Fees payable to the Issuing Bank in respect of Letters of Credit
issued hereunder are specified on Schedule I hereto (and such fees shall be in
addition to the Issuing Bank's customary documentary and processing charges in
connection with the issuance, amendment or transfer of any Letter of Credit
issued hereunder). Each payment of Issuing Bank Fees payable hereunder shall be
made not later than 12:00 (noon), local time at the place of payment, on the
date when due, in immediately available funds, to the account of the Issuing
Bank specified on Schedule I hereto (or to such other account of the Issuing
Bank as it may specify by notice to CCSC).
SECTION 5. Credit Agreement Terms. Notwithstanding any
provision hereof which may be construed to the contrary, it is expressly
understood and agreed that (a) this Agreement is supplemental to the Credit
Agreement and is intended to constitute an Issuing Bank Agreement, as defined
therein (and, as such, constitutes an integral part of the Credit Agreement as
though the terms of this Agreement were set forth in the Credit Agreement), (b)
each Letter of Credit issued hereunder and each and every L/C Disbursement made
under any such Letter of Credit shall constitute a "Letter of Credit" and an
"L/C Disbursement", respectively, for all purposes of the Credit Agreement, (c)
the Issuing Bank's commitment to issue Letters of Credit hereunder, and each and
every Letter of Credit requested or issued hereunder, shall in each case be
subject to the terms and conditions and entitled to the benefits of the Credit
Agreement and (d) the terms and conditions of the Credit Agreement are hereby
incorporated herein as though set forth herein in full and shall supersede any
contrary provisions hereof.
<PAGE>
SECTION 6. Assignment. The Issuing Bank may not assign its
commitment to issue Letters of Credit hereunder without the consent of CCSC and
prior notice to the Administrative Agent. In the event of an assignment by the
Issuing Bank of all its other interests, rights and obligations under the Credit
Agreement, then the Issuing Bank's commitment to issue Letters of Credit
hereunder shall terminate unless the Issuing Bank, CCSC and the Administrative
Agent otherwise agree.
SECTION 7. Effectiveness. This Agreement shall not be
effective until counterparts hereof executed on behalf of each of CCSC and the
Issuing Bank have been delivered to and accepted by the Administrative Agent.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
CROWN CORK & SEAL COMPANY,
by
-------------------------
Name:
Title:
[ISSUING BANK],
by
-------------------------
Name:
Title:
Accepted:
CHEMICAL BANK, as Administrative Agent,
by
-----------------------
Name:
Title:
<PAGE>
Schedule 1 to the
Issuing Bank Agreement
Issuing Bank:
Letters of Credit:
Issuing Bank's Address
and Telecopy Number for
Notices:
Time of Day by which
Notices must be received: A notice requesting the issuance of a Letter of Credit
must be received by the Issuing Bank by 11:00 a.m. not less than three business
days prior to the proposed date of issuance.
Issuing Bank Fees: [ ]% per annum on the average daily undrawn amount of each
Letter of Credit issued hereunder, payable on the dates that L/C Participation
Fees are payable pursuant to Section 2.11 of the Credit Agreement.
Issuing Bank's Account
for Payment of Issuing
Bank Fees:
<PAGE>
EXHIBIT F
FORM OF LOCAL CURRENCY AGREEMENT
[SPECIFY COUNTRY] CREDIT AGREEMENT
dated as of [DATE] (this "Agreement"), among
[SPECIFY CCSC ENTITY], a corporation
organized under the laws of [SPECIFY COUNTRY
OF ORGANIZATION] (the "Borrower"), and the
financial institutions party hereto (the
"Lenders").
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"Aggregate Maximum Borrowing Amount" shall have the meaning
specified in Section 2.02(a).
"Base Rate" shall mean [identify LIBOR or another base rate
customarily used in connection with loans in the applicable currency].
"CCSC" shall mean Crown Cork & Seal Company, Inc., a
Pennsylvania corporation.
"CCSC Credit Agreement" shall mean the Revolving Credit and
Competitive Advance Facility Agreement dated as of February 10, 1995, among
CCSC, each Subsidiary Borrower (as defined therein), the several banks and other
financial institutions from time to time party thereto and Chemical Bank, a New
York banking corporation, as administrative agent, as the same may be amended,
waived or modified and in effect from time to time.
"Lender Maximum Borrowing Amount" shall have the meaning
specified in Section 2.02(b).
"Loan" shall mean any loan made pursuant to this Agreement.
<PAGE>
"Local Currency Equivalent" shall mean, on any date of
determination, with respect to any amount expressed in U.S. Dollars, the
equivalent in [SPECIFY CURRENCY] of such amount, determined pursuant to Section
2.05.
"Sub-Facility" shall mean each of the following credit
facilities provided pursuant to this Agreement: [SPECIFY CREDIT FACILITIES]. The
Sub-Facilities in which each Lender has agreed to participate are identified
opposite such Lender's name in Schedule I to this Agreement.
"U.S. Dollars" or "US$" shall mean dollars in lawful currency
of the United States of America.
"US$ Equivalent" shall mean, on any date of determination,
with respect to the amount of any Loan, the equivalent in U.S. Dollars of such
amount, determined pursuant to Section 2.05.
SECTION 1.02. Terms Generally. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms defined.
Wherever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections and Schedules shall be deemed
references to Articles and Sections of, and Schedules to, this Agreement unless
the context shall otherwise require.
ARTICLE II
THE CREDITS
SECTION 2.01. Local Currency Facility. This Agreement (as the
same may be amended, waived or modified and in effect from time to time) is a
"Local Currency Facility Agreement" as defined in, and under, the CCSC Credit
Agreement and is subject in all respects to the terms and provisions of the CCSC
Credit Agreement (including, without limitation, Section 2.17 thereof). In the
event of any inconsistency between the terms and provisions of this Agreement
(on the one hand) and those of the CCSC Credit Agreement (on the other hand),
the terms and provisions of the CCSC Credit Agreement shall prevail; without
limiting the foregoing, this Agreement and the borrowings made hereunder are
subject in all respects to the provisions of
<PAGE>
Article III of the CCSC Credit Agreement. Without limiting the foregoing, CCSC
by countersigning this Agreement hereby acknowledges that the provisions of
Article X of the CCSC Credit Agreement shall be applicable to this Agreement and
that all amounts outstanding hereunder shall be "Subsidiary Borrower
Obligations", as defined in the CCSC Credit Agreement, for all purposes under
such Article X.
SECTION 2.02. Maximum Borrowing Amounts. (a) Each Lender and
the Borrower hereby agree that the maximum aggregate principal amount available
to be borrowed at any time pursuant to all Sub-Facilities subject to this
Agreement (the "Aggregate Maximum Borrowing Amount") by the Borrower is the
Local Currency Equivalent at such time of US$ . The Aggregate Maximum Borrowing
Amount may be increased or decreased from time to time as a result of the
operation of Article III of the CCSC Credit Agreement. The Borrower shall give
prompt notice to each of the Lenders of any such increase or decrease of the
Aggregate Maximum Borrowing Amount.
(b) Each Lender and the Borrower hereby agree that the maximum
amount available to be borrowed at any time from each Lender party hereto (each
amount, a "Lender Maximum Borrowing Amount") pursuant to Sub-Facilities in which
such Lender participates is the Local Currency Equivalent of the amount set
forth in Dollars opposite such Lender's name in Schedule I to this Agreement.
Each Lender Maximum Borrowing Amount may be increased or decreased from time to
time as a result of the operation of Article III of the CCSC Credit Agreement.
The Borrower shall give prompt notice to each of the relevant Lenders of any
such increase or decrease.
SECTION 2.03. Loans. (a) Each Loan shall be made in [SPECIFY
CURRENCY] pursuant to the commitments, in accordance with the procedures and,
with respect to the payment, repayment and prepayment of principal, interest and
other amounts and certain other provisions, subject to the terms set forth on
Schedule II hereto. No Loans shall be made on any date on which an Exchange Rate
with respect to [SPECIFY CURRENCY] cannot be determined.
(b) The following committed pricing will apply to the Loans,
as determined based upon the ratings of CCSC's senior, unsecured, non-externally
credit-enhanced long-term indebtedness for borrowed money by Standard & Poor's
Ratings
<PAGE>
Group ("S&P") and Moody's Investors Service, Inc.
("Moody's"):
<TABLE>
<CAPTION>
Category 1 Category 2 Category 3
<S> <C> <C> <C>
S&P A or better A- to BBB BBB- or
below
Moody's A2 or better A3 to Baa2 Baa3 or
below
Base Rate 12.00 20.00 26.25
Plus (Basis
Points Per
Annum)
</TABLE>
The provisions set forth in the definition of the term "Applicable Percentage"
in the CCSC Credit Agreement for determining the Applicable Percentage at any
time based on the then effective ratings of S&P and Moody's shall apply to the
determination of the applicable Category hereunder.
SECTION 2.04. Prepayment. The Borrower shall prepay each Loan
outstanding on any date on which such payment is required pursuant to the
provisions of the CCSC Credit Agreement, including without limitation Article
III thereof, and shall have the right to prepay any Loan, in whole or in part,
at any time and from time to time, upon giving written or telecopy notice (or
telephone notice promptly confirmed by written or telecopy notice) to the
relevant Lender or Lenders before [SPECIFY TIME], local time at the applicable
Lender's office, on the date of such prepayment. Prepayments under this Section
2.04 shall be subject to Section 2.18 of the CCSC Credit Agreement as
incorporated by Section 5.06 hereof but otherwise without premium or penalty.
Nothing in this Section 2.04 shall be interpreted as impairing any Borrower's
right to prepay any Loans pursuant to Section 2.05 of the CCSC Credit Agreement.
SECTION 2.05. Exchange Rate. For purposes of determining the
Local Currency Equivalent of the Aggregate Maximum Borrowing Amount or any
Lender Maximum Borrowing Amount or the US$ Equivalent of any borrowing under
this Agreement, the "Exchange Rate", as such term is defined in the CCSC Credit
Agreement, will be used to convert amounts
<PAGE>
between [SPECIFY CURRENCY] and U.S. Dollars, in the manner contemplated by the
CCSC Credit Agreement.
SECTION 2.06. Pro Rata Treatment. Each Loan hereunder shall be
made by the Lenders pro rata according to the amounts of the Lender's
Commitments under this Agreement. Each reduction of the Commitments of the
Lenders under this Agreement shall be made pro rata according to the amounts of
such Commitments. Each payment (including each prepayment other than any
prepayment made pursuant to Section 3.02(f) of the CCSC Credit Agreement) by
the Borrower on account of principal of and interest on Loans shall be made pro
rata according to the respective outstanding principal amounts of such Loans
then held by the Lenders.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties. The Borrower
hereby makes and confirms each representation and warranty applicable to it or
any of its subsidiaries contained in Article IV of the CCSC Credit Agreement and
in addition represents and warrants to each of the Lenders that:
(a) No Default or Event of Default has occurred and is
continuing under the CCSC Credit Agreement (as such terms are defined
therein), and no such Default or Event of Default shall arise as a
result of the entry by the Borrower into this Agreement, the making of
the Loans hereunder or any other transaction contemplated hereby.
(b) CCSC has delivered a copy of this Agreement to the
Administrative Agent under the CCSC Credit Agreement and has designated
the credit facility provided hereunder as a "Local Currency Facility"
under and in accordance with Section 3.01 of the CCSC Credit Agreement.
(c) At the time of each borrowing hereunder, the Exchange Rate
referred to in Section 2.05 will be determinable by reference to the
Reuters currency pages (or another publicly available service, as
provided in the CCSC Credit Agreement).
<PAGE>
ARTICLE IV
COVENANTS
SECTION 4.01. Covenants. The Borrower hereby covenants and
agrees that so long as this Agreement shall remain in effect and until all
obligations of the Lenders hereunder shall have been terminated and the
principal of and interest on each Loan and all other expenses or amounts payable
hereunder shall have been paid in full, it will, and will cause each of its
subsidiaries to, comply with each covenant contained in Article VI and Article
VII of the CCSC Credit Agreement, to the extent each such covenant is applicable
to it.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.01. Effectiveness. This Agreement shall become
effective as of the date hereof when the Borrower shall have received copies
hereof that, when taken together, bear the signatures of each of the Borrower
and the Lenders.
SECTION 5.02. Notices. Notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:
(a) if to the Borrower, to it at [ ],
Attention of [ ] (Telecopy No. [ ])
with a copy to Crown Cork & Seal Company, 9300 Ashton
Road, Philadelphia, Pennsylvania, U.S.A., 19136,
Attention of Mr. Craig R.L. Calle (Telecopy No. 215-
676-6011); and
(b) if to a Lender, to it at its address (or
telecopy number) set forth in Schedule I.
SECTION 5.03. Applicable Law. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF [SPECIFY JURISDICTION].
<PAGE>
SECTION 5.04. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract. Delivery of an
executed counterpart of a signature page of this Agreement by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart of this Agreement. If one or more of such counterparts has been
translated into a language other than English, then in the event of any
inconsistency, the English language counterpart shall prevail.
SECTION 5.05. Headings. Section headings used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 5.06. CCSC Credit Agreement Provisions. The provisions
of Sections 2.05, 2.13, 2.15 through 2.18 and Sections 11.02, 11.03, 11.04 and
11.05, 11.06 and 11.08 of the CCSC Credit Agreement are hereby incorporated in
their
<PAGE>
entirety and shall apply as among the Borrower and the Lenders mutatis mutandis.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers, all as of the
date and year first above written.
[SPECIFY CCSC ENTITY],
by
________________________________
Name:
Title:
[SPECIFY LENDERS],
by
_______________________________
Name:
Title:
Acknowledged and Agreed:
CROWN CORK & SEAL COMPANY, INC.,
by
______________________________
Name:
Title:
<PAGE>
SCHEDULE I
Lender
Maximum
Address Borrowing
(Including Sub- Amount
Lender Telecopy Number) Facilities US$
<PAGE>
SCHEDULE II
LOANS AND COMMITMENTS
1. Commitments to Lend/Reduction and Expiration:
2. Notice Requirements and Borrowing Procedures:
3. Maturity:
4. Repayment:
5. Prepayment:
6. Payment of Interest/Interest Periods:
7. Fees:
8. Other Provisions:
<PAGE>
Exhibit G
[Form of]
Significant Subsidiary Election Notice
Chemical Bank, as Administrative
Agent for the Lenders referred
to below
270 Park Avenue
New York, NY 10017
Dear Sirs:
Reference is made to the Revolving Credit and Competitive
Advance Facility Agreement dated as of February 10, 1995 (as amended, modified,
extended or restated from time to time, the "Credit Agreement"), among Crown
Cork & Seal Company ("CCSC"), certain subsidiaries of CCSC, the Lenders named
therein and Chemical Bank, as Administrative Agent. Capitalized terms used but
not defined herein shall have the meanings assigned to such terms in the Credit
Agreement.
CCSC hereby gives notice of its decision to undertake the
obligations set forth in Section 6.07 of the Credit Agreement. CCSC acknowledges
that in the event it rescinds this notice pursuant to such Section 6.07, it may
not deliver another such notice at any time.
Very truly yours,
CROWN CORK & SEAL COMPANY,
by
___________________________
Name:
Title:
<PAGE>
EXHIBIT H
FORM OF
SUBSIDIARY BORROWER NOTICE AND DESIGNATION
To: Chemical Bank, as Administrative Agent
From: Crown Cork & Seal Company, Inc.
1. This Subsidiary Borrower Notice and Designation is being
delivered to you pursuant to Section 5.01(d) of the Revolving Credit and
Competitive Advance Facility Agreement, dated as of February 10, 1995, among
Crown Cork & Seal Company, Inc. each Subsidiary Borrower party thereto, the
Lenders named therein and Chemical Bank, as Administrative Agent (as the same
may be amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement and used herein shall
have the meanings given to them in the Credit Agreement.
2. The effective date of this Subsidiary Borrower Notice and
Designation will be [ ].
3. Please be advised that the following Subsidiary is hereby
designated as a Subsidiary Borrower and is authorized to use the credit
facilities provided for under Section 2.01, 2.04 and 2.06 of the Credit
Agreement.
[3. Please be advised that the designation of the following
Subsidiary as a Subsidiary Borrower is terminated effective on the date referred
to in paragraph 2 above.]
Name and Address
of Subsidiary
Borrower
CROWN CORK & SEAL COMPANY,INC.
by
___________________________
Name:
Title:
<PAGE>
[SUBSIDIARY BORROWER],
by
___________________________
Name:
Title:
Accepted and Acknowledged:
CHEMICAL BANK, as Administrative
Agent
by
___________________________
Name:
Title:
<PAGE>
EXHIBIT I
FORM OF SUBSIDIARY BORROWER CLOSING CERTIFICATE 1/
Pursuant to Section 5.01(e) of the Revolving Credit and
Competitive Advance Facility Agreement dated as of February 10, 1995 (the
"Credit Agreement"; unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement) among Crown Cork & Seal Company, Inc., a Pennsylvania corporation
("CCSC"), certain subsidiaries of CCSC, the Lenders named therein, and Chemical
Bank, as Administrative Agent, the undersigned [ ] of [ ] (the
"Borrower") hereby certifies on behalf of the Borrower as follows:
1. The representations and warranties contained in Article IV
of the Credit Agreement, to the extent applicable to the Borrower, are true and
correct in all material respects on and as of the date hereof with the same
effect as if made on the date hereof except for (a) representations and
warranties stated to relate to a specific earlier date, in which case such
representations and warranties were true and correct in all material respects as
of such earlier date and (b) representations and warranties contained in Section
4.6 of the Credit Agreement;
2. No Default or Event of Default will result from the making
of any loans to be made to the Borrower on the date hereof;
3. is and at all times since 19 ,
has been the duly elected and qualified [Assistant] Secretary of the Borrower
and the signature set forth on the signature line for such officer below is such
officer's true genuine signature;
and the undersigned [Assistant] Secretary of the Borrower
hereby certifies as follows:
4. There are no liquidation or dissolution proceedings pending
or to my knowledge threatened against the Borrower, nor to my knowledge has any
other event
_____________________
1/ If necessary, appropriate modifications should be made to references to
officer titles and to paragraphs 4-7 below with respect to Subsidiary Borrowers.
<PAGE>
occurred threatening the corporate existence of the Borrower;
5. Attached hereto as Exhibit A is a complete and correct copy
of resolutions duly adopted by the Board of Directors (or a duly authorized
committee thereof) of the Borrower on , 19 ; such
resolutions have not in any way been amended, modified, revoked or rescinded
and have been in full force and effect since their adoption to and including the
date hereof; such resolutions are the only corporate proceedings of the
Borrower now in force relating to or affecting the matters referred to therein;
6. Attached hereto as Exhibit B is a complete and correct copy
of the by-laws of the Borrower as in effect at all times since ,
19 to and including the date hereof; and attached hereto as Exhibit C is a
true and complete copy of the articles of association or other organizational
documents of the Borrower as in effect at all times since , 19
to and including the date hereof; and
7. The following persons are now duly elected and qualified
officers of the Borrower holding the offices indicated next to their respective
names below, and such officers have held such offices with the Borrower at all
times since , 19 to and including the date hereof, and
the signatures appearing opposite their respective names below are the true and
genuine signatures of such officers, and each of such officers is duly
authorized to executive and deliver on behalf of the Borrower the Credit
Agreement and any certificate or other document to be delivered by the Borrower
pursuant to the Credit Agreement:
Name Office Signature
________________ [ ] __________________
_
________________ [Assistant] Secretary __________________
IN WITNESS WHEREOF, the undersigned have hereto set our names.
<PAGE>
_____________________________ _________________________________
Title: [ ] Title: [Assistant] Secretary
Date: , 19
<PAGE>
EXHIBIT J-1
[FORM OF OPINION OF DECHERT PRICE & RHOADS]
To each of the Lenders party
to the Revolving Credit and
Competitive Advance Facility
Agreement referred to below and
Chemical Bank, as Administrative Agent
February ___, 1995
Ladies and Gentlemen:
We have acted as counsel to Crown Cork & Seal Company, Inc., a
Pennsylvania corporation ("CCSC"), in connection with the execution and delivery
of the Revolving Credit and Competitive Advance Facility Agreement, dated as of
February ___, 1995 (the "Credit Agreement"), among CCSC, each Subsidiary
Borrower (as defined therein) and you. This opinion letter is delivered to you
pursuant to Section 5.02(a) of the Credit Agreement. Capitalized terms used
herein that are not defined herein have the respective specified meanings in the
Credit Agreement.
In rendering the opinions set forth below, we have examined
executed originals of the Credit Agreement and the other Loan Documents; the
Articles of Incorporation of CCSC and all amendments thereto (the "Charter");
the Bylaws of CCSC and all amendments thereto (the "Bylaws"); and a certificate
of the Secretary of the Commonwealth of Pennsylvania, dated February 9, 1995,
attesting to the continued corporate existence and good standing of CCSC in the
Commonwealth. In addition, we have examined originals or photostatic or
certified copies of certain of the corporate records and documents of CCSC and
its Subsidiaries, copies of public documents, certificates of officers of CCSC
and public officials, and such other documents as we have deemed necessary and
appropriate as a basis for the opinions hereinafter set forth.
- 1 -
<PAGE>
February , 1995
Page 2
In our examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
corporate records, documents, instruments and certificates submitted to us as
originals and the conformity to authentic original corporate records, documents,
instruments and
- 2 -
<PAGE>
February , 1995
Page 3
certificates of all corporate records, documents, instruments and certificates
submitted to us as certified, conformed or photostatic copies. As to questions
of fact material to our opinions, we have relied upon representations and
warranties of the parties in the Loan Documents and the other agreements and
documents contemplated therein, and on certificates of officers of CCSC and
certain other entities (including, without limitation, those given pursuant to
the Credit Agreement) and of public officials.
We have further assumed that you have the power and authority
and have taken the corporate action necessary to execute and deliver the Credit
Agreement and that no approvals, waivers, filings, notices or consents,
governmental or non-governmental, are required for the valid execution, delivery
and performance by you of the Credit Agreement, and that the Credit Agreement
executed by you constitutes the legal, valid and binding obligation of you.
Based upon the foregoing and subject to the qualifications set
forth above and hereinafter, we are of the opinion that:
1. CCSC is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Pennsylvania.
2. The execution, delivery and performance by CCSC of the
Credit Agreement are within CCSC's corporate powers, have been duly authorized
by all necessary corporate action, and do not (i) contravene the Charter or the
By-laws, (ii) to the best of our knowledge, violate any Federal, New York or
Pennsylvania law, rule or regulation applicable to CCSC (including, without
limitation, Regulations G, T, U and X of the Board of Governors of the Federal
Reserve System, insofar as the proceeds of the Loans are used solely for the
purposes set forth in, and in accordance with the provisions of, the Credit
Agreement) or (iii) to the best of our knowledge, result in any breach or
violation of, or constitute a default under, any material agreement or
instrument known to us.
3. The Credit Agreement has been duly executed and delivered
by or on behalf of CCSC and constitutes the legal, valid and binding obligation
of CCSC, enforceable against CCSC in accordance with its terms.
4. No authorization or approval or other action by, and no
notice to or filing with, any Federal, New York or
- 3 -
<PAGE>
February , 1995
Page 4
Pennsylvania governmental authority or regulatory body (other than any
applicable securities law filings) is required in respect of CCSC for the due
execution, delivery or performance by CCSC of the Credit Agreement.
5. CCSC is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
6. We are not aware (based upon our inquiry of officers of
CCSC) of any pending or threatened litigation, proceeding or labor controversy
affecting CCSC or any of its properties, business, assets or revenues which will
have a Material Adverse Effect, or which purports to affect the legality,
validity or enforceability of the Credit Agreement.
The foregoing opinions are subject to the following additional
qualifications:
(a) The opinions expressed herein are limited to the laws and
regulations of the United States of America, the State of New York and the
Commonwealth of Pennsylvania.
(b) Our opinions regarding the enforceability of the Credit
Agreement are limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws or decisions affecting the enforcement of
debtors' obligations and creditors' rights generally, and by general principles
of equity and public policy. Our opinions are also subject to the effect of
certain laws and judicial decisions which may limit the enforceability of
certain provisions of the Credit Agreement, although such limitations do not, in
our judgment, make the remedies provided for therein (taken as a whole)
inadequate for the practical realization of the benefits afforded thereby.
(c) Whenever our opinion with respect to the existence or
absence of facts is indicated based on our knowledge or awareness we are
referring to the actual knowledge of the Dechert Price & Rhoads attorneys who
have given substantive attention to the matters concerning CCSC in connection
with the transactions contemplated by the Credit Agreement.
The opinions expressed herein are solely for your benefit in
connection with the performance of the Credit Agreement, and without our express
prior written consent, neither
- 4 -
<PAGE>
February , 1995
Page 5
our opinions nor this opinion letter may be circulated or furnished to or relied
upon by any other person.
Very truly yours,
- 5 -
<PAGE>
EXHIBIT J-2
[FORM OF OPINION OF RICHARD L. KRZYZANOWSKI]
To each of the Lenders party
to the Revolving Credit and
Competitive Advance Facility
Agreement referred to below and
Chemical Bank, as Administrative Agent
February , 1995
Dear Ladies and Gentlemen:
I am Executive Vice President, Secretary and General Counsel
of Crown Cork & Seal Company, Inc., a Pennsylvania corporation ("CCSC"). This
opinion is being rendered to you pursuant to Section 5.02(a) of the Revolving
Credit and Competitive Advance Facility Agreement, dated as of February ___,
1995 (the "Credit Agreement"), among CCSC, each Subsidiary Borrower (as defined
therein) and you. Capitalized terms used herein that are not defined herein have
the respective specified meanings in the Credit Agreement.
I have examined such corporate records of CCSC and other
certificates and documents as I have deemed necessary for the opinion
hereinafter set forth.
Based on the foregoing, I am of the opinion that each
Significant Subsidiary of CCSC listed on Schedule A attached hereto has been
duly incorporated and is validly existing and in good standing under the laws of
its respective jurisdiction of incorporation, with corporate power and authority
to own its respective properties and conduct its respective business as now
being conducted; and CCSC and each of its Significant Subsidiaries are duly
qualified to do business as foreign corporations in good standing in all other
jurisdictions in which any such corporation owns or leases substantial
properties or in which the conduct of any such corporation's business requires
such qualification (except where the failure so to qualify would not have a
Material Adverse Effect).
This opinion is limited to the laws of the United States of
America and the Commonwealth of Pennsylvania.
- 1 -
<PAGE>
The opinions expressed herein are solely for your benefit in
connection with the performance of the Credit Agreement, and without our express
prior written consent, neither our opinions nor this opinion letter may be
circulated or furnished to or relied upon by any other person.
Very truly yours,
Richard L. Krzyzanowski
Executive Vice President,
Secretary and General Counsel
- 2 -
<PAGE>
SCHEDULE A
Significant Subsidiaries
Crown Beverage Packaging, Inc.
Crown Cork & Seal (Delaware) Corporation
CONSTAR International Inc.
CONSTAR Plastics Inc.
Van Dorn Company
<PAGE>
EXHIBIT K
COMPLIANCE CERTIFICATE
To: Each of the Lenders (as defined
below) and Chemical
Bank, as Agent for such Lenders
270 Park Avenue
New York, New York 10017
Attention: Mr. Theodore C. Swimmer
Crown Cork & Seal Company, Inc.
Gentlemen:
This Compliance Certificate is being delivered pursuant to Section
6.01(c) of the Revolving Credit and Competitive Advance Facility Agreement,
dated as of February 10, 1995 (as amended, supplemented, amended and restated or
otherwise modified, the "Credit Agreement"), among Crown Cork & Seal Company,
Inc., a Pennsylvania corporation ("CCSC"), the Subsidiary Borrowers referred to
therein, various financial institutions now or hereafter parties thereto (the
"Lenders") and Chemical Bank, as Administrative Agent for the Lenders (the
"Agent"). Terms used herein without definition shall have the meanings assigned
to such terms in the Credit Agreement.
CCSC hereby certifies, represents and warrants that as of____________,
19___ (the "Computation Date"):
(a) The Leverage Ratio was ___ : ___ , as computed on Attachment 1
hereto and such ratio [complies] [does not comply] with the provisions of
Section 7.04(a) of the Credit Agreement;
(b) The Interest Coverage Ratio was ___ : ___ , as computed on
Attachment 2 hereto and such amount [complies] [does not comply] with the
provisions of Section 7.04(b) of the Credit Agreement; and
<PAGE>
(c) No Default or Event of Default has occurred and is continuing
[other than as follows:].
IN WITNESS WHEREOF, CCSC has caused this Compliance Certificate to be
executed and delivered by its duly Authorized Officer on this ____ day of
___________ , 19___ .
CROWN CORK & SEAL COMPANY, INC.
By:________________________
Title:
<PAGE>
ATTACHMENT 1
1. Leverage Ratio:
A. Funded Debt: All (i) Loans and
(ii) all other Indebtedness of CCSC
and its Subsidiaries (including,
without duplication, Contingent
Liabilities relating to such
Indebtedness), on a consolidated
basis, which by its terms
(i) matures or is payable
more than one year from the date on
which it was created, or
(ii) matures within one year
from the date on which it was created but
is renewable or extendible under terms
such that under GAAP such Indebtedness
would be treated as long-term indebtedness
(other than Funded Debt which is nonrecourse
to CCSC and its Subsidiaries and giving
effect only to CCSC's or its Subsidiaries'
pro-rata share of consolidated Indebtedness
of joint ventures)....................... $____________
B. Long-Term Capitalization: The sum
of (i) Funded Debt of CCSC and its
Subsidiaries on a consolidated
basis and (ii) the amount,
determined on a consolidated basis,
in the capital stock account plus
(or minus in the case of a deficit)
the additional paid-in capital and
retained earnings of CCSC and its
Subsidiaries, and in any event, net
of the value of treasury stock in
such capital stock account, plus
accounting liabilities for post-
retirement benefits (FAS 106) and
<PAGE>
post-employment benefits (FAS 112),
net of charges for income tax
(FAS 109).............................. $_____________
C. LEVERAGE RATIO: The ratio of
Item 1.A to Item l.B................... _____ : _____
<PAGE>
ATTACHMENT 2
2. *Interest Coverage Ratio:
A.
The sum of all amounts which, in
accordance with GAAP, would be
included on the consolidated
financial statements of CCSC and
its Subsidiaries as
(i) Net Income (excluding any
extraordinary gains and losses,
and any net income (or net loss)
attributable to the write-up (or
write-down, as the case may be)
in value of any assets) .............
(ii) Net Interest Expense...........
(iii) to the extent deducted in
determining Net Income, provisions
for income taxes.....................
B.
EBIT: The sum of Items 2.A.(i)
through 2.A.(iii).................... $________
C.
Net Interest Expense: The aggregate
amount of interest expense of CCSC
and its Subsidiaries for the relevant
period which, in accordance with GAAP,
would be included on the consolidated
financial statements of CCSC and its
Subsidiaries, including without
limitation the portion of any rent paid
on Capitalized Lease Liabilities which
is allocable to interest expense in
accordance with GAAP, minus the amount
of interest income received by CCSC and
its Subsidiaries for such period........ $________
__________________________
* Calculated as of each Fiscal Quarter end following the
Closing Date on the basis of the Fiscal Quarter then ended and the three
immediately preceding Fiscal Quarters.
<PAGE>
D.
INTEREST COVERAGE RATIO: The ratio
of Item 2.B. to Item 2.C................ $________
<PAGE>
EXHIBIT 10.g
CROWN CORK & SEAL COMPANY, INC.
1994 STOCK-BASED INCENTIVE COMPENSATION PLAN
Date Adopted: October 27, 1994
<PAGE>
CROWN CORK & SEAL COMPANY, INC.
1994 STOCK-BASED INCENTIVE COMPENSATION PLAN
1. Purpose of the Plan
The purpose of the Plan is to assist the Company, its Subsidiaries and
Affiliates in attracting and retaining valued employees by offering them a
greater stake in the Company's success and a closer identity with it, and to
encourage ownership of the Company's stock by such employees.
2. Definitions
2.1 "Affiliate" means any entity other than the Subsidiaries
in which the Company has a substantial direct or indirect equity interest, as
determined by the Board.
2.2 "Award" means an award of Deferred Stock, Restricted
Stock, Options or SARs under the Plan.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Code" means the Internal Revenue Code of 1986, as
amended.
2.5 "Common Stock" means the common stock of the Company, par
value $5.00 per share, or such other class or kind of shares or other securities
resulting from the application of Section 10.
2.6 "Company" means Crown Cork & Seal Company, Inc., a
Pennsylvania corporation, or any successor corporation.
<PAGE>
2
2.7 "Committee" means the committee designated by the Board to
administer the Plan under Section 4. The Committee shall have at least three
members, each of whom shall be a member of the Board, a Disinterested Person and
an Outside Director.
2.8 "Deferred Stock" means an Award made under Section 6 of
the Plan to receive Common Stock at the end of a specified Deferral Period.
2.9 "Deferral Period" means the period during which the
receipt of a Deferred Stock Award under Section 6 of the Plan will be deferred.
2.10 "Disinterested Person" means a person defined in Rule
16b- 3(d)(3) promulgated by the Securities and Exchange Commission under the
1934 Act, or any successor definition adopted by the Securities and Exchange
Commission.
2.11 "Employee" means an officer or other key employee of the
Company, a Subsidiary or an Affiliate including a director who is such an
employee.
2.12 "Fair Market Value" means, on any given date, the mean
between the highest and lowest prices of actual sales of shares of Common Stock
on the principal national securities exchange on which the Common Stock is
listed on such date or, if Common Stock was not traded on such date, on the last
preceding day on which the Common Stock was traded.
2.13 "Holder" means an Employee to whom an Award is made.
<PAGE>
3
2.14 "Incentive Stock Option" means an Option intended to meet
the requirements of an incentive stock option as defined in section 422A of the
Code and designated as an Incentive Stock Option.
2.15 "1934 Act" means the Securities Exchange Act of 1934, as
amended.
2.16 "Non-Qualified Option" means an Option not intended to be
an Incentive Stock Option, and designated as a Non-Qualified Option.
2.17 "Option" means any stock option granted from time to time
under Section 8 of the Plan.
2.18 "Outside Director" means a member of the Board who: (i)
is not a current employee of the Company, its Subsidiaries or Affiliates; (ii)
is not a former employee of the Company, its Subsidiaries or Affiliates who
receives during the year compensation for prior services with the Company, its
Subsidiaries or Affiliates (other than benefits under a tax-qualified retirement
plan); (iii) has not been an officer of the Company, its Subsidiaries or
Affiliates; and (iv) does not receive any remuneration from the Company, its
Subsidiaries or Affiliates (either directly or indirectly) in any capacity other
than as director. The requirements of this Section shall be interpreted and
applied in a manner consistent with the requirements of Treasury Regulation
Section 1.162-27(e)(3).
<PAGE>
4
2.19 "Plan" means the Crown Cork & Seal Company, Inc. 1994
Stock-Based Incentive Compensation Plan herein set forth, as amended from time
to time.
2.20 "Restricted Stock" means Common Stock awarded by the
Committee under Section 7 of the Plan.
2.21 "Restriction Period" means the period during which
Restricted Stock awarded under Section 7 of the Plan is subject to forfeiture.
2.22 "SAR" means a stock appreciation right awarded by the
Committee under Section 9 of the Plan.
2.23 "Retirement" means retirement from the active employment
of the Company, a Subsidiary or an Affiliate pursuant to the relevant provisions
of the applicable pension plan of such entity or as otherwise determined by the
Board.
2.24 "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company (or any
subsequent parent of the Company) if each of the corporations other than the
last corporation in the unbroken chain owns stock possession 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
2.25 "Ten Percent Shareholder" means a person who on any given
date owns, either directly or indirectly (taking into account the attribution
rules contained in section
<PAGE>
5
425(d) of the Code), stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or a Subsidiary.
3. Eligibility
Any Employee is eligible to receive an Award.
4. Administration and Implementation of Plan
4.1 The Plan shall be administered by the Committee, which
shall have full power to interpret and administer the Plan and full authority to
act in selecting the Employees to whom Awards will be granted, in determining
the type and amount of Awards to be granted to each such Employee, the terms and
conditions of Awards granted under the Plan and the terms of agreements which
will be entered into with Holders.
4.2 The Committee's powers shall include, but not be limited
to, the power to determine whether, to what extent and under what circumstances
an Option may be exchanged for cash, Restricted Stock, Deferred Stock or some
combination thereof; to determine whether, to what extent and under what
circumstances an Award is made and operates on a tandem basis with other Awards
made hereunder; to determine whether, to what extent and under what
circumstances Common Stock or cash payable with respect to an Award shall be
deferred, either automatically or at the election of the Holder (including the
power to add deemed earnings to any such deferral); and to determine the effect,
if any, of a change in control of the Company
<PAGE>
6
upon outstanding Awards; and to grant Awards (other than Incentive Stock
Options) that are transferable by the Holder.
4.3 The Committee shall have the power to adopt regulations
for carrying out the Plan and to make changes in such regulations as it shall,
from time to time, deem advisable. The Committee shall have the power
unilaterally and without approval of a Holder to amend an existing Award in
order to carry out the purposes of the Plan so long as such an amendment does
not take away any benefit granted to a Holder by the Award and as long as the
amended Award comports with the terms of the Plan. Any interpretation by the
Committee of the terms and provisions of the Plan and the administration
thereof, and all action taken by the Committee, shall be final and binding on
Holders.
4.4 The Committee may condition the grant of any award or the
lapse of any Deferral or Restriction Period (or any combination thereof) upon
the Holder's achievement of a Performance Goal that is established by the
Committee before the grant of the Award. For this purpose, a "Performance Goal"
shall mean a goal that must be met by the end of a period specified by the
Committee (but that is substantially uncertain to be met before the grant of the
Award) based upon: (i) the price of Common Stock, (ii) the market share of the
Company, its Subsidiaries or Affiliates (or any business unit thereof), (iii)
sales by the Company, its Subsidiaries or Affiliates (or any business unit
thereof), (iv) earnings per share of Common Stock, (v) return on shareholder
equity of the Company, or (vi) costs of the Company, its
<PAGE>
7
Subsidiaries or Affiliates (or any business unit thereof). The Committee shall
have discretion to determine the specific targets with respect to each of these
categories of Performance Goals. Before granting an Award or permitting the
lapse of any Deferral or Restriction Period subject to this Section, the
Committee shall certify that an individual has satisfied the applicable
Performance Goal.
5. Shares of Stock Subject to the Plan
5.1 Subject to adjustment as provided in Section 10, the total
number of shares of Common Stock available for Awards under the Plan shall be
4,000,000 shares.
5.2 The maximum number of Awards that may be awarded to any
Employee shall not exceed 250,000 during any calendar year (the "Individual
Limit"). Subject to Section 5.3 and Section 10, any Award that is cancelled or
repriced by the Committee shall count against the Individual Limit.
Notwithstanding the foregoing, the Individual Limit may be adjusted to reflect
the effect on Awards of any transaction or event described in Section 10.
5.3 Any shares issued by the Company through the assumption or
substitution of outstanding grants from an acquired company shall not (i) reduce
the shares available for Awards under the Plan, or (ii) be counted against the
Individual Limit. Any shares issued hereunder may consist, in whole or in part,
of authorized and unissued shares or treasury shares. If any shares subject to
any Award granted hereunder are forfeited or such Award otherwise terminates
without the issuance of such shares or the payment of other consideration in
<PAGE>
lieu of such shares, the shares subject to such Award, to the extent of any such
forfeiture or termination, shall again be available for Awards under the Plan.
6. Deferred Stock
An Award of Deferred Stock is an agreement by the Company to deliver to
the recipient a specified number of shares of Common Stock at the end of a
specified deferral period or periods. Such an Award shall be subject to the
following terms and conditions.
6.1 Deferred Stock Awards shall be evidenced by Deferred Stock
agreements. Such agreements shall conform to the requirements of the Plan and
may contain such other provisions as the Committee shall deem advisable.
6.2 Upon determination of the number of shares of Deferred
Stock to be awarded to a Holder, the Committee shall direct that the same be
credited to the Holder's account on the books of the Company but that issuance
and delivery of the same shall be deferred until the date or dates provided in
Section 6.5 hereof. Prior to issuance and delivery hereunder the Holder shall
have no rights as a stockholder with respect to any shares of Deferred Stock
credited to the Holder's account.
6.3 Amounts equal to any dividends declared during the
Deferral Period with respect to the number of shares covered by a Deferred Stock
Award will be paid to the Holder currently, or deferred and deemed to be
reinvested in additional Deferred Stock, or
<PAGE>
9
otherwise reinvested on such terms as are determined at the time of the Award by
the Committee, in its sole discretion, and specified in the Deferred Stock
agreement.
6.4 The Committee may condition the grant of an Award of
Deferred Stock or the expiration of the Deferral Period upon the Employee's
achievement of one or more Performance Goal(s) specified in the Deferred Stock
agreement. If the Employee fails to achieve the specified Performance Goal(s),
the Committee shall not grant the Deferred Stock Award to the Employee, or the
Holder shall forfeit the Award and no Common Stock shall be transferred to him
pursuant to the Deferred Stock Award. Dividends paid during the Deferral Period
on Deferred Stock subject to a Performance Goal shall be reinvested in
additional Deferred Stock and the lapse of the Deferral Period for such Deferred
Stock shall be subject to the Performance Goal(s) previously established by the
Committee.
6.5 The Deferred Stock agreement shall specify the duration of
the Deferral Period taking into account termination of employment on account of
death, disability, Retirement or other cause. The Deferral Period may consist of
one or more installments. At the end of the Deferral Period or any installment
thereof the shares of Deferred Stock applicable to such installment credited to
the account of a Holder shall be issued and delivered to the Holder (or, where
appropriate, the Holder's legal representative) in accordance with the terms of
the Deferred Stock agreement. The Committee may, in its sole discretion,
accelerate the delivery of
<PAGE>
10
all or any part of a Deferred Stock Award or waive the deferral limitations for
all or any part of a Deferred Stock Award.
7. Restricted Stock
An Award of Restricted Stock is a grant by the Company of a specified
number of shares of Common Stock to the Employee, which shares are subject to
forfeiture upon the happening of specified events. Such an Award shall be
subject to the following terms and conditions:
7.1 Restricted Stock shall be evidenced by Restricted Stock
agreements. Such agreements shall conform to the requirements of the Plan and
may contain such other provisions as the Committee shall deem advisable.
7.2 Upon determination of the number of shares of Restricted
Stock to be granted to the Holder, the Committee shall direct that a certificate
or certificates representing the number of shares of Common Stock be issued to
the Holder with the Holder designated as the registered owner. The
certificate(s) representing such shares shall be legended as to sale, transfer,
assignment, pledge or other encumbrances during the Restriction Period and
deposited by the Holder, together with a stock power endorsed in blank, with the
Company, to be held in escrow during the Restriction Period.
7.3 During the Restriction Period the Holder shall have the
right to receive dividends from and to vote the shares of Restricted Stock.
<PAGE>
11
7.4 The Committee may condition the grant of an Award of
Restricted Stock or the expiration of the Restriction Period upon the Employee's
achievement of one or more Performance Goal(s) specified in the Restricted Stock
Agreement. If the Employee fails to achieve the specified Performance Goal(s),
the Committee shall not grant the Restricted Stock to the Employee, or the
Holder shall forfeit the Award of Restricted Stock and the Common Stock shall be
forfeited to the Company.
7.5 The Restricted Stock agreement shall specify the duration
of the Restriction Period and the performance, employment or other conditions
(including termination of employment on account of death, disability, Retirement
or other cause) under which the Restricted Stock may be forfeited to the
Company. At the end of the Restriction Period the restrictions imposed hereunder
shall lapse with respect to the number of shares of Restricted Stock as
determined by the Committee, and the legend shall be removed and such number of
shares delivered to the Holder (or, where appropriate, the Holder's legal
representative). The Committee may, in its sole discretion, modify or accelerate
the vesting and delivery of shares of Restricted stock.
8. Options
Options give an Employee the right to purchase a specified number of
shares of Common Stock from the Company for a specified time period at a fixed
price. Options may be
<PAGE>
12
either Incentive Stock Options or Non-Qualified Stock Options. The grant of
Options shall be subject to the following terms and conditions:
8.1 Option Grants: Options shall be evidenced by Option
agreements. Such agreements shall conform to the requirements of the plan, and
may contain such other provisions as the Committee shall deem advisable.
8.2 Option Price: The price per share at which Common Stock
may be purchased upon exercise of an Option shall be determined by the
Committee, but, in the case of grants of Incentive Stock Options, shall be not
less than the Fair Market Value of a share of Common Stock on the date of grant.
In the case of any Incentive Stock Option granted to a Ten Percent Shareholder,
the option price per share shall not be less than 110% of the Fair Market Value
of a share of Common Stock on the date of grant. The option price per share for
Non-Qualified Options may be less than the Fair Market Value of a share of
Common Stock on the date of grant.
8.3 Term of Options: The Option agreements shall specify when
an Option may be exercisable and the terms and conditions applicable thereto.
The term of an Option shall in no event be greater than fifteen years (five
years in the case of an Incentive Stock Option granted to a Ten Percent
shareholder) and no Option may be exercisable sooner than six months from date
of grant.
<PAGE>
8.4 Incentive Stock Options: Each provision of the Plan and
each Option agreement relating to an Incentive Stock Option shall be construed
so that each Incentive Stock Option shall be an incentive stock option as
defined in section 422A of the Code, and any provisions of the Option agreement
thereof that cannot be so construed shall be disregarded. In no event may a
Holder be granted an Incentive Stock Option which does not comply with such
grant and vesting limitations as may be prescribed by section 422A(b) (7) of the
Code. Incentive Stock Options may not be granted to employees of Affiliates.
8.5 Restrictions on Transferability: No Incentive Stock Option
shall be transferable otherwise than by will or the laws of descent and
distribution and, during the lifetime of the Holder, shall be exercisable only
by the Holder. Upon the death of a Holder, the person to whom the rights have
passed by will or by the laws of descent and distribution may exercise an
Incentive Stock Option only in accordance with this Section 8.
8.6 Payment of Option Price: The option price of the shares of
Common Stock upon the exercise of an Option shall be paid in full in cash at the
time of the exercise or, with the consent of the Committee, in whole or in part
in Common Stock valued at Fair Market Value on the date of exercise. With the
consent of the Committee, payment upon the exercise of a Non-Qualified Option
may be made in whole or in part by Restricted Stock (based on the fair market
value of the Restricted Stock on the date the Option is exercised, as determined
by the Committee). In such case the Common Stock to which the Option relates
<PAGE>
14
shall be subject to the same forfeiture restrictions originally imposed on the
Restricted Stock exchanged therefor.
8.7 Termination by Death: If a Holder's employment by the
Company, a Subsidiary or Affiliate terminates by reason of death, any Option
granted to such Holder may thereafter be exercised (to the extent such Option
was exercisable at the time of death or on such accelerated basis as the
Committee may determine at or after grant) by, where appropriate, the Holder's
transferee or by the Holder's legal representative, for a period of 6 months
from the date of death or until the expiration of the stated term of the Option,
whichever period is shorter.
8.8 Termination by Reason of Retirement or Disability: If a
Holder's employment by the Company, a Subsidiary or Affiliate terminates by
reason of disability (as determined by the Committee) or Retirement, any
unexercised Option granted to the Holder may thereafter be exercised by the
Holder (or, where appropriate, the Holder's transferee or legal representative),
to the extent it was exercisable at the time of termination or on such
accelerated basis as the Committee may determine at or after grant, for a period
of 24 months or such shorter period as determined by the Committee (3 months in
the case of an Incentive Stock Option) from the date of such termination of
employment or until the expiration of the stated term of the Option, whichever
period is shorter.
<PAGE>
15
8.9 Other Termination: If a Holder's employment by the
Company, Subsidiary or Affiliate terminates for any reason other than death,
disability or Retirement, all unexercised Options awarded to the Holder shall
terminate on the date of such termination of employment.
9. Stock Appreciation Rights
SARs give the Employee the right to receive, upon exercise of the SAR,
the increase in the Fair Market Value of a specified number of shares of Common
Stock from the date of grant of the SAR to the date of exercise. The grant of
SARs shall be subject to the following terms and conditions:
9.1 SARs are rights to receive a payment in cash, Common
Stock, Restricted Stock or Deferred Stock as selected by the Committee. The
value of these rights, which are determined by the appreciation in the number of
shares of Common Stock subject to the SAR, shall be evidenced by SAR agreements.
Such agreements shall conform to the requirements of the Plan and may contain
such other provisions as the committee shall deem advisable. An SAR may be
granted in tandem with all or a portion of a related Option under the Plan
("Tandem SAR"), or may be granted separately ("Freestanding SAR"). A Tandem SAR
may be granted either at the time of the grant of the Option or at any time
thereafter during the term of the Option and shall be exercisable only to the
extent that the related Option is exercisable. In no event shall any SAR be
exercisable with the first six months of its grant.
<PAGE>
9.2 The base price of a Tandem SAR shall be the option price
under the related Option. The base price of a Freestanding SAR shall be not less
than 100% of the Fair Market Value of the Common Stock, as determined by the
Committee, on the date of grant of the Freestanding SAR.
9.3 An SAR shall entitle the recipient to receive a payment
equal to the excess of the Fair Market Value of the shares of Common Stock
covered by the SAR on the date of exercise over the base price of the SAR. Such
payment may be in cash, in shares of Common Stock, in shares of Deferred Stock,
in shares of Restricted Stock or any combination, as the Committee shall
determine. Upon exercise of a Tandem SAR as to some or all of the shares of
Common Stock covered by the grant, the related Option shall be cancelled
automatically to the extent of the number of shares of Common Stock covered by
such exercise, and such shares shall no longer be available for purchase under
the Option pursuant to Section 8. Conversely, if the related option is exercised
as to some or all of the shares of Common Stock covered by the grant, the
related Tandem SAR, if any, shall be cancelled automatically to the extent of
the number of shares of Common Stock covered by the Option exercise.
9.4 SARs shall be subject to the same terms and conditions
applicable to Options as stated in sections 8.3, 8.5, 8.7, 8.8, 8.9. SARs shall
also be subject to such other terms and conditions not consistent with the Plan
as shall be determined by the Committee.
<PAGE>
10. Adjustments upon Changes in Capitalization
In the event of a reorganization, recapitalization, stock split,
spin-off, split-off, split-up, stock dividend, issuance of stock rights,
combination of shares, merger, consolidation or any other change in the
corporate structure of the Company affecting Common Stock, or any distribution
to stockholders other than a cash dividend, the Board shall make appropriate
adjustment in the number and kind of shares authorized by the Plan and any
adjustments to outstanding Awards as it determines appropriate. No fractional
shares of Common Stock shall be issued pursuant to such an adjustment. The Fair
Market Value of any fractional shares resulting from adjustments pursuant to
this Section shall, where appropriate, be paid in cash to the Holder.
11. Effective Date, Termination and Amendment
The Plan shall become effective on October 27, 1994, subject to
shareholder approval. Options granted under the Plan prior to such shareholder
approval shall expressly not be exercisable prior to such approval. The Plan
shall remain in full force and effect until the earlier of 5 years from the date
of its adoption by the Board, or the date it is terminated by the Board. The
Board shall have the power to amend, suspend or terminate the Plan at any time,
provided that no such amendment shall be made without stockholder approval which
shall:
11.1 Increase (except as provided in Section 10) the total
number of shares available for issuance pursuant to the Plan;
<PAGE>
18
11.2 Change the class of employees eligible to be Holders;
11.3 Modify the Individual Limit (except as provided Section
10) or the categories of Performance Goals set forth in Section 4.4.
11.4 Change the provisions of this Section 11; or
11.5 Make any other change for which shareholder approval is
required under section 16(b) or any successor provision of the 1934 Act.
Termination of the Plan pursuant to this Section 11 shall not
affect Awards outstanding under the Plan at the time of termination.
12. Transferability
Except as provided below, Awards may not be pledged, assigned or
transferred for any reason during the Holder's lifetime, and any attempt to do
so shall be void and the relevant Award shall be forfeited. The Committee may
grant Awards (except Incentive Stock Options) that are transferable by the
Holder during his lifetime, but such Awards shall be transferable only to the
extent specifically provided in the agreement entered into with the Holder. The
transferee of the Holder shall, in all cases, be subject to the provisions of
the agreement between the Company and the Holder.
13. General Provisions
13.1 Nothing contained in the Plan, or any Award granted
pursuant to the Plan, shall confer upon any Employee any right with respect to
continuance of employment
<PAGE>
19
by the Company, a Subsidiary or Affiliate, nor interfere in any way with the
right of the Company, a Subsidiary or Affiliate to terminate the employment of
any Employee at any time.
13.2 For purposes of this Plan, transfer of employment between
the company and its Subsidiaries and Affiliates shall not be deemed termination
of employment.
13.3 Holders shall be responsible to make appropriate
provision for all taxes required to be withheld in connection with any Award,
the exercise thereof and the transfer of shares of Common Stock pursuant to this
Plan. Such responsibility shall extend to all applicable Federal, state, local
or foreign withholding taxes. In the case of the payment of Awards in the form
of common Stock, or the exercise of Options or SARs, the Company shall, at the
election of the Holder, have the right to retain the number of shares of Common
Stock whose Fair Market Value equals the amount to be withheld in satisfaction
of the applicable withholding taxes. Agreements evidencing such Awards shall
contain appropriate provisions to effect withholding in this manner.
13.4 Without amending the Plan, Awards may be granted to
Employees who are foreign nationals or employed outside the United States or
both, on such terms and conditions different from those specified in the Plan as
may, in the judgment of the committee, be necessary or desirable to further the
purpose of the Plan.
13.5 To the extent that Federal laws (such as the 1934 Act,
the Code or the Employee Retirement Income Security Act of 1974) do not
otherwise control, the Plan and
<PAGE>
20
all determinations made and actions taken pursuant hereto shall be governed by
the law of Pennsylvania and construed accordingly.
13.6 The Committee may amend any outstanding Awards to the
extent it deems appropriate. Such amendment may be made by the Committee without
the consent of the Holder, except in the case of amendments adverse to the
Holder, in which case the Holder's consent is required to any such amendment.
EXHIBIT 12
RATIO OF EARNINGS TO FIXED CHARGES
(millions, except ratio)
<TABLE>
<CAPTION>
COMPUTATION OF EARNINGS
<S> <C>
Pre-tax Income $182.7
Adjustments to earnings---
Add: Fixed Charges 104.7
Add: Distributed Income from less than 50% owned affiliates 7.3
Add: Amortization of interest previously capitalized .4
Less: Capitalized Interest ( 5.5)
-------
Earnings $289.6
------
COMPUTATION OF FIXED CHARGES
Interest Incurred $98.8
Interest Capitalized 5.5
Amortization of debt expenses and discount or premium
relating to indebtedness .4
Portion of rental expenses representative of interest expense - 0 -
-------
Fixed Charges $104.7
*Ratio of Earnings to Fixed Charges 2.8 x
=======
<FN>
* During the third quarter of 1994, the Company incurred a pre-tax charge of
$114.6 million to reflect the costs associated with the restructuring of
its metal packaging operations in the United States and Canada. Thirteen
facilities were affected by the restructuring, primarily those that produce
three-piece, steel food and aerosol containers. The charge covers the
restructuring of facilities, including applicable severance and related
fixed asset writedowns. If such charge had not occurred, the ratio of
earnings to fixed charges for the year ended December 31, 1994 would have
been 3.9 x.
</FN>
</TABLE>
Exhibit 21 - Subsidiaries of Registrant
1 of 2
<TABLE>
<CAPTION>
PERCENT OF
VOTING
SECURITIES
NAME WHERE ORGANIZED OWNED
---- --------------- -----
<S> <C> <C>
Crown Cork & Seal Company, Inc. Pennsylvania Registrant
Crown Cork & Seal Company (PA) Inc. Pennsylvania 100%
CONSTAR International, Inc. Delaware 100%
Van Dorn Company Ohio 100%
Crown Financial Corporation Pennsylvania 100%
Nationwide Recyclers, Inc. Pennsylvania 100%
H-V Industries, Inc. Pennsylvania 100%
Volstro Manufacturing Company Pennsylvania 100%
Northern Engineering and Machine Corporation Pennsylvania 100%
Nationwide Coil Coating Company, Inc. Ohio 100%
Midway Tool Engineering Company, Inc. Pennsylvania 100%
Wissota Enterprises, Inc. Wisconsin 100%
Foreign Manufacturers Finance Corporation Delaware 100%
Crown Cork & Seal Company, (Delaware) Inc. Delaware 100%
Crown Beverage Packaging, Inc. Delaware 100%
Automated Containers Corporation Florida 100%
Crown Precision Technologies, Inc. Florida 100%
Central States Can Company of Puerto Rico, Inc. Ohio 100%
Crown Swire Investment Company Limited Bermuda 50.1%
Crown Cork & Seal Foreign Sales Corporation Virgin Islands 100%
Aluplata S.A. Argentina 100%
Crown Cork de Argentina S.A. Argentina 100%
Crown Cork Company (Austria) GMBH Austria 100%
Crown Cork Company (Belgium) N.V. Belgium 99.82%
Crown Cork do Brasil, S.A. (Rolhas Metalicas) Brazil 100%
Crown Cork & Seal Canada Inc. Canada 100%
CONSTAR Plastics of Canada, Inc. Canada 100%
Crown Cork de Chile, S.A.I. Chile 100%
Crown Litometal S.A. Colombia 100%
Crown Cork Centroamericana, S.A. Costa Rica 100%
Crown Cork de Puerto Rico, Inc. Delaware 100%
Crown Cork Co. (Scandinavia) A/S Denmark 100%
Crown Cork del Ecuador, C.A. Ecuador 100%
Crown Cork Company (France) S.A. France 100%
CONSTAR International France, SARL France 100%
</TABLE>
<PAGE>
Exhibit 21 - Subsidiaries of Registrant
2 of 2
<TABLE>
<CAPTION>
PERCENT OF
VOTING
SECURITIES
NAME WHERE ORGANIZED OWNED
---- --------------- -----
<S> <C> <C>
Crown Financial Corporation-France France 100%
Crown Bender (Germany) GMBH Germany 100%
Crown Cork Holding GMBH Germany 100%
Crown Cork de Guatemala, S.A. Guatemala 100%
Wellstar Acquisition B.V. Holland 100%
Crown Cork Hong Kong, Ltd. Hong Kong 50.1%
Magyar Crown Cork KFT (Crown Cork
Manufacturers Company, Hungary KFT) Hungary 100%
CONSTAR International Plastics KFT Hungary 66.5%
The Irish Crown Cork Ltd. Ireland 100%
Crown Cork Company (Italy) S.P.A. Italy 100%
The Crown Cork Company (East Africa) Ltd. Kenya 70%
Crown Cork de Mexico, S.A. Mexico 100%
Envases Generales Crown, S.A. DE C.V. Mexico 100%
Crown Cork Company (Morocco) S.A. Morocco 100%
Crown Cork Company (Holland) B.V. The Netherlands 100%
Crown Cork Netherlands Holding B.V. The Netherlands 100%
CONSTAR International Holland B.V. The Netherlands 100%
Crown Cork del Peru, S.A. Peru 96.07%
Crown Cork & Seal (Portugal) S.A. Portugal 100%
Crown Investment Holdings (Pty) Limited South Africa 100%
Crown Cork Company Iberica (Spain) S.A. Spain 100%
Crown Cork AG Switzerland 100%
Crown Obrist Switzerland 100%
COPAG Trading AG Switzerland 100%
Crown Cork & Seal (Thailand) Co., Ltd. Thailand 99.82%
Ambalaj Sanayi Ve Ticaret A.S. Turkey 55%
Emirates Can Company, Ltd. (Dubai, UAE) United Arab Emirates 50%
The Crown Cork Company Limited United Kingdom 100%
CONSTAR International U.K. Ltd. United Kingdom 100%
Copag Trading S.A. Uruguay 100%
Crown Cork de Venezuela, C.A. Venezuela 100%
Crown Cork Company (Zambia) Limited Zambia 70%
Crown Cork Company (1958) (Pvt) Limited Zimbabwe 70%
</TABLE>
EXHIBIT 23
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 33-56965) and
in the Registration Statements on Form S-8 (Nos. 33-01893, 33-45900,
33-39529,33-63732, 33-61240, 33- 61238, 33-50369 and 33-52699) of Crown Cork &
Seal Company, Inc. of our report dated February 10, 1995 appearing on page 19 of
this Form 10-K.
Price Waterhouse LLP
Philadelphia, Pennsylvania
March 31, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 43
<SECURITIES> 0
<RECEIVABLES> 658
<ALLOWANCES> 11
<INVENTORY> 768
<CURRENT-ASSETS> 1606
<PP&E> 2866
<DEPRECIATION> 1049
<TOTAL-ASSETS> 4781
<CURRENT-LIABILITIES> 1483
<BONDS> 1089
<COMMON> 592
0
0
<OTHER-SE> 773
<TOTAL-LIABILITY-AND-EQUITY> 4781
<SALES> 4452
<TOTAL-REVENUES> 4452
<CGS> 3700
<TOTAL-COSTS> 4032
<OTHER-EXPENSES> 10
<LOSS-PROVISION> 5
<INTEREST-EXPENSE> 99
<INCOME-PRETAX> 183
<INCOME-TAX> 56
<INCOME-CONTINUING> 127
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 131
<EPS-PRIMARY> 1.47
<EPS-DILUTED> 1.47
</TABLE>
