<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-K
----------------
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1993
Commission file number 1-6458
JOHN DEERE CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-2386361
(State of incorporation) (IRS Employer Identification No.)
Suite 600, First Interstate Bank Bldg.,
1 East First Street, Reno, Nevada 89501 (702) 786-5527
(Address of principal executive offices) (Zip Code) (Telephone Number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT
Title of each class Name of each exchange on which registered
9.35% Subordinated Debentures Due 2003 New York Stock Exchange
6% Notes Due 1995 New York Stock Exchange
7.20% Notes Due 1997 New York Stock Exchange
9-5/8% Subordinated Notes Due 1998 New York Stock Exchange
8-5/8% Subordinated Debentures Due 2019 New York Stock Exchange
5% Notes Due 1995 New York Stock Exchange
4-5/8% Notes Due 1996 New York Stock Exchange
SECURITIES REGISTERED PURSUANT
TO SECTION 12(G) OF THE ACT: NONE
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/
At January 1, 1994, 2,500 shares of common stock, without par value, of the
registrant were outstanding, all of which were owned by John Deere Credit
Company.
The registrant meets the conditions set forth in General Instruction J(1)(a)
and (b) of Form 10-K and is therefore filing this Form with certain reduced
disclosures as permitted by Instruction J(2).
_____________________________________________________________________________
Page 1 of 322 pages.
Index to Exhibits Page 48.
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PART I
ITEM 1. BUSINESS.
THE COMPANY
The principal business of John Deere Capital Corporation (Capital
Corporation) is the purchasing and financing of retail installment sales and
loan contracts (retail notes) from the equipment sales branches in the United
States operated by Deere & Company and its wholly-owned subsidiaries
(collectively called John Deere). These notes are acquired by the sales
branches through John Deere retail dealers in the United States and originate
in connection with retail sales by dealers of new John Deere agricultural
equipment, industrial equipment and lawn and grounds care equipment, as well
as used equipment. The Capital Corporation and its subsidiaries also purchase
and finance retail notes unrelated to John Deere equipment, representing
primarily recreational vehicle and recreational marine product notes acquired
from independent dealers of those products and from marine mortgage service
companies (recreational product retail notes). The Capital Corporation and
its subsidiaries also lease John Deere equipment to retail customers, finance
and service unsecured revolving charge accounts acquired from merchants in the
agricultural, lawn and grounds care and marine retail markets, and provide
wholesale financing for recreational vehicles and John Deere engine
inventories held by dealers of those products.
The Capital Corporation and its subsidiaries: Deere Credit, Inc., Farm
Plan Corporation, Deere Credit Services, Inc. and John Deere Receivables, Inc.
are collectively called the Company. John Deere Credit Company, a
wholly-owned finance holding subsidiary of Deere & Company, is the parent of
the Capital Corporation.
Retail notes, revolving charge accounts, financing leases and
wholesale notes receivable are collectively called "Receivables." Receivables
and operating leases are collectively called "Receivables and Leases."
The Capital Corporation was incorporated under the laws of Delaware and
commenced operations in 1958. At January 1, 1994, the Company had 852 full-
and part-time employees.
BUSINESS OF JOHN DEERE
John Deere's operations are categorized into five business segments:
John Deere's worldwide AGRICULTURAL EQUIPMENT segment manufactures and
distributes a full range of equipment used in commercial farming --
including tractors; tillage, soil preparation, planting and harvesting
machinery; and crop handling equipment.
John Deere's worldwide INDUSTRIAL EQUIPMENT segment manufactures and
distributes a broad range of machines used in construction, earthmoving
and forestry -- including backhoe loaders; crawler dozers and loaders;
four-wheel-drive
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loaders; scrapers; motor graders; excavators; and log skidders. This
segment also includes the manufacture and distribution of engines and
drivetrain components for the original equipment manufacturer (OEM)
market.
John Deere's worldwide LAWN AND GROUNDS CARE EQUIPMENT segment
manufactures and distributes equipment for commercial and residential
uses - including small tractors for lawn, garden and utility purposes;
riding and walk-behind mowers; golf course equipment; utility transport
vehicles; snowblowers; and other outdoor power products.
The products produced by the equipment segments are marketed primarily
through independent retail dealer networks.
The CREDIT segment includes the operations of the Company (described
herein), the Company's parent, John Deere Credit Company, and John Deere
Finance Limited, which primarily purchases and finances retail notes
from John Deere's equipment sales branches in Canada.
The INSURANCE AND HEALTH CARE segment issues policies in the United
States and Canada primarily for: a general line of property and
casualty insurance to John Deere and non-Deere dealers and to the
general public; group life and group accident and health insurance for
employees of participating John Deere dealers; group life and group
accident and health insurance for employees of John Deere; life and
annuity products to the general public and credit physical damage
insurance in connection with certain retail sales of John Deere products
financed by the credit subsidiaries. This segment also provides health
management programs and related administrative services in the United
States to corporate customers and employees of John Deere.
John Deere's total worldwide net sales and revenues in 1993 and 1992,
which include net sales of agricultural equipment, industrial equipment and
lawn and grounds care equipment and revenues from credit, insurance and health
care operations, were as follows: total net sales and revenues, $7.8 billion
and $7.0 billion; total sales of equipment, $6.5 billion and $5.7 billion;
agricultural equipment sales, $4.1 billion and $3.8 billion; industrial
equipment sales, $1.3 billion and $1.0 billion; and lawn and grounds care
equipment sales, $1.1 billion and $.9 billion, respectively. John Deere
believes that its worldwide sales of agricultural equipment during recent
years have been greater than those of any other business enterprise. It also
believes that it is an important provider of most of the types of industrial
equipment that it markets and a leader in some size ranges. John Deere also
believes that it is the largest manufacturer of lawn and garden tractors and
provides the broadest line of grounds care equipment in North America.
John Deere's 1993 worldwide income before the effects of special items
(accounting changes, restructuring charges and the new United States tax law)
was $286 million compared with $37 million in 1992. Additional information
concerning the special items is presented in the Deere & Company Annual Report
on Form 10-K for the fiscal year ended October 31, 1993. John Deere's
improved 1993 results were mainly attributable to North American equipment
operations. Sales and production volumes in
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North America were higher this year in response to increased retail demand.
Price realization also improved in all of John Deere's North American
equipment businesses compared with 1992 as sales incentive cost levels were
significantly lower. Also, North American productivity continued to improve
during 1993. Additionally, income of John Deere's financial services
subsidiaries was significantly higher in 1993 compared with 1992. After the
effects of restructuring charges, the incremental expenses from the accounting
changes and the tax rate change, John Deere's worldwide income in 1993 was
$184 million. John Deere incurred a worldwide net loss in 1993 of $921
million after all of the special items, including the cumulative effect of the
accounting changes.
North American agricultural economic conditions were generally more
favorable in 1993 than in 1992. Although flooding and excessively wet
conditions in certain areas of the Midwest and drought conditions in parts of
the Southeast resulted in an estimated 31 percent decrease in corn production
and a 16 percent decline in soybean production in 1993, United States farm net
cash income is expected to achieve a record level in 1993. The lower
production caused grain prices to rise above 1992 levels. Livestock producers
enjoyed favorable prices and profit margins during 1993 and farmers boosted
their cash flow by selling inventories accumulated from record corn and
soybean yields in 1992. Additionally, direct government payments to farmers
are expected to increase in 1993, aiding farmers most heavily impacted by this
year's flooding. Uncertainties over the passage of a new investment tax
credit were resolved in 1993 as the anticipated tax credit was not included in
the final tax legislation. Consequently, many United States farmers who had
delayed making purchases in 1992 bought equipment this year. Sales in Canada
were boosted by a special 13-month investment tax credit in effect from
December 1992 to December 1993. As a result of these developments, North
American retail sales of John Deere agricultural equipment were considerably
higher in 1993 compared with last year.
The North American general economy continued its slow expansion in 1993.
In the United States, housing starts increased about five percent during the
year with second-half strength overcoming a very sluggish first half. Real
public construction was up slightly from the previous year's level while
nonresidential construction was flat. However, the cumulative effects of the
rebound in economic activity were felt in 1993, as housing starts were up more
than 25 percent from their 1991 level and real public construction was nine
percent larger. North American retail sales of industrial and construction
machinery for both the industry and John Deere rose significantly in 1993.
Consumer spending for durable goods rose briskly in 1993, and North
American retail sales of John Deere lawn and grounds care equipment increased
significantly. Sales were also supported by favorable moisture conditions
over most areas throughout the prime selling season. However, dry conditions
did emerge in portions of the Southeast and Northeast which impeded some late
season buying activity.
Industry retail sales of agricultural equipment in overseas markets in
general remained relatively weak during 1993. However, overseas retail sales
of John Deere agricultural equipment were higher in 1993 than in 1992,
reflecting good acceptance of John Deere's new tractors and combines. Despite
recessionary conditions prevailing in most European markets and in Japan,
overseas retail sales of John Deere lawn and
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grounds care equipment continued to expand in 1993. Overseas industrial and
construction equipment markets were relatively flat in 1993 compared with
1992.
RELATIONSHIPS OF THE COMPANY WITH JOHN DEERE
The operations and results of the Company are affected by its
relationships with John Deere, including, among other things, the terms on
which the Company acquires Receivables and Leases and borrows funds from John
Deere, the reimbursement for waiver and low-rate finance programs from John
Deere and the payment to John Deere for various expenses applicable to the
Company's operations. In addition, the Capital Corporation and John Deere
have joint access to all of the Capital Corporation's bank lines of credit.
The Company's acquisition of Receivables and Leases is largely dependent
upon the level of retail sales and leases of John Deere products. The level
of John Deere retail sales and leases is responsive to a variety of economic,
financial, climatic and other factors which influence demand for its products.
Since 1986, the Company has also been providing retail sales financing through
dealers of certain unrelated manufacturers of recreational vehicles and
recreational marine products. The net balance of recreational product retail
notes outstanding under these arrangements at October 31, 1993 totaled $804
million.
The Company bears all of the credit risk (net of recovery from
withholdings from certain John Deere dealers and Farm Plan merchants)
associated with its holding of Receivables and Leases, and performs all
servicing and collection functions. The Company compensates John Deere for
originating retail notes and leases on John Deere products or through John
Deere dealers. John Deere is also reimbursed for staff and other
administrative services at estimated cost, and for credit lines provided to
the Company based on utilization of those lines.
The terms of retail notes and the basis on which the Company acquires
retail notes from John Deere are governed by agreements with the sales
branches, terminable by either the sales branches or the Company on 30 days
notice. As provided in these agreements, the Company sets its terms and
conditions for purchasing the retail notes from the sales branches. Under
these agreements, the sales branches are not obligated to sell retail notes to
the Company, and the Company is obligated to purchase retail notes from the
sales branches only if the notes comply with the terms and conditions set by
the Company.
The terms of retail notes and the basis on which the sales branches
acquire retail notes from the dealers are governed by agreements with the
independent John Deere dealers, terminable at will by either the dealers or
the sales branches. In acquiring the retail notes from dealers, the terms
and conditions, as set forth in agreements with the dealers, conform with the
terms and conditions adopted by the Company in determining the acceptability
of retail notes to be purchased from the sales branches. The dealers are not
obligated to send retail notes to the sales branches, and the sales branches
are not obligated to accept retail notes from the dealers. In practice,
retail notes are acquired from dealers only if the terms of the notes and the
creditworthiness of the customers are
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acceptable to the Company for purchase of the notes from the sales branches.
The Company acts on behalf of both itself and the sales branches in
determining the acceptability of the notes and in acquiring acceptable notes
from dealers.
The terms of leases, and the basis on which the Company enters into such
leases with retail customers through John Deere dealers, are governed by
agreements between dealers and the Company. Leases are accepted based on the
lessees' creditworthiness, the anticipated residual values of the equipment
and the intended uses of the equipment.
Deere & Company has expressed an intention of conducting its business
with the Company on such terms that the Company's consolidated ratio of
earnings before fixed charges to fixed charges will not be less than 1.05 to 1
for any fiscal quarter. For 1993, the ratio was 1.99 to 1 (excluding the
effects of accounting changes) and for 1992, it was 1.74 to 1. For additional
information concerning these accounting changes, see note 1 to the
consolidated financial statements. This arrangement is not intended to make
Deere & Company responsible for the payment of obligations of the Company.
DESCRIPTION OF RECEIVABLES AND LEASES
Receivables and Leases arise mainly from the retail sale or lease
(including the sale to John Deere dealers for rental to users) of John Deere
products, used equipment accepted in trade for them, and equipment of
unrelated manufacturers, and also include revolving charge accounts receivable
and wholesale notes receivable. The great majority derive from retail sales
and leases of agricultural equipment, industrial equipment and lawn and
grounds care equipment sold by John Deere dealers. The Company also offers
financing to recreational product customers through the secured retail
financing of recreational vehicles and recreational marine products. The
Company also offers Farm Plan revolving charge accounts which are used
primarily by agri-businesses to finance customer purchases, as well as credit
cards which are used primarily by retail customers to finance purchases of
John Deere lawn and grounds care equipment and marine equipment. Retail notes
provide for retention by John Deere or the Company of security interests under
certain statutes, including the Uniform Commercial Code or comparable state
statutes, certain Federal statutes, and state motor vehicle laws. See notes 1
and 2 to the consolidated financial statements.
Recreational product retail notes conform to industry standards
different from those for John Deere retail notes and often have smaller down
payments and longer repayment terms. In addition, the volumes, margins, and
collectibility of recreational product retail notes are affected by different
economic, marketing and competitive factors and cycles, such as fluctuations
in fuel prices and recreational spending patterns, than those affecting retail
notes arising from the sale of John Deere equipment. Recreational product
retail notes are acquired from more than 1,400 recreational vehicle dealers
throughout the United States, representing a variety of manufacturers, and
from approximately 900 marine product dealers.
Receivables and Leases are eligible for acceptance if they conform to
prescribed finance and lease plan terms. Guidelines relating to down payments
and contract terms
5
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on retail notes and leases are described in note 2 to the consolidated
financial statements.
The John Deere Credit Revolving Plan is used primarily by retail
customers of John Deere dealers to finance purchases of John Deere lawn and
grounds care equipment. Additionally, through its Farm Plan credit product,
the Company finances revolving charge accounts offered by approximately 2,100
participating agri-businesses in the 48 contiguous states to their retail
customers for the purchase of goods and services. Farm Plan account holders
consist mainly of farmers purchasing equipment parts and service at implement
dealerships. Farm Plan revolving charge accounts are also used by customers
patronizing other agribusinesses, including farm supply, feed and seed, parts
supply, bulk fuel, building supply and veterinarians. John Deere Marine
Finance is used by the Company's marine customers to finance the purchase of
marine related products. See notes 1 and 2 to the consolidated financial
statements under "Revolving Charge Accounts Receivable."
The Company finances recreational vehicle inventories and John Deere
engines for approximately 300 dealers. A portion of the wholesale financing
provided by the Company is with dealers from whom it also purchases
recreational product retail notes. See notes 1 and 2 to the consolidated
financial statements under "Wholesale Receivables."
The Company requires that theft and physical damage insurance be carried
on all equipment leased or securing retail notes. The customer may, at his
own expense, have the Company purchase this insurance or obtain it from other
sources. Theft and physical damage insurance is also required on wholesale
notes and can be purchased through the Company or from other sources. If the
customer elects to purchase theft and physical damage insurance through the
Company, the Company purchases it from insurance subsidiaries of Deere &
Company. Insurance is not required for revolving charge accounts.
In some circumstances, Receivables and Leases may be accepted and
acquired even though they do not conform in all respects to the established
guidelines. Acceptability and servicing of retail notes, wholesale notes and
leases, according to the finance plans and retail terms, including any waiver
of conformity with such plans and terms, is determined by Company personnel.
Officers of the Company are responsible for reviewing the performance of the
Company in accepting and collecting retail notes, wholesale notes and leases.
The Company normally makes all routine collections, compromises, settlements
and repossessions on Receivables and Leases.
FINANCE RATES ON RETAIL NOTES
As of October 31, 1993, approximately 57 percent of the net dollar value
of retail notes held by the Company bore a variable finance rate.
Recreational product retail notes are primarily fixed-rate notes.
A portion of the finance income earned by the Company arises from retail
sales of John Deere equipment sold in advance of the season of use or in other
sales promotions
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by John Deere on which finance charges are waived by John Deere for a period
from the date of sale to a specified subsequent date. Some low-rate financing
programs are also offered by John Deere. The Company receives compensation
from John Deere approximately equal to the normal net finance charge on retail
notes for periods during which finance charges have been waived or reduced.
The portions of the Company's finance income earned that were received from
John Deere on retail notes containing waiver of finance charges or reduced
rates was 19 percent in 1993 and 17 percent in 1992.
RECEIVABLES AND LEASES ACQUIRED AND HELD
Receivable and Lease acquisitions during the fiscal years ended and
amounts held at October 31, 1993 and 1992 were as follows in millions of
dollars:
<TABLE>
<CAPTION>
Fiscal Year Balance at
Acquisitions October 31
-------------- ---------------
1993 1992 1993 1992
---- ---- ---- ----
<S> <C> <C> <C> <C>
Retail Notes (1)
Agricultural equipment $1,526.8 $1,559.2 $1,546.8 $2,085.2
Industrial equipment 317.8 273.6 271.2 360.4
Lawn and grounds care equipment 89.7 123.8 169.5 193.2
Recreational products 201.8 250.8 804.2 870.3
------- ------- ------- -------
Total 2,136.1 2,207.4 2,791.7 3,509.1
Revolving charge accounts (1) 763.5 619.5 331.1 268.0
Financing and Operating Leases (2) 145.0 79.0 204.2 170.5
Wholesale Notes (1) 296.0 275.6 109.6 111.9
-------- -------- -------- --------
Total Receivables and Leases $3,340.6 $3,181.5 $3,436.6 $4,059.5
-------- -------- -------- --------
-------- -------- -------- --------
<FN>
(1) "Amount" as used here means the approximate principal value financed.
(2) "Amount" as used here represents the cost of equipment financed on both
financing and operating leases.
</TABLE>
John Deere equipment note acquisitions were slightly lower in the
current year due primarily to a larger volume of cash purchases by John Deere
customers and a more competitive agricultural financing environment. Lower
acquisitions of agricultural and lawn and grounds care equipment notes were
partially offset by higher acquisitions of industrial equipment notes.
Acquisitions of recreational product retail notes were 20 percent lower in the
current year due to a more competitive market for recreational product
financing.
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The Company's business is somewhat seasonal, with overall acquisitions
of credit receivables traditionally higher in the second half of the fiscal
year than in the first half, and overall collections of credit receivables
traditionally somewhat higher in the first six months than in the last half of
the fiscal year.
From time to time, the Capital Corporation sells retail notes to other
financial institutions and in the public market. The Capital Corporation
received net proceeds from such sales of John Deere retail notes of $1.143
billion in 1993 and $683 million in 1992. The net unpaid balance of all
retail notes previously sold was $1.394 billion at October 31, 1993 and $688
million at October 31, 1992. For additional information on the terms,
conditions, recourse and accounting for such sales, see note 2 to the
consolidated financial statements.
AVERAGE ORIGINAL TERM AND AVERAGE LIFE OF RETAIL NOTES AND LEASES
The following table shows the estimated average original term in months
(based on dollar amounts) for retail notes and leases acquired by the Company
during 1993 and 1992:
<TABLE>
<CAPTION>
Average Original Term
---------------------
1993 1992
---- ----
<S> <C> <C>
Retail Notes 67 68
New Equipment:
Agricultural 55 55
Industrial 43 40
Lawn and grounds care 44 43
Recreational products 152 151
Used Equipment:
Agricultural 52 51
Industrial 37 36
Lawn and grounds care 45 44
Recreational products 161 170
Leases 42 42
</TABLE>
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Because of prepayments, the average actual life of retail notes is
considerably shorter than the average original term. The following table
shows the estimated average life in months (based on dollar amounts) for John
Deere retail notes and leases liquidated in 1993 and 1992:
<TABLE>
<CAPTION>
Average Life in Months
----------------------
1993 1992
---- ----
<S> <C> <C>
Retail Notes (1) 28 28
Agricultural 25 24
Industrial 29 28
Lawn and grounds care 31 31
Recreational products (2) 46 47
Leases (3) 47 48
<FN>
(1) Includes new and used equipment.
(2) Estimated based on industry averages due to limited experience with the
recreational product portfolio.
(3) The average lives of leases liquidated in 1993 and 1992 were longer than
the average original terms of leases acquired during 1993 and 1992 due
to longer average original terms during prior years.
</TABLE>
DEPOSITS WITHHELD ON RECEIVABLES AND LEASES
Generally, the Company has limited recourse against certain John Deere
dealers on retail notes and leases and against certain Farm Plan merchants on
revolving charge account balances acquired from or through those dealers and
merchants. For these John Deere dealers and Farm Plan merchants, separate
withholding accounts are maintained by the Company. The total amount of
deposits withheld from John Deere dealers and Farm Plan merchants totaled
$104.9 million and $100.7 million at October 31, 1993 and 1992, respectively.
Of this amount, deposits withheld from Farm Plan merchants totaled $.4 million
at October 31, 1993 and $ .8 million at October 31, 1992. Credit losses are
charged against these withheld deposits. To the extent that a loss cannot be
absorbed by the deposit withheld from the dealer or merchant from which the
retail note, lease or Farm Plan account was acquired, it is charged against
the Company's allowance for credit losses. Beginning in January 1992, all
industrial equipment retail notes have been accepted on a non-recourse basis,
and the withholding of dealer deposits on those notes ceased. See note 1 to
the consolidated financial statements.
The Company does not withhold deposits on recreational product retail
notes, credit card receivables, or wholesale notes acquired. However, an
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allowance for credit losses has been established by the Company in an amount
considered to be appropriate in relation to the Receivables and Leases
outstanding. In addition, for wholesale notes relating to recreational
vehicles, there are agreements with the recreational vehicle manufacturers for
the repurchase of new inventories held by dealers. For additional information
on credit losses and deposits withheld on Receivables and Leases, see note 3
to the consolidated financial statements.
DELINQUENCIES AND LOSSES
RETAIL NOTES. The following table shows unpaid installments 60 days
or more past due on retail notes held by the Company and the total unpaid
balances on the retail notes with such delinquencies, on the basis of retail
note terms in effect at the indicated dates, in millions of dollars and as a
percentage of retail notes at face value held by the Company at such dates:
<TABLE>
<CAPTION>
Installments Past Due 60 Balances on Which Any Installment
Days or More is Past Due 60 Days or More
------------------------ ---------------------------------
Percent of Percent of
Face Value Face Value
of Retail of Retail
Notes Notes
October 31 Amount Outstanding Amount Outstanding
- ---------- ------ ----------- ------ -----------
<S> <C> <C> <C> <C>
1993 $ 6.8 0.19% $ 42.3 1.16%
1992 7.0 0.15 55.6 1.23
1991 17.5 0.35 108.0 2.15
</TABLE>
The following table shows losses on retail notes in millions of dollars (after
charges to withheld dealer deposits) and as a percentage of retail notes
liquidated:
<TABLE>
<CAPTION>
Percentage of Retail
Year Ended October 31 Amount Notes Liquidated
- --------------------- ------ --------------------
<S> <C> <C>
1993 $19.3 0.83%
1992 33.8 1.06
1991 41.3 1.52
</TABLE>
The decrease in losses in 1993 and 1992 related mainly to lower
write-offs of recreational product retail notes, primarily as a result of the
development and use of more selective credit criteria over the past few years,
and lower write-offs of John Deere industrial equipment retail notes. The
losses incurred in 1991 related primarily to recreational product retail
notes, resulting from recessionary pressures and lower resale values of
repossessed equipment. Write-offs of recreational product retail notes
totaled $16.9 million in 1993 compared with $24.2 million in 1992 and $33.3
million in 1991.
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REVOLVING CHARGE ACCOUNTS. The following table shows revolving
charge account payments 60 days or more past due in millions of dollars and as
a percentage of total revolving charge accounts receivable:
<TABLE>
<CAPTION>
Payments Past Due 60 Days or More
---------------------------------------
Percent of Total Revolving
October 31 Amount Charge Accounts Receivable
- ---------- ------ ---------------------------
<S> <C> <C>
1993 $5.3 1.6%
1992 6.4 2.4
1991 8.5 3.5
</TABLE>
The following table shows losses on revolving charge accounts in
millions of dollars and as a percentage of revolving charge amounts
liquidated:
<TABLE>
<CAPTION>
Percent of Revolving
Year Ended October 31 Amount Charge Amounts Liquidated
- --------------------- ------ -------------------------
<S> <C> <C>
1993 $3.3 0.5%
1992 6.0 1.0
1991 8.4 1.6
</TABLE>
Losses declined in 1993 and 1992 for both Farm Plan and the John Deere
Credit Revolving Plan reflecting improvements in the Company's overall
collection procedures and improved economic conditions. The losses incurred
in 1991 were due primarily to general recessionary conditions in the economy.
LEASES. The following table shows finance and operating lease
payments 60 days or more past due in millions of dollars and as a percent of
the total lease payments receivable:
<TABLE>
<CAPTION>
Payments Past Due 60 Days or More
--------------------------------------
Percent of Total Lease
October 31 Amount Payments Receivable
- --------------------- ------ -------------------------
<S> <C> <C>
1993 $ .5 0.3%
1992 1.2 0.8
1991 1.0 0.5
</TABLE>
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The following table shows losses absorbed by the Company, in millions of
dollars and as a percent of total lease proceeds, on terminated financing and
operating leases (after charges to withheld dealer deposits). Total lease
proceeds include collections from regularly scheduled lease payments and
proceeds from the disposal of equipment.
<TABLE>
<CAPTION>
Percent of Total
Year Ended October 31 Amount Lease Proceeds
- --------------------- ------ ----------------
<S> <C> <C>
1993 $1.2 1.1%
1992 2.7 2.3
1991 3.9 3.3
</TABLE>
The decline in 1993 losses resulted from improvements in the Company's
overall collection procedures and improved economic conditions. The decline
in 1992 losses resulted from a more seasoned and smaller lease portfolio. The
losses incurred in 1991 related primarily to the overall recessionary
environment.
WHOLESALE NOTES. The following table shows wholesale note payments
60 days or more past due in millions of dollars and as a percentage of
wholesale notes receivable:
<TABLE>
<CAPTION>
Payments Past Due 60 Days or More
------------------------------------
Percent of Wholesale
October 31 Amount Notes Receivable
- ---------- ------ ---------------------
<S> <C> <C>
1993 $0.1 0.1%
1992 0.0 0.0
1991 0.1 0.1
</TABLE>
The following table shows wholesale note losses in millions of dollars
and as a percentage of wholesale note amounts liquidated:
<TABLE>
<CAPTION>
Percent of Wholesale
Year Ended October 31 Amount Note Amounts Liquidated
- --------------------- ------- -------------------------
<S> <C> <C>
1993 $2.3 0.8%
1992 1.2 0.5
1991 2.9 1.5
</TABLE>
The losses in 1993 and 1991 resulted primarily from relatively large
losses incurred with two recreational vehicle dealers, one in each of those
years.
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COMPETITION
The businesses in which the Company is engaged are highly competitive.
The Company competes for customers based upon customer service and finance
rates (or time-price differentials) charged. The proportion of John Deere
equipment retail sales and leases financed by the Company is influenced by
conditions prevailing in the agricultural equipment, industrial equipment and
lawn and grounds care equipment industries, in the financial markets, and in
business generally. A significant portion of such retail sales during 1993
were financed by the Company. A substantial part of the retail sales and
leases eligible for financing by the Company is financed by others, including
banks and other finance and leasing companies.
The Company attempts to emphasize convenient service to retail customers
and to offer terms desired in its specialized markets such as seasonal
installment schedules of repayment and rental. The Company's sales and loan
finance rates, time-price differentials and lease rental rates are believed to
be in the range of those of sales finance and leasing companies generally,
although not as low as those of some banks and other lenders and lessors.
REGULATION
In a number of states, the maximum finance rate or time-price
differential on retail notes is limited by state law. The present state
limitations have not, thus far, significantly limited the Company's
variable-rate finance charges, which are determined in relation to a base rate
quoted by a bank, nor the fixed-rate finance charges established by the
Company. However, if interest rate levels should increase, maximum state
rates or time-price differentials could affect the Company by preventing the
variable rates on outstanding variable-rate retail notes from increasing above
the maximum state rate or time-price differential, and/or by limiting the
fixed rates or time-price differentials on new notes. In some states, the
Company may be able to qualify new retail notes for a higher maximum limit by
using retail installment sales contracts (rather than loan contracts) or by
using fixed-rate rather than variable-rate contracts.
In addition to rate regulation, various state and federal laws and
regulations apply to some Receivables and Leases, principally retail notes for
goods sold for personal, family or household use and to Farm Plan and John
Deere revolving charge accounts receivable for such goods. To date, such laws
and regulations have not had a significant, adverse effect on the Company.
ITEM 2. PROPERTIES.
The Company's properties principally consist of office equipment and
leased office space in Reno, Nevada; West Des Moines, Iowa; Moline, Illinois;
Madison, Wisconsin; and Ft. Lauderdale, Florida.
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ITEM 3. LEGAL PROCEEDINGS.
The Company is subject to various unresolved legal actions which arise
in the normal course of its business. The most prevalent of such actions
relates to state and federal regulations concerning retail credit. There are
various claims and pending actions against the Company with respect to
commercial and consumer financing matters. These matters include lawsuits
pending in federal and state courts in Texas alleging that certain of the
Company's retail finance contracts for recreational vehicles and boats violate
certain technical provisions of Texas consumer credit statutes dealing with
maximum rates, licensing and disclosures. The plaintiffs in Texas claim they
are entitled to common law and statutory damages and penalties. On November
6, 1992, the federal District Court certified a federal class action under
Rule 23(b)(3) of the Federal Rules of Civil Procedure in an action brought by
Russell Durrett, individually and on behalf of others, against John Deere
Company (filed in state court on February 19, 1992 and removed on February 26,
1992 to the United States District Court for the Northern District of Texas,
Dallas Division). On October 12, 1993, in a case named DEERE CREDIT, INC. V.
SHIRLEY Y. MORGAN, ET AL., filed February 20, 1992, the 281st District Court
for Harris County, Texas, certified a class under Rules 42(b)(1)(A),
42(b)(1)(B) and 42(b)(2) of the Texas Rules of Civil Procedure, of all persons
who opt out of the federal class action. The Company believes that it has
substantial defenses and intends to defend the actions vigorously. Although
it is not possible to predict the outcome of these unresolved legal actions,
and the amounts of claimed damages and penalties are large, the Company
believes that these unresolved legal actions will not have a material adverse
effect on its consolidated financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Omitted pursuant to instruction J(2).
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
All of the Capital Corporation's common stock is owned by John Deere
Credit Company, a finance holding company that is wholly-owned by Deere &
Company.
In 1993, the Capital Corporation paid a cash dividend to John Deere
Credit Company of $82 million, which in turn paid an $82 million cash dividend
to Deere & Company. Similarly during 1992, the Capital Corporation paid a $70
million dividend. During the first quarter of 1994, the Capital Corporation
declared and paid a dividend of $150 million to John Deere Credit Company,
which in turn declared and paid a dividend of $150 million to Deere & Company.
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ITEM 6. SELECTED FINANCIAL DATA.
Omitted pursuant to instruction J(2).
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
1993 COMPARED WITH 1992
Total acquisitions of Receivables and Leases by the Company increased
five percent during 1993 compared with acquisitions in 1992. The higher
acquisitions this year resulted from an increased volume of John Deere leases,
revolving charge accounts and wholesale receivables, which more than offset
lower acquisitions of retail notes. Receivables and Leases held by the
Company at October 31, 1993 totaled $3.437 billion compared with $4.060
billion one year ago. This decrease resulted from sales of retail notes
during 1993. Receivables and Leases administered, which include retail notes
previously sold but still administered, amounted to $4.873 billion at the end
of 1993 compared with $4.796 billion at October 31, 1992.
During 1993, net retail notes (face value less unearned finance income)
acquired by the Company decreased three percent compared with 1992. Net
retail note acquisitions totaled $2.136 billion during 1993 compared with 1992
acquisitions of $2.207 billion. Acquisitions of recreational product retail
notes accounted for nine percent of total note acquisitions in 1993 and 11
percent in 1992.
Net retail note acquisitions from John Deere decreased by $22 million in
1993, due primarily to a larger volume of cash purchases by John Deere
customers and a more competitive agricultural financing environment. Lower
acquisitions of agricultural and lawn and grounds care equipment notes were
partially offset by higher acquisitions of industrial equipment notes. Note
acquisitions in 1993 from John Deere continued to represent a significant
proportion of the total United States retail sales of John Deere equipment.
Net acquisitions of recreational product retail notes, representing
primarily recreational vehicle and recreational marine product notes acquired
from independent dealers of several unrelated manufacturers, were $202 million
in 1993 compared with $251 million in 1992. This decline was due mainly to a
more competitive market for recreational product financing and more selective
acquisition criteria.
At October 31, 1993, the net amount of retail notes held by the Company
was $2.792 billion compared to $3.509 billion last year. Included in these
amounts were recreational product notes of $804 million in 1993 and $870
million in 1992. The net balance of John Deere retail notes decreased from
$2.639 billion at October 31, 1992 to $1.988 billion at the end of 1993, even
though net retail
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notes acquired exceeded collections. This decrease resulted primarily from
the sale of retail notes during 1993. The Company periodically sells retail
notes as one of several funding techniques. In 1993 and in 1992, the Company
received net proceeds of $1.143 billion and $455 million, respectively, from
the sale of retail notes to limited-purpose business trusts which utilized the
notes as collateral for the issuance of asset backed securities to the public.
During 1992, the Company also sold retail notes to other financial
institutions receiving proceeds of $228 million. The net balance of retail
notes administered by the Company, which include retail notes previously sold,
amounted to $4.185 billion at 31 October 1993, compared with $4.197 billion at
31 October 1992. The net balance of retail notes previously sold was $1.394
billion at October 31, 1993 compared with $688 million at October 31, 1992.
Additional sales of retail notes are expected to be made in the future. On
October 31, 1993, the Company was contingently liable for recourse in the
maximum amount of $108 million on retail notes sold.
Retail notes bearing variable finance rates totaled 57 percent of the
total retail note portfolio at October 31, 1993 compared with 54 percent one
year earlier. The Company actively manages the increased interest rate risk
posed by fixed-rate retail notes through the issuance of fixed-rate borrowings
and the use of financial instruments such as interest rate swaps and interest
rate caps. See "Capital Resources and Liquidity" on pages 22 through 24.
At the end of fiscal 1993, revolving charge accounts receivable totaled
$331 million, an increase of 24 percent compared with $268 million at October
31, 1992. The balance at October 31, 1993 included $147 million of John Deere
Credit Revolving Plan receivables (including a small balance of marine finance
receivables) and $184 million of Farm Plan receivables compared with $114
million and $154 million, respectively, at October 31, 1992. The John Deere
Credit Revolving Plan, which was introduced in 1993, contains terms that
increase the maximum amount financed, offer more attractive financing
conditions and provide more flexible payment terms. Revolving charge account
acquisitions increased 23 percent in 1993 compared with last year.
The portfolio of net financing leases totaled $85 million at both
October 31, 1993 and October 31, 1992. The net investment in operating leases
was $119 million and $85 million at the end of 1993 and 1992, respectively.
Overall, lease acquisitions increased 84 percent in 1993 primarily due to a
new lease program applicable to some models of John Deere tractors. In
addition, $19 million of municipal leases were sold to Deere & Company during
1993 compared with $21 million sold last year. At October 31, 1993, the net
unpaid balance of leases sold to John Deere was $43 million compared with $48
million at October 31, 1992.
Wholesale notes on recreational vehicle and John Deere engine
inventories totaled $110 million at October 31, 1993 compared with $112
million at October 31, 1992.
Total Receivable and Lease amounts 60 days or more past due were $12.7
million at October 31, 1993 compared with $14.6 million at October 31, 1992.
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These past-due amounts represented .30 percent of the face value of
Receivables and Leases held at October 31, 1993 and .29 percent at October 31,
1992. The total face amount of retail notes held with any installment 60 days
or more past due was $42.3 million at October 31, 1993 compared with $55.6
million one year earlier. The amount of retail note installments 60 days or
more past due was $7.0 million at both October 31, 1993 and October 31, 1992.
These past-due installments represented .19 percent of the unpaid face value
of retail notes at October 31, 1993 and .15 percent at October 31, 1992.
The total balance of revolving charge accounts receivable 60 days or
more past due was $5.3 million at October 31, 1993 compared with $6.4 million
at October 31, 1992. These past due amounts represented 1.6 and 2.4 percent
of the revolving charge accounts receivable held at each of those respective
dates. The total balance of financing and operating lease payments 60 days or
more past due was $0.5 million at October 31, 1993 compared with $1.2 million
at October 31, 1992. These past-due installments represented .3 percent of
the total lease payments receivable at October 31, 1993 and .8 percent at
October 31, 1992.
At October 31, 1993, the Company's allowance for credit losses, totaled
$77 million and represented 2.3 percent of the total net Receivables and
Leases financed compared with $83 million and 2.0 percent, respectively, one
year earlier. Deposits withheld from dealers and merchants, which are
available for potential credit losses, totaled $105 million at October 31,
1993 compared with $101 million one year earlier.
The Capital Corporation's consolidated income for the fiscal year ended
October 31, 1993, before the cumulative effect of adopting new accounting
standards related to postretirement and postemployment benefits, was $111.0
million compared with 1992 net income of $95.0 million. The ratio of earnings
before fixed charges to fixed charges was 1.99 to 1 (excluding the effects of
accounting changes) for 1993 compared with 1.74 to 1 last year. The
improvement in net income resulted primarily from higher securitization and
servicing fee income from retail notes previously sold, lower credit losses,
higher financing margins, and increased gains from the sale of retail notes,
which more than offset the effects of a lower balance of Receivables and
Leases financed. Net income totaled $107.2 million in 1993, including the
cumulative effect of adopting FASB Statement No. 106, Employers' Accounting
for Postretirement Benefits Other Than Pensions, and FASB Statement No. 112,
Employers' Accounting for Postemployment Benefits.
Total revenues decreased one percent during 1993 to $466 million
compared with $471 million in 1992. The average balance of total net
Receivables and Leases financed was seven percent lower in 1993 compared with
last year due primarily to the sale of receivables during 1993. Revenues were
also affected by the lower level of interest rates and the corresponding lower
finance charges earned in 1993 compared with last year. These decreases in
revenues were partially offset by higher securitization and servicing fee
income from retail notes previously sold. However, borrowing rates were also
lower this year resulting in the slightly improved financing margins. The
lower borrowing rates and decrease
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in average borrowings this year resulted in an 11 percent decrease in interest
expense, which totalled $168 million in 1993 compared with $189 million last
year. Average borrowings were $3.127 billion in 1993, a seven percent decline
from last year's average borrowings of $3.379 billion. The weighted average
annual interest rate incurred on all interest-bearing borrowings this year
declined to 5.1 percent from 5.4 percent in 1992.
Finance income earned on retail notes was $314 million this year
compared with $356 million in 1992, a decrease of 12 percent. The average
balance of the net retail note portfolio financed during 1993 was 10 percent
lower than during 1992.
Revenues earned on revolving charge accounts amounted to $54 million in
1993, a 14 percent increase over revenues of $47 million earned during 1992.
This increase was primarily due to a 20 percent increase in the average
balance of Farm Plan receivables financed and a 15 percent increase in the
average balance of John Deere Credit Revolving Plan receivables financed in
1993 compared with 1992.
The average net investment in financing and operating leases decreased
by two percent in 1993 compared with 1992. However, total lease revenues
increased eight percent to $39.6 million in 1993 compared with $36.8 million
in 1992. Lease revenues were favorably affected in 1993 by a significant
increase in rentals earned on operating leases.
The net gain on retail notes sold totaled $15.6 million during 1993
compared with $8.5 million for 1992. The Company received proceeds from the
sale of retail notes in the amount of $1.143 billion during 1993 and $683
million in 1992. Securitization and servicing fee income totaled $22.3 million
in 1993 compared with $1.1 million during 1992. Securitization and servicing
fee income relates to retail notes sold to limited-purpose business trusts and
includes the amortization of present value receivable amounts from the trusts
established at the time of sale and reimbursed administrative expenses
received from the trusts. The amount of securitization and servicing fee
income was small in 1992 because the first retail note sale to a trust
occurred near the end of that year.
Administrative and operating expenses increased 18 percent to $75
million in 1993 compared with $63 million in 1992. These expenses increased
primarily due to higher employment costs and legal expenses. The Company
incurred additional costs associated with efforts relating to future growth
and improving the quality of the portfolio.
The provision for credit losses declined to $28 million in 1993 from $48
million last year mainly as a result of improved credit experience resulting
in lower Receivable and Lease write-offs. The decline in write-offs related
particularly to recreational product retail notes and John Deere industrial
equipment retail notes.
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ACCOUNTING CHANGES
In the fourth quarter of 1993, the Company adopted FASB Statement No.
106, Employers' Accounting for Postretirement Benefits Other Than Pensions,
effective November 1, 1992. Prior quarters of 1993 were restated as required
by this Statement. This Statement generally requires the accrual of retiree
health care and other postretirement benefits during employees' years of
active service. The Company elected to recognize the pretax transition
obligation of $5.4 million ($3.6 million net of deferred income taxes) as a
one-time charge to earnings in the current year. This obligation represents
the portion of future retiree benefit costs related to service already
rendered by both active and retired employees up to November 1, 1992. The
1993 postretirement benefits expense and related disclosures have been
determined according to the provisions of FASB Statement No. 106. For years
prior to 1993, postretirement benefits were generally included in costs as
covered expenses were actually incurred. The adoption of FASB Statement No.
106 resulted in an incremental pretax expense of $.2 million compared with the
expense determined under the previous accounting principle. This increase in
the current year expense is in addition to the previously mentioned one-time
charge relating to the transition obligation.
In the fourth quarter of 1993, the Company also adopted FASB Statement
No. 112, Employers' Accounting for Postemployment Benefits, effective November
1, 1992. This Statement requires the accrual of certain benefits provided to
former or inactive employees after employment but before retirement during
employees' years of active service. The Company previously accrued certain
disability related benefits when the disability occurred. Results for the
first quarter of 1993 were restated for the cumulative pretax charge resulting
from this change in accounting as of November 1, 1992 which totaled $.3
million ($.2 million net of deferred income taxes). The adoption of FASB
Statement No. 112 had an immaterial effect on 1993 expenses.
1992 COMPARED WITH 1991
Total acquisitions of Receivables and Leases by the Company decreased
three percent during 1992 compared with acquisitions in 1991. Receivables and
Leases held by the Company at October 31, 1992 totaled $4.060 billion compared
with $4.398 billion one year ago. This decrease resulted from sales of retail
notes during 1992. Receivables and Leases administered, which include retail
notes previously sold but still administered, amounted to $4.796 billion at
the end of 1992 compared with $4.693 billion at October 31, 1991.
During 1992, the volume of net retail notes acquired by the Company
decreased eight percent compared with 1991. Net retail note acquisitions
totaled $2.207 billion during 1992 compared with 1991 acquisitions of $2.400
billion. Acquisitions of recreational product retail notes accounted for 11
percent of total note acquisitions in 1992 and 13 percent in 1991.
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Net retail note acquisitions from John Deere decreased by $142 million
in 1992, due primarily to a decrease in retail sales of John Deere
agricultural equipment. Acquisitions of industrial equipment retail notes
also were lower in 1992 while lawn and grounds care equipment note
acquisitions were significantly higher due mainly to finance waiver programs
on lawn and garden tractors. Note acquisitions in 1992 from John Deere
continued to represent a significant proportion of the total United States
retail sales of John Deere equipment.
Net acquisitions of recreational product retail notes were $251 million
in 1992 compared with $301 million in 1991. This decline was due mainly to a
more competitive financing environment and the development of more selective
retail note acquisition criteria by the Company over the past few years.
At October 31, 1992, 1991 and 1990, the net amount of retail notes held
by the Company was $3.509 billion, $3.854 billion and $3.074 billion,
respectively. Included in these amounts were non-Deere notes of $870 million,
$888 million and $773 million at those respective dates. The net balance of
John Deere retail notes decreased from $2.966 billion at October 31, 1991 to
$2.639 billion at the end of 1992. John Deere retail notes totaled $2.301
billion at the end of 1990. The decrease in 1992 resulted primarily from the
sale of retail notes. During 1992, the Company sold retail notes to other
financial institutions and the public, receiving net proceeds of $683 million.
Notes were not sold in 1991. At October 31, 1992, 1991 and 1990, the net
unpaid balance of retail notes sold was $688 million, $242 million and $521
million, respectively. Additional sales of retail notes are expected to be
made in the future.
Retail notes bearing variable finance rates totaled 54 percent of the
total retail note portfolio at October 31, 1992 compared with 56 percent one
year earlier.
Revolving charge accounts receivable totaled $268 million at October 31,
1992 compared with $240 million one year earlier. The increase in the
outstanding balance at October 31, 1992 was due mainly to an increase in Farm
Plan volume. The October 31, 1992 balance of revolving charge accounts
receivable includes $114 million of credit card receivables and $154 million
of Farm Plan receivables, compared with $112 million and $128 million,
respectively, at October 31, 1991.
At October 31, 1992, the net investment in financing and operating
leases on John Deere equipment was $170 million compared with $213 million at
October 31, 1991. Lease acquisitions declined 27 percent in 1992 compared
with 1991 due to a decrease in agricultural lease activity and competitive
pressures. Lease liquidations during 1992 exceeded acquisitions, as the high
lease acceptances of several years ago continued to mature. Also, $21 million
net value of municipal leases were sold to John Deere during 1992 compared
with $27 million sold in 1991. At October 31, 1992, the net unpaid balance of
leases sold to John Deere was $48 million compared with $53 million at October
31, 1991.
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Wholesale notes receivable totaled $112 million at October 31, 1992
compared with $91 million at October 31, 1991, as wholesale note acquisitions
increased 37 percent in 1992.
Total Receivable and Lease amounts 60 days or more past due were $14.6
million at October 31, 1992 compared with $27.1 million at October 31, 1991.
These past due amounts represented .29 percent of the face value of
Receivables and Leases held at October 31, 1992 and .49 percent at October 31,
1991. The total face amount of retail notes held with any installment 60 days
or more past due was $55.6 million at October 31, 1992 compared with $108.0
million one year earlier. The amount of retail note installments 60 days or
more past due was $7.0 million at October 31, 1992, a decrease of 60 percent
compared with $17.5 million at October 31, 1991. These past-due installments
represented .15 percent of the unpaid face value of retail notes held at
October 31, 1992 and .35 percent at October 31, 1991.
The total balance of revolving charge accounts receivable 60 days or
more past due was $6.4 million at October 31, 1992 compared with $8.5 million
at October 31, 1991. These past due amounts represented 2.4 and 3.5 percent
of the revolving charge accounts receivable held at each of those respective
dates. The total balance of financing and operating lease payments 60 days or
more past due was $1.2 million at October 31, 1992 compared with $1.0 million
at October 31, 1991. These past-due installments represented .8 percent of
the total lease payments receivable at October 31, 1992 and .5 percent at
October 31, 1991.
At October 31, 1992, the Company's allowance for credit losses totaled
$83 million and represented 2.0 percent of the total net Receivables and
Leases financed compared with $78 million and 1.8 percent at October 31, 1991.
Deposits withheld from dealers and merchants amounted to $101 million at
October 31, 1992 compared with $99 million one year earlier.
Net income in 1992 totaled $95.0 million, an increase of 30 percent
compared with 1991 income of $73.0 million. The ratio of earnings before
fixed charges to fixed charges was 1.74 to 1 for 1992 compared with 1.48 to 1
in 1991. The improvement in net income in 1992 resulted primarily from a
higher average volume of Receivables and Leases financed and improved credit
loss experience. Results in 1992 also benefited from after-tax income of $5.6
million from sales of retail notes.
The average balance of total net Receivables and Leases financed was
seven percent higher in 1992 compared with 1991, although the year-end balance
was lower due to the sale of a substantial amount of retail notes in October
1992. However, total revenues decreased three percent to $471 million in 1992
compared with $487 million in 1991, as the average yield earned on the
portfolio was lower this year. While revenues were affected by the lower
level of interest rates and correspondingly lower finance charges earned in
1992 compared with last year, borrowing costs were also lower this year.
Interest expense totaled $189 million in 1992, a decrease of 17 percent
compared with $228 million in 1991. Total
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average borrowings were $3.379 billion in 1992, an 11 percent increase over
fiscal year 1991 average borrowings of $3.053 billion. The weighted average
interest rate incurred on all interest-bearing borrowings during 1992 declined
to 5.4 percent from 7.2 percent in 1991.
Finance income earned on retail notes was $356 million this year
compared with $383 million in 1991, a decrease of seven percent. The average
balance of the net retail note portfolio financed during 1992 was seven
percent higher than during 1991.
Revenues earned on revolving charge accounts amounted to $47 million in
1992, an 11 percent increase over revenues of $43 million earned during 1991.
This increase was primarily due to a 17 percent increase in the average
balance of Farm Plan receivables financed and a 10 percent increase in the
average balance of credit card receivables financed in 1992 compared with
1991.
The average net investment in financing and operating leases decreased
by 13 percent in 1992 compared with 1991. In addition, total lease revenues
decreased slightly to $36.8 million in 1992 compared with $36.9 million in
1991. Lease revenues were favorably affected in 1992 by a significant
increase in rentals earned on operating leases.
Administrative and operating expenses for 1992 were $63 million, an
increase of eight percent compared with $59 million for 1991. These expenses
increased primarily due to the costs associated with the larger average
portfolio financed.
The provision for credit losses decreased to $48 million in 1992 from
$66 million in 1991 mainly as a result of improved credit experience resulting
in lower Receivable and Lease write-offs. The most significant decline in
write-offs related to recreational product notes, resulting primarily from
more selective note acquisition criteria used by the Company. Write-offs of
recreational product notes totaled $24.2 million in 1992 compared with $33.3
million in 1991.
CAPITAL RESOURCES AND LIQUIDITY
The Company relies on its ability to raise substantial amounts of funds
to finance its Receivable and Lease portfolios. The Company's primary sources
of funds for this purpose are a combination of borrowings and equity capital.
Additionally, the Company periodically sells substantial amounts of retail
notes in the public market. The Company's ability to obtain funds is affected
by its debt ratings, which are closely related to the outlook for and the
financial condition of Deere & Company, and the nature and availability of
support facilities, such as its lines of credit. For information regarding
Deere & Company and its business, see Exhibit 99.1.
The Company's ability to meet its debt obligations is supported in a
number of ways as described below. All commercial paper issued is backed by
bank credit lines. The assets of the Company are self-liquidating in nature.
A strong
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equity position is available to absorb unusual losses on these assets.
Liquidity is also provided by the Company's ability to sell or "securitize"
these assets. Asset-liability risk is also actively managed to minimize
exposure to interest rate fluctuations.
The Company's business is somewhat seasonal, with overall acquisitions
of Receivables and Leases traditionally higher in the second half of the
fiscal year than in the first half, and overall collections of Receivables and
Leases traditionally somewhat higher in the first six months than in the last
half of the fiscal year.
The Company's cash flows from operating activities were $157 million in
1993. See "Statement of Consolidated Cash Flows" on page 34. Net cash
provided by investing activities totaled $477 million in 1993, primarily due
to net proceeds of $1.143 billion received from the securitization and sale of
receivables in the public market, which was partially offset by funds used for
Receivable and Lease acquisitions which exceeded collections by $698 million
in 1993. Collections of receivables in 1993 were slightly lower than last
year, due primarily to the lower retail note portfolio financed in 1993. The
aggregate cash provided by operating and investing activities was used for
financing activities and a $74 million increase in cash and cash equivalents.
Cash used for financing activities totaled $561 million in 1993, representing
a net decrease in outside borrowings of $853 million and the payment of an $82
million dividend to Deere & Company which were partially offset by a $374
million increase in payables to Deere & Company.
Over the past three years, operating activities have provided $453
million in cash. Proceeds from the sale of receivables and an increase in
payables to Deere & Company provided $1.893 and $423 million, respectively,
during the same period. These amounts were used mainly to fund Receivable and
Lease acquisitions which exceeded collections by $2.101 billion, a decrease of
$438 million in net outside borrowings, $202 million in dividends and an
increase in cash and cash equivalents of $67 million.
In common with other large finance and credit companies, the Company
actively manages the relationship of the types and amounts of its funding
sources to its Receivable and Lease portfolios in an effort to diminish risk
due to interest rate and currency fluctuations, while responding to favorable
competitive and financing opportunities. Accordingly, from time to time, the
Company enters into interest rate swap and interest rate cap agreements to
hedge its interest rate exposure in amounts corresponding to a portion of its
borrowings. See notes 4 and 5 to the consolidated financial statements for
further details. The credit and market risks under these agreements are not
considered to be significant.
Total indebtedness amounted to $2.777 billion at October 31, 1993
compared with $3.256 billion at October 31, 1992. Total short-term
indebtedness amounted to $1.299 billion at October 31, 1993 compared with
$2.017 billion at October 31, 1992. See note 4 to the consolidated financial
statements. Total long-term indebtedness amounted to $1.478 billion at
October 31, 1993 and $1.239 billion at October 31, 1992. See note 5 to the
consolidated financial statements. The
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decrease in total indebtedness at October 31, 1993 compared with October 31,
1992 was due primarily to the decline in Receivables and Leases financed. The
ratio of total interest-bearing debt to stockholder's equity was 3.8 to 1 and
4.6 to 1 at October 31, 1993 and October 31, 1992, respectively.
In 1993, the Company issued $150 million of 5% notes due in 1995 and
$200 million of 4-5/8% notes due in 1996. The Company also retired $150
million of 7.40% notes due in 1993, $125 million of 9.0% debentures due in
1993 and $47 million of 7-1/2% debentures due in 1998. In November 1993, the
Capital Corporation announced that on January 4, 1994 it will redeem the $40
million balance of outstanding 9.35% subordinated debentures due 2003.
Additional information on these borrowings is included in the discussion of
"Long-Term Borrowings" on page 41.
During 1993, the Capital Corporation issued $337 million and retired
$176 million of medium-term notes. At October 31, 1993, $737 million of
medium-term notes were outstanding having original maturity dates of between
one and seven years and interest rates that ranged from 3.4 percent to 9.5
percent.
At October 31, 1993, the Capital Corporation and Deere & Company,
jointly, had unsecured lines of credit with various banks in North America and
overseas totaling $3.025 billion. Included in the total credit lines were
three long-term credit agreement commitments totaling $3.016 billion. At
October 31, 1993, $2.265 billion of the lines of credit were unused. For the
purpose of computing unused credit lines, the aggregate of total short-term
borrowings, excluding the current portion of long-term borrowings, of the
Capital Corporation, Deere & Company, John Deere Limited (Canada) and John
Deere Finance Limited (Canada) were considered to constitute utilization.
Annual facility fees on the credit agreements are paid by Deere & Company and
a portion is charged to the Capital Corporation based on utilization.
In 1993, the Capital Corporation paid a dividend of $82 million to John
Deere Credit Company, which, in turn, paid an $82 million dividend to Deere &
Company. During the first quarter of 1994, the Capital Corporation declared
and paid a dividend of $150 million to John Deere Credit Company, which in
turn declared and paid a dividend of $150 million to Deere & Company.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
See accompanying table of contents of financial statements.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
24
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Omitted pursuant to instruction J(2).
ITEM 11. EXECUTIVE COMPENSATION.
Omitted pursuant to instruction J(2).
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Omitted pursuant to instruction J(2).
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Omitted pursuant to instruction J(2).
25
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) (1) Financial Statements
(2) Financial Statement Schedules
See the table of contents to financial statements and schedules
immediately preceding the financial statements and schedules to
consolidated financial statements.
(3) Exhibits
See the index to exhibits immediately preceding the exhibits filed with
this report.
(b) Reports on Form 8-K
Current Report on Form 8-K dated August 24, 1993 (Items 5 and 7).
Current Report on Form 8-K dated August 4, 1993 (Items 5 and 7).
26
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
27
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
JOHN DEERE CAPITAL CORPORATION
By: /s/ Hans W. Becherer
----------------------
Hans W. Becherer,
Chairman
Date: 24 January 1994
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 date indicated.
Signature Title Date
----------- ----- ----
/s/ Hans W. Becherer Director, Chairman and Principal )
-------------------- Executive Officer )
Hans W. Becherer )
)
/s/ J. Michael Dunn Director )
-------------------- )
J. Michael Dunn )
)
/s/ J. W. England Director, Vice President and )
------------------- Principal Accounting Officer )
J. W. England )
)
/s/ B. L. Hardiek Director )
------------------- )
B. L. Hardiek )
)
/s/ B. C. Harpole Director )
------------------- )
B. C. Harpole )
)
/s/ D. E. Hoffmann Director )
------------------- )
D. E. Hoffmann )
)
/s/ J. K. Lawson Director ) 24 January 1994
-------------------
J. K. Lawson
28
<PAGE>
/s/ Pierre E. Leroy Director )
- -------------------- )
Pierre E. Leroy )
)
/s/ M. P. Orr Director and President )
- -------------------- )
M. P. Orr )
)
/s/ E. L. Schotanus Director, Vice President and ) 24 January 1994
- -------------------- Principal Financial Officer )
E. L. Schotanus )
)
/s/ D. H. Stowe, Jr. Director )
- -------------------- )
D. H. Stowe, Jr. )
)
/s/ S. E. Warren Director )
- -------------------- )
S. E. Warren )
29
<PAGE>
[LOGO]
INDEPENDENT AUDITORS' REPORT
John Deere Capital Corporation:
We have audited the accompanying consolidated balance sheets of John Deere
Capital Corporation and subsidiaries as of October 31, 1993 and 1992 and the
related statements of consolidated income and retained earnings and of
consolidated cash flows for each of the three years in the period ended
October 31, 1993. Our audits also included the financial statement schedules
listed in the Table of Contents on page 31. These financial statements and
financial statement schedules are the responsibility of the company's
management. Our responsibility is to express an opinion on the financial
statements and financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of John Deere Capital Corporation
and subsidiaries at October 31, 1993 and 1992 and the results of their
operations and their cash flows for each of the three years in the period
ended October 31, 1993 in conformity with generally accepted accounting
principles. Also, in our opinion, such financial statement schedules, when
considered in relation to the basic consolidated financial statements taken as
a whole, present fairly in all material respects the information set forth
therein.
As discussed in Note 1 to the consolidated financial statements, effective
November 1, 1992 the company changed its method of accounting for
postretirement benefits other than pensions.
DELOITTE & TOUCHE
December 10, 1993
[LOGO]
30
<PAGE>
TABLE OF CONTENTS
FINANCIAL STATEMENTS: Page
----
John Deere Capital Corporation and Subsidiaries
(consolidated):
Statement of Consolidated Income and Retained Earnings for
the Years Ended October 31, 1993, 1992 and 1991...............32
Consolidated Balance Sheet, October 31, 1993 and 1992...........33
Statement of Consolidated Cash Flows for the Years Ended
October 31, 1993, 1992 and 1991...............................34
Notes to Consolidated Financial Statements......................35
FINANCIAL STATEMENT SCHEDULES:
Schedule VIII - Valuation and Qualifying Accounts for the
Years Ended October 31, 1993, 1992 and 1991...................46
Schedule IX - Short-term Borrowings for the Years Ended
October 31, 1993, 1992 and 1991...............................47
SCHEDULES OMITTED
The following schedules are omitted because of the absence of the
conditions under which they are required:
I, II, III, IV, V, VI, VII, X, XI, XII, XIII and XIV.
31
<PAGE>
STATEMENT OF CONSOLIDATED INCOME AND RETAINED EARNINGS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
John Deere Capital Corporation and Subsidiaries For the Year Ended October 31
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
(In millions of dollars) 1993 1992 1991
- --------------------------------------------------------------------------------
REVENUES:
- --------------------------------------------------------------------------------
Finance income earned on retail notes $ 314.2 $ 356.3 $ 383.5
- --------------------------------------------------------------------------------
Revolving charge account income 53.8 47.3 42.8
- --------------------------------------------------------------------------------
Lease revenues 39.6 36.8 36.9
- --------------------------------------------------------------------------------
Finance income earned on wholesale notes 10.3 9.5 9.3
- --------------------------------------------------------------------------------
Net gain on retail notes sold 15.6 8.5 2.6
- --------------------------------------------------------------------------------
Interest income from short-term investments 6.2 7.2 7.7
- --------------------------------------------------------------------------------
Securitization and servicing fee income 22.3 1.1
- --------------------------------------------------------------------------------
Interest income from Deere & Company .9 1.0 .8
- --------------------------------------------------------------------------------
Other income 3.1 3.2 3.5
- --------------------------------------------------------------------------------
Total revenues 466.0 470.9 487.1
- --------------------------------------------------------------------------------
EXPENSES:
- --------------------------------------------------------------------------------
Interest Expense:
- --------------------------------------------------------------------------------
On obligations to others 165.8 189.2 228.0
- --------------------------------------------------------------------------------
On notes payable to Deere & Company 2.0 .1 .3
- --------------------------------------------------------------------------------
Total interest expense 167.8 189.3 228.3
- --------------------------------------------------------------------------------
OPERATING EXPENSES:
- --------------------------------------------------------------------------------
Administrative and operating expenses 74.5 63.2 58.7
- --------------------------------------------------------------------------------
Provision for credit losses 28.1 48.5 66.2
- --------------------------------------------------------------------------------
Insurance expense 2.7 1.5
- --------------------------------------------------------------------------------
Fees paid to Deere & Company 7.1 8.3 9.1
- --------------------------------------------------------------------------------
Depreciation of equipment on operating leases 19.2 16.0 12.5
- --------------------------------------------------------------------------------
Total operating expenses 128.9 138.7 148.0
- --------------------------------------------------------------------------------
Total expenses 296.7 328.0 376.3
- --------------------------------------------------------------------------------
Income before Income Taxes and Changes in Accounting 169.3 142.9 110.8
- --------------------------------------------------------------------------------
Provision for Income Taxes 58.3 47.9 37.8
- --------------------------------------------------------------------------------
Income before Changes in Accounting 111.0 95.0 73.0
- --------------------------------------------------------------------------------
Changes in Accounting (3.8)
- --------------------------------------------------------------------------------
Net Income $ 107.2 $ 95.0 $ 73.0
- --------------------------------------------------------------------------------
Cash Dividends Paid (82.0) (70.0) (50.0)
- --------------------------------------------------------------------------------
Retained Earnings at Beginning of the Year 601.1 576.1 553.1
- --------------------------------------------------------------------------------
Retained Earnings at End of the Year $ 626.3 $ 601.1 $ 576.1
- --------------------------------------------------------------------------------
Ratio of Earnings to Fixed Charges 1.99* 1.74 1.48
- --------------------------------------------------------------------------------
The accompanying Notes to Consolidated Financial Statements on pages 35 to 45
are an integral part of this statement.
<FN>
*Excludes effect of accounting changes.
- --------------------------------------------------------------------------------
</TABLE>
32
<PAGE>
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
John Deere Capital Corporation and Subsidiaries October 31
- --------------------------------------------------------------------------------
(In millions of dollars) 1993 1992
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
- --------------------------------------------------------------------------------
Cash and Cash Equivalents $ 165.2 $ 91.1
- --------------------------------------------------------------------------------
Receivables and Leases:
- --------------------------------------------------------------------------------
Retail notes 2,791.7 3,509.1
- --------------------------------------------------------------------------------
Revolving charge accounts 331.1 268.0
- --------------------------------------------------------------------------------
Financing leases 84.9 85.4
- --------------------------------------------------------------------------------
Wholesale notes 109.6 111.9
- --------------------------------------------------------------------------------
Total receivables 3,317.3 3,974.4
- --------------------------------------------------------------------------------
Equipment on operating leases 119.3 85.1
- --------------------------------------------------------------------------------
Total receivables and leases 3,436.6 4,059.5
- --------------------------------------------------------------------------------
Allowance for credit losses (77.5) (83.0)
- --------------------------------------------------------------------------------
Total receivables and leases-net 3,359.1 3,976.5
- --------------------------------------------------------------------------------
Other Receivables 182.8 87.5
- --------------------------------------------------------------------------------
Other Assets 46.4 49.6
- --------------------------------------------------------------------------------
TOTAL $3,753.5 $4,204.7
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDER'S EQUITY
- --------------------------------------------------------------------------------
Short-Term Borrowings:
- --------------------------------------------------------------------------------
Commercial paper $ 454.0 $1,486.7
- --------------------------------------------------------------------------------
Deere & Company 439.5 65.7
- --------------------------------------------------------------------------------
Current maturities of long-term borrowings 405.2 464.4
- --------------------------------------------------------------------------------
Total short-term borrowings 1,298.7 2,016.8
- --------------------------------------------------------------------------------
Accounts Payable and Accrued Liabilities:
- --------------------------------------------------------------------------------
Accrued interest on notes and debentures 41.1 39.4
- --------------------------------------------------------------------------------
Other payables 79.4 91.3
- --------------------------------------------------------------------------------
Total accounts payable and accrued liabilities 120.5 130.7
- --------------------------------------------------------------------------------
Deposits Withheld from Dealers and Merchants 104.9 100.7
- --------------------------------------------------------------------------------
Long-Term Borrowings:
- --------------------------------------------------------------------------------
Notes and debentures 1,178.2 893.9
- --------------------------------------------------------------------------------
Subordinated debt 300.0 345.0
- --------------------------------------------------------------------------------
Total long-term borrowings 1,478.2 1,238.9
- --------------------------------------------------------------------------------
Retirement Benefit Accruals and Other Liabilities 12.1 3.7
- --------------------------------------------------------------------------------
Stockholder's Equity:
- --------------------------------------------------------------------------------
Common stock, without par value (authorized,
- --------------------------------------------------------------------------------
issued and outstanding-2,500 shares
- --------------------------------------------------------------------------------
owned by John Deere Credit Company) 112.8 112.8
- --------------------------------------------------------------------------------
Retained earnings 626.3 601.1
- --------------------------------------------------------------------------------
Total stockholder's equity 739.1 713.9
- --------------------------------------------------------------------------------
TOTAL $3,753.5 $4,204.7
- --------------------------------------------------------------------------------
The accompanying Notes to Consolidated Financial Statements on pages 35 to 45
are an integral part of this statement.
- --------------------------------------------------------------------------------
</TABLE>
33
<PAGE>
STATEMENT OF CONSOLIDATED CASH FLOWS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
John Deere Capital Corporation and Subsidiaries For the Year Ended October 31
- -------------------------------------------------------------------------------------------
(In millions of dollars) 1993 1992 1991
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- -------------------------------------------------------------------------------------------
Net income $ 107.2 $ 95.0 $ 73.0
- -------------------------------------------------------------------------------------------
Adjustments to reconcile net income to net cash
- -------------------------------------------------------------------------------------------
provided by operator activities:
- -------------------------------------------------------------------------------------------
Changes in accounting, cumulative net adjustment 3.8
- -------------------------------------------------------------------------------------------
Provision for credit losses 28.1 48.5 66.2
- -------------------------------------------------------------------------------------------
Provision for depreciation 21.0 17.9 14.3
- -------------------------------------------------------------------------------------------
Deferred income taxes 3.8 (4.8) (14.5)
- -------------------------------------------------------------------------------------------
Other (6.6) (1.4) 1.5
- -------------------------------------------------------------------------------------------
Net cash provided by operating activities 157.3 155.2 140.5
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------------------------------------------------------------
Cost of receivables and leases acquired (3,340.6) (3,180.4) (3,248.7)
- -------------------------------------------------------------------------------------------
Collections of receivables 2,642.5 2,708.0 2,318.7
- -------------------------------------------------------------------------------------------
Proceeds from sales of receivables 1,161.7 703.6 27.4
- -------------------------------------------------------------------------------------------
Other 13.9 14.7 10.2
- -------------------------------------------------------------------------------------------
Net cash provided by (used for) investing activities 477.5 245.9 (892.4)
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------------------------------------------------------------
Increase (decrease) in notes payable to others (1,032.7) (615.1) 310.3
- -------------------------------------------------------------------------------------------
Change in receivable/payable with Deere & Company 373.9 (39.5) 88.5
- -------------------------------------------------------------------------------------------
Proceeds from issuance of long-term borrowings 687.0 522.7 426.2
- -------------------------------------------------------------------------------------------
Principal payments on long-term borrowings (506.9) (227.5) (1.9)
- -------------------------------------------------------------------------------------------
Dividends paid (82.0) (70.0) (50.0)
- -------------------------------------------------------------------------------------------
Net cash provided by (used for) financing activities (560.7) (429.4) 773.1
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 74.1 (28.3) 21.2
- -------------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of year 91.1 119.4 98.2
- -------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 165.2 $ 91.1 $ 119.4
- -------------------------------------------------------------------------------------------
The accompanying Notes to Consolidated Financial Statements on pages 35 to 45 are an integral
part of this statement.
- -------------------------------------------------------------------------------------------
</TABLE>
34
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CORPORATE ORGANIZATION
John Deere Capital Corporation (Capital Corporation) is a wholly-owned
subsidiary of John Deere Credit Company, a finance holding company which is
wholly-owned by Deere & Company. The Capital Corporation and its subsidiaries,
Deere Credit Services, Inc. (DCS), Farm Plan Corporation (FPC), Deere Credit,
Inc. (DCI), and John Deere Receivables, Inc. (JDRI), are collectively called the
Company. Deere & Company with its other wholly-owned subsidiaries are
collectively called John Deere.
Retail notes, revolving charge accounts, financing leases and wholesale
notes receivable are collectively called "receivables." Receivables and
operating leases are collectively called "receivables and leases."
The risk of credit losses applicable to John Deere retail notes and leases,
net of recovery from withholdings from John Deere dealers, is borne by the
Company. John Deere is compensated by the Company at a rate of 2.9 percent or
less of the finance income earned, depending on prevailing bank interest rate
levels, for originating retail notes on John Deere products. John Deere is
reimbursed by the Company for staff support and other administrative services at
estimated cost, and for credit lines provided by Deere & Company based on
utilization of the lines. John Deere is compensated for originating leases on
John Deere products and is reimbursed for staff support in a manner similar to
the procedures for retail notes.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the financial statements of the
Capital Corporation and its subsidiaries, all of which are wholly-owned.
ACCOUNTING CHANGES
In the fourth quarter of 1993, the Company adopted FASB Statement No. 106,
Employers' Accounting for Postretirement Benefits Other Than Pensions, effective
November 1, 1992. Prior quarters of 1993 were restated as required by this
Statement. This Statement generally requires the accrual of retiree health care
and other postretirement benefits during employees' years of active service. The
Company elected to recognize the pretax transition obligation of $5.4 million
($3.6 million net of deferred income taxes) as a one-time charge to earnings in
the current year. This obligation represents the portion of future retiree
benefit costs related to service already rendered by both active and retired
employees up to November 1, 1992. The 1993 postretirement benefits expense and
related disclosures have been determined according to the provisions of FASB
Statement No. 106. For years prior to 1993, postretirement benefits were
generally included in costs as covered expenses were actually incurred. The
adoption of FASB Statement No. 106 resulted in an incremental pretax expense of
$.2 million compared with the expense determined under the previous accounting
principle. This increase in the current year expense is in addition to the
previously mentioned one-time charge relating to the transition obligation.
In the fourth quarter of 1993, the Company adopted FASB Statement No. 112,
Employers' Accounting for Postemployment Benefits, effective November 1, 1992.
This Statement requires the accrual of certain benefits provided to former or
inactive employees after employment but before retirement during employees'
years of active service. The Company previously accrued certain disability
related benefits when the disability occurred. Results for the first quarter of
1993 were restated for the cumulative pretax charge resulting from this change
in accounting as of November 1, 1992 which totaled $.3 million ($.2 million net
of deferred income taxes). The adoption of FASB Statement No. 112 had an
immaterial effect on 1993 expenses.
In the fourth quarter of 1993, the Company adopted FASB Statement No. 107,
Disclosures about Fair Values of Financial Instruments. Disclosures of the fair
values of financial instruments which do not approximate the carrying values in
the financial statements are included in the appropriate financial statement
notes. Fair values of other financial instruments approximate the carrying
amounts because of the short maturities or current market interest rates of
those instruments.
In the second quarter of 1992, the Company adopted FASB Statement No. 109,
Accounting for Income Taxes. See note 10 for further information.
RETAIL NOTES RECEIVABLE
The Company purchases and finances retail notes from John Deere's agricultural
equipment, industrial equipment and lawn and grounds care equipment sales
branches in the United States. The notes are acquired by the sales branches
through John Deere retail dealers and principally originate in connection with
retail sales by dealers of new John Deere equipment and used equipment. The
Company also purchases and finances retail
35
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
notes unrelated to John Deere equipment, representing primarily recreational
vehicle and recreational marine product notes acquired from independent dealers
of those products and from marine mortgage service companies (recreational
product retail notes).
Finance income included in the face amount of retail notes is amortized
into income over the lives of the notes on the effective-yield basis. Unearned
finance income on variable-rate notes is adjusted monthly based on fluctuations
in the base rate of a specified bank.
Costs incurred in the acquisition of retail notes are deferred and
amortized into income over the expected lives of the notes on the
effective-yield basis.
A portion of the finance income earned by the Company arises from retail
sales of John Deere equipment sold in advance of the season of use or in other
sales promotions by John Deere on which finance charges are waived by John Deere
for a period from the date of sale to a specified subsequent date. Some low-rate
financing programs are also offered by John Deere. The Company receives
compensation from John Deere approximately equal to the normal net finance
charge on retail notes for periods during which finance charges have been waived
or reduced. The portions of the Company's finance income earned that were
received from John Deere on retail notes containing waiver of finance charges or
reduced rates were 19 percent in 1993, 17 percent in 1992 and 20 percent in
1991.
A deposit equal to one percent of the face amount of John Deere
agricultural and lawn and grounds care equipment retail notes originating from
each dealer is withheld from that dealer and recorded by the Company. Any
subsequent retail note losses are charged against the withheld deposits. To the
extent that a loss on a retail note cannot be absorbed by deposits withheld from
the dealer from which the retail note was acquired, it is charged against the
Company's allowance for credit losses. At the end of each calendar year, the
balance of each dealer's withholding account in excess of a specified percent
(currently 3 percent) of the total balance outstanding on retail notes
originating with that dealer is remitted to the dealer, and any negative balance
in the dealer withholding account is written off and absorbed by the Company's
allowance for credit losses.
All John Deere industrial equipment retail notes are currently acquired on
a non-recourse basis and there is no withholding of dealer deposits on those
notes. This procedure originated in January 1992. Industrial notes acquired
prior to January 1992 remain subject to the agricultural and lawn and grounds
care equipment procedures, noted in the above paragraph, until the notes are
paid in full, or the withholding accounts are depleted. Because of this change,
the allowance for credit losses was increased to compensate for the additional
credit risk. The Company does not withhold deposits on recreational product
retail notes.
The Company requires that theft and physical damage insurance be carried on
all equipment leased or securing retail notes. The customer may, at his own
expense, have the Company purchase this insurance or obtain it from other
sources. Theft and physical damage insurance is also required on wholesale notes
and can be purchased through the Company or from other sources. Insurance is not
required on revolving charge accounts.
Generally, when an account becomes 120 days delinquent, accrual of finance
income is suspended, the collateral is repossessed or the account is designated
for litigation, and the estimated uncollectible amount, after charging the
dealer's withholding account, if any, is written off to the allowance for credit
losses.
REVOLVING CHARGE ACCOUNTS RECEIVABLE
Revolving charge account income is generated primarily by two revolving credit
products: Farm Plan and the John Deere Credit Revolving Plan.
Farm Plan is primarily used by agri-businesses to finance customer
purchases, such as parts and service labor, which would otherwise be carried by
the merchants as accounts receivable. Farm Plan income includes a discount paid
by merchants for the purchase of customer accounts and finance charges paid by
customers on their outstanding revolving charge account balances. Merchant
recourse and a merchant reserve are established on some receivables purchased.
The John Deere Credit Revolving Plan is used primarily by retail customers
of John Deere dealers to finance lawn and grounds care equipment. Income
includes a discount paid by dealers on most transactions and finance charges
paid by customers on their outstanding account balances.
Accrual of revolving charge account income is suspended generally when an
account becomes 120 days delinquent. Accounts are deemed to be uncollectible and
written off to the allowance for credit losses when delinquency reaches 180 days
for a Farm Plan account and 150 days for John Deere Credit Revolving Plan
accounts.
36
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DIRECT FINANCING LEASES AND EQUIPMENT ON OPERATING LEASES
The Company leases John Deere agricultural equipment, industrial equipment and
lawn and grounds care equipment directly to retail customers.
At the time of accepting a lease that qualifies as a direct financing lease
under FASB Statement No. 13, the Company records the gross amount of lease
payments receivable, estimated residual value of the leased equipment for
non-purchase option leases and unearned lease income. The unearned lease income
is equal to the excess of the gross lease receivable plus the estimated residual
value over the cost of the equipment. The unearned lease income is recognized as
revenue over the lease term on the effective-yield method.
Leases that do not meet the criteria for direct financing leases as
outlined by FASB Statement No. 13 are accounted for as operating leases. Rental
payments applicable to equipment on operating leases are recorded as income on a
straight-line method over the lease terms. Operating lease assets are recorded
at cost and depreciated on a straight-line method over the terms of the leases.
Lease acquisition costs are accounted for in a manner similar to the
procedures for retail notes.
Deposits withheld from John Deere dealers and related losses on leases are
handled in a manner similar to the procedures for retail notes. In addition, a
lease payment discount program, allowing reduced payments over the term of the
lease, is administered in a manner similar to finance waiver on retail notes.
Equipment returned to the Company upon termination of leases and held for
subsequent sale or lease is recorded at the estimated wholesale market value of
the equipment.
Generally, when an account becomes 120 days delinquent, accrual of lease
revenue is suspended, the equipment is repossessed or the account is designated
for litigation and the estimated uncollectible amount, after charging the
dealer's withholding account, if any, is written off to the allowance for credit
losses.
WHOLESALE RECEIVABLES
The Company finances recreational vehicle inventory and John Deere engines held
by dealers of those products. Wholesale finance income is recognized monthly
based on the daily balance of wholesale receivables outstanding and the
applicable effective interest rate. Interest rates vary with a prevailing bank
base rate, the type of equipment financed and the balance outstanding. Wholesale
receivables are secured by the recreational vehicle and engine inventories
financed. Although amounts are not withheld from dealers to cover uncollectible
receivables, there are repurchase agreements with manufacturers for new
inventories held by dealers. Generally, when an account becomes 60 days
delinquent, accrual of finance income is suspended, the collateral is
repossessed and the estimated uncollectible amount is written off to the
allowance for credit losses.
OTHER RECEIVABLES
During 1993 and 1992, the Company sold retail notes to limited-purpose business
trusts, which utilized the notes as collateral for the issuance of asset backed
securities to the public. At the time of the sales, "other receivables" from
the trusts were recorded at net present value. The receivables relate to
deposits made pursuant to recourse provisions and other payments to be received
under the sales agreements. The receivables will be amortized to their value at
maturity using the interest method. The Company is also compensated by the
trusts for certain expenses incurred in the administration of these receivables.
Securitization and servicing fee income includes both the amortization of the
above receivables and reimbursed administrative expenses.
CONCENTRATION OF CREDIT RISK
Receivables and leases have significant concentrations of credit risk in the
agricultural, industrial, lawn and grounds care, and recreational product
business sectors as shown in note 2, "Receivables and Leases." On a geographic
basis, there is not a disproportionate concentration of credit risk in any area
of the United States. The Company retains as collateral a security interest in
the equipment associated with receivables and leases other than revolving charge
accounts.
RECLASSIFICATIONS
Certain amounts for 1991 and 1992 have been reclassified to conform with 1993
financial statement presentations.
37
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 RECEIVABLES AND LEASES
RETAIL NOTES RECEIVABLE
Retail notes receivable by product category at October 31 in millions
of dollars follow:
<TABLE>
<CAPTION>
1993 1992
- ---------------------------------------------------------------------------
<S> <C> <C>
Agricultural equipment--new $ 993.1 $1,350.2
- ---------------------------------------------------------------------------
Agricultural equipment--used 840.0 1,092.4
- ---------------------------------------------------------------------------
Industrial equipment--new 233.1 319.7
- ---------------------------------------------------------------------------
Industrial equipment--used 71.8 85.3
- ---------------------------------------------------------------------------
Lawn and grounds care equipment--new 175.1 203.2
- ---------------------------------------------------------------------------
Lawn and grounds care equipment--used 22.2 23.8
- ---------------------------------------------------------------------------
Recreational Products 1,303.1 1,446.5
- ---------------------------------------------------------------------------
Total 3,638.4 4,521.1
- ---------------------------------------------------------------------------
Unearned finance income:
- ---------------------------------------------------------------------------
John Deere (347.7) (435.8)
- ---------------------------------------------------------------------------
Recreational Products (499.0) (576.2)
- ---------------------------------------------------------------------------
Total (846.7) (1,012.0)
- ---------------------------------------------------------------------------
Retail notes receivable--net $2,791.7 $3,509.1
- ---------------------------------------------------------------------------
Retail note installments at October 31 are scheduled as follows in millions of
dollars:
<S> <C> <C>
1993 1992
- ---------------------------------------------------------------------------
Due in:
- ---------------------------------------------------------------------------
0-12 months $ 871.5 $1,180.1
- ---------------------------------------------------------------------------
13-24 months 750.9 985.9
- ---------------------------------------------------------------------------
25-36 months 618.2 776.1
- ---------------------------------------------------------------------------
37-48 months 462.6 547.6
- ---------------------------------------------------------------------------
49-60 months 308.8 335.5
- ---------------------------------------------------------------------------
61-72 months 162.6 165.0
- ---------------------------------------------------------------------------
Over 72 months 463.8 530.9
- ---------------------------------------------------------------------------
Total $3,638.4 $4,521.1
- ---------------------------------------------------------------------------
Company guidelines relating to down payment requirements and maximum contract
terms on retail notes are generally as follows:
<S> <C> <C>
Down Contract
Payment Terms
- ---------------------------------------------------------------------------
Agricultural equipment, new and used:
- ---------------------------------------------------------------------------
Seasonal payments 30% 7 crop years
- ---------------------------------------------------------------------------
Monthly payments 20% 84 months
- ---------------------------------------------------------------------------
Industrial equipment:
- ---------------------------------------------------------------------------
New 20% 48-60 months
- ---------------------------------------------------------------------------
Used 20% 36 months
- ---------------------------------------------------------------------------
Lawn and grounds care equipment,
- ---------------------------------------------------------------------------
new and used:
- ---------------------------------------------------------------------------
Personal use 10% 72 months
- ---------------------------------------------------------------------------
Commercial use 20% 72 months
- ---------------------------------------------------------------------------
Recreational Products:
- ---------------------------------------------------------------------------
New 20% 180 months
- ---------------------------------------------------------------------------
Used 20% 144 months
- ---------------------------------------------------------------------------
</TABLE>
During 1993, the average effective yield on retail notes held by the Company was
approximately 9.8 percent compared with 10.1 percent in 1992.
Retail notes acquired by the Company during the year ended October 31, 1993
had an estimated average original term (based on dollar amounts) of 67 months.
During 1992 and 1991, the estimated average original term was 68 and 66 months,
respectively. Historically, because of prepayments, the average actual life of
retail notes has been considerably shorter than the average original term.
During 1993, the Company received net proceeds of $1.143 billion from the
sale of retail notes to limited-purpose business trusts, which utilized the
notes as collateral for the issuance of asset backed securities to the public.
During 1992, the Company received net proceeds of $683 million from the sale of
retail notes.
At October 31, 1993 and 1992, the net balance of all retail notes
previously sold by the Company was $1.394 billion and $688 million,
respectively. Additional sales of retail notes are expected to be made in the
future.
The Company recognizes any gain or loss at the time of the sale of retail
notes. The sale price of retail notes sold to financial institutions is subject
to subsequent monthly adjustments to reflect changes in short-term interest
rates and variations in timing between actual and anticipated collections. The
Company acts as agent for the buyers in collection and administration of all the
notes it has sold and was contingently liable for recourse in the maximum amount
of $108 million and $67 million at October 31, 1993 and 1992, respectively. All
retail notes sold are collateralized by security agreements on the related
machinery sold to the customers. There is a minimal amount of market risk due to
monthly adjustments to the sale price of a small portion of the retail notes.
There is no anticipated credit risk related to the nonperformance by the
counterparties.
REVOLVING CHARGE ACCOUNTS RECEIVABLE
Revolving charge accounts receivable at October 31, 1993 totaled $331 million
compared with $268 million at October 31, 1992. Account holders may pay the
account balance in full at any time, or make payments over a number of months
according to a payment schedule. A minimum amount is due each month from
customers selecting the revolving payment option.
FINANCING LEASES RECEIVABLE
Financing leases receivable by product category at October
38
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
31 are as follows in millions of dollars:
<TABLE>
<CAPTION>
1993 1992
- ---------------------------------------------------------------------------
<S> <C> <C>
Agricultural equipment $ 68.5 $ 71.8
- ---------------------------------------------------------------------------
Industrial equipment 23.8 18.1
- ---------------------------------------------------------------------------
Lawn and grounds care equipment 4.9 5.8
- ---------------------------------------------------------------------------
Total 97.2 95.7
- ---------------------------------------------------------------------------
Estimated residual values 2.3 3.1
- ---------------------------------------------------------------------------
Unearned finance income (14.6) (13.4)
- ---------------------------------------------------------------------------
Financing leases receivable--net $ 84.9 $ 85.4
- ---------------------------------------------------------------------------
</TABLE>
Residual values represent the amounts estimated to be recoverable at maturity
from disposition of the leased equipment under non-purchase option financing
leases.
Initial lease terms for financing leases range from 12 months to 72 months.
Payments on financing leases receivable at October 31 are scheduled as follows
in millions of dollars:
<TABLE>
<CAPTION>
1993 1992
- ---------------------------------------------------------------------------
<S> <C> <C>
Due in:
- ---------------------------------------------------------------------------
0-12 months $ 35.4 $ 62.2
- ---------------------------------------------------------------------------
13-24 months 25.9 18.5
- ---------------------------------------------------------------------------
25-36 months 18.3 10.1
- ---------------------------------------------------------------------------
37-48 months 11.1 4.1
- ---------------------------------------------------------------------------
Over 48 months 6.5 .8
- ---------------------------------------------------------------------------
Total $ 97.2 $ 95.7
- ---------------------------------------------------------------------------
</TABLE>
The Company sold $19 million of municipal leases to Deere & Company in 1993
compared with $21 million in 1992. At October 31, 1993, the net balance of
leases sold was $43 million compared with $48 million at October 31, 1992.
Additional sales of leases may be made in the future.
WHOLESALE RECEIVABLES
Wholesale receivables at October 31, 1993 totaled $110 million compared with
$112 million at October 31, 1992.
Maturities range from 12 to 24 months, with scheduled principal reductions from
invoice date to maturity.
EQUIPMENT ON OPERATING LEASES
The cost of equipment on operating leases by product category at October 31
follows in millions of dollars:
<TABLE>
<CAPTION>
1993 1992
- ---------------------------------------------------------------------------
<S> <C> <C>
Agricultural equipment $ 102.4 $ 63.0
- ---------------------------------------------------------------------------
Industrial equipment 49.1 48.1
- ---------------------------------------------------------------------------
Lawn and grounds care equipment 1.6 1.6
- ---------------------------------------------------------------------------
Total 153.1 112.7
- ---------------------------------------------------------------------------
Accumulated depreciation (33.8) (27.6)
- ---------------------------------------------------------------------------
Equipment on operating leases--net $ 119.3 $ 85.1
- ---------------------------------------------------------------------------
</TABLE>
Initial lease terms for equipment on operating leases range from 12 months to 72
months. Rental payments for equipment on operating leases at October 31 are
scheduled as follows in millions of dollars:
<TABLE>
<CAPTION>
1993 1992
- ---------------------------------------------------------------------------
<S> <C> <C>
Due in:
- ---------------------------------------------------------------------------
0-12 months $ 27.0 $ 20.0
- ---------------------------------------------------------------------------
13-24 months 17.7 14.0
- ---------------------------------------------------------------------------
25-36 months 4.9 7.3
- ---------------------------------------------------------------------------
37-48 months 1.6 2.3
- ---------------------------------------------------------------------------
Over 48 months .2 .2
- ---------------------------------------------------------------------------
Total $ 51.4 $ 43.8
- ---------------------------------------------------------------------------
</TABLE>
FAIR VALUE
At October 31, 1993, the estimated fair value of total net receivables and
leases was $3.516 billion compared with the carrying value of $3.436 billion.
The fair values of fixed-rate retail notes and financing leases were based on
the discounted values of their related cash flows at current market interest
rates. The fair values of variable-rate retail notes, revolving charge accounts
and wholesale notes approximate the carrying amounts.
NOTE 3 ALLOWANCE FOR CREDIT LOSSES
Allowances for credit losses on receivables and leases are maintained in
amounts considered to be appropriate in relation to the receivables and leases
outstanding based on estimated collectibility and collection experience.
An analysis of the allowance for credit losses on total receivables and
losses follows in millions of dollars:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1993 1992 1991
- ---------------------------------------------------------------------------
Balance, beginning
- ---------------------------------------------------------------------------
of the year $ 83.0 $ 78.2 $ 68.5
- ---------------------------------------------------------------------------
Provision charged to
- ---------------------------------------------------------------------------
operations 28.1 48.5 66.2
- ---------------------------------------------------------------------------
Amounts written off (26.1) (43.7) (56.5)
- ---------------------------------------------------------------------------
Transfers related to
- ---------------------------------------------------------------------------
retail note sales (7.5)
- ---------------------------------------------------------------------------
Balance, end of the year $ 77.5 $ 83.0 $ 78.2
- ---------------------------------------------------------------------------
</TABLE>
The allowance for credit losses represented 2.3 percent, 2.0 percent and 1.8
percent of receivables and leases outstanding at October 31, 1993, 1992 and
1991, respectively. In addition, the Company had $105 million, $101 million and
$99 million at October 31, 1993, 1992 and 1991, respectively, of deposits
withheld from John Deere dealers and Farm Plan merchants available for certain
potential credit losses originating from those dealers and merchants. The lower
provisions in 1993 and 1992 resulted from a decrease in write-offs of
uncollectible receivables and leases, particularly recreational product retail
notes. The decrease in write-offs of recreational product notes resulted
primarily from the development of more selective recreational product retail
note acquisition criteria by the Company over the past few years and improved
collection effectiveness.
39
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 SHORT-TERM BORROWINGS
On October 31, 1993, short-term borrowings were $1.299 billion, $454 million of
which was commercial paper. Short-term borrowings were $2.017 billion one year
ago, $1.487 billion of which was commercial paper. Original maturities of
commercial paper outstanding on October 31, 1993 ranged up to 244 days. The
weighted average remaining term of commercial paper outstanding on October 31,
1993 was approximately 71 days. The Capital Corporation's short-term debt also
includes amounts borrowed from Deere & Company, which totaled $439.5 million at
October 31, 1993. The Capital Corporation pays a market rate of interest to
Deere & Company based on the average outstanding borrowings each month. The
weighted average interest rates on all short-term borrowings, excluding current
maturities of long-term borrowings, for 1993, 1992 and 1991 were 4.0 percent,
5.0 percent and 6.9 percent, respectively.
At October 31, 1993, the Capital Corporation and Deere & Company, jointly,
had unsecured lines of credit with various banks in North America and overseas
totaling $3.025 billion. Included in the total credit lines are three long-term
credit agreements expiring on various dates through March 1996 for an aggregate
maximum amount of $3.016 billion. At October 31, 1993, $2.265 billion of the
lines of credit were unused. For the purpose of computing unused credit lines,
the aggregate of total short-term borrowings, excluding the current portion of
long-term borrowings, of the Capital Corporation, Deere & Company, John Deere
Limited (Canada) and John Deere Finance Limited (Canada) were considered to
constitute utilization. Annual facility fees on the credit agreements are paid
by Deere & Company and charged to the Capital Corporation based on utilization.
At October 31, 1993, the Capital Corporation had no borrowings outstanding
under the credit agreements. These agreements require the Capital Corporation to
maintain its consolidated ratio of earnings before fixed charges to fixed
charges at no less than 1.05 to 1 for each fiscal quarter. In addition, the
Capital Corporation's ratio of senior debt to total stockholder's equity plus
subordinated debt may not be more than 8 to 1 at the end of any fiscal quarter.
For purposes of these calculations, "earnings" consist of income before income
taxes to which are added fixed charges. "Fixed charges" consist of interest on
indebtedness, amortization of debt discount and expense, an estimated amount of
rental expense under capitalized leases which is deemed to be representative of
the interest factor and rental expense under operating leases. "Senior debt"
consists of the Company's total interest-bearing obligations, excluding
subordinated debt, but including borrowings from Deere & Company. The Company's
ratio of earnings to fixed charges was 1.99 to 1 (excluding the effect of the
accounting changes), 1.74 to 1 and 1.48 to 1 in 1993, 1992 and 1991,
respectively. The Company's ratio of senior debt to total stockholder's equity
plus subordinated debt was 2.2 to 1 at October 31, 1993 compared with 2.7 to 1
at October 31, 1992.
In common with other large finance and credit companies, the Company
actively manages the relationship of the types and amounts of its funding
sources to its receivable and lease portfolios in an effort to diminish risk due
to interest rate and currency fluctuations, while responding to favorable
competitive and financing opportunities. Accordingly, from time to time, the
Company has entered into interest rate swap and interest rate cap agreements to
hedge its interest rate exposure in amounts corresponding to a portion of its
short-term borrowings. At October 31, 1993 and 1992, the total notional
principal amounts of interest rate swap agreements were $510 million and $150
million having rates of 3.6 to 9.6 percent terminating in up to 28 months and 14
months, respectively. The total notional principal amounts of interest rate cap
agreements at October 31, 1993 and 1992 were $44 million and $105 million having
capped rates of 8.0 percent to 9.0 percent terminating in up to 15 months and 28
months, respectively. The differential to be paid or received on all swap and
cap agreements is accrued as interest rates change and is recognized over the
lives of the agreements. The credit and market risk under these agreements is
not considered to be significant. The estimated fair value and carrying value of
these interest rate swap and cap agreements were not significant at October 31,
1993.
40
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 LONG-TERM BORROWINGS
Long-term borrowings of the Capital Corporation at October 31 consisted of the
following in millions of dollars:
<TABLE>
<CAPTION>
1993 1992
- --------------------------------------------------------------------------------
<S> <C> <C>
Senior Debt:
- --------------------------------------------------------------------------------
Medium-term notes due 1994-2000:
- --------------------------------------------------------------------------------
Average interest rate of 5.9% as
- --------------------------------------------------------------------------------
of year end 1993 and 6.7% as of
- --------------------------------------------------------------------------------
year end 1992 $ 382.0 $ 400.1
- --------------------------------------------------------------------------------
5% Debenture due 1995 150.0
- --------------------------------------------------------------------------------
4-5/8% Debenture due 1996 200.0
- --------------------------------------------------------------------------------
6.0% Notes due 1995:
- --------------------------------------------------------------------------------
Swapped to variable interest rate
- --------------------------------------------------------------------------------
of 3.1% as of year end 1993
- --------------------------------------------------------------------------------
and 3.6% as of year end 1992 100.0 100.0
- --------------------------------------------------------------------------------
11-5/8% Notes due 1995:
- --------------------------------------------------------------------------------
Swapped to variable interest rate
- --------------------------------------------------------------------------------
of 3.2% as of year end 1993 and
- --------------------------------------------------------------------------------
3.3% as of year end 1992 150.0 150.0
- --------------------------------------------------------------------------------
7.2% Debenture due 1997 100.0 100.0
- --------------------------------------------------------------------------------
7.5% Debenture due 1998 47.5
- --------------------------------------------------------------------------------
5% Swiss Franc Bonds due 1999:
- --------------------------------------------------------------------------------
Swapped to variable interest rate
- --------------------------------------------------------------------------------
of 3.7% as of year end 1993 and
- --------------------------------------------------------------------------------
3.8% as of year end 1992 97.5 97.5
- --------------------------------------------------------------------------------
Total 1,179.5 895.1
- --------------------------------------------------------------------------------
Less unamortized debt discount 1.3 1.2
- --------------------------------------------------------------------------------
Net Senior Debt 1,178.2 893.9
- --------------------------------------------------------------------------------
Subordinated Debt:
- --------------------------------------------------------------------------------
9-5/8% Subordinated Notes due 1998:
- --------------------------------------------------------------------------------
Swapped to variable interest rate
- --------------------------------------------------------------------------------
of 3.8% as of year end 1993 and
- --------------------------------------------------------------------------------
3.9% as of year end 1992 150.0 150.0
- --------------------------------------------------------------------------------
9.35% Subordinated Debentures
- --------------------------------------------------------------------------------
due 2003 45.0
- --------------------------------------------------------------------------------
8-5/8% Subordinated Debentures
- --------------------------------------------------------------------------------
due 2019: Swapped to variable
- --------------------------------------------------------------------------------
interest rate of 3.2% as of
- --------------------------------------------------------------------------------
year end 1993 and 3.2% as of
- --------------------------------------------------------------------------------
year end 1992 150.0 150.0
- --------------------------------------------------------------------------------
Total Subordinated Debt 300.0 345.0
- --------------------------------------------------------------------------------
Total $1,478.2 $1,238.9
- --------------------------------------------------------------------------------
</TABLE>
In 1993, the Capital Corporation issued $150 million of 5% notes due in 1995
and $200 million of 4-5/8% notes due in 1996. The Capital Corporation also
retired $150 million of 7.4% notes due in 1993, $125 million of 9.0% debentures
due in 1993 and $47 million of 7-1/2% debentures due in 1998. During 1993, the
Capital Corporation issued $337 million and retired $176 million of medium-term
notes. In November 1993, the Capital Corporation announced that on January 4,
1994 it will redeem the $40 million balance of outstanding 9.35% subordinated
debentures due 2003.
The Capital Corporation has entered into interest rate swap agreements
with independent parties that change the effective rate of interest on certain
long-term borrowings to a variable rate based on specified United States
commercial paper rate indices. The table reflects the effective year-end
variable interest rates relating to these swap agreements. The notional
principal amounts and maturity dates of these swap agreements are the same as
the principal amounts and maturities of the related borrowings. In addition, the
Capital Corporation has interest rate swap agreements corresponding to a portion
of its fixed rate long-term borrowings. At October 31, 1993, the total notional
principal amount of these interest rate swap agreements was $347 million, having
variable rates of 3.4 percent to 3.8 percent, terminating in up to 40 months.
The Capital Corporation also has interest rate swap and cap agreements
associated with medium-term notes. The table reflects the interest rates
relating to these swap and cap agreements. At October 31, 1993 and 1992, the
total notional principal amounts of these swap agreements were $138 million and
$110 million, terminating in up to 42 months and 54 months, respectively. At
October 31, 1993 and 1992, the total notional principal amounts of these cap
agreements were $25 million and $125 million, terminating in up to 22 months and
34 months, respectively. A Swiss franc to United States dollar currency swap
agreement is also associated with the Swiss franc bonds in the table. The credit
and market risk under these agreements is not considered to be significant.
At October 31, 1993, the total estimated fair value of the Company's total
long-term borrowings was $1.496 billion. The corresponding carrying amount of
total long-term borrowings was $1.478 billion. Fair values of long-term
borrowings with fixed rates were based on a discounted cash flow model. Fair
values of long-term borrowings, which have been swapped to current variable
interest rates, approximate their carrying amounts. The estimated fair value and
carrying value of the Company's interest rate swap and cap agreements associated
with medium-term notes were not significant at October 31, 1993.
The approximate amounts of long-term borrowings maturing and sinking fund
payments required in each of the next five years, in millions of dollars, are
as follows: 1994-$405, 1995-$633, 1996-$262, 1997-$309, 1998-$11.
41
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 FIXED CHARGE COVERAGE
Deere & Company has expressed an intention of conducting its business with the
Company on such terms that the Company's consolidated ratio of earnings before
fixed charges to fixed charges will not be less than 1.05 to 1 for each fiscal
quarter. Financial support was not provided in 1993, 1992 or 1991, as the ratios
were 1.99 to 1 (excluding the effect of the accounting changes), 1.74 to 1, and
1.48 to 1, respectively. This arrangement is not intended to make Deere &
Company responsible for the payment of obligations of the Company.
NOTE 7 COMMON STOCK
All of the Company's common stock is owned by John Deere Credit Company, a
wholly-owned finance holding subsidiary of Deere & Company. No shares of common
stock of the Company were reserved for officers or employees or for options,
warrants, conversions or other rights at October 31, 1993 or 1992.
NOTE 8 DIVIDENDS
In October 1993, the Capital Corporation paid a cash dividend to John Deere
Credit Company of $82 million, which in turn paid an $82 million cash dividend
to Deere & Company. Similarly, during 1992, the Capital Corporation paid a $70
million dividend. During the first quarter of 1994, the Capital Corporation
declared and paid a dividend of $150 million to John Deere Credit Company, which
in turn declared and paid a dividend of $150 million to Deere & Company.
NOTE 9 PENSION AND OTHER RETIREMENT BENEFITS
The Company participates in the Deere & Company salaried pension plan, which is
a defined benefit plan in which benefits are based primarily on years of service
and employees' compensation near retirement. This plan is funded according to
the 1974 Employee Retirement Income Security Act (ERISA) and income tax
regulations. Plan assets consist primarily of common stocks, common trust funds,
government securities and corporate debt securities. Pension expense is
actuarially determined based on the Company's employees included in the plan.
The Company's pension expense amounted to $1.5 million in 1993, $1.0 million in
1992 and was negligible in prior years. Further disclosure for the plan is
included in the Deere & Company 1993 annual report pension note.
During the fourth quarter of 1993, the Company adopted FASB Statement
No. 106, Employers' Accounting for Postretirement Benefits Other Than Pensions,
effective November 1, 1992. Additional information is presented in the "Summary
of Significant Accounting Policies" on page 35, and the "Quarterly Data
(unaudited)" on page 45.
The Company generally provides defined benefit health care and life
insurance plans for retired employees. Health care and life insurance benefits
expense is actuarially determined based on the Company's employees included in
the plans and amounted to $.6 million in 1993. The 1992 and 1991 expenses were
negligible as determined under the previous accounting principle.
42
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 INCOME TAXES
TAXES ON INCOME AND INCOME TAX CREDITS
The taxable income of the Company is included in the consolidated United States
income tax return of Deere & Company. Provisions for income taxes are made
generally as if the Capital Corporation and each of its subsidiaries filed
separate income tax returns.
DEFERRED INCOME TAXES
In 1992, the Company adopted FASB Statement No. 109, Accounting for Income
Taxes. There was no cumulative effect of adoption or current effect on
continuing operations mainly because the Company had previously adopted FASB
Statement No. 96, Accounting for Income Taxes, in 1988.
Deferred income taxes arise because there are certain items that are
treated differently for financial accounting than for income tax reporting
purposes. An analysis of deferred income tax assets and liabilities at October
31 in millions of dollars follows:
<TABLE>
<CAPTION>
1993 1992
-----------------------------------------------------
Deferred Deferred Deferred Deferred
Tax Tax Tax Tax
Assets Liabilities Assets Liabilities
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Allowance for credit losses $27.1 $28.2
- ----------------------------------------------------------------------------------------------------------
Deferred lease income $4.1 $2.6
- ----------------------------------------------------------------------------------------------------------
Deferred retail note
- ----------------------------------------------------------------------------------------------------------
finance income 1.5 .2
- ----------------------------------------------------------------------------------------------------------
Accrual for retirement and
- ----------------------------------------------------------------------------------------------------------
postemployment benefits 2.1
- ----------------------------------------------------------------------------------------------------------
Miscellaneous accruals and other .4 .1 .5
- ----------------------------------------------------------------------------------------------------------
Total deferred income tax
- ----------------------------------------------------------------------------------------------------------
assets and liabilities $29.2 $6.0 $28.3 $3.3
- ----------------------------------------------------------------------------------------------------------
</TABLE>
The provision for income taxes consisted of the following in millions of
dollars:
<TABLE>
<CAPTION>
1993 1992 1991
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current $ 54.5 $ 52.7 $ 52.3
- -------------------------------------------------------------------------------------------
Deferred 3.8 (4.8) (14.5)
- -------------------------------------------------------------------------------------------
Total provision for
- -------------------------------------------------------------------------------------------
income taxes $ 58.3 $ 47.9 $ 37.8
- -------------------------------------------------------------------------------------------
</TABLE>
The Omnibus Budget Reconciliation Act of 1993, which enacted an increase in the
United States federal statutory income tax rate effective January 1, 1993, was
signed into law during the fourth quarter of 1993. In accordance with FASB
Statement No. 109, Accounting for Income Taxes, deferred tax assets and
liabilities as of the enactment date were revalued during the fourth quarter of
1993 using the new rate of 35 percent. This resulted in a credit of $.7 million
to the provision for income taxes.
EFFECTIVE INCOME TAX PROVISION
A comparison of the statutory and effective income tax provisions of the Company
and reasons for related differences follow in millions of dollars:
<TABLE>
<CAPTION>
1993 1992 1991
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
United States federal income tax
- ------------------------------------------------------------------------------------------
provision at a statutory rate
- ------------------------------------------------------------------------------------------
of 34.83 percent in 1993
- ------------------------------------------------------------------------------------------
and 34 percent
- ------------------------------------------------------------------------------------------
in 1992 and 1991 $ 59.0 $ 48.6 $ 37.7
- ------------------------------------------------------------------------------------------
Municipal lease income
- ------------------------------------------------------------------------------------------
not taxable (.3) (.2) (.3)
- ------------------------------------------------------------------------------------------
Effect of statutory tax rate
- ------------------------------------------------------------------------------------------
change on deferred taxes (.7)
- ------------------------------------------------------------------------------------------
Other adjustments--net .3 (.5) .4
- ------------------------------------------------------------------------------------------
Total provision for
- ------------------------------------------------------------------------------------------
income taxes $ 58.3 $ 47.9 $ 37.8
- ------------------------------------------------------------------------------------------
</TABLE>
43
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 CASH FLOW INFORMATION
For purposes of the statement of consolidated cash flows, the Company considers
investments with original maturities of three months or less to be cash
equivalents. Substantially all of the Company's short-term borrowings mature
within three months or less.
Cash payments by the Company for interest incurred on borrowings in 1993,
1992 and 1991 were $134.8 million, $172.6 million and $215.9 million,
respectively. Cash payments for income taxes during these same periods were
$54.9 million, $53.0 million and $53.3 million, respectively.
NOTE 12 LEGAL PROCEEDINGS
The Company is subject to various unresolved legal actions which arise in the
normal course of its business. The most prevalent of such actions relates to
state and federal regulations concerning retail credit. There are various claims
and pending actions against the Company with respect to commercial and consumer
financing matters. These matters include lawsuits pending in federal and state
courts in Texas alleging that certain of the Company's retail finance contracts
for recreational vehicles and boats violate certain technical provisions of
Texas consumer credit statutes dealing with maximum rates, licensing and
disclosures. The plaintiffs in Texas claim they are entitled to common law and
statutory damages and penalties. On November 6, 1992 the federal District Court
certified a federal class action under Rule 23 (b) (3) of the Federal Rules of
Civil Procedure in an action brought by Russell Durrett, individually and on
behalf of others, against John Deere Company (filed in state court on February
19, 1992 and removed on February 26, 1992 to the United States District Court
for the Northern District of Texas, Dallas Division). On October 12, 1993, in a
case named DEERE CREDIT, INC. V. SHIRLEY Y. MORGAN, ET AL., filed February 20,
1992, the 281st District Court for Harris County, Texas, certified a class under
Rules 42 (b) (1) (A), 42 (b) (1) (B) and 42 (b) (2) of the Texas Rules of Civil
Procedure, of all persons who opt out of the federal class action. The Company
believes that it has substantial defenses and intends to defend the actions
vigorously. Although it is not possible to predict the outcome of these
unresolved legal actions, and the amounts of claimed damages and penalties are
large, the Company believes that these unresolved legal actions will not have a
material adverse effect on its consolidated financial position.
44
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 QUARTERLY DATA (UNAUDITED)
Supplemental consolidated quarterly information for the
Company follows in millions of dollars:
<TABLE>
<CAPTION>
First Second Third Fourth Fiscal
Quarter Quarter Quarter Quarter Year
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1993:
- --------------------------------------------------------------------------------
Revenues $115.1 $116.7 $114.4 $119.8 $466.0
- --------------------------------------------------------------------------------
Interest expense 43.6 42.8 40.7 40.7 167.8
- --------------------------------------------------------------------------------
Operating expenses (1) 30.1 33.3 30.4 35.1 128.9
- --------------------------------------------------------------------------------
Income taxes 14.0 13.8 14.7 15.8 58.3
- --------------------------------------------------------------------------------
Income before changes in accounting (1) 27.4 26.8 28.6 28.2 111.0
- --------------------------------------------------------------------------------
Changes in accounting (1) 3.8 3.8
- --------------------------------------------------------------------------------
Net income 23.6 26.8 28.6 28.2 107.2
- --------------------------------------------------------------------------------
1992:
- --------------------------------------------------------------------------------
Revenues $117.5 $116.8 $120.0 $116.6 $470.9
- --------------------------------------------------------------------------------
Interest expense 53.2 46.7 45.9 43.5 189.3
- --------------------------------------------------------------------------------
Operating expenses 33.1 34.7 31.4 39.5 138.7
- --------------------------------------------------------------------------------
Income taxes 10.6 11.6 14.9 10.8 47.9
- --------------------------------------------------------------------------------
Net income 20.6 23.8 27.8 22.8 95.0
- --------------------------------------------------------------------------------
<FN>
(1) In the fourth quarter of 1993, the Company adopted FASB Statement Nos. 106
and 112 relating to postretirement and postemployment benefits, effective
November 1, 1992. Accordingly, results for the first quarter of 1993 were
restated for the cumulative after-tax effect of these changes in accounting as
of November 1, 1992, which totaled $3.8 million. Previously reported income
before changes in accounting for the first three quarters of 1993 were also
restated to reflect incremental pretax postretirement benefits expense of $.2
million ($.1 million after income taxes) compared with expense under the
previous accounting principles. The fourth quarter of 1993 also included an
incremental pretax increase in the postretirement and postemployment benefits
expense of $.1 million compared with expense under the previous accounting
principles. Additional information relating to the adoption of FASB Statement
Nos. 106 and 112 is presented in the "Summary of Significant Accounting
Policies" on page 35.
</TABLE>
45
<PAGE>
Schedule VIII
JOHN DEERE CAPITAL CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED OCTOBER 31, 1993, 1992 AND 1991
(in thousands of dollars)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- --------
ADDITIONS DEDUCTIONS
------------------------- -------------------------------------
BALANCE AT CHARGED TO CHARGED TO
BEGINNING COSTS AND OTHER ACCOUNTS BALANCE AT
DESCRIPTION OF YEAR EXPENSES -EXPLAIN DESCRIPTION AMOUNT END OF YEAR
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Year Ended October 31, 1993:
Reserve deducted from the asset
to which it applies-
Credit losses
Transfers related
to retail note sales $7,511
Uncollectible receivables $26,094 $77,486
--------- ---------
Total $83,002 $28,089 Total Deductions $33,605 $77,486
--------- --------- --------- ---------
--------- --------- --------- ---------
Year ended October 31, 1992:
Reserve deducted from the asset
to which it applies-
Credit losses
Total $78,159 $48,497 Uncollectible receivables $43,654 $83,002
--------- --------- --------- ---------
--------- --------- --------- ---------
Year ended October 31, 1991:
Reserve deducted from the asset
to which it applies-
Credit losses
Total $68,480 $66,210 $56,531 $78,159
--------- --------- Uncollectible receivables --------- ---------
--------- --------- --------- ---------
</TABLE>
46
<PAGE>
Schedule IX
SHORT-TERM BORROWINGS
FOR THE YEARS ENDED OCTOBER 31, 1993, 1992 AND 1991
(in thousands of dollars)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
-------- -------- -------- -------- -------- --------
MAXIMUM AMOUNT AVE AMOUNT WEIGHTED AVE
OUTSTANDING OUTSTANDING INTEREST RATE
BALANCE AT END WEIGHTED AVE DURING DURING DURING
CATEGORY OF AGGREGATE SHORT-TERM BORROWINGS OF PERIOD INTEREST RATE THE PERIOD THE PERIOD THE PERIOD
- --------------------------------------------------------------------------------------------------------------------------------
(1) (2) (3)
<S> <C> <C> <C> <C> <C>
Year Ended October 31, 1993:
Demand notes payable to Deere & Company $439,540 3.2% $439,540 $58,821 3.5%
Payable to holders of commercial paper (4) 454,009 3.4% 1,477,078 1,119,574 3.4%
------------ ------------
Total short-term borrowings $893,549 3.3% $1,477,078 $1,178,395 3.4%
------------ ------------
------------ ------------
Year ended October 31, 1992:
Demand notes payable to Deere & Company $65,661 3.9% $65,661 $7,181 4.4%
Payable to holders of commercial paper (4) 1,486,673 3.4% 2,011,756 $1,850,245 4.3%
------------ ------------
Total short-term borrowings $1,552,334 3.4% $2,011,756 $1,857,426 4.3%
------------ ------------
------------ ------------
Year ended October 31, 1991:
Demand notes payable to Deere & Company $105,223 5.5% $105,223 $19,487 6.7%
Payable to holders of commercial paper (4) 2,101,804 5.9% 2,101,804 1,866,667 6.9%
------------ ------------
Total short-term borrowings $2,207,027 5.9% $2,207,027 $1,186,154 6.9%
------------ ------------
------------ ------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Maximum amount outstanding at end of any month during the fiscal year.
(2) Average amount outstanding during the period is computed by dividing the total of daily outstanding principal
balances by the number of days in the fiscal year.
(3) Weighted average interest rates were computed by dividing interest expense for the year (excluding commitment fees)
by the average daily principal balance outstanding. When commitment fees are included in the computation of the
weighted average interest rate the adjusted rates are 3.6 percent, 4.4 percent and 7.0 percent for 1993, 1992, and
1991 respectively.
(4) Commercial paper is issued with varying interest rates and with varying maturities up to a maximum of 270 days.
</TABLE>
47
<PAGE>
INDEX TO EXHIBITS
Page No.
-------
3.1 Certificate of Incorporation, as amended 50
3.2 By-laws, as amended 57
4.1 Credit agreements among registrant, Deere & Company, various
financial institutions, and Chemical Bank and Deutsche Bank,
as Managing Agents, dated as of December 15, 1993. 64
4.2 Revolving evergreen facility linked credit agreement among
registrant, Deere & Company and a number of banks dated as of
March 26, 1993 (Exhibit 4.2 to Form 10-Q of the registrant for
the quarter ended April 30, 1993*).
4.3 Form of certificate for common stock (Exhibit 4.3 to Form 10-Q
of the registrant for the quarter ended April 30, 1993*)
4.4 Indenture dated as of February 15, 1991 between registrant and
Citibank, N.A., as Trustee (Exhibit 4.5 to Form 10-Q of the
registrant for the quarter ended April 30, 1993*).
Certain instruments relating to long-term debt constituting
less than 10% of the registrant's total assets, are not
filed as exhibits herewith pursuant to Item 601(b)(4)(iii)(A)
of Regulation S-K. The registrant will file copies of such
instruments upon request of the Commission.
9. Not applicable.
10.1 Agreement dated May 11, 1993 between registrant and
Deere & Company concerning agricultural retail notes
(Exhibit 10.1 to Form 10-Q of registrant for the quarter
ended April 30, 1993*).
10.2 Agreement dated May 11, 1993 between registrant and Deere
& Company concerning lawn and grounds care retail notes
(Exhibit 10.2 to Form 10-Q of the registrant for the quarter
ended April 30, 1993*).
10.3 Agreement dated May 11, 1993 between registrant and
John Deere Industrial Equipment Company concerning
industrial retail notes (Exhibit 10.3 to Form 10-Q
of the registrant for the quarter ended April 30, 1993*).
48
<PAGE>
10.4 Agreement dated January 26, 1983 between registrant and Deere
& Company relating to agreements with United States sales
branches on retail notes (Exhibit 10.4 to Form 10-Q of the
registrant for the quarter ended April 30, 1993*).
10.5 Insurance policy no. CL-001 of Sierra General Life Insurance
Company providing insurance on lives of purchasers of certain
equipment financed with receivables (Exhibit 10.5 to Form 10-Q
of the registrant for the quarter ended April 30, 1993*).
11. Not applicable.
12. Statement of computation of the ratio of earnings before
fixed charges to fixed charges for each of the five years
in the period ended October 31, 1993. 321
13. Not applicable
16. Not applicable
18. Not applicable
21. Omitted pursuant to instruction J(2)
22. Not applicable
23. Consent of Deloitte & Touche 322
24. Not applicable
27. Not applicable
28. Not applicable
99.1 Parts I and II of the Deere & Company Form 10-K for the
fiscal year ended October 31, 1993.*
- -----------------------------
* Incorporated by reference. Copies of these exhibits are available
from the Company upon request.
49
<PAGE>
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
JOHN DEERE CAPITAL CORPORATION
(As Adopted July 18, 1958)
(As Amended effective June 18, 1993)
FIRST. The name of the corporation is
JOHN DEERE CAPITAL CORPORATION
SECOND. Its principal office in the State of Delaware is located at
No. 100 West Tenth Street, in the City of Wilmington, County of New Castle. The
name and address of its resident agent is The Corporation Trust Company, No. 100
West Tenth Street, Wilmington 99, Delaware.
THIRD. The nature of the business, or objects or purposes to be
transacted, promoted or carried on are:
(a) To carry on the business of a finance company, and to
perform any acts and engage in any activities or functions generally
performed or engaged in by finance companies, and nothing in
subsequent paragraphs of this Certificate of Incorporation shall limit
the generality of this statement.
(b) To purchase or otherwise acquire, sell, hypothecate or
otherwise dispose of, and generally to trade and deal in:
(i) Obligations and contracts of all kinds, however arising,
whether of persons, partnerships, associations, corporations
or other entities, whether secured or unsecured, whether or
not evidenced by a written instrument, whether payable in
installments or otherwise, and whether fixed or determined
in amount or otherwise;
(ii) Bills of lading, warehouse receipts and other documents
representing goods or any interest in goods;
<PAGE>
2
(iii) Mortgages, liens, trust receipts and any other
interests in property, real or personal, tangible or
intangible.
(c) To make loans to any person, partnership, association,
corporation or other enterprise, either with or without security.
(d) To acquire, and pay for in cash, property, stock, bonds or
other securities of the corporation or otherwise, the good will,
rights, assets and property, and to undertake or assume the whole or
any part of the obligations or liabilities, of any person,
partnership, association, corporation or other enterprise.
(e) To acquire, hold, guarantee, sell, mortgage,
pledge or otherwise dispose of or deal in any of the shares or other
interests in, or obligations of, any person, partnership, association,
corporation or other enterprise, public or private, regardless of the
nature of the business in which such person, partnership, association,
corporation or other enterprise is or may be engaged.
(f) To borrow or raise moneys for any of the objects or purposes
of the corporation and, from time to time without limit as to amount,
to issue, sell, pledge or otherwise dispose of appropriate instruments
to evidence such indebtedness, and to secure the payment thereof by
mortgage or other lien upon the whole or any part of the property of
the corporation, whether at the time owned or thereafter acquired.
(g) To issue stock, bonds, debentures, or other
securities convertible into stock of any class or other securities of
any kind of the corporation or bearing warrants or other evidence of
optional rights to purchase or subscribe to stock of any class or
other securities of any kind of the corporation.
(h) To purchase, hold, sell and transfer the shares of its own
capital stock; provided it shall not use its funds or property for the
purchase of its own shares of capital stock when such use would cause
any impairment of its capital except as otherwise permitted by law,
and provided further that shares of its own capital stock belonging to
it shall not be voted upon directly or indirectly.
(i) To make any guaranty respecting stocks, dividends,
securities, indebtedness, interest, contracts, or other obligations of
any person,
<PAGE>
3
partnership, association, corporation or other enterprise.
(j) To hold, purchase, mortgage, sell and convey real and
personal property, both tangible and intangible, either within or
without the State of Delaware.
(k) To carry on any business whatsoever which the corporation
may deem proper or convenient in connection with any of the foregoing
purposes or otherwise, or which may be calculated, directly or
indirectly, to promote the interests of the corporation or to enhance
the value of its property; to conduct its business in the State of
Delaware, in other states, in the District of Columbia, in the
territories and colonies of the United States, and in foreign
countries; and to have and to exercise all the powers conferred by the
laws of Delaware upon corporations formed under the act pursuant to
and under which the corporation is formed.
The objects and purposes specified in the foregoing clauses shall,
except where otherwise expressed, be in nowise limited or restricted by
reference to, or inference from, the terms of any other clause in this
Certificate of Incorporation, but the objects and purposes specified in each of
the foregoing clauses of this article shall be regarded as independent objects
and purposes.
FOURTH. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 10,002,500 shares, consisting of
2,500 shares of Common Stock without par value ("Common Stock") and 10,000,000
shares of Preferred Stock, par value $1.00 per share ("Preferred Stock").
FIFTH. The Board of Directors (or a Committee delegated by the Board)
shall have authority be resolution to issue the shares of Preferred Stock from
time to time on such terms as it may determine and to divide the Preferred Stock
into one or more series and, in connection with the creation of any such series,
to determine and fix by the resolution or resolutions providing for the issuance
of shares thereof:
(a) the distinctive designation of such series, the number of
shares which shall constitute such series, which number may be
increased or decreased (but not below the number of shares then
outstanding) from time to time by action of the Board of Directors,
and the stated value thereof, if different from the par value thereof;
(b) the dividend rate, the times of payment of dividends on the
shares of such series, whether dividends shall be cumulative, and, if
so,
<PAGE>
4
from what date or dates, and the preference or relation which such
dividends will bear to the dividends payable on any shares of stock of
any other class or any other series of this class;
(c) the price or prices at which, and the terms and conditions
on which, the shares of such series may be redeemed;
(d) whether or not the shares of such series shall be entitled
to the benefit of a retirement or sinking fund to be applied to the
purchase or redemption of such shares and, if so entitled, the amount
of such fund and the terms and provisions relative to the operation
thereof;
(e) whether or not the shares of such series shall be
convertible into, or exchangeable for, any other shares of stock of
the corporation or any other securities and, if so convertible or
exchangeable, the conversion price or prices, or the rates of
exchange, and any adjustments thereof, at which such conversion or
exchange may be made, and any other terms and conditions of such
conversion or exchange;
(f) the rights of the shares of such series in the event of
voluntary or involuntary liquidation, dissolution or winding up, or
upon any distribution of the assets, of the corporation;
(g) whether or not the shares of such series shall have priority
over or parity with or be junior to the shares of any other class or
series in any respect, or shall be entitled to the benefit of
limitations restricting (i) the creation of indebtedness of the
corporation, (ii) the issuance of shares of any other class or series
having priority over or being on a parity with the shares of such
series in any respect, or (iii) the payment of dividends on, the
making of other distributions in respect of, or the purchase or
redemption of shares of any other class or series on a parity with or
ranking junior to the shares of such series as to dividends or assets,
and the terms of any such restrictions, or any other restriction with
respect to shares of any other class or series on a parity with or
ranking junior to the shares of such series in any respect;
(h) whether such series shall have voting rights, in addition to
any voting rights provided by law and, if so, the terms of such voting
rights, which may be general or limited; and
(i) any other powers, designations, preferences and relative,
<PAGE>
5
participating, optional, or other special rights of such series, and
the qualifications, limitations or restrictions thereof, to the full
extent now or hereafter permitted by law.
The powers, designations, preferences and relative, participating,
optional and other special rights of each series of Preferred Stock, and
the qualifications, limitations or restrictions thereof, if any, may differ
from those of any and all other series at any time outstanding. All shares
of any one series of Preferred Stock shall be identical in all respects
with all other shares of such series, except that shares of any one series
issued at different times may differ as to the dates from which dividends
thereon shall be cumulative.
SIXTH. The minimum amount of capital with which the corporation will
commence business is one thousand dollars ($1,000).
SEVENTH. The names and places of residence of the incorporators are
as follows:
Name Residence
---- ---------
H. K. Webb Wilmington, Delaware
H. C. Broadt Wilmington, Delaware
L. H. Herman Wilmington, Delaware
EIGHTH. The corporation is to have perpetual existence.
NINTH. The private property of the stockholders shall not be subject
to the payment of corporate debts to any extent whatever.
TENTH. In furtherance and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized:
To make, alter or repeal the bylaws of the corporation;
To authorize and cause to be executed mortgages and other liens
upon the real and personal property of the corporation;
To set apart out of any of the funds of the corporation available
for dividends a reserve or reserves for any proper purpose and to
abolish any such reserve in the manner in which it was created;
<PAGE>
6
By resolution passed by a majority of the whole board, to
designate one or more committees, each committee to consist of two or
more of the directors of the corporation, which, to the extent
provided in the resolution or in the bylaws of the corporation, shall
have and may exercise the powers of the board of directors in the
management of the business and affairs of the corporation, and may
authorize the seal of the corporation to be affixed to all papers
which may require it. Such committee or committees shall have such
name or names as may be stated in the bylaws of the corporation or as
may be determined from time to time by resolution adopted by the board
of directors;
When and as authorized by the affirmative vote of the holders of
a majority of the stock issued and outstanding having voting power
given at a stockholders' meeting duly called for that purpose, or when
authorized by the written consent of the holders of a majority of the
voting stock issued and outstanding, to sell, lease, or exchange all
of the property and assets of the corporation, including its good will
and its corporate franchises, upon such terms and conditions and for
such consideration, which may be in whole or in part shares of stock
in or other securities of any other corporation or corporations, or
both, as the board of directors shall deem expedient and for the best
interests of the corporation.
ELEVENTH. No contract or other transaction between this corporation
and any other entity or person (including directors, officers and stockholders
of this corporation) and no act of this corporation shall be invalidated or
rendered voidable solely by reason of the fact that any of the directors,
officers or stockholders of this corporation are pecuniarily or otherwise
interested in such contract, transaction or act of the corporation, individually
or as directors, trustees, partners, officers, or holders of equivalent
positions in such entity or person, or by reason of a pecuniary or other
interest in such entity or person; and any director of this corporation who is
so interested may be counted in determining the existence of a quorum at any
meeting of the board of directors of this corporation which shall authorize any
such contract, transaction or act and may vote at any such meeting to authorize
any such contract, transaction or act.
TWELFTH. The board of directors, by the affirmative vote of a
majority of the whole board, and irrespective of any personal interest of its
members, shall have authority to provide reasonable compensation of all
directors for services, ordinary or extraordinary, to the corporation as
directors, officers or otherwise.
THIRTEENTH. Any person made a party to any action, suit or
proceeding, whether civil, criminal, administrative or other, by reason of the
fact that he,
<PAGE>
7
or his testator or intestate, is or was a director, officer or employee of the
corporation or of any other enterprise which he, or his testator or intestate,
served as such at the request of the corporation, shall be indemnified by the
corporation against the reasonable expenses actually and necessarily incurred by
him in connection with the defense of such action, suit or proceeding, and
against amounts paid by him (other than to the corporation or such other
enterprise) in reasonable settlement of any such action, suit or proceeding,
where it is in the interest of the corporation that such settlement be made,
except in relation to matters as to which it shall be adjudged in such action,
suit or proceeding that such director, officer or employee is liable for
negligence or misconduct in the performance of duty, or in the event of
settlement, where it shall appear that such person is guilty of negligence or
misconduct in the performance of duty. The foregoing right of indemnification
shall not be deemed exclusive of any other right to which those indemnified may
be entitled, under any bylaw, agreement, vote of stockholders, or otherwise.
FOURTEENTH. Meetings of stockholders and directors may be held
outside the State of Delaware, if the bylaws so provide. The books and records
of the corporation may be kept (subject to any provision contained in the
statutes) outside the State of Delaware. Elections of directors need not be by
ballot unless the bylaws of the corporation shall so provide.
FIFTEENTH. The corporation reserves the right to amend, alter, change
or repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
*****
<PAGE>
EXHIBIT 3.2
BYLAWS
OF
JOHN DEERE CAPITAL CORPORATION
(As Amended August 27, 1993)
ARTICLE I - IDENTIFICATION
SECTION 1. NAME. The name of the Company is John Deere Capital Corporation
(hereinafter referred to as the "Company").
SECTION 2. OFFICES. The principal office of the Company in Delaware shall be
at 1209 Orange Street, in the City of Wilmington, County of New Castle, State of
Delaware. The Company may maintain, change or discontinue its other offices,
including its principal business office in the City of Reno, State of Nevada,
and may have such other offices both within and without the State of Delaware as
its business may require.
SECTION 3. SEAL. The seal of the Company shall be circular in form and mounted
upon a metal die, suitable for impressing the same upon paper. It shall have
inscribed thereon the name of the Company, the words "Corporate Seal" and the
word "Delaware."
SECTION 4. FISCAL YEAR. The fiscal year of the Company shall begin on the
first day of November in each calendar year and end on the last day of October
in the following calendar year.
ARTICLE II - THE STOCKHOLDERS
SECTION 1. PLACE OF MEETINGS. Annual meetings of the stockholders for the
election of directors and meetings of the stockholders for any other purpose may
be held at such place within the State of Delaware or elsewhere as may be
specified by the Chairman, the President or the Board of Directors.
SECTION 2. ANNUAL MEETING. The annual meeting of the stockholders, at which
they shall elect directors by voice vote or otherwise and by plurality vote and
may transact such other business as may properly be brought before the meeting,
shall be held at three forty-five o'clock in the afternoon, local time, on the
Tuesday before the last Wednesday in February of each year, if such day is not a
legal holiday, and if a legal holiday, then on the first following day that it
not a legal holiday. The time and place of such meeting shall not be changed
within sixty days before such meeting.
SECTION 3. SPECIAL MEETINGS. Special meetings of the stockholders may be
called by the Chairman, the President or the Board of Directors, and shall be
called by the Chairman, the President or the Secretary at the request in writing
of stockholders owning
<PAGE>
2
not less than twenty percent of the shares entitled to vote at a meeting. Such
request shall state the purpose or purposes of the proposed meeting.
SECTION 4. NOTICE OF MEETINGS. Notice of each meeting of stockholders, stating
the place, day and hour of the meeting and, in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered at least
ten days before the date of the meeting, either personally or by mail, by or at
the direction of the President or the Secretary to each stockholder of record
entitled to vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail addressed to the stockholder
at his address as it appears on the stock transfer books of the Company, with
postage thereon prepaid. Notice of any meeting of stockholders may be waived in
writing signed by the stockholder entitled to such notice, whether before or
after the time of such meeting, and shall be equivalent to the giving of such
notice.
SECTION 5. QUORUM. The holders of a majority of the shares entitled to vote at
any meeting of stockholders, present in person or by proxy, shall constitute a
quorum at such meeting except as otherwise provided by statute. If, however,
such quorum shall not be present at a meeting of the stockholders, the holders
of a majority of the shares entitled to vote, present in person or by proxy, may
adjourn the meeting from time to time without notice other than announcement at
the meeting until a quorum shall be present. At any such adjourned meeting at
which a quorum shall be present, any business may be transacted which might have
been transacted at the meeting as originally called. Whenever a quorum shall be
present at any meeting, all matters shall be decided by vote of the holders of a
majority of the shares present, unless otherwise provided by statute or, in the
case of election of directors, by these Bylaws.
SECTION 6. ORGANIZATION. The Chairman of the Company or, in the event of his
absence or inability to act, the President or in the event of the absence or
inability to act of both, a Director present, acting in such order of priority
as shall be designated by the Chairman, shall preside as chairman at each
meeting of the stockholders. The Secretary of the Company shall act as
secretary of each meeting of the stockholders. In the event of his absence or
inability to act, the chairman of the meeting shall appoint a person who need
not be a stockholder to act as secretary of the meeting.
SECTION 7. ACTION WITHOUT A MEETING. Whenever the vote of stockholders at a
meeting thereof is required or permitted to be taken in connection with any
corporate action by any provisions of the statutes or of the certificate of
incorporation, the meeting and vote of stockholders may be dispensed with, if
all the stockholders who would have been entitled to vote upon the action if
such meeting were held, shall consent in writing to such corporate action being
taken.
<PAGE>
3
ARTICLE III - THE BOARD OF DIRECTORS
SECTION 1. NUMBER AND QUALIFICATIONS. The business and affairs of the Company
shall be managed by a Board of thirteen directors who need not be residents of
the State of Delaware or stockholders of the Company. The number of directors
may be increased or decreased from time to time by amendment of the Bylaws,
provided no decrease shall have the effect of shortening the term of any
incumbent director.
SECTION 2. ELECTION. Directors shall be elected at the annual meeting of the
stockholders, except as provided in Section 3 of this Article, and each director
elected shall hold office during the term for which he is elected and until his
successor is elected and qualified.
SECTION 3. VACANCIES. Any vacancies occurring in the Board of Directors and
newly created directorships resulting from any increase in the authorized number
of directors may be filled by a majority of the remaining directors though less
than a quorum of the Board of Directors, and the directors so chosen shall hold
office until the next annual election of directors and until their successors
are elected by the stockholders and are qualified.
SECTION 4. REGULAR MEETINGS. Regular meetings of the Board of Directors may be
held without notice at such time and at such place either within or without the
State of Delaware as shall from time to time be determined by the Board.
SECTION 5. SPECIAL MEETINGS. Special meetings of the Board of Directors may be
held upon notice by letter, telegram, cable or radiogram, delivered for
transmission not later than during the day immediately preceding the day for
such meeting, or by word of mouth, telephone or radiophone received not later
than during the second day immediately preceding the day for such meeting, upon
call of the Chairman, the President, or upon call by the Chairman, the President
or the Secretary at the request in writing of one-third of the directors then in
office, at the principal business office of the Company, or at any other place
either within or without the State of Delaware approved by the Board of
Directors, the Chairman or the President. Notice of any special meeting of the
Board of Directors may be waived in writing signed by the person or persons
entitled to such notice, whether before or after the time of such meeting, and
shall be equivalent to the giving of such notice. Attendance of a director at
such meeting shall constitute a waiver of notice thereof, except where a
director attends a meeting for the express purpose of objecting to the
transaction of any business because such meeting is not lawfully convened.
Neither the business to be transacted at, nor the purpose of, any special
meeting of the Board of Directors need be specified in the notice, or waiver of
notice, of such meeting.
<PAGE>
4
SECTION 6. QUORUM. One-third of the number of directors fixed by the Bylaws
(but in no event less than two) shall constitute a quorum for the transaction of
business. The act of a majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors except as
otherwise provided by statute or these Bylaws. During an emergency period
following a national catastrophe, due to enemy attack, a majority of the
surviving members of the Board of Directors who have not been rendered incapable
of acting as the result of physical or mental incapacity or the difficulty of
transportation to the place of the meeting shall constitute a quorum for the
purpose of filling vacancies in the Board of Directors and among the elected
officers of the Company.
SECTION 7. ORGANIZATION. The Chairman or, in the event of his absence or
inability to act, the President or, in the event of the absence or inability to
act of both the Chairman and the President, another director present, acting in
such order of priority as shall be designated by the Chairman, shall act as
chairman of each meeting of the Board of Directors.
SECTION 8. ACTIONS BY WRITTEN CONSENT. Any action required or permitted to be
taken at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting, if prior to such action a written consent thereto is
signed by all members of the Board or of such committee as the case may be, and
such written consent is filed with the minutes of proceedings of the Board or
such committee.
SECTION 9. INTEREST OF DIRECTORS IN TRANSACTIONS. No contract or other
transaction between this Company and any other entity or person (including
directors, officers and stockholders of this Company) and no act of this Company
shall be invalidated or rendered voidable solely by reason of the fact that any
of the directors, officers or stockholders of this Company are pecuniarily or
otherwise interested in such contract, transaction or act of the Company,
individually or as directors, trustees, partners, officers or holders of
equivalent positions in such entity or person, or by reason of a pecuniary or
other interest in such entity or person; and any director of this Company who is
so interested may be counted in determining the existence of a quorum at any
meeting of the Board of Directors which shall authorize any such contract,
transaction or act and may vote at any such meeting to authorize any such
contract, transaction or act.
SECTION 10. COMMITTEES OF DIRECTORS. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one or more committees, each
committee to consist of two or more of the directors of the Company, which, to
the extent provided in the resolution, shall have any may exercise the powers of
the Board of Directors in the management of the business and affairs of the
Company and may authorize the seal of the Company to be affixed to all papers
which may require it. Such committee or committees shall have such name or
names as may be determined from time to time by resolution adopted by the Board
of Directors. The committees shall
<PAGE>
5
keep regular minutes of their proceedings and report the same to the Board of
Directors when required.
ARTICLE IV - THE OFFICERS
SECTION 1. NUMBER AND QUALIFICATIONS. The principal officers of the Company
shall consist of a Chairman, a President, one or more Vice Presidents, a
Secretary and a Treasurer; and the Company may have such other officers and
assistant officers as may be deemed necessary by the Board of Directors. Any
number of offices may be held by the same person.
SECTION 2. GENERAL DUTIES. All officers of the Company shall have such
authority and perform such duties in the management of the Company as may be
provided by or delegated in accordance with these Bylaws, or as may be
determined by resolution of the Board of Directors not inconsistent with these
Bylaws. All agents and employees of the Company not appointed by the Board of
Directors may be appointed by THE CHAIRMAN, the President or by persons
authorized by either of them to do so, to serve for such time and to have such
duties as the appointing authority may determine from time to time.
SECTION 3. ELECTION AND TERM OF OFFICE. The officers shall be elected annually
by the Board of Directors at its regular meeting held on the Friday following
the last Wednesday in February of each year. Each officer shall hold office for
one year and until his successor is elected and qualified, or until he shall
have resigned or shall have been removed in the manner provided in Section 4.
SECTION 4. REMOVAL. Any officer may be removed by the Board of Directors
whenever in its judgment the interests of the Company will be served thereby,
but such removal shall be without prejudice to the contract rights, if any, of
the person removed. Election of an officer shall not of itself create contract
rights.
SECTION 5. RESIGNATIONS. Any officer may resign at any time by giving written
notice to the Board of Directors, the Chairman or to the President. Such
resignation shall take effect at the time specified therein and, unless
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
SECTION 6. VACANCIES. A vacancy in any office shall be filled by the Board of
Directors.
SECTION 7. CHAIRMAN. The Chairman shall be the chief executive officer of the
Company. He shall have power to execute in the name of the Company all bonds,
contracts, other obligations and property conveyances which are duly authorized,
and he shall have all the powers and perform all duties devolving upon him by
law and as head of the Company. He may call special meetings of the
stockholders and of the Board of
<PAGE>
6
Directors. From time to time he shall bring to the attention of the Board of
Directors such information or recommendations concerning the business and
affairs of the Company as he may deem necessary or appropriate. When present,
he shall preside at all meetings of the stockholders and the Board of Directors.
SECTION 8. PRESIDENT. The President shall have such powers and perform such
duties as the Board of Directors may from time to time prescribe or as the chief
executive officer may from time to time delegate to him. In the absence or
inability to act of the Chairman, the President shall perform the duties of the
Chairman.
SECTION 9. VICE PRESIDENTS. Each Vice President shall have such powers and
perform such duties as the Board of Directors may from time to time prescribe or
as the Chairman or the President may from time to time delegate to him. In the
absence or inability to act of the President, his duties shall be performed by a
Vice President designated by the Chairman of the Board of Directors.
SECTION 10. SECRETARY. The Secretary shall act as Secretary of all meetings of
the stockholders and the Board of Directors, and of committees of the Board of
Directors. He shall prepare and keep, or cause to be kept in books provided for
the purpose, minutes of all meetings of the stockholders and the Board of
Directors; shall see that all notices are fully given in accordance with the
provisions of these Bylaws and as required by law; shall be custodian of the
records and of the seal of the Company and see that the seal is affixed to all
documents the execution of which on behalf of the Company under its seal is duly
authorized; and in general, he shall perform all duties incident to the office
of Secretary and as required by law and such other duties as may be assigned to
him from time to time by the Board of Directors, the Chairman or by the
President.
Each Assistant Secretary (if one or more Assistant Secretaries be elected) shall
assist the Secretary in his duties and shall perform such other duties as the
Board of Directors may prescribe from time to time, or the Chairman, the
President or the Secretary may delegate to him from time to time. In the event
of the absence or inability to act of the Secretary, his duties shall be
performed by an Assistant Secretary.
SECTION 11. TREASURER. The Treasurer shall have charge and custody of, and be
responsible for, all moneys, notes and securities in the possession of the
Company, and deposit all funds in the name of the Company in such banks, trust
companies or other depositories as he may select; shall receive, and give
receipts for, moneys due and payable to the Company from any source whatsoever;
and in general, he shall perform all the duties incident to the office of
Treasurer and as required by law and such other duties as may be assigned to him
from time to time by the Board of Directors, the Chairman or by the President.
Each Assistant Treasurer (if one or more Assistant Treasurers be elected) shall
assist the Treasurer in his duties and shall perform such other duties as the
Board of Directors
<PAGE>
7
may prescribe from time to time, or the Chairman, the President or the Treasurer
may delegate to him from time to time. In the event of the absence or inability
to act of the Treasurer, his duties shall be performed by an Assistant
Treasurer.
ARTICLE V - ACTS WITH RESPECT TO SECURITIES OWNED
SECTION 1. ENDORSEMENT OF SECURITIES. Subject always to the specific
directions of the Board of Directors, any security or securities owned by the
Company (including re-acquired shares of capital stock of the Company) may, for
sale or transfer, be endorsed in the name of the Company by the Chairman, the
President or a Vice President, and may be attested by the Secretary or an
Assistant Secretary either with or without affixing thereto the corporate seal.
SECTION 2. VOTING OF SHARES OWNED. Subject always to the specific directions
of the Board of Directors, any share or shares of stock issued by any other
corporation and owned or controlled by the Company may be voted at any
stockholders' meeting of such other corporation by the Chairman, the President
of the Company if either be present at such meeting, or in his absence by any
Vice President of the Company who may be present at such meeting. Whenever, in
the judgment of the Chairman, the President or a Vice President, it is desirable
for the Company to execute a proxy or give a stockholder's consent in respect to
any share or shares of stock issued by any other corporation and owned or
controlled by the Company, such proxy or consent shall be executed in the name
of the Company by the Chairman, the President or a Vice President of the Company
and shall be attested by the Secretary or an Assistant Secretary of the Company
under the corporate seal without necessity of any further authorization of the
Board of Directors. Any person or persons designated in the manner above stated
as the proxy or proxies of the Company shall have full right, power and
authority to vote the share or shares of stock issued by such other corporation
and owned or controlled by the Company.
ARTICLE VI - OTHER PROVISIONS
SECTION 1. CERTIFICATES OF STOCK. Certificates to evidence ownership of stock
of the Company shall be issued in such form as the Board of Directors shall from
time to time approve.
SECTION 2. LOANS. No loan shall be made to any director or officer of the
Company, and no loan shall be made to anyone secured by shares of the Company's
capital stock.
SECTION 3. AMENDMENTS. These Bylaws may be altered or repealed either by the
Board of Directors or by the holders of the issued and outstanding voting stock
of the Company.
*****
<PAGE>
EXHIBIT 4.1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DEERE & COMPANY
JOHN DEERE CAPITAL CORPORATION
$1,675,000,000
CREDIT AGREEMENT
Dated as December 15, 1993
CHEMICAL BANK,
an Administrative Agent and as a Managing Agent
DEUTSCHE BANK AG CHICAGO BRANCH,
as Auction Agent and as a Managing Agent
- --------------------------------------------------------------------------------
and
- --------------------------------------------------------------------------------
DEERE & COMPANY
JOHN DEERE CAPITAL CORPORATION
$825,000,000
CREDIT AGREEMENT
Dated as of December 15, 1993
CHEMICAL BANK,
as Administrative Agent and as a Managing Agent
DEUTSCHE BANK AG CHICAGO BRANCH,
as Auction Agent and as a Managing Agent
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
[CONFORMED COPY]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DEERE & COMPANY
JOHN DEERE CAPITAL CORPORATION
------------------
$1,675,000,000
CREDIT AGREEMENT
Dated as of December 15, 1993
------------------
CHEMICAL BANK,
as Administrative Agent and as a Managing Agent
DEUTSCHE BANK AG CHICAGO BRANCH,
as Auction Agent and as a Managing Agent
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions. . . . . . . . . . . . 14
SECTION 2. THE COMMITTED RATE LOANS; THE BID LOANS; THE
NEGOTIATED RATE LOANS; AMOUNT AND TERMS. . . . . . . 15
2.1 The Committed Rate Loans . . . . . . . . . . . . . . 15
2.2 The Bid Loans; the Negotiated Rate Loans . . . . . . 16
2.3 Loan Accounts . . . . . . . . . . . . . . . . . . . 21
2.4 Fees . . . . . . . . . . . . . . . . . . . . . . . . 21
2.5 Termination or Reduction of Commitments;
Cancellation of Capital Corporation as
Borrower . . . . . . . . . . . . . . . . . . . . . 22
2.6 Optional Prepayments . . . . . . . . . . . . . . . . 23
2.7 Minimum Amount of Certain Loans . . . . . . . . . . 23
2.8 Committed Rate Loan Interest Rate and Payment
Dates . . . . . . . . . . . . . . . . . . . . . . 23
2.9 Conversion and Continuation Options . . . . . . . . 24
2.10 Computation of Interest and Fees . . . . . . . . . . 25
2.11 Inability to Determine Interest Rate . . . . . . . . 26
2.12 Pro Rata Treatment and Payments . . . . . . . . . . 27
2.13 Requirements of Law . . . . . . . . . . . . . . . . 30
2.14 Indemnity . . . . . . . . . . . . . . . . . . . . . 33
2.15 Non-Receipt of Funds by the Administrative
Agent . . . . . . . . . . . . . . . . . . . . . . 34
2.16 Extension of Termination Date . . . . . . . . . . . 34
2.17 Foreign Taxes . . . . . . . . . . . . . . . . . . . 35
2.18 Confirmations . . . . . . . . . . . . . . . . . . . 38
2.19 Replacement of Cancelled Banks . . . . . . . . . . . 38
SECTION 3. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . 38
3.1 Financial Condition . . . . . . . . . . . . . . . . 38
3.2 Corporate Existence . . . . . . . . . . . . . . . . 39
3.3 Corporate Power; Authorization; Enforceable
Obligations . . . . . . . . . . . . . . . . . . . 39
3.4 No Legal Bar . . . . . . . . . . . . . . . . . . . . 39
3.5 No Material Litigation . . . . . . . . . . . . . . . 40
3.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . 40
3.7 Margin Regulations . . . . . . . . . . . . . . . . . 40
3.8 Pari Passu Ranking . . . . . . . . . . . . . . . . . 40
3.9 No Defaults . . . . . . . . . . . . . . . . . . . . 40
3.10 Use of Proceeds . . . . . . . . . . . . . . . . . . 41
-i-
<PAGE>
Page
----
SECTION 4. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . 41
4.1 Conditions to Initial Loan . . . . . . . . . . . . . 41
4.2 Conditions to All Loans . . . . . . . . . . . . . . 42
SECTION 5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . 43
5.1 Financial Statements . . . . . . . . . . . . . . . . 43
5.2 Certificates; Other Information . . . . . . . . . . 43
5.3 Company Indenture Documents . . . . . . . . . . . . 44
5.4 Capital Corporation Indenture Documents . . . . . . 44
5.5 Notice of Default . . . . . . . . . . . . . . . . . 44
5.6 Ownership of Capital Corporation Stock . . . . . . . 44
5.7 Employee Benefit Plans . . . . . . . . . . . . . . . 44
SECTION 6. NEGATIVE COVENANTS OF THE COMPANY . . . . . . . . 44
6.1 Company May Consolidate, etc., Only on Certain
Terms . . . . . . . . . . . . . . . . . . . . . . 45
6.2 Limitation on Liens . . . . . . . . . . . . . . . . 45
6.3 Limitations on Sale and Lease-back
Transactions . . . . . . . . . . . . . . . . . . . 49
6.4 Consolidated Tangible Net Worth . . . . . . . . . . 50
SECTION 7. NEGATIVE COVENANTS OF THE CAPITAL
CORPORATION . . . . . . . . . . . . . . . . . . . . 50
7.1 Fixed Charges Ratio . . . . . . . . . . . . . . . . 50
7.2 Consolidated Senior Debt to Consolidated
Capital Base . . . . . . . . . . . . . . . . . . . . 50
7.3 Limitation on Liens . . . . . . . . . . . . . . . . 50
7.4 Consolidation; Merger . . . . . . . . . . . . . . . 52
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . 53
SECTION 9. THE AGENTS. . . . . . . . . . . . . . . . . . . . 55
9.1 Appointment . . . . . . . . . . . . . . . . . . . . 55
9.2 Delegation of Duties . . . . . . . . . . . . . . . . 56
9.3 Exculpatory Provisions . . . . . . . . . . . . . . . 56
9.4 Reliance by Agents . . . . . . . . . . . . . . . . . 56
9.5 Notice of Default . . . . . . . . . . . . . . . . . 57
9.6 Non-Reliance on Agents and Other Banks . . . . . . . 57
9.7 Indemnification . . . . . . . . . . . . . . . . . . 58
9.8 Agents in their Individual Capacities . . . . . . . 58
9.9 Successor Agents . . . . . . . . . . . . . . . . . . 58
-ii-
<PAGE>
Page
----
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . 59
10.1 Amendments and Waivers . . . . . . . . . . . . . . . 59
10.2 Notices . . . . . . . . . . . . . . . . . . . . . . 60
10.3 No Waiver; Cumulative Remedies . . . . . . . . . . . 61
10.4 Payment of Expenses and Taxes . . . . . . . . . . . 61
10.5 Successors and Assigns; Participations;
Purchasing Banks . . . . . . . . . . . . . . . . . 63
10.6 Adjustments . . . . . . . . . . . . . . . . . . . . 68
10.7 Confidentiality . . . . . . . . . . . . . . . . . . 68
10.8 Counterparts . . . . . . . . . . . . . . . . . . . . 69
10.9 Governing Law . . . . . . . . . . . . . . . . . . . 69
10.10 Consent to Jurisdiction and Service of
Process . . . . . . . . . . . . . . . . . . . . . 70
SCHEDULES:
Schedule I Terms of Subordination
Schedule II Commitments
Schedule III Addresses for Notices
EXHIBITS:
Exhibit A Form of Borrowing Notice
Exhibit B Form of Bid Loan Request
Exhibit C Form of Bid Loan Offer
Exhibit D Form of Bid Loan Confirmation
Exhibit E Form of Loan Assignment
Exhibit F Form of Commitment Transfer Supplement
Exhibit G Form of Opinion of General Counsel to
the Borrowers
Exhibit H Form of Opinion of Special New York Counsel
to the Borrowers
Exhibit I Form of Extension Request
Exhibit J Form of Form 1001 Tax Letter
Exhibit K Form of Form 4224 Tax Letter
Exhibit L Form of Agreement
Exhibit M Form of Promissory Note
-iii-
<PAGE>
CREDIT AGREEMENT, dated as of December 15, 1993, among
DEERE & COMPANY, a Delaware corporation (the "COMPANY"), JOHN
DEERE CAPITAL CORPORATION, a Delaware corporation (the "CAPITAL
CORPORATION"), the several financial institutions parties hereto
(collectively, the "BANKS", and individually, a "BANK"), CHEMICAL
BANK, a New York banking corporation, as administrative agent for
the Banks hereunder (in such capacity, the "ADMINISTRATIVE
AGENT"), DEUTSCHE BANK AG CHICAGO BRANCH, an Illinois state
licensed branch of a German banking corporation, as auction agent
for the Banks hereunder (in such capacity, the "AUCTION AGENT"),
CHEMICAL BANK and DEUTSCHE BANK AG CHICAGO BRANCH, as managing
agents (together, the "MANAGING AGENTS"), and the co-agents
identified on the signature pages hereof (collectively, the "CO-
AGENTS").
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement,
the following terms have the following meanings:
"ABR": at any particular date, the higher of (a) the
rate of interest per annum publicly announced by Chemical
for such date as its prime rate in effect at its principal
office in New York City and (b) .5% per annum above the rate
set forth for such date or, if such date is not a Business
Day, the next preceding Business Day, opposite the caption
"Federal Funds (Effective)" in the weekly statistical
release designated as "H.15(519)" (or any successor
publication) published by the Board of Governors of the
Federal Reserve System. The prime rate is not intended to
be the lowest rate of interest charged by Chemical in
connection with extensions of credit to debtors.
"ABR LOANS": Committed Rate Loans at such time as they
are made and/or being maintained at a rate of interest based
upon the ABR.
"ABSOLUTE RATE BID LOAN": any Bid Loan made pursuant
to an Absolute Rate Bid Loan Request.
"ABSOLUTE RATE BID LOAN REQUEST": any Bid Loan Request
requesting the Banks to offer to make Bid Loans at an
absolute rate (as opposed to a rate composed of the
Applicable Index Rate PLUS (or MINUS) a margin).
"ADMINISTRATIVE AGENT": as defined in the preamble
hereto.
"AGENT": the Administrative Agent or the Auction
Agent, as the context shall require; together, the "AGENTS".
<PAGE>
2
"AGREEMENT": this Credit Agreement, as amended,
supplemented or modified from time to time.
"APPLICABLE INDEX RATE": in respect of any Bid Loan
requested pursuant to an Index Rate Bid Loan Request, the
Eurodollar Rate applicable to the Interest Period for such
Bid Loan.
"APPLICABLE MARGIN": for each Type of Committed Rate
Loan the rate per annum set forth below:
<TABLE>
<CAPTION>
ABR Eurodollar C/D Rate
Loans Loans Loans
------- ---------- --------
<S> <C> <C>
0% .25% .375%
</TABLE>
"ASSESSMENT RATE": with respect to each day during
each Interest Period for a C/D Rate Loan, the net annual
assessment rate in effect two Business Days prior to the
first day of such Interest Period which is payable by a
member of the Bank Insurance Fund classified as well
capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within
the meaning of 12 C.F.R. SECTION 327.3(d) (or any successor
provision) to the Federal Deposit Insurance Corporation (or
any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of such institution in the
United States.
"ATTRIBUTABLE DEBT": as defined in subsection
6.2(b)(ii).
"AUCTION AGENT": as defined in the preamble hereto.
"AVAILABLE COMMITMENT": as to any Bank, at a
particular time, an amount equal to the difference between
(a) the amount of such Bank's Commitment at such time and
(b) the aggregate unpaid principal amount at such time of
all Loans made by such Bank; collectively, as to all the
Banks, the "AVAILABLE COMMITMENTS".
"BANK" and "BANKS": as defined in the preamble hereto.
"BASE RATE": with respect to each day during each
Interest Period for a C/D Rate Loan, (a) the rate determined
by the Administrative Agent to be the rate set forth in
H.15(519) (published by the Federal Reserve Bank of New
York) for such Interest Period under the caption "CDs
(Secondary Market)", or, if on the first day of such
Interest Period such rate for such Interest Period is not
yet published in H.15(519), the rate for such Interest
Period will be the rate determined by the Administrative
Agent to be the rate set forth in Composite 3:30 P.M.
<PAGE>
3
Quotations for U.S. Government Securities (published by the
Federal Reserve Bank of New York) for that day in respect of
such Interest Period under the caption "Certificates of
Deposit" or (b), if on the first day of such Interest
Period, the appropriate rate for such Interest Period is not
yet published in either H.15(519) or Composite 3:30 P.M.
Quotations for U.S. Government Securities, the rate for such
Interest Period will be the arithmetic average (rounded
upward to the nearest 1/100 of 1%) of the respective rates
notified to the Administrative Agent by the Reference Banks
as the rates per annum bid at 10:00 A.M. (New York City
time) (or as soon thereafter as practicable) on the first
day of such Interest Period by a total of three certificate
of deposit dealers located in New York City and of
recognized standing selected by each Reference Bank for the
purchase at face value from such Reference Bank of its
certificates of deposit in an amount comparable to the C/D
Rate Loan of such Reference Bank to which such Interest
Period applies and having a maturity comparable to such
Interest Period.
"BENEFITTED BANK": as defined in subsection 10.6.
"BID LOAN": each loan (other than Negotiated Rate
Loans) made pursuant to subsection 2.2; the aggregate amount
advanced by a Bid Loan Bank pursuant to subsection 2.2 on
each Borrowing Date shall constitute one Bid Loan, or more
than one Bid Loan if so specified by the relevant Loan
Assignee in its request for promissory notes pursuant to
subsection 10.5(c).
"BID LOAN BANKS": the collective reference to each
Bank designated from time to time as a Bid Loan Bank by a
Borrower (for purposes of Bid Loans to such Borrower) by
written notice to the Auction Agent and the Administrative
Agent and which has not been removed as a Bid Loan Bank by
such Borrower by written notice to the Auction Agent and the
Administrative Agent (each of which notices the Auction
Agent shall transmit to each such affected Bank).
"BID LOAN CONFIRMATION": each confirmation by the
Company or the Capital Corporation of its acceptance of Bid
Loan Offers, which Bid Loan Confirmation shall be
substantially in the form of Exhibit D and shall be
delivered to the Auction Agent by facsimile transmission or
by telephone, immediately confirmed by facsimile
transmission.
"BID LOAN OFFER": each offer by a Bid Loan Bank to
make Bid Loans pursuant to a Bid Loan Request, which Bid
Loan Offer shall contain the information specified in
Exhibit C, and shall be delivered to the Auction Agent by
facsimile transmission or by telephone, immediately
confirmed by facsimile transmission.
<PAGE>
4
"BID LOAN REQUEST": each request by a Borrower for Bid
Loan Banks to submit bids to make Bid Loans, which shall
contain the information in respect of such requested Bid
Loans specified in Exhibit B and shall be delivered to the
Auction Agent by facsimile transmission or by telephone,
immediately confirmed by facsimile transmission.
"BORROWER": the Company or the Capital Corporation;
collectively, the "BORROWERS".
"BORROWING DATE": in respect of any Loan, the date
such Loan is made.
"BUSINESS DAY": 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.
"CANCELLED BANK": any Bank that has the whole or any
part of its Commitment cancelled under subsection 2.13(a),
(b) or (c), subsection 2.16(c) or subsection 2.17(b) or the
Commitment of which has expired under subsection 2.16(a).
"CAPITAL CORPORATION": as defined in the preamble
hereto.
"C/D RATE": with respect to each day during the
Interest Period for a C/D Rate Loan, a rate per annum equal
to the following determined for such day:
Base Rate
------------------------- + Assessment Rate
1.00 - Reserve Percentage
"C/D RATE LOANS": Committed Rate Loans at such time as
they are made and/or being maintained at a rate of interest
based upon a C/D Rate.
"CHEMICAL": Chemical Bank, a New York banking
corporation.
"CLOSING DATE": the date on which each of the
conditions precedent specified in subsection 4.1 shall have
been satisfied (or compliance therewith shall have been
waived by the Required Banks hereunder).
"CO-AGENT": as defined in the preamble hereto.
"CODE": the Internal Revenue Code of 1986, as amended
from time to time.
"COMMITMENT": as to any Bank, the amount set opposite
such Bank's name on Schedule II, as such amount may be
reduced as provided herein; collectively, as to all the
Banks, the "COMMITMENTS".
<PAGE>
5
"COMMITMENT PERCENTAGE": as to any Bank at any time,
the percentage which such Bank's Commitment at such time
constitutes of all the Commitments at such time;
collectively, as to all the Banks, the "COMMITMENT
PERCENTAGES".
"COMMITMENT PERIOD": the period from and including the
Closing Date to but not including the Termination Date or
such earlier date on which the Commitments shall terminate
as provided herein.
"COMMITMENT TRANSFER SUPPLEMENT": a Commitment
Transfer Supplement, substantially in the form of Exhibit F.
"COMMITTED RATE LOANS": each loan made pursuant to
subsection 2.1.
"COMMONLY CONTROLLED ENTITY": in relation to a
Borrower, an entity, whether or not incorporated, which is
under common control with such Borrower within the meaning
of Section 414(b) or (c) of the Code.
"COMPANY": as defined in the preamble hereto.
"CONSOLIDATED CAPITAL BASE": at a particular time for
the Capital Corporation and its consolidated Subsidiaries,
the sum of (a) the amount shown opposite the item "Total
stockholder's equity" on the consolidated balance sheet of
the Capital Corporation and its consolidated Subsidiaries
PLUS (b) the principal amounts outstanding under the 9.35%
Subordinated Debentures due 2003, the 8-5/8% Subordinated
Debentures due 2019 and the 9-5/8% Subordinated Notes due
1998 of the Capital Corporation (in each case so long as the
subordination terms thereof continue to be as favorable to
the Administrative Agent and the Banks as in existence on
the Closing Date) and all indebtedness of the Capital
Corporation and its consolidated Subsidiaries for borrowed
money subordinated (on terms no less favorable to the
Administrative Agent and the Banks than the terms of
subordination set forth on Schedule I) to the indebtedness
which may be incurred hereunder by the Capital Corporation,
PROVIDED that the sum of clauses (a) and (b) hereof as at
the end of a fiscal quarter of the Capital Corporation and
its consolidated Subsidiaries (including the last quarter of
a fiscal year of the Capital Corporation and its
consolidated Subsidiaries) shall be determined by reference
to the publicly available consolidated balance sheet of the
Capital Corporation and its consolidated Subsidiaries as at
the end of such fiscal quarter and after such adjustments,
if any, as may be required so that the sum of the amounts
referred to in clauses (a) and (b) is determined in
accordance with GAAP.
<PAGE>
6
"CONSOLIDATED NET WORTH": as defined in subsection
6.2(b)(ii).
"CONSOLIDATED SENIOR DEBT": at a particular time for
the Capital Corporation and its consolidated Subsidiaries,
indebtedness for borrowed money other than the 9.35%
Subordinated Debentures due 2003, the 8-5/8% Subordinated
Debentures due 2019 and the 9-5/8% Subordinated Notes due
1998 of the Capital Corporation (in each case so long as the
subordination terms thereof continue to be as favorable to
the Administrative Agent and the Banks as such terms in
existence on the Closing Date) and any such indebtedness
that is subordinated, on terms no less favorable to the
Administrative Agent and the Banks than the terms of
subordination set forth on Schedule I, to the indebtedness
which may be incurred hereunder by the Capital Corporation,
PROVIDED that the amount of such indebtedness for borrowed
money (other than such subordinated indebtedness) as at the
end of a fiscal quarter of the Capital Corporation and its
consolidated Subsidiaries (including the last quarter of a
fiscal year of the Capital Corporation and its consolidated
Subsidiaries) shall be determined by reference to the
publicly available consolidated balance sheet of the Capital
Corporation and its consolidated Subsidiaries as at the end
of such fiscal quarter and after such adjustments, if any,
as may be required so that such amount is determined in
accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH": at a particular
time for a Borrower and its consolidated Subsidiaries, the
excess of the amount shown opposite the item "Total
stockholder's equity" on the consolidated balance sheet of
such Borrower and its consolidated Subsidiaries over the
aggregate amount shown on such balance sheet for any
intangible assets, including, without limitation, goodwill,
franchises, licenses, patents, trademarks, trade-names,
copyrights, service marks and brand names, PROVIDED that
such excess amount shall be determined (a) with respect to
the Company and its consolidated Subsidiaries as at the end
of any of their fiscal quarters (including the last quarter
of any of their fiscal years), by reference to the publicly
available consolidated balance sheet of the Company and its
consolidated Subsidiaries as at the end of such fiscal
quarter and (b) with respect to the Capital Corporation and
its consolidated Subsidiaries as at the end of any of their
fiscal quarters (including the last quarter of any of their
fiscal years), by reference to the publicly available
consolidated balance sheet of the Capital Corporation and
its consolidated Subsidiaries as at the end of such fiscal
quarter, in each such case after such adjustments, if any,
as may be required so that such excess is determined in
accordance with GAAP.
<PAGE>
7
"CONTRACTUAL OBLIGATION": as to any Person, any
provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is
a party or by which it or any of its property is bound.
"DEAL YEAR": as defined in subsection 2.16(c).
"DEBT": as defined in subsection 6.2.
"DEFAULT": any of the events specified in Section 8,
whether or not any requirement for the giving of notice, the
lapse of time, or both, or any other condition, event or act
has been satisfied.
"DOLLARS" and "$": dollars in lawful currency of the
United States of America.
"DOMESTIC DOLLAR LOANS": the collective reference to
C/D Rate Loans and ABR Loans.
"ERISA": the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"EURODOLLAR LOANS": Committed Rate Loans at such time
as they are made and/or being maintained at a rate of
interest based upon a Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during
each Interest Period for a Eurodollar Loan and for each
Index Rate Bid Loan, (a) the rate determined by the
Administrative Agent to be the arithmetic mean of the
offered rates for deposits in Dollars for a period of such
Interest Period which appear on the Reuters Screen LIBO Page
as of 11:00 a.m., London time, on the date that is two
Working Days prior to the beginning of such Interest Period
or (b) if fewer than two offered rates appear, the rate in
respect of such Interest Period will be the rate per annum
equal to the average (rounded upwards, if necessary, to the
nearest whole multiple of one sixteenth of one percent) of
the respective rates notified to the Administrative Agent by
the Reference Banks as the rate at which such Reference Bank
is offered Dollar deposits two Working Days prior to the
beginning of such Interest Period in the interbank
eurodollar market where the eurodollar and foreign currency
and exchange operations in respect of its Eurodollar Loans
are customarily conducted at or about 10:00 a.m., New York
City time, for delivery on the first day of such Interest
Period for the number of days comprised therein and in an
amount (i) in the case of Eurodollar Loans, comparable to
the amount of the Eurodollar Loan of such Reference Bank to
be outstanding during such Interest Period and (ii) in the
case of an Index Rate Bid Loan by any Bank, equal to the
principal amount of all Index Rate Bid Loans to which such
Interest Period applies.
<PAGE>
8
"EVENT OF DEFAULT": any of the events specified in
Section 8, PROVIDED that any requirement for the giving of
notice, the lapse of time, or both, or any other condition,
event or act has been satisfied.
"EXTENSION REQUEST": each request by the Borrowers
made pursuant to subsection 2.16 for the Banks to extend
this Agreement, which shall contain the information in
respect of such extension specified in Exhibit I and shall
be delivered to the Administrative Agent in writing.
"FIXED CHARGES": for any particular period for the
Capital Corporation and its consolidated Subsidiaries, all
of the Capital Corporation's and its consolidated
Subsidiaries' consolidated interest on indebtedness for
borrowed money, amortization of discounts of indebtedness
for borrowed money, the portion of rentals under financing
leases deemed to represent interest and rentals under
operating leases, PROVIDED that such amounts for a fiscal
quarter of the Capital Corporation and its consolidated
Subsidiaries (including the last quarter of a fiscal year of
the Capital Corporation and its consolidated Subsidiaries)
shall be determined by reference to the publicly available
consolidated statement of income of the Capital Corporation
and its consolidated Subsidiaries for or covering such
fiscal quarter and after such adjustments, if any, as may be
required so that such amounts are determined in accordance
with GAAP.
"FOREIGN TAXES": as defined in subsection 2.17(a).
"GAAP": generally accepted accounting principles in
the United States of America as applied in the preparation
of financial statements of the Company or the Capital
Corporation, respectively, as of the fiscal year ended
October 31, 1992.
"GOVERNMENTAL AUTHORITY": any nation or government,
any state or other political subdivision thereof, and any
entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"IMPORTANT PROPERTY": (a) any manufacturing plant,
including land, all buildings and other improvements
thereon, and all manufacturing machinery and equipment
located therein, owned and used by the Company or a
Restricted Subsidiary primarily for the manufacture of
products to be sold by the Company or such Restricted
Subsidiary, (b) the executive office and administrative
building of the Company in Moline, Illinois, and (c)
research and development facilities, including land and
buildings and other improvements thereon and research and
development machinery and equipment located therein, in each
<PAGE>
9
case, owned and used by the Company or a Restricted
Subsidiary; except in any case property of which the
aggregate fair value as determined by the Board of Directors
of the Company does not at the time exceed 1% of
Consolidated Net Worth, as shown on the audited consolidated
balance sheet contained in the latest annual report to
stockholders of the Company.
"INDENTURE": the Indenture dated February 1, 1991
between the Company and Continental Bank, National
Association, as Trustee.
"INDEX RATE BID LOAN": any Bid Loan made at an
interest rate based upon the Applicable Index Rate.
"INDEX RATE BID LOAN REQUEST": any Bid Loan Request
requesting the Banks to offer to make Index Rate Bid Loans
at an interest rate equal to the Applicable Index Rate PLUS
(or MINUS) a margin.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the
last Business Day of each March, June, September and
December, commencing on the first of such days to occur
after such ABR Loan is made or a C/D Rate Loan or a
Eurodollar Loan is converted to an ABR Loan and (b) as to
any Eurodollar Loan or C/D Rate Loan, the last day of each
Interest Period applicable thereto, PROVIDED that as to any
Eurodollar Loan in respect of which a Borrower has selected
an Interest Period of six months and any C/D Rate Loan in
respect of which a Borrower has selected an Interest Period
of 180 days, interest shall also be paid on the day which is
three months or 90 days, as the case may be, after the
beginning of such Interest Period.
"INTEREST PERIOD": (a) with respect to any Eurodollar
Loan, the period commencing on the Borrowing Date, the date
any ABR Loan or C/D Rate Loan is converted to a Eurodollar
Loan or the date any Eurodollar Loan is continued as a
Eurodollar Loan, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by a Borrower in its notice of
borrowing as provided in subsection 2.1(c);
(b) with respect to any C/D Rate Loan, the period
commencing on the Borrowing Date, the date any ABR Loan or
Eurodollar Loan is converted to a C/D Rate Loan or the date
any C/D Rate Loan is continued as a C/D Rate Loan, as the
case may be, with respect to such C/D Rate Loan and ending
30, 90 or 180 days thereafter, as selected by a Borrower in
its notice of borrowing as provided in subsection 2.1(c);
(c) with respect to any Bid Loan, the period commencing
on the Borrowing Date with respect to such Bid Loan and
ending on the date not less than seven days nor more than
<PAGE>
10
six months thereafter, as specified by a Borrower in its Bid
Loan Request as provided in subsection 2.2(b); and
(d) with respect to any Negotiated Rate Loan, the
period or periods commencing on the Borrowing Date with
respect to such Negotiated Rate Loan or the last day of any
Interest Period with respect thereto and ending on the dates
as shall be mutually agreed upon between the relevant
Borrower and the relevant Bank;
PROVIDED THAT, all of the foregoing provisions relating to
Interest Periods are subject to the following:
(i) if any Interest Period pertaining to a
Eurodollar Loan or an Index Rate Bid Loan would
otherwise end on a day which is not a Working Day, that
Interest Period shall be extended to the next
succeeding Working Day unless the result of such
extension would be to carry such Interest Period into
another calendar month in which event such Interest
Period shall end on the immediately preceding Working
Day;
(ii) if any Interest Period pertaining to an ABR
Loan, a C/D Rate Loan or an Absolute Rate Bid Loan
would otherwise end on a day which is not a Business
Day, that Interest Period shall be extended to the next
succeeding Business Day;
(iii) any Interest Period pertaining to a
Eurodollar Loan having an Interest Period of one, two,
three or six months or an Index Rate Bid Loan having an
Interest Period of one, two, three, four, five or six
months, that begins on the last Working Day of a
calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Working Day of a calendar month;
(iv) Interest Periods shall be deemed available
only if the Required Banks shall not have advised the
Administrative Agent that the C/D Rate or the
Eurodollar Rate, as the case may be, determined by the
Administrative Agent on the basis of the applicable
quotes will not adequately and fairly reflect the cost
to such Banks of maintaining or funding their Committed
Rate Loans bearing interest based on the C/D Rate or
the Eurodollar Rate, as the case may be, determined for
such Interest Period. The Administrative Agent shall
notify the Borrowers and each Bank promptly after
having been advised by the Required Banks that a C/D
Rate or Eurodollar Rate will not so adequately and
fairly reflect such Banks' costs as aforesaid. If a
requested Interest Period shall be unavailable in
<PAGE>
11
accordance with the foregoing sentence, the proposed
Borrower may (A) in accordance with the provisions
(including any requirements for notification) of
subsection 2.1 request, at its option, that the
requested Committed Rate Loans be made or maintained as
C/D Rate Loans, if applicable, or ABR Loans or (B)
withdraw the request for such Committed Rate Loans for
which the Interest Period was unavailable by giving
notice of such election to the Administrative Agent in
accordance with subsection 2.11; PROVIDED, that if the
Administrative Agent does not receive any notice
hereunder, such Borrower shall be deemed to have
requested ABR Loans; and
(v) no Interest Periods shall end after the last
day of the Commitment Period.
"LOANS": the collective reference to the Committed
Rate Loans, the Bid Loans and the Negotiated Rate Loans.
"LOAN ACCOUNT": as defined in subsection 2.3;
collectively, the "LOAN ACCOUNTS".
"LOAN ASSIGNEES": as defined in subsection 10.5(c).
"LOAN ASSIGNMENT": a Loan Assignment, substantially in
the form of Exhibit E.
"MAJORITY BANKS": at any particular time, Banks having
Commitment Percentages aggregating more than fifty percent.
"MANAGING AGENTS: as defined in the preamble hereto.
"MARGIN STOCK": as defined in Regulation U of the
Board of Governors of the Federal Reserve System.
"MORTGAGE": as defined in subsection 6.2.
"NEGOTIATED RATE LOAN": each Loan made to a Borrower
by a Bank pursuant to a Negotiated Rate Loan Request in such
principal amount, for such number of Interest Periods
(subject to the proviso to the definition of "Interest
Period" in this subsection 1.1) and having such interest
rate(s) and repayment terms as shall, in each case, be
mutually agreed upon between such Borrower and such Bank.
"NEGOTIATED RATE LOAN REQUEST": each request by a
Borrower for a Bank to make Negotiated Rate Loans, which
shall be delivered to such Bank in writing, by facsimile
transmission, or by telephone, immediately confirmed in
writing, and which shall specify the amount to be borrowed
and the proposed Borrowing Date.
<PAGE>
12
"NET EARNINGS AVAILABLE FOR FIXED CHARGES": for any
particular period for the Capital Corporation and its
consolidated Subsidiaries, consolidated net earnings of the
Capital Corporation and such Subsidiaries for such period
without deduction of Fixed Charges and without deduction of
federal, state or other income taxes, PROVIDED that such net
earnings for a fiscal quarter of the Capital Corporation and
its consolidated Subsidiaries (including the last quarter of
a fiscal year of the Capital Corporation and its
consolidated Subsidiaries) shall be determined by reference
to the publicly available statement of income of the Capital
Corporation and its consolidated Subsidiaries for or
covering such fiscal quarter and after such adjustments, if
any, as may be required so that such net earnings are
determined in accordance with GAAP, except that earned
investment tax credits may be included as revenue in the
consolidated income statement of the Capital Corporation and
its consolidated Subsidiaries, rather than as an offset
against the provision for income taxes.
"OBJECTING BANKS": as defined in subsection 2.16(a).
"PARTICIPANTS": as defined in subsection 10.5(b).
"PERSON": an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other
entity of whatever nature, PROVIDED that for purposes of
Section 8(h), Person shall also include two or more entities
acting as a syndicate or any other group for the purpose of
acquiring, holding or disposing of securities of the
Company.
"PLAN": any pension plan which is covered by Title IV
of ERISA and in respect of which either Borrower or a
Commonly Controlled Entity is an "employer" as defined in
Section 3(5) of ERISA.
"PURCHASING BANKS": as defined in subsection 10.5(d).
"REFERENCE BANKS": Chemical, Deutsche Bank AG and
Morgan Guaranty Trust Company of New York.
"REGISTER": as defined in subsection 10.5(e).
"REPORT PERIOD": as defined in subsection 2.18.
"REPORTABLE EVENT": any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder.
"REQUIRED BANKS": at a particular time, Banks having
Commitment Percentages aggregating at least 66-2/3%,
PROVIDED that as used in subsection 2.16, "Required Banks"
means with respect to any Extension Request, at a particular
<PAGE>
13
time after the Termination Date has been extended pursuant
to such subsection, Banks (a) which are not Objecting Banks
with respect to any previous Extension Request and (b) which
have Commitment Percentages aggregating at least 66-2/3% of
the aggregate Commitment Percentages of such non-Objecting
Banks.
"REQUIREMENT OF LAW": as to any Person, the
Certificate of Incorporation and By-Laws or other
organizational or governing documents of such Person, and
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 to which such Person or any of its
property is subject.
"RESERVES": as defined in subsection 2.13(c).
"RESERVE PERCENTAGE": for any day during the Interest
Period for a C/D Rate Loan, that percentage (expressed as a
decimal) which is in effect on the first day of such
Interest Period, as prescribed by the Board of Governors of
the Federal Reserve System (or any successor), for
determining the maximum reserve requirement for a member
bank of the Federal Reserve System in New York City with
deposits exceeding one billion Dollars in respect of new
non-personal time deposits in Dollars in New York City
having a maturity comparable to the Interest Period for the
relevant C/D Rate Loans and in an amount of $100,000 or
more.
"RESPONSIBLE OFFICER": of a Borrower, the Chairman,
the President, any Executive, Senior or other Vice
President, the Treasurer and any Assistant Treasurer of such
Borrower.
"RESTRICTED MARGIN STOCK": any Margin Stock, the sale,
pledge or other disposition of which by the Company or any
of its Subsidiaries is in any way restricted by an
arrangement with any Bank or any affiliate thereof to the
extent that the value thereof (determined in accordance with
Regulation U of the Board of Governors of the Federal
Reserve System) does not exceed 25% of the value (determined
in accordance with such Regulation U) of all the assets
subject to such restriction.
"RESTRICTED SUBSIDIARY": any Subsidiary of the Company
incorporated in the United States of America or Canada (a)
which is engaged in, or whose principal assets consist of
property used by the Company or any Restricted Subsidiary
in, the manufacture of products within the United States of
America or Canada or in the sale of products principally to
customers located in the United States of America or Canada
except any corporation which is a retail dealer in which the
<PAGE>
14
Company has, directly or indirectly, an investment, or (b)
which the Company shall designate as a Restricted Subsidiary
in an officers' certificate signed by two Responsible
Officers and delivered to the Administrative Agent.
"SALE AND LEASE-BACK TRANSACTION": as defined in
subsection 6.3.
"SIGNIFICANT SUBSIDIARY": of a Borrower, any
Subsidiary of such Borrower the assets, revenues or net
worth of which is, at the time of determination, equal to or
greater than ten percent of the assets, revenues or net
worth, respectively, of such Borrower at such time.
"SUBSIDIARY": of a Person, a corporation or other
entity of which securities or other ownership interests
having ordinary voting power (other than securities or other
ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the
board of directors or other Persons performing similar
functions are at the time directly or indirectly owned by
such Person or one or more Subsidiaries of such Person, or
by such Person and one or more Subsidiaries of such Person.
"TERMINATION DATE": December 15, 1998 or such later
date as shall be determined pursuant to the provisions of
subsection 2.16 with respect to non-Objecting Banks.
"TRANSFEREES": as defined in subsection 10.5(g).
"TRANSFER EFFECTIVE DATE": as defined in each
Commitment Transfer Supplement and each Loan Assignment.
"TYPE": as to any Committed Rate Loan, its nature as
an ABR Loan, Eurodollar Loan or C/D Rate Loan.
"WORKING DAY": any day on which dealings in foreign
currencies and exchange between banks may be carried on in
London, England and New York, New York.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) All terms
defined in this Agreement shall have the defined meanings when
used in any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any certificate or other
document made or delivered pursuant hereto, accounting terms
relating to either Borrower and its Subsidiaries not defined in
subsection 1.1, and accounting terms partly defined in subsection
1.1 to the extent not defined, shall have the respective meanings
given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
<PAGE>
15
to this Agreement as a whole and not to any particular provision
of this Agreement, and Section, subsection, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(d) Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the relevant Borrower.
SECTION 2. THE COMMITTED RATE LOANS; THE BID
LOANS; THE NEGOTIATED RATE LOANS;
AMOUNT AND TERMS
2.1 THE COMMITTED RATE LOANS. (a) During the
Commitment Period, subject to the terms and conditions hereof,
each Bank severally agrees to make loans (individually, a
"COMMITTED RATE LOAN") to either Borrower from time to time in an
aggregate principal amount for both Borrowers at any one time
outstanding not to exceed such Bank's Commitment minus the
aggregate principal amount of Bid Loans and Negotiated Rate Loans
made by such Bank at such time outstanding unless such Bank shall
have notified the Administrative Agent in writing that it agrees
to make such Committed Rate Loans in an aggregate principal
amount for both Borrowers at any one time outstanding not to
exceed such Bank's Commitment minus the portion of the aggregate
principal amount of the Bid Loans and Negotiated Rate Loans made
by such Bank at such time outstanding specified in such notice,
PROVIDED, HOWEVER, that the aggregate principal amount of Loans
at any time outstanding shall not exceed the aggregate amount of
the Commitments at such time. During the Commitment Period,
either Borrower may use the Commitments by borrowing, repaying
and reborrowing, all in accordance with the terms and conditions
hereof.
(b) The Committed Rate Loans may be either (i)
Eurodollar Loans, (ii) ABR Loans, (iii) C/D Rate Loans or (iv) a
combination thereof as determined by the relevant Borrower.
(c) Either Borrower may borrow Committed Rate Loans on
any Working Day, if the borrowing is of Eurodollar Loans, or on
any Business Day, if the borrowing is of C/D Rate Loans or ABR
Loans; PROVIDED, HOWEVER, that a Responsible Officer of such
Borrower shall give the Administrative Agent irrevocable notice
thereof (which notice must be received by the Administrative
Agent (i) prior to 12:00 Noon, New York City time, three Working
Days prior to the requested Borrowing Date, in the case of
Eurodollar Loans, (ii) prior to 12:00 Noon, New York City time,
two Business Days prior to the requested Borrowing Date in the
case of C/D Rate Loans, (iii) except as provided in clause (iv)
hereof, prior to 12:00 Noon, New York City time, one Business Day
prior to the requested Borrowing Date, in the case of ABR Loans
and (iv) prior to 11:00 A.M., New York City time, on the
requested Borrowing Date in the case of ABR Loans up to an
aggregate principal amount for both Borrowers not to exceed 25%
<PAGE>
16
of the Commitments on such Borrowing Date). Each such notice
shall be given in writing or by facsimile transmission
substantially in the form of Exhibit A (with appropriate
insertions) or shall be given by telephone (specifying the
information set forth in Exhibit A) promptly confirmed by notice
given in writing or by facsimile transmission substantially in
the form of Exhibit A (with appropriate insertions). On the day
of receipt of any such notice from either Borrower, the
Administrative Agent shall promptly notify each Bank thereof.
Subject to paragraph (e) below, each Bank will make the amount of
its share of each borrowing available to the Administrative Agent
for the account of such Borrower at the office of the
Administrative Agent set forth in subsection 10.2 at 11:00 A.M.
(or 2:00 P.M., in the case of ABR Loans requested pursuant to
clause (iv) above), New York City time, on the Borrowing Date
requested by such Borrower in funds immediately available to the
Administrative Agent as the Administrative Agent may direct. The
proceeds of all such Committed Rate Loans will be made available
promptly to such Borrower by the Administrative Agent at the
office of the Administrative Agent specified in subsection 10.2
by crediting the account of such Borrower on the books of such
office of the Administrative Agent with the aggregate of the
amount made available to the Administrative Agent by the Banks
and in like funds as received by the Administrative Agent.
(d) All Committed Rate Loans made to each Borrower
shall be repaid in full by such Borrower on or before the
Termination Date.
2.2 THE BID LOANS; THE NEGOTIATED RATE LOANS. (a)
Either Borrower may borrow Bid Loans or Negotiated Rate Loans
from time to time on any Business Day (in the case of Bid Loans
made pursuant to an Absolute Rate Bid Loan Request), any Working
Day (in the case of Bid Loans made pursuant to an Index Rate Bid
Loan Request) or, in the case of Negotiated Rate Loans, on such
days as shall be mutually agreed upon between the relevant
Borrower and the applicable Bank, in each case during the
Commitment Period and in the manner set forth in this subsection
2.2 and in amounts such that the aggregate principal amount of
Loans at any time outstanding shall not exceed the aggregate
amount of the Commitments at such time. Notwithstanding any
other provision of this Agreement, the aggregate principal amount
of the outstanding Bid Loans and/or Negotiated Rate Loans made by
any Bank may at any time (but shall not be required to) exceed
the Commitment of such Bank so long as the aggregate principal
amount of the Loans outstanding by all Banks does not exceed the
aggregate amount of the Commitments at such time.
(b)(i) Either Borrower shall request Bid Loans or
Negotiated Rate Loans by delivering (A) in the case of an Index
Rate Bid Loan, a Bid Loan Request to the Auction Agent, c/o
Deutsche Bank AG New York Branch, 31 West 52nd Street, New York,
New York 10019, Attention: Loan Syndications, Telephone: (212)
474-7041, Facsimile: (212) 474-7048, not later than 12:00 Noon
<PAGE>
17
(New York City time) four Working Days prior to the proposed
Borrowing Date, (B) in the case of an Absolute Rate Bid Loan, a
Bid Loan Request to the Auction Agent at the address set forth in
clause (A) of this subsection 2.2(b)(i) not later than 10:00 A.M.
(New York City time) one Business Day prior to the proposed
Borrowing Date or (C) in the case of a Negotiated Rate Loan, a
Negotiated Rate Loan Request to any Bank at such time as the
applicable Borrower and the applicable Bank shall agree. Each
Bid Loan Request may solicit bids for Bid Loans in an aggregate
principal amount of $25,000,000 or an integral multiple of
$5,000,000 in excess thereof and for not more than three
alternative Interest Periods for such Bid Loans. The Auction
Agent shall promptly notify each Bid Loan Bank and the
Administrative Agent by facsimile transmission or by telephone,
immediately confirmed by facsimile transmission, of the contents
of each Bid Loan Request received by it.
(ii) In the case of an Index Rate Bid Loan Request,
upon receipt of notice from the Auction Agent of the contents of
such Bid Loan Request, any Bid Loan Bank that elects, in its sole
discretion, to do so, shall irrevocably offer to make one or more
Bid Loans at the Applicable Index Rate plus or minus a margin for
each such Bid Loan determined by such Bid Loan Bank, in its sole
discretion. Any such irrevocable offer shall be made by
delivering a Bid Loan Offer to the Auction Agent at the address
set forth in clause (i)(A) above before 10:30 A.M. (New York City
time) three Working Days before the proposed Borrowing Date,
setting forth the maximum amount of Bid Loans for each Interest
Period, and the aggregate maximum amount for all Interest
Periods, which such Bank would be willing to make and the margin
above or below the Applicable Index Rate at which such Bid Loan
Bank is willing to make each such Bid Loan. The Auction Agent
shall advise the relevant Borrower before 11:00 A.M. (New York
City time) three Working Days before the proposed Borrowing Date
of the contents of each such Bid Loan Offer received by it. If
the Auction Agent in its capacity as a Bid Loan Bank shall, in
its sole discretion, elect to make any such offer, it shall
advise such Borrower of the contents of its Bid Loan Offer before
10:15 A.M. (New York City time) three Working Days before the
proposed Borrowing Date.
(iii) In the case of an Absolute Rate Bid Loan
Request, upon receipt of notice from the Auction Agent of the
contents of such Bid Loan Request, any Bid Loan Bank that elects,
in its sole discretion, to do so, shall irrevocably offer to make
one or more Bid Loans at a rate or rates of interest for each
such Bid Loan determined by such Bid Loan Bank in its sole
discretion. Any such irrevocable offer shall be made by
delivering a Bid Loan Offer to the Auction Agent at the address
set forth in clause (i)(A) of this subsection 2.2(b) before 9:30
A.M. (New York City time) on the proposed Borrowing Date, setting
forth the maximum amount of Bid Loans for each Interest Period,
and the aggregate maximum amount for all Interest Periods, which
such Bid Loan Bank would be willing to make and the rate or rates
<PAGE>
18
of interest at which such Bid Loan Bank is willing to make each
such Bid Loan. The Auction 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 Bid Loan Offer
received by it. If the Auction Agent in its capacity as a Bid
Loan Bank shall, in its sole discretion, elect to make any such
offer, it shall advise such Borrower of the contents of its Bid
Loan Offer before 9:15 A.M. (New York City time) on the proposed
Borrowing Date.
(iv) The relevant Borrower shall before 11:30 A.M.
(New York City time) three Working Days before the proposed
Borrowing Date (in the case of Bid Loans requested by an Index
Rate Bid Loan Request) and before 10:30 A.M. (New York City time)
on the proposed Borrowing Date (in the case of Bid Loans
requested by an Absolute Rate Bid Loan Request) either, in its
absolute discretion:
(A) cancel such Bid Loan Request by giving the Auction
Agent telephone notice to that effect, or
(B) accept one or more of the offers made by any Bid
Loan Bank or Bid Loan Banks pursuant to clause (ii) or
clause (iii) of this subsection 2.2(b), as the case may be,
by giving telephone notice to the Auction Agent (immediately
confirmed by delivery to the Auction Agent at the address
set forth in clause (i)(A) of this subsection 2.2(b) of a
Bid Loan Confirmation) of the amount of Bid Loans for each
relevant Interest Period to be made by each Bid Loan Bank
(which amount shall be equal to or less than the maximum
amount for such Interest Period specified in the Bid Loan
Offer of such Bid Loan Bank, and for all Interest Periods
included in such Bid Loan Offer shall be equal to or less
than the aggregate maximum amount specified in such Bid Loan
Offer for all such Interest Periods) and reject any
remaining offers made by Bid Loan Banks pursuant to clause
(ii) or clause (iii) above, as the case may be; PROVIDED,
HOWEVER, that (x) such Borrower may not accept offers for
Bid Loans for any Interest Period in an aggregate principal
amount in excess of the maximum principal amount requested
for such Interest Period in the related Bid Loan Request,
(y) if such Borrower accepts any such offers, it must accept
offers strictly based upon pricing for such relevant
Interest Period and upon no other criteria whatsoever and
(z) if two or more Bid Loan Banks submit offers for any
Interest Period at identical pricing and such Borrower
accepts any of such offers but does not wish to borrow the
total amount offered by such Bid Loan Banks with such
identical pricing, such Borrower shall accept offers from
all of such Bid Loan Banks in amounts allocated among them
PRO RATA according to the amounts offered by such Bid Loan
Banks (or as nearly PRO RATA as shall be practicable, after
giving effect to the requirement that Bid Loans made by a
Bid Loan Bank on a Borrowing Date for each relevant Interest
<PAGE>
19
Period shall be in a principal amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, it being
agreed that to the extent that it is not possible to make
allocations in accordance with the provisions of this clause
(z) such allocations shall be made in accordance with the
instructions of such Borrower, it being understood that in
no event shall any Bank be obligated to make any Bid Loan in
a principal amount less than $5,000,000).
(v) If such Borrower notifies the Auction Agent that a
Bid Loan Request is cancelled pursuant to clause (iv)(A) of this
subsection 2.2(b), the Auction Agent shall give prompt telephone
notice thereof to the Bid Loan Banks and the Administrative
Agent, and the Bid Loans requested thereby shall not be made.
(vi) (A) If such Borrower accepts pursuant to clause
(iv)(B) of this subsection 2.2(b) one or more of the offers
made by any Bid Loan Bank or Bid Loan Banks pursuant to a
Bid Loan Request, the Auction Agent shall promptly notify by
telephone the Administrative Agent and each Bid Loan Bank
which has made such an offer of the aggregate amount of such
Bid Loans to be made on such Borrowing Date for each
Interest Period and of the acceptance or rejection of any
offers to make such Bid Loans made by such Bid Loan Bank.
Each Bid Loan Bank which is to make a Bid Loan pursuant to a
Bid Loan Request shall, before 12:00 Noon (New York City
time) on the Borrowing Date specified in the Bid Loan
Request applicable thereto, make available to the
Administrative Agent at its office set forth in subsection
10.2 the amount of Bid Loans to be made by such Bid Loan
Bank, in immediately available funds. The Administrative
Agent will make such funds available to such Borrower as
soon as practicable on such date at the Administrative
Agent's aforesaid address.
(B) If such Borrower and any Bank agree to the terms
of a Negotiated Rate Loan to be made on a Borrowing Date
pursuant to a Negotiated Rate Loan Request, such Borrower
and such Bank shall promptly notify by telephone the
Administrative Agent of the aggregate amount of Negotiated
Rate Loans to be made on such Borrowing Date and the
respective Interest Periods therefor. Each Bank which is to
make a Negotiated Rate Loan shall, at such time, on such
Borrowing Date and at such location as shall be mutually
agreed upon between such Borrower and such Bank, make avail-
able to such Borrower the amount of Negotiated Rate Loans to
be made by such Bank, in immediately available funds.
(C) As soon as practicable after each Borrowing Date
for Bid Loans and Negotiated Rate Loans, the Administrative
Agent shall notify each Bank of the aggregate amount of Bid
Loans or Negotiated Rate Loans advanced pursuant to a Bid
Loan Request or Negotiated Rate Loan Request on such
Borrowing Date and the respective Interest Periods therefor.
<PAGE>
20
(c) Within the limits and on the conditions set forth
in this subsection 2.2, each Borrower may from time to time
borrow under this subsection 2.2, repay pursuant to paragraph (d)
below, and reborrow under this subsection 2.2.
(d) Each Borrower shall repay to the Administrative
Agent for the account of each Bid Loan Bank (or the Loan Assignee
in respect thereof, as the case may be) which has made a Bid Loan
to such Borrower on the last day of the Interest Period for each
Bid Loan (such Interest Period being that specified by such
Borrower for repayment of such Bid Loan in the related Bid Loan
Request) the then unpaid principal amount of such Bid Loan. Each
Borrower shall repay to each Bank which has made a Negotiated
Rate Loan to such Borrower (or the Loan Assignee in respect
thereof, as the case may be) the principal thereof as agreed by
such Borrower and such Bank.
(e) Each Borrower shall pay interest on the unpaid
principal amount of each Bid Loan and each Negotiated Rate Loan
borrowed by such Borrower from the applicable Borrowing Date to
the stated maturity date thereof, in the case of a Bid Loan, at
the rate of interest determined pursuant to paragraph (b) of this
subsection 2.2, and, in the case of a Negotiated Rate Loan, as
agreed by such Borrower and the relevant Bank (calculated on the
basis of a 360 day year for actual days elapsed), payable on the
interest payment date or dates (i) specified by such Borrower for
such Bid Loan in the related Bid Loan Request and (ii) mutually
agreed upon between such Borrower and such Bank in the case of
Negotiated Rate Loans, PROVIDED that as to any Bid Loan in
respect of which the stated maturity date is more than three
months after such Borrowing Date, interest shall also be paid on
the day which occurs three months after such Borrowing Date. If
all or a portion of the principal amount of any Bid Loan shall
not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue principal amount shall,
without limiting any rights of any Bank under this Agreement,
bear interest from the date on which such payment was due at a
rate per annum which is 1% above the rate which would otherwise
be applicable to such Bid Loan until the scheduled maturity date
with respect thereto and for each day thereafter at a rate per
annum which is 1% above the ABR until paid in full (as well after
as before judgment). If all or any portion of the principal
amount of any Negotiated Rate Loan shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise),
such overdue principal amount shall, without limiting any rights
of any Bank under this Agreement, bear interest from the date on
which such payment was due at a rate per annum as shall be
mutually agreed upon between the relevant Borrower and the
relevant Bank.
(f) After the first Bid Loan Request has been given
hereunder, no Bid Loan Request or Negotiated Rate Loan Request
shall be given until at least one Business Day, in the case of an
Absolute Rate Bid Loan Request, or one Working Day, in the case
<PAGE>
21
of an Index Rate Bid Loan Request, after the earliest to occur of
(i) the Borrowing Dates with respect to all prior Bid Loan
Requests made pursuant to subsection 2.2(b)(i), (ii) the date on
which all Bid Loan Banks have failed to submit Bid Loan Offers
with respect to any Bid Loan Requests within the time specified
in subsection 2.2(b)(ii) or (iii), as the case may be, and (iii)
the date on which the relevant Borrower has cancelled all prior
Bid Loan Requests pursuant to subsection 2.2(b)(iv).
2.3 LOAN ACCOUNTS. Each Bank, with respect to its
Committed Rate Loans, Bid Loans and Negotiated Rate Loans, and
the Administrative Agent, with respect to all Committed Rate
Loans and Bid Loans, shall open and maintain in the name of each
Borrower loan accounts (as to each Bank, its "LOAN ACCOUNT"
applicable to such Borrower) on its books and records setting
forth the amounts of principal, interest and other sums paid and
payable by such Borrower from time to time hereunder in respect
of such Loans, and the obligation of such Borrower to pay or
repay, as the case may be, such amounts to such Bank shall be
evidenced by such Bank's Loan Account. In case of any dispute,
action or proceeding relating to any Committed Rate Loan, Bid
Loan or Negotiated Rate Loan, the entries in such records shall
constitute PRIMA FACIE evidence of the accuracy of the
information set forth therein. In case of discrepancy between
the entries in the Administrative Agent's books and records and
any Bank's, the entries in the Administrative Agent's books and
records shall constitute PRIMA FACIE evidence of the accuracy of
the information set forth therein.
2.4 FEES. (a) The Company and the Capital
Corporation jointly and severally agree to pay to the
Administrative Agent for the account of each Bank a facility fee
from and including the Closing Date to and including the last day
of the Commitment Period, computed at a rate of .125% per annum
on the average daily amount of the Commitment of such Bank in
effect during the period for which payment is made, payable
quarterly in arrears on the first Business Day of each January,
April, July and October of each year and on the Termination Date
or such earlier date as the Commitments shall terminate as
provided herein, commencing on the first of such dates to occur
after the date hereof.
(b) The Company and the Capital Corporation jointly
and severally agree to pay to the Auction Agent for its own
account all fees set forth in the letter agreement dated November
23, 1993 from the Auction Agent to the Borrowers.
(c) The Company and the Capital Corporation jointly
and severally agree to pay to the Administrative Agent for its
own account all fees set forth in the letter agreement dated
November 18, 1993 from the Administrative Agent to the Borrowers.
<PAGE>
22
2.5 TERMINATION OR REDUCTION OF COMMITMENTS;
CANCELLATION OF CAPITAL CORPORATION AS BORROWER. (a) The
Borrowers, acting jointly, shall have the right, upon not less
than five Business Days' notice to the Administrative Agent, to
terminate the Commitments or, from time to time, reduce the
amount of the Commitments, provided that (i) any such reduction
shall be accompanied by prepayment of Loans made hereunder in
accordance with subsection 2.6, together with accrued interest on
the amount so prepaid to the date of such prepayment, to the
extent, if any, that the amount of such Loans then outstanding
exceeds the amount of the Commitments as then reduced, and (ii)
any such termination of the Commitments shall be accompanied by
prepayment in full of the Loans then outstanding hereunder in
accordance with subsection 2.6, and any termination of a Bank's
Commitment pursuant to subsection 2.13, 2.16 or 2.17 shall, with
respect to each affected Loan, on the last day of the applicable
Interest Period therefor or, if earlier, on such earlier date as
shall be notified by the Borrowers, be accompanied by prepayment
in full of such Loan, together with, in each case, accrued
interest thereon to the date of such prepayment, the payment of
any unpaid facility fee then accrued hereunder, and the payment
of any amounts then payable pursuant to subsections 2.13, 2.14,
2.15 and 2.17. Upon receipt of such notice from the Borrowers
the Administrative Agent shall promptly notify each Bank thereof.
Any reduction of the Commitments pursuant to this subsection 2.5
shall be in an amount not less than $25,000,000, and shall be an
amount which is a whole multiple of $5,000,000, and shall reduce
permanently the amount of the Commitments then in effect.
(b) The Company may cancel the ability of the Capital
Corporation to borrow hereunder upon not less than five Business
Days' notice to the Administrative Agent. Upon receipt of such
notice from the Company the Administrative Agent shall promptly
notify each Bank thereof. On the first day following receipt of
such notice, on which all Loans to the Capital Corporation and
all interest thereon shall have been paid in full, and
notwithstanding any other provision of this Agreement, (i) the
Capital Corporation shall cease to be a party hereto or to have
any right or obligation hereunder, (ii) rights and obligations
expressed herein to be, in effect, of either the Company or the
Capital Corporation or of both of them, but not any such rights
and obligations expressed herein to be of the Capital Corporation
only, shall be deemed to be rights and obligations of the Company
only and (iii) the Banks shall cease to have any right or
obligation hereunder which depends or is contingent upon any
action, condition or performance, or the absence thereof, whether
past or present, of the Capital Corporation other than any
action, condition or performance, or the absence thereof, of the
Capital Corporation in its capacity as a Subsidiary, Significant
Subsidiary or Restricted Subsidiary hereunder; PROVIDED, HOWEVER,
that the obligation of the Capital Corporation to make any
payment pursuant to subsection 2.13, 2.14, 2.15 or 2.17 which
arises prior to the cancellation of the ability of the Capital
<PAGE>
23
Corporation to borrow hereunder shall survive the cancellation of
the ability of the Capital Corporation to borrow hereunder.
2.6 OPTIONAL PREPAYMENTS. Either Borrower may at any
time and from time to time prepay its Committed Rate Loans in
whole or in part, without premium or penalty, but subject to the
provisions of subsection 2.14, upon at least three Business Days'
irrevocable notice, in the case of Eurodollar Loans, two Business
Days' irrevocable notice in the case of C/D Rate Loans, or one
Business Day's irrevocable notice in the case of ABR Loans, in
each case to the Administrative Agent, specifying the date and
amount of prepayment and whether the prepayment is of its
Eurodollar Loans, ABR Loans, C/D Rate Loans, or a combination
thereof, and if of a combination thereof the amount of prepayment
allocable to each. Upon receipt of such notice the
Administrative Agent shall promptly notify each Bank thereof. If
such notice is given, the Borrower delivering such notice shall
make such prepayment, and the payment of 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 and any amounts payable pursuant to subsections
2.14 and 2.15. Except as provided in the immediately following
sentence, partial prepayments shall be in an aggregate principal
amount of $5,000,000, or a whole multiple thereof; PROVIDED,
HOWEVER, that after giving effect thereto, the aggregate
principal amount of all Committed Rate Loans made on the same
Borrowing Date shall not be less than $25,000,000. Anything
contained in this subsection 2.6 to the contrary notwithstanding,
partial prepayments of a Cancelled Bank's Loans in connection
with the termination under subsection 2.13(a), (b) or (c),
2.16(c) or 2.17(b) of such Cancelled Bank's Commitment (in whole
or in part) shall be in an amount equal to the principal amount
of the Loans of such Bank being prepaid, notwithstanding the
amount thereof, and shall be permitted notwithstanding the
provisions of the foregoing proviso. Either Borrower may prepay
Negotiated Rate Loans or Bid Loans on such terms as shall be
mutually agreed upon between the relevant Borrower and the
relevant Bank.
2.7 MINIMUM AMOUNT OF CERTAIN LOANS. All borrowings,
payments and, except as set forth in the penultimate sentence of
subsection 2.6 hereof, prepayments in respect of Committed Rate
Loans shall be in such amounts and be made pursuant to such
elections that, after giving effect thereto, (a) the aggregate
principal amount of Committed Rate Loans made on any Borrowing
Date shall not be less than $25,000,000 or a whole multiple of
$5,000,000 in excess thereof and (b) the aggregate principal
amount of Committed Rate Loans of any Type with the same Interest
Period made on any Borrowing Date shall not be less than
$10,000,000 or a whole multiple of $1,000,000 in excess thereof.
2.8 COMMITTED RATE LOAN INTEREST RATE AND PAYMENT
DATES. (a) The Eurodollar Loans shall bear interest for the
period from the date thereof until the stated maturity thereof on
<PAGE>
24
the unpaid principal amount thereof at a rate per annum equal to
the Eurodollar Rate determined for the Interest Period therefor
plus the Applicable Margin.
(b) The ABR Loans shall bear interest for each day
during the period from the date thereof until the payment in full
thereof on the unpaid principal amount thereof at a fluctuating
rate per annum equal to the ABR for such day plus the Applicable
Margin.
(c) The C/D Rate Loans shall bear interest for the
period from the date thereof until the stated maturity thereof on
the unpaid principal amount thereof at a rate per annum equal to
the C/D Rate determined for the Interest Period therefor plus the
Applicable Margin.
(d) If all or a portion of the principal amount of any
of the Committed Rate Loans shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise) such
overdue principal amount of such Committed Rate Loan (i) shall
bear interest at a rate per annum which is 1% above the rate
which would otherwise be applicable pursuant to subsection
2.8(a), (b) or (c), as the case may be, from the date when such
principal amount is due until the date on which such amount is
paid in full and (ii) shall, if such Committed Rate Loan is a
Eurodollar Loan or C/D Rate Loan, be converted to an ABR Loan at
the end of the Interest Period applicable thereto.
(e) Interest shall be payable in arrears on each
Interest Payment Date.
2.9 CONVERSION AND CONTINUATION OPTIONS. (a) The
relevant Borrower may elect from time to time to convert
Committed Rate Loans of one Type into Committed Rate Loans of
another Type by giving to the Administrative Agent irrevocable
notice of such conversion by the earliest time that they would
have been required to give notice under subsection 2.1(c) if they
had been borrowing Committed Rate Loans of each such Type on the
conversion date specified in such notice, PROVIDED that any such
conversion of Eurodollar Loans or C/D Rate Loans may only be made
on the last day of an Interest Period with respect thereto. Any
such notice of conversion to Eurodollar Loans or C/D Rate 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 Bank thereof. If
the last day of the then current Interest Period with respect to
C/D Rate Loans that are to be converted to Eurodollar Loans is
not a Working Day, such conversion shall be made on the next
succeeding Working Day, and during the period from such last day
to such succeeding Working Day such Loans shall bear interest as
if they were ABR Loans. All or any part of outstanding
Eurodollar Loans, ABR Loans and C/D Rate Loans may be converted
as provided herein, PROVIDED that no Loan may be converted into a
<PAGE>
25
Eurodollar Loan or a C/D Rate Loan after the date that is one
month or 30 days, respectively, prior to the Termination Date.
(b) Any Eurodollar Loans or C/D Rate Loans may be
continued as such upon the expiration of the then current
Interest Period with respect thereto by the relevant Borrower
giving notice to the Administrative Agent, such notice to be
given by the time it would have been required to give notice
under subection 2.1(c) if it had been borrowing Eurodollar Loans
or C/D Rate Loans, as the case may be, on the last day of the
then expiring Interest Period therefor, of the length of the next
Interest Period to be applicable to such Loans, PROVIDED that no
Eurodollar Loan or C/D Rate Loan may be continued as such after
the date that is one month or 30 days, respectively, prior to the
Termination Date.
2.10 COMPUTATION OF INTEREST AND FEES. (a) Facility
fees and interest in respect of ABR Loans based upon clause (a)
of the definition of ABR shall be calculated on the basis of a
365 (or 366 as the case may be) day year for the actual days
elapsed (including the first day and excluding the last day).
Interest in respect of Eurodollar Loans, C/D Rate Loans, Bid
Loans and ABR Loans based upon clause (b) of the definition of
ABR shall be calculated on the basis of a 360 day year for the
actual days elapsed (including the first day and excluding the
last day). The Administrative Agent shall promptly notify the
Borrowers and the Banks of each determination of a Eurodollar
Rate and of a C/D Rate. Any change in the interest rate on a
Committed Rate Loan resulting from a change in the ABR shall
become effective as of the opening of business on the day on
which such change in the ABR shall become effective. The
Administrative Agent shall promptly notify the Borrowers and the
Banks of the effective date and the amount of each such change.
(b) 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 Banks in
the absence of manifest error. The Administrative Agent shall,
at the request of a Borrower, deliver to such Borrower a
statement showing the quotations given by the Reference Banks and
the computations used by the Administrative Agent in determining
any interest rate.
(c) If any Reference Bank's Commitment shall terminate
(otherwise than on termination of all the Commitments) or, as the
case may be, its Loans are assigned, prepaid or repaid for any
reason whatsoever, such Reference Bank shall thereupon cease to
be a Reference Bank, and the Administrative Agent (after
consultation with the Banks and with the consent of the
Borrowers) shall, by notice to the Borrowers and the Banks,
designate a sufficient number of other Banks as Reference Banks
so that there shall at all times be at least three Reference
Banks.
<PAGE>
26
(d) Each Reference Bank shall use its best efforts to
furnish quotations of rates to the Administrative Agent as
contemplated hereby. If any of the Reference Banks shall be
unable or otherwise fails to supply such rates to the
Administrative Agent upon its request, the rate of interest shall
be determined on the basis of the quotations of the remaining
Reference Banks or Reference Bank.
2.11 INABILITY TO DETERMINE INTEREST RATE. (a) In
the event that the Administrative Agent shall have determined
(which determination shall be conclusive and binding upon the
Borrowers) that by reason of circumstances affecting the
interbank eurodollar market generally, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for any
requested Interest Period with respect to Committed Rate Loans
that a Borrower has requested be made as, continued as or
converted into Eurodollar Loans, the Administrative Agent shall
promptly give notice of such determination to such Borrower and
the Banks prior to the first day of the requested Interest Period
for such Eurodollar Loans. If such notice is given, such
Borrower may (i) in accordance with the provisions of subsections
2.1 or 2.9, as the case may be, (including any requirements for
notification) request that the affected Loans be made as,
continued as or converted into, as the case may be, C/D Rate
Loans or ABR Loans, or (ii) in the case of Loans requested to be
made on the first day of such Interest Period, withdraw the
notice given under subsections 2.1 or 2.9, as the case may be, by
giving telephonic notice to the Administrative Agent, no later
than 10:00 A.M. (New York City time) on the applicable Borrowing
Date, confirmed in writing no later than one Business Day after
such telephonic notice is given; PROVIDED that, if the
Administrative Agent does not receive any notice permitted from
the relevant Borrower hereunder, such Borrower shall be deemed to
have requested that the affected Loans be made as, continued as
or converted into, as the case may be, ABR Loans. Until the
notice given pursuant to the first sentence of this paragraph has
been withdrawn by the Administrative Agent, no further Loans
shall be made as, continued as or converted into, as the case may
be, Eurodollar Loans.
(b) In the event that the Administrative Agent shall
have determined (which determination shall be conclusive and
binding upon the Borrowers) that by reason of circumstances
affecting the domestic certificate of deposit market generally,
adequate and reasonable means do not exist for ascertaining the
C/D Rate for any requested Interest Period with respect to
Committed Rate Loans that a Borrower has requested be made as,
continued as or converted into, C/D Rate Loans, the
Administrative Agent shall promptly give notice of such
determination to such Borrower and the Banks on or prior to the
first day of the requested Interest Period for such C/D Rate
Loans. If such notice is given, such Borrower may (i) in
accordance with the provisions of subsections 2.1 or 2.9, as the
case may be, (including any requirements for notification)
<PAGE>
27
request that the affected Loans be made as, continued as or
converted into, as the case may be, ABR Loans, or (ii) in the
case of Loans requested to be made on the first day of such
Interest Period, withdraw the notice given under subsections 2.1
or 2.9, as the case may be, by giving telephonic notice to the
Administrative Agent, no later than the later of 10:00 A.M. (New
York City time) on the applicable Borrowing Date and one hour
after receipt by such Borrower of the notice referred to in the
preceding sentence, confirmed in writing no later than one
Business Day after such telephonic notice is given; PROVIDED
that, if the Administrative Agent does not receive any notice
permitted from the relevant Borrower hereunder, such Borrower
shall be deemed to have requested that the affected Loans be made
as, continued as or converted into, as the case may be, ABR
Loans. Until the notice given pursuant to the first sentence of
this paragraph has been withdrawn by the Administrative Agent, no
further Loans shall be made as, continued as or converted into,
as the case may be, C/D Rate Loans.
(c) In the event that the Auction Agent shall have
determined (which determination shall be conclusive and binding
upon the Borrowers) that by reason of circumstances affecting the
interbank eurodollar market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for any Interest
Period with respect to a proposed Bid Loan to be made pursuant to
an Index Rate Bid Loan Request, the Auction Agent shall forthwith
give notice of such determination to the relevant Borrower and
the Bid Loan Banks at least two Business Days prior to the
proposed Borrowing Date, and such Bid Loans shall not be made on
such Borrowing Date. Until any such notice has been withdrawn by
the Auction Agent, no further Index Rate Bid Loan Requests shall
be submitted by either Borrower.
2.12 PRO RATA TREATMENT AND PAYMENTS. (a) All
payments (including prepayments), to be made by the Borrowers on
account of principal, interest and fees shall be made without
defense, set-off or counterclaim and shall be made, in the case
of fees and principal of, and interest on, Loans (other than
Negotiated Rate Loans) at the Administrative Agent's office
specified in subsection 10.2, in each case in lawful money of the
United States of America and in immediately available funds not
later than 11:00 A.M. (New York City time) on the date due. The
Administrative Agent shall distribute such payments to the Banks
entitled thereto on the day of receipt in like funds as received,
PROVIDED that the Administrative Agent shall have received such
payments not later than 11:00 A.M. (New York City time). If the
Administrative Agent shall distribute such payments to the Banks
entitled thereto on a date after the date on which such payments
were received prior to 11:00 A.M. (New York City time), the
Administrative Agent shall pay to each such Bank on demand an
amount equal to the product of (i) the daily average Federal
funds rate during such period as quoted by the Administrative
Agent, TIMES (ii) the amount of such Bank's PRO RATA share of
such payment, TIMES (iii) a fraction the numerator of which is
<PAGE>
28
the number of days that elapse from and including such date of
receipt of payment by the Administrative Agent to but excluding
the date on which such Bank's PRO RATA share of such payment
shall have become immediately available to such Bank and the
denominator of which is 360. All payments (including
prepayments) to be made by the Borrowers on account of principal,
interest and fees relating to Negotiated Rate Loans shall be made
to the Bank with respect thereto on such terms, at such address
and at such time as shall be mutually agreed upon between the
relevant Borrower and the relevant Bank in lawful money of the
United States of America on the date due.
(b) Each borrowing by the Borrowers of Committed Rate
Loans shall be made PRO RATA among the Banks according to their
respective Available Commitments, PROVIDED, HOWEVER, that for the
purposes hereof, each Bank's Available Commitment shall be
increased by the amount that such Bank has agreed to make
Committed Rate Loans in excess of its Available Commitment
pursuant to the terms of subsection 2.1(a), and, except as
provided in subsections 2.13, 2.16 and 2.17, each reduction of
the Commitments shall be made PRO RATA among the Banks according
to the respective Commitment Percentages. Each payment by the
Borrowers under this Agreement or of any Loan (other than
Negotiated Rate Loans) shall be applied, FIRST, to any fees then
due and owing pursuant to subsection 2.4, SECOND, to interest
then due and owing in respect of the Loans (other than Negotiated
Rate Loans) and THIRD, to principal then due and owing hereunder
(other than principal due and owing under Negotiated Rate Loans)
and under the Loans (other than Negotiated Rate Loans). Each
payment made by the Borrowers under this Agreement relating to a
Negotiated Rate Loan to the Bank with respect thereto shall be
applied, FIRST, to interest then due and owing in respect of such
Negotiated Rate Loan and SECOND, to principal then due and owing
hereunder with respect to such Negotiated Rate Loan and under
such Negotiated Rate Loan. Each payment (other than prepayments)
by either Borrower on account of principal of and interest on the
Loans shall be made for the account of each Bank PRO RATA
according to the respective amounts due and owing to such Bank.
Each prepayment by a Borrower on account of principal of the
Loans (other than Negotiated Rate Loans) shall be applied, FIRST,
to such of its Committed Rate Loan borrowings as such Borrower
may designate (to be applied PRO RATA among the Banks in
accordance with each Bank's share of such borrowing), and,
SECOND, after all Committed Rate Loans shall have been paid in
full, to all of its Absolute Rate Bid Loans or Index Rate Bid
Loans made on the same Borrowing Date with the same Interest
Period as such Borrower may designate, PRO RATA according to the
respective amounts outstanding; PROVIDED, HOWEVER, that
prepayments made pursuant to subsection 2.13(a), (b) or (c),
2.16(c) or 2.17(b) shall be applied in accordance with such
subsection.
(c) If any payment hereunder (other than payments on
the Eurodollar Loans and Index Rate Bid Loans) becomes due and
<PAGE>
29
payable on a day other than a Business Day, such payment shall be
extended to the next succeeding Business Day. If any payment on
a Eurodollar Loan or Index Rate Bid Loan becomes due and payable
on a day other than a Working Day, the maturity thereof shall be
extended to the next succeeding Working Day 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 Working Day. With respect to any extension
of the payment of principal pursuant to this subsection 2.12(c),
interest thereon shall be payable at the then applicable rate
during such extension.
(d) Unless the Administrative Agent shall have been
notified in writing by any Bank prior to the date of the
Committed Rate Loan, Committed Rate Loans, Bid Loan or Bid Loans
to be made by such Bank (which notice shall be effective upon
receipt) that such Bank will not make its PRO RATA share of the
amount of the requested borrowing on such date available to the
Administrative Agent, the Administrative Agent may assume that
such Bank has made such amount available to it on such date and
the Administrative Agent may, in reliance upon such assumption,
make available to the relevant Borrower a corresponding amount.
If a Bank shall make such amount available to the Administrative
Agent on a date after such Borrowing Date, such Bank shall pay to
the Administrative Agent on demand an amount equal to the product
of (i) the daily average Federal funds rate during such period as
quoted by the Administrative Agent, TIMES (ii) the amount of such
Bank's PRO RATA share of such borrowing, TIMES (iii) a fraction
the numerator of which is the number of days that elapse from and
including such Borrowing Date to but excluding the date on which
such Bank's PRO RATA share of such borrowing shall have become
immediately available to the Administrative Agent and the
denominator of which is 360. A certificate of the Administrative
Agent submitted to any Bank with respect to any amounts owing
under this subsection 2.12(d) shall be conclusive, absent
manifest error. If such Bank's PRO RATA share is not in fact
made available to the Administrative Agent by such Bank within
three Business Days of such Borrowing Date, the Administrative
Agent shall be entitled to recover such amount, on demand, from
the relevant Borrower with interest thereon at the rate equal to
the product of (i) during the period from and including such
Borrowing Date to the Business Day next following the date of
such demand, the daily average Federal funds rate quoted by the
Administrative Agent, TIMES a fraction the numerator of which is
the number of days that elapse from and including such Borrowing
Date to but excluding the Business Day next following the date of
such demand and the denominator of which is 360 and (ii)
thereafter, the interest rate or rates applicable to the Loan or
Loans funded by the Administrative Agent on behalf of such Bank
on the Borrowing Date, TIMES a fraction the numerator of which is
the number of days which elapse from and including the Business
Day next following the date of such demand to but excluding the
date such amount is recovered by the Administrative Agent from
such Borrower and the denominator of which is 360. In the event
<PAGE>
30
any Bank's PRO RATA share of a borrowing is not made available to
the Administrative Agent in accordance with this paragraph within
three Business Days of the applicable Borrowing Date (i) such
Bank shall, during the period from such Borrowing Date to the
date such Bank makes its PRO RATA share of the applicable
borrowing available, not accrue and shall not be entitled to
receive any facility fee under subsection 2.4 and (ii) either
Borrower may exercise or pursue any other rights, remedies,
powers and privileges against such Bank as are provided by law or
by contract.
2.13 REQUIREMENTS OF LAW. (a) If any Bank shall
determine that by reason of (i) the introduction after the date
hereof of any applicable law, regulation or guideline or any
change after the date hereof in any applicable law, regulation or
guideline (including the phasing-in of a provision of any
applicable law, regulation or guideline) or in the interpretation
thereof by any governmental or other regulatory authority charged
with the administration thereof or court of competent
jurisdiction and/or (ii) compliance by such Bank with any
requirement adopted after the date hereof of or directive adopted
after the date hereof from any central bank or other fiscal,
monetary or other regulatory authority (whether or not having the
force of law), there shall be any increase in the cost of such
Bank of maintaining or giving effect to its obligations with
respect to Committed Rate Loans under this Agreement or
maintaining its Commitment with respect to Committed Rate Loans
or making or maintaining any C/D Rate Loans or Eurodollar Loans
or any reduction in any amount receivable by such Bank in respect
of C/D Rate Loans or Eurodollar Loans under this Agreement,
notwithstanding the reasonable efforts (such reasonable efforts
not to result in the incurrence of additional costs or expenses)
of such Bank to mitigate such increase or reduction, then the
relevant Borrower shall from time to time on receipt (whenever
occurring) of a certificate from such Bank (which shall be
executed by an officer thereof and a copy of which shall be
delivered to the Administrative Agent) pay to such Bank such
amounts as are stated therein to be required to indemnify such
Bank against such increased costs or reduction; PROVIDED,
HOWEVER, that if such Borrower becomes obligated to pay any Bank
any additional amount pursuant to this subsection 2.13(a), such
Borrower shall have the right, so long as no Event of Default has
occurred and is then continuing, upon giving notice to the
Administrative Agent and such Bank in accordance with subsection
2.6, to prepay in full the Loans of any such Bank, together with
accrued interest thereon, any amounts payable to such Bank
pursuant to subsections 2.13, 2.14, 2.15 and 2.17 and any accrued
and unpaid facility fee or other amount payable to such Bank
hereunder and/or, upon giving not less than three Business Days'
notice to any such Bank and the Administrative Agent, to cancel
the whole or part of the Commitment of any such Bank; PROVIDED,
FURTHER, that such Borrower shall not be obligated to pay any
Bank any additional amount pursuant to this subsection 2.13(a)(A)
which constitutes a present or future income, stamp or other tax,
<PAGE>
31
levy, impost, duty, charge, fee, deduction or withholding
referred to in subsection 2.17(a) or (B) as a result of any law,
rule, guideline, regulation, request or directive regarding
capital adequacy referred to in subsection 2.13(b). The
certificate of such Bank as to the amount of such increased costs
or reduction shall set forth in reasonable detail the computation
of such increased costs or reduction, and shall be binding and
conclusive in the absence of manifest error. Amounts payable
pursuant to this subsection 2.13(a) shall not include amounts
which the relevant Borrower is obligated to pay pursuant to the
definition of "C/D Rate" or subsection 2.13(c). A Bank which
demands indemnification hereunder as a result of an increased
cost or reduction referred to herein shall deliver the
certificate referred to above to the relevant Borrower demanding
indemnification no later than the later of (y) the thirtieth day
immediately following each payment or realization by such Bank of
such increased cost or reduction (and such certificate shall
certify that the amounts set forth therein were paid or realized
within such thirty-day period) and (z) the thirtieth day
immediately following such Bank's knowledge of the incurrence or
realization by such Bank of such increased cost or reduction (and
such certificate shall so certify).
(b) In the event that any Bank shall have determined
that the adoption after the date hereof of any law, rule,
guideline or regulation regarding capital adequacy, or any change
after the date hereof in any existing or future law, rule,
guideline or regulation regarding capital adequacy (excluding,
however, the phasing-in of any existing law, rule, regulation or
guideline regarding capital adequacy) or in the interpretation or
application thereof or compliance by such Bank or any corporation
controlling such Bank with any request or directive made or
adopted after the date hereof regarding capital adequacy (whether
or not having the force of law) from any central bank or
Governmental Authority, does or shall have the effect of reducing
the rate of return on such Bank's or such corporation's capital
as a consequence of its obligations hereunder to a level below
that which such Bank or such corporation could have achieved but
for such adoption, change or compliance (taking into
consideration such Bank's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Bank to
be material, then from time to time, within 30 days after receipt
(whenever occurring) of a certificate from such Bank (which shall
be executed by an officer thereof and a copy of which shall be
delivered to the Administrative Agent), the Borrowers jointly and
severally agree to pay to such Bank such additional amounts as
are stated therein to be required to compensate it for such
reduction; PROVIDED, HOWEVER, that if such Borrower becomes
obligated to pay any Bank any additional amount pursuant to this
subsection 2.13(b), such Borrower shall have the right, so long
as no Event of Default has occurred and is then continuing, upon
giving notice to the Administrative Agent and such Bank in
accordance with subsection 2.6, to prepay in full the Loans of
any such Bank, together with accrued interest thereon, any
<PAGE>
32
amounts payable pursuant to subsections 2.13, 2.14, 2.15 and 2.17
and any accrued and unpaid facility fee or other amounts payable
to it hereunder and/or, upon giving not less than three Business
Days' notice to any such Bank and the Administrative Agent, to
cancel the whole or part of the Commitment of any such Bank. The
certificate of such Bank as to the amount of such reduction shall
set forth in reasonable detail the computation of such reduction,
and shall be binding and conclusive in the absence of manifest
error. A Bank which demands indemnification hereunder as a
result of a reduction referred to herein shall deliver the
certificate referred to above to the relevant Borrower demanding
indemnification no later than the later of (i) the thirtieth day
immediately following each realization by such Bank of such
reduction (and such certificate shall certify that the amounts
set forth therein were realized within such thirty-day period)
and (ii) the thirtieth day immediately following such Bank's
knowledge of the realization by such Bank of such reduction (and
such certificate shall so certify).
(c) Each Borrower shall pay to each Bank that delivers
a certificate to such Borrower in accordance with the second and
third following sentences such amounts as shall be necessary to
reimburse such Bank for the costs (determined in accordance with
the immediately following sentence), if any, incurred by such
Bank, as a result of the application to such Bank during any
period on which there are outstanding Eurodollar Loans advanced
by such Bank to such Borrower of basic, supplemental, marginal
and emergency reserves under any regulations of the Board of
Governors of the Federal Reserve System or other Governmental
Authority having jurisdiction with respect thereto dealing with
reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency liabilities" in
Regulation D of such Board) maintained by a member bank of such
System (any such reserves dealing with reserve requirements
prescribed for eurocurrency funding being referred to as
"RESERVES"), such amount to be set forth in a certificate of such
Bank delivered to the relevant Borrower; PROVIDED, HOWEVER, that
if a Bank gives to a Borrower the written notice contemplated by
the proviso set forth in the second following sentence, such
Borrower shall have the right, so long as no Event of Default has
occurred and is then continuing, upon giving notice to the
Administrative Agent and such Bank in accordance with subsection
2.6, to prepay in full the Loans of such Bank, together with
accrued interest thereon, any amounts payable pursuant to
subsections 2.13, 2.14, 2.15 and 2.17 and any accrued and unpaid
facility fee or other amounts payable to it hereunder and/or upon
giving not less than three Working Days' notice to any such Bank
and the Administrative Agent, to cancel the whole or part of the
Commitment of any such Bank. Amounts certified by a Bank
hereunder for any period shall represent such Bank's calculation
or, if an accurate calculation is impracticable, reasonable
estimate (using such reasonable means of allocation as such Bank
shall determine) of the actual costs, if any, theretofore
incurred by such Bank as a result of the application of Reserves
<PAGE>
33
to Eurocurrency liabilities (as referred to in Regulation D
referred to above) of such Bank in an amount equal to such Bank's
Eurodollar Loans during such period and in any event shall not
exceed the amount obtainable utilizing the maximum Reserves
prescribed by the Board of Governors of the Federal Reserve
System or other Governmental Authority having jurisdiction with
respect thereto for such period. Such payment shall be made
within fifteen days after receipt by the relevant Borrower of a
certificate, signed by an officer of the Bank delivering such
certificate, specifying the period (prior to the date of such
certificate) during which the cost set forth therein was incurred
by such Bank and stating (i) that such amount represents the
actual cost, or, if an accurate calculation of such cost is
impracticable stating that such amount represents such Bank's
reasonable estimate of the actual cost, incurred by such Bank
during such period as a result of the application of Reserves to
Eurocurrency liabilities of such Bank in an amount equal to such
Bank's Eurodollar Loans during such period and specified in such
certificate and (ii) that the amount set forth therein does not
in any event exceed the amount obtainable utilizing the maximum
Reserves prescribed for such period by the Board of Governors of
the Federal Reserve System or such other Governmental Authority
having jurisdiction with respect thereto; PROVIDED that the
obligation of the Borrowers to pay any amounts pursuant to this
subsection 2.13(c) shall apply only in the case of those Banks
that give to the relevant Borrower and the Administrative Agent,
no later than 3:00 P.M. (New York City time) on the day that is
two Working Days prior to the applicable Borrowing Date therefor,
a written notice stating that such Bank intends to demand
reimbursement pursuant hereto. A Bank which demands
reimbursement of Reserve costs hereunder on account of a
Eurodollar Loan made by such Bank shall deliver the certificate
referred to in the preceding sentence to the relevant Borrower
setting forth the items specified in clauses (i) and (ii) of the
preceding sentence no later than the thirtieth day immediately
following the last day of the Interest Period applicable to such
Eurodollar Loan.
(d) The obligations of the parties under this
subsection 2.13 shall survive termination of this Agreement and
payment of the Loans.
2.14 INDEMNITY. Each Borrower agrees to indemnify
each Bank and to hold such Bank harmless from any loss or expense
which such Bank may sustain or incur as a consequence of (a)
default by such Borrower in payment of the principal amount of or
interest on any Loan by such Bank, including, but not limited to,
any such loss or expense arising from interest or fees payable by
such Bank to lenders of funds obtained by it in order to maintain
its Loans hereunder, (b) default by such Borrower in making a
borrowing after such Borrower has given a notice in accordance
with subsection 2.1 or 2.2, (c) default by such Borrower in
making any prepayment after such Borrower has given a notice in
accordance with subsection 2.5 or 2.6 or (d) the making by such
<PAGE>
34
Borrower of a prepayment of a Committed Rate Loan other than an
ABR Loan, a Bid Loan or, to the extent agreed to by the relevant
Borrower and the relevant Bank with respect to a Negotiated Rate
Loan, a Negotiated Rate Loan on a day which is not the last day
of an Interest Period with respect thereto (with respect to
Committed Rate Loans) or the maturity date therefor (with respect
to Bid Loans) or any agreed date (with respect to Negotiated Rate
Loans), including, but not limited to, any such loss or expense
arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Loans hereunder.
This covenant shall survive termination of this Agreement and
payment of the outstanding Loans. A certificate as to any amount
payable pursuant to the foregoing shall be submitted by such Bank
(and executed by an officer thereof) to the relevant Borrower,
setting forth the computation of such amounts in reasonable
detail, and shall be conclusive in the absence of manifest error.
2.15 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.
With respect to all Loans except Negotiated Rate Loans, unless
the Administrative Agent shall have been notified by the relevant
Borrower prior to the date on which any payment is due from it
hereunder (which notice shall be effective upon receipt) that
such Borrower does not intend to make such payment, the
Administrative Agent may assume that such Borrower has made such
payment when due, and the Administrative Agent may in reliance
upon such assumption (but shall not be required to) make
available to each Bank on such payment date an amount equal to
the portion of such assumed payment to which such Bank is
entitled hereunder, and if such Borrower has not in fact made
such payment to the Administrative Agent, such Bank shall, on
demand, repay to the Administrative Agent the amount made
available to such Bank together with interest thereon in respect
of each day during the period commencing on the date such amount
was made available to such Bank and ending on (but excluding) the
date such Bank repays such amount to the Administrative Agent, at
a rate per annum equal to the Administrative Agent's cost of
obtaining overnight funds in the federal funds market in New York
on each such day. A certificate of the Administrative Agent
submitted to the relevant Bank with respect to any amount owing
under this subsection 2.15 shall be conclusive absent manifest
error.
2.16 EXTENSION OF TERMINATION DATE. (a) No later
than one year prior to the Termination Date then in effect,
provided that no Event of Default shall have occurred and be
continuing, the Borrowers may request an extension of such
Termination Date by submitting to the Administrative Agent an
Extension Request containing the information in respect of such
extension specified in Exhibit I, which the Administrative Agent
shall promptly furnish to each Bank. If the Required Banks shall
approve in writing the extension of the Termination Date
requested in such Extension Request, the Termination Date shall
automatically and without any further action by any Person be
extended for the period specified in such Extension Request;
<PAGE>
35
PROVIDED that (i) each extension pursuant to this subsection 2.16
shall be for a maximum of one year, (ii) after giving effect to
any extension, the Termination Date shall not be more than five
years after the date of such extension and (iii) the Commitment
of any Bank which does not consent in writing to such extension
within 30 days of its receipt of such Extension Request (an
"OBJECTING BANK") shall, unless earlier terminated in accordance
with this Agreement, expire on the Termination Date in effect on
the date of such Extension Request. If, within 30 days of their
receipt of an Extension Request, the Required Banks shall not
approve in writing the extension of the Termination Date
requested in such Extension Request, the Termination Date shall
not be extended pursuant to such Extension Request. The
Administrative Agent shall promptly notify (y) the Banks and the
Borrowers of any extension of the Termination Date pursuant to
this subsection 2.16 and (z) the Borrowers and any other Bank of
any Bank which becomes an Objecting Bank.
(b) Any Objecting Bank the Commitment of which shall
expire prior to any extended Termination Date shall, subject to
subsection 2.16(c), have its Committed Rate Loans prepaid in full
by the applicable Borrower(s) on such expiration date, together
with accrued interest thereon, and shall have any accrued and
unpaid facility fee or other amount payable to it hereunder paid
on the first date to occur following such expiration date on
which the fees referred to in subsection 2.4(a) are payable to
the non-Objecting Banks or, if such fees shall be so payable on
such expiration date, such unpaid facility fee and other amount
shall be paid on such expiration date.
(c) The Borrowers shall have the right, so long as no
Event of Default has occurred and is then continuing, upon giving
notice to the Administrative Agent and an Objecting Bank in
accordance with subsection 2.6, to prepay in full the Committed
Rate Loans of such Objecting Bank, together with accrued interest
thereon, any amounts payable pursuant to subsections 2.13, 2.14,
2.15 and 2.17 and any accrued and unpaid facility fee or other
amounts payable to it hereunder and/or, upon giving not less than
three Working Days' notice to such Objecting Bank and the
Administrative Agent, to cancel the whole or part of the
Commitment of such Objecting Bank, PROVIDED that during the
period from the Closing Date through December 14, 1994 and,
commencing December 15, 1994, during each one-year period
thereafter to and including the Termination Date (each, a "DEAL
YEAR"), the aggregate Commitments of Banks which are terminated
pursuant to this subsection 2.16(c) and are not replaced during
such Deal Year pursuant to subsection 2.19 shall not exceed 33-
1/3% of the aggregate Commitments in effect on the first day of
such Deal Year of Banks which were not Objecting Banks on such
first day.
2.17 FOREIGN TAXES. (a) All payments made under this
Agreement shall be made without set-off or counterclaim and free
and clear of, and without reduction for or on account of, any
<PAGE>
36
present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions, withholdings or restrictions
or conditions of any nature whatsoever, now or hereafter imposed,
levied, collected, withheld or assessed by any country (or by any
political subdivision or taxing authority thereof or therein)
from or through which any amount is paid under this Agreement
excluding, in the case of each Bank, (i) income and franchise
taxes (including, without limitation, branch taxes imposed by the
United States or similar taxes imposed by a political subdivision
or taxing authority thereof or therein but excluding, in the case
of any Bank not organized under the laws of the United States,
any taxes imposed by the United States by means of withholding at
the source), (ii) in the case of any Bank not organized under the
laws of the United States, any taxes imposed by the United States
by means of withholding at the source unless such Bank has
provided the Company, the Capital Corporation and the
Administrative Agent with the documents it is required to provide
to them under subsection 2.17(c) and (iii) taxes that would not
have been imposed on such Bank but for the existence of a
connection between such Bank and the jurisdiction imposing such
taxes (other than a connection arising principally by virtue of
this Agreement) (such non-excluded taxes being called "FOREIGN
TAXES"). If any Foreign Taxes are required to be withheld from
any amounts so payable to any Bank hereunder, the amounts so
payable to such Bank shall be increased to the extent necessary
to yield to such Bank (after payment of all Foreign Taxes)
interest or any such other amounts payable hereunder at the rates
or in the amounts specified in this Agreement. Whenever any
Foreign Taxes are payable by the Company or the Capital
Corporation, as the case may be, as promptly as possible
thereafter the Company or the Capital Corporation, as the case
may be, shall send to the Administrative Agent, for the account
of the affected Bank, a certified copy of the original official
receipt, if any, received by the Company or the Capital
Corporation, as the case may be, showing payment thereof. If the
Company or the Capital Corporation, as the case may be, fails to
pay any Foreign Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent, for the
account of the affected Banks, the required receipts or other
required documentary evidence, the Company or the Capital
Corporation, as the case may be, shall indemnify such Banks for
any incremental taxes, interest or penalties that may become
payable by such Banks as a result of any such failure.
(b) If a Borrower is required by this subsection 2.17
to make a payment to or in respect of any Bank, such Borrower
shall have the right, so long as no Event of Default has occurred
and is then continuing, upon giving notice to the Administrative
Agent and such Bank in accordance with subsection 2.6, to prepay
in full the Loans of such Bank, together with accrued interest
thereon, any amounts payable pursuant to subsections 2.13, 2.14,
2.15 and 2.17 and any accrued and unpaid facility fee or other
amounts payable to it hereunder and/or on giving not less than
three Business Days' notice to any such Bank and the
<PAGE>
37
Administrative Agent, to cancel the whole or part of the
Commitment of such Bank.
(c) At least two Business Days prior to the first
Borrowing Date or, if such date does not occur within thirty days
after the Closing Date, by the end of such thirty-day period,
each Bank agrees that it will deliver to each Borrower and the
Administrative Agent (i) either (A) a statement that it is
incorporated under the laws of the United States or a state
thereof or (B) if it is not so incorporated, a letter in
duplicate in the form of Exhibit J or Exhibit K, as appropriate,
and two duly completed copies of United States Internal Revenue
Service Form 4224 or 1001 or successor applicable form, as the
case may be, certifying in each case that such Bank is entitled
to receive payment under this Agreement without deduction or
withholding of any United States Federal income taxes, and (ii)
Internal Revenue Service Form W-8 or W-9, or successor applicable
form, as the case may be, to establish an exemption from United
States backup withholding tax. Each Bank agrees (for the benefit
of the Administrative Agent and the Borrowers) to provide the
Administrative Agent and the Borrowers a new letter and Form 4224
or 1001 and Form W-8 or W-9, or successor applicable form or
other manner of certification, on or before the date that any
such letter or form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent
letter or form previously delivered by it, certifying in the case
of a Form 1001 or 4224 that such Bank is entitled to receive
payments under this Agreement without deduction or withholding of
any United States Federal income tax, and in the case of a Form
W-8 or W-9 establishing exemption from United States backup
withholding tax. The Administrative Agent shall not be
responsible for obtaining such documentation from any Bank other
than Chemical.
(d) The Company and the Capital Corporation shall not
be required to make payments on account of United States
withholding taxes to any Bank under the second sentence of
subsection 2.17(a) to the extent that such taxes could have been
avoided had such Bank complied with a reasonable request by the
Company, the Capital Corporation or the Administrative Agent for
the forms or documents referred to in subsection 2.17(c).
(e) To the extent that, as determined by any Bank in
its sole discretion and without any obligation to disclose its
tax records, Foreign Taxes have been irrevocably utilized by such
Bank (either as credits or deductions) to reduce its tax
liabilities and such utilization is consistent with its overall
tax policies, such Bank shall pay to the Company or the Capital
Corporation, as the case may be, an amount equal to such
reduction obtained to the extent of such increased amounts paid
by the Company or the Capital Corporation to such Bank as
aforesaid.
<PAGE>
38
(f) The obligations of the parties under this
subsection 2.17 shall survive termination of this Agreement and
payment of the Loans.
2.18 CONFIRMATIONS. The Administrative Agent shall,
within 15 days following the last day of each calendar quarter
(each such period being a "REPORT PERIOD"), furnish to the
Borrowers a written account with respect to all amounts
outstanding under the Loan Accounts as at the last day of such
Report Period, including an accounting setting forth, for such
Report Period the amounts of principal, interest and other sums
paid and payable hereunder. The Borrowers shall, within 15 days
following receipt of such written account, notify the
Administrative Agent of any discrepancies between such written
account and the Borrowers' records or, if no such discrepancies
exist, furnish written confirmation to the Administrative Agent
of the accuracy of such written account. Upon any Bank's
request, the Administrative Agent shall furnish to each Bank a
copy of such written account together with the Borrowers'
response thereto.
2.19 REPLACEMENT OF CANCELLED BANKS. The Borrowers
may designate one or more financial institutions to act as a Bank
hereunder in place of any Cancelled Bank, and upon the Borrowers,
each such financial institution and the Administrative Agent
executing a writing substantially in the form of Exhibit L, such
financial institution shall become and be a Bank hereunder with
all the rights and obligations it would have had if it had been
named on the signature pages hereof, and having for all such
financial institutions an aggregate Commitment no greater than
the whole, or such cancelled part, of the Commitment of the
Cancelled Bank in place of which such financial institutions were
designated; PROVIDED, HOWEVER, that all rights and obligations of
such Cancelled Bank relating to the Loans made by such Cancelled
Bank that are outstanding on the date of such cancellation shall
be the rights and obligations of such Cancelled Bank and not of
any such financial institution. The Administrative Agent shall
execute any such writing presented to it and shall notify the
Banks of the execution thereof, the name of the financial
institution executing such writing and the amount of its
Commitment.
SECTION 3. REPRESENTATIONS AND WARRANTIES
Each Borrower hereby represents and warrants to the
Administrative Agent and to each Bank that:
3.1 FINANCIAL CONDITION. The consolidated balance
sheet of such Borrower and its consolidated Subsidiaries as at
October 31, 1992 and the related consolidated statements of
income and of cash flow for the fiscal year then ended (including
the related schedules and notes) reported on by Deloitte &
Touche, copies of which have heretofore been furnished to each
<PAGE>
39
Bank, fairly present the consolidated financial condition of such
Borrower and its consolidated Subsidiaries as at such date, and
the consolidated results of their operations and changes in
financial position for the fiscal year then ended. The condensed
unaudited consolidated balance sheet of such Borrower and its
consolidated Subsidiaries as at July 31, 1993 and the related
unaudited consolidated statement of income for the nine-month
period ended on such date, certified by a Responsible Officer,
copies of which have heretofore been furnished to each Bank,
present fairly the consolidated financial condition of such
Borrower and its consolidated Subsidiaries as at such date, and
the consolidated results of their operations for the nine-month
period then ended (subject to normal year-end audit adjustments).
All such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with
generally accepted accounting principles in the United States of
America applied consistently throughout the periods involved
(except as approved by such accountants or Responsible Officer,
as the case may be, and as disclosed therein).
3.2 CORPORATE EXISTENCE. Such Borrower is duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the corporate
power and authority to own its properties and to conduct the
business in which it is currently engaged.
3.3 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE
OBLIGATIONS. Such Borrower has the corporate power and authority
and the legal right to execute, deliver and perform this
Agreement and to borrow hereunder and has taken all necessary
corporate action to authorize its borrowings on the terms and
conditions of this Agreement and to authorize its execution,
delivery and performance of this Agreement. No consent or
authorization of, filing with, or other act by or in respect of
any Governmental Authority, is required in connection with the
borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement other
than any such consents, authorizations, filings or acts as have
been obtained, taken or made and are in full force and effect.
This Agreement has been duly executed and delivered on behalf of
such Borrower, and this Agreement constitutes a legal, valid and
binding obligation of such Borrower enforceable against such
Borrower in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equity
principles (whether enforcement is sought by proceedings in
equity or at law).
3.4 NO LEGAL BAR. The execution, delivery and
performance of this Agreement, the borrowings hereunder and the
use of the proceeds thereof, will not violate any Requirement of
Law or any Contractual Obligation of such Borrower, and will not
result in, or require, the creation or imposition of any lien on
<PAGE>
40
any of its properties or revenues pursuant to any Requirement of
Law or Contractual Obligation.
3.5 NO MATERIAL LITIGATION. No litigation,
investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of such
Borrower, threatened by or against such Borrower or any of its
Subsidiaries or against any of its or their respective properties
or revenues except actions, suits or proceedings which will not
materially adversely affect the ability of such Borrower to
perform its obligations hereunder. All of the defaults, if any,
of such Borrower or any of its Subsidiaries with respect to any
order of any Governmental Authority do not, and will not
collectively, have a material adverse effect on the business,
operations, property or financial or other condition of such
Borrower and its Subsidiaries taken as a whole.
3.6 TAXES. Each of such Borrower and its Subsidiaries
has filed or caused to be filed all tax returns which, to the
knowledge of such Borrower, are required to be filed (except
where the failure to file such tax returns would not have a
material adverse effect on the business, operations, property or
financial or other condition of such Borrower and its
Subsidiaries taken as a whole), and has paid all taxes shown to
be due and payable on said returns or on any assessments made
against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any
Governmental Authority (other than assessments, taxes, fees and
other charges the amount or validity of which is currently being
contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been
provided on the books of such Borrower or its Subsidiaries, as
the case may be).
3.7 MARGIN REGULATIONS. No part of the proceeds of
any Loan hereunder will be used for any purpose which violates
the provisions of Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in
effect.
3.8 PARI PASSU RANKING. The indebtedness of such
Borrower under its Loans and all other amounts due hereunder
ranks at least pari passu with all present and future unsecured
senior indebtedness of such Borrower (other than indebtedness
preferred by law).
3.9 NO DEFAULTS. No "Event of Default" or similar
event, or event which, with the lapse of time or the giving of
notice, or both, would constitute such an Event or event, has
occurred and is continuing hereunder or under any material bond,
debenture, note or other evidence of indebtedness, or in any
material mortgage, deed of trust, indenture or loan agreement, of
such Borrower.
<PAGE>
41
3.10 USE OF PROCEEDS. The proceeds of the Loans will
be used by such Borrower for its general corporate purposes,
which shall include, but shall not be limited to, any purchase or
other acquisition of all or a portion of the debt or stock or
other evidences of ownership of such Borrower or the assets or
stock or other evidences of ownership of any other Person or
Persons.
SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO INITIAL LOAN. The obligation of
each Bank to make its initial Loan hereunder is subject to the
satisfaction of the following conditions precedent:
(a) COUNTERPARTS. The Administrative Agent shall have
received counterparts hereof, executed by all of the parties
hereto.
(b) RESOLUTIONS. The Administrative Agent shall have
received, with a counterpart for each Bank, resolutions,
certified by the Secretary or an Assistant Secretary of each
Borrower, in form and substance satisfactory to the
Administrative Agent, adopted by the Board of Directors of
such Borrower authorizing the execution of this Agreement
and the performance of its obligations hereunder and any
borrowings hereunder from time to time.
(c) LEGAL OPINIONS. The Administrative Agent shall
have received, with a counterpart for each Bank, an opinion
of Frank S. Cottrell, Esq., or his successor, as general
counsel, or an associate general counsel, for each of the
Borrowers, dated the Closing Date and addressed to the
Agents and the Banks, substantially in the form of Exhibit
G, and an opinion of Shearman & Sterling, special counsel to
the Borrowers, dated the Closing Date and addressed to the
Agents and the Banks, substantially in the form of Exhibit
H. Such opinions shall also cover such other matters
incident to the transactions contemplated by this Agreement
as the Administrative Agent shall reasonably require.
(d) INCUMBENCY CERTIFICATE. The Administrative Agent
shall have received, with a counterpart for each Bank, a
certificate of the Secretary or an Assistant Secretary of
each Borrower certifying the names and true signatures of
the officers of such Borrower authorized to sign this
Agreement, together with evidence of the incumbency of such
Secretary or Assistant Secretary.
(e) EXISTING AGREEMENT. The commitment of each
financial institution to make loans to the Borrowers
pursuant to (i) the Credit Agreement, dated as of November
30, 1989, among the Company, the Capital Corporation, the
financial institution parties thereto and Chemical Bank (as
<PAGE>
42
successor by merger to Manufacturers Hanover Trust Company),
as agent, and (ii) the Multi-Country Multi-Option Financing
Facility, dated December 15, 1989, among the Company, the
Capital Corporation, certain other Subsidiaries of the
Company, the financial institution parties thereto and
Deutsche Bank Luxembourg S.A., as agent, shall have been
terminated in full and the outstanding principal amount of
the indebtedness thereunder and all other amounts owing to
any bank thereunder shall have been repaid or paid by the
Borrowers.
(f) FEES. The Administrative Agent shall have
received, for the accounts of the Banks and the
Administrative Agent, and the Auction Agent shall have
received, for the account of the Auction Agent, all accrued
fees and expenses owing hereunder or in connection herewith
to the Banks and the Agents to be received on the Closing
Date.
(g) ADDITIONAL MATTERS. All other documents which the
Administrative Agent may reasonably request in connection
with the transactions contemplated by this Agreement shall
be reasonably satisfactory in form and substance to the
Administrative Agent and its counsel.
4.2 CONDITIONS TO ALL LOANS. The obligation of each
Bank to make any Loan (which shall include the initial Loan to be
made by it hereunder) to be made by it hereunder is subject to
the satisfaction of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by the Borrowers herein
or which are contained in any certificate, document or
financial or other statement furnished by either Borrower at
any time hereunder or in connection herewith (other than any
representations and warranties which by the terms of such
certificate, document or financial or other statement do not
survive the execution of this Agreement) shall be correct on
and as of the date of such Loan as if made on and as of such
date except as such representations and warranties expressly
relate to an earlier date.
(b) NO DEFAULT OR EVENT OF DEFAULT. No Default or
Event of Default shall have occurred and be continuing on
such date or after giving effect to the Loans to be made on
such date and the application of the proceeds thereof.
(c) ADDITIONAL CONDITIONS TO BID LOANS. If such Loan
is made pursuant to subsection 2.2, all conditions set forth
in subsection 2.2(f) shall have been satisfied.
Each acceptance by either Borrower of a Loan shall
constitute a representation and warranty by the relevant Borrower
as of the date of such Loan that the applicable conditions in
<PAGE>
43
clauses (a), (b) and (c) of this subsection 4.2 have been
satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
Each of the Borrowers (except as otherwise specified)
hereby agrees that, so long as there is any obligation by any
Bank to make Loans hereunder, any Loan of such Borrower remains
outstanding and unpaid or any other amount is owing by such
Borrower to any Bank or either Agent hereunder (unless the
Required Banks shall otherwise consent in writing):
5.1 FINANCIAL STATEMENTS. Such Borrower shall furnish
to each Bank:
(a) as soon as available, but in any event within 120
days after the end of each fiscal year of such Borrower, a
copy of the consolidated balance sheet of such Borrower and
its consolidated Subsidiaries as at the end of such year and
the related consolidated statements of income and of cash
flow for such year, reported on by Deloitte & Touche or
other independent certified public accountants of nationally
recognized standing; and
(b) as soon as available, but in any event not later
than 60 days after the end of each of the first three
quarterly periods of each fiscal year of such Borrower, the
condensed unaudited consolidated balance sheet of such
Borrower and its consolidated Subsidiaries as at the end of
each such quarter and the related unaudited consolidated
statement of income of such Borrower and its consolidated
Subsidiaries for such quarterly period and the portion of
the fiscal year through such date, certified by a
Responsible Officer (subject to normal year-end audit
adjustments);
all such financial statements to present fairly the consolidated
financial condition of such Borrower and to be prepared in
accordance with generally accepted accounting principles in the
United States of America applied consistently throughout the
periods reflected therein (except as approved by such accountants
or officer, as the case may be, and disclosed therein).
5.2 CERTIFICATES; OTHER INFORMATION. Such Borrower
shall furnish to each Bank:
(a) concurrently with the delivery of the financial
statements referred to in subsections 5.1(a) and (b) above,
a certificate of a Responsible Officer stating that (i) he
has no knowledge of the occurrence and continuance of any
Default or Event of Default except as specified in such
certificate, in which case such certificate shall contain a
description thereof and a statement of the steps, if any,
<PAGE>
44
which such Borrower is taking, or proposes to take, to cure
the same and (ii) the financial statements delivered
pursuant to subsection 5.1 would not be different if
prepared in accordance with GAAP except as specified in such
certificate; and
(b) promptly, such additional financial and other
information as any Bank may from time to time reasonably
request.
5.3 COMPANY INDENTURE DOCUMENTS. The Company shall,
contemporaneously with the delivery thereof to the Trustee,
furnish to each Bank a copy of any information, document or
report required to be filed with the Trustee pursuant to Section
7.03 of the Indenture.
5.4 CAPITAL CORPORATION INDENTURE DOCUMENTS. The
Capital Corporation shall, contemporaneously with the delivery
thereof to the Trustee, furnish to each Bank a copy of any
information, document or report required to be filed with the
Trustee pursuant to Section 7.03 of the Indenture dated February
1, 1991, between the Capital Corporation and The Bank of New
York, as Trustee.
5.5 NOTICE OF DEFAULT. Such Borrower shall promptly
give notice to the Administrative Agent of the occurrence of any
Default or Event of Default, which notice shall be given in
writing as soon as possible, and in any event within 10 days
after a Responsible Officer obtains knowledge of such occurrence,
with a description of the steps being taken to remedy the same
(provided that such Borrower shall not be obligated to give
notice of any Default or Event of Default which is remedied prior
to or within 10 days after a Responsible Officer of such Borrower
first acquires such knowledge).
5.6 OWNERSHIP OF CAPITAL CORPORATION STOCK. The
Company shall continue to own, directly or through one or more
wholly-owned Subsidiaries, free and clear of any lien or other
encumbrance, 51% of the voting stock of the Capital Corporation;
PROVIDED, HOWEVER, that the Capital Corporation may merge or
consolidate with, or sell or convey substantially all of its
assets to, the Company as provided in subsection 7.4.
5.7 EMPLOYEE BENEFIT PLANS. The Company shall
maintain, and cause each of its Subsidiaries to maintain, each
Plan as to which it may have liability, in compliance with all
applicable requirements of law and regulations.
SECTION 6. NEGATIVE COVENANTS OF THE COMPANY
The Company hereby agrees that, so long as there is any
obligation by any Bank to make Loans hereunder, any Loan remains
outstanding and unpaid or any other amount is owing to either
<PAGE>
45
Agent or any Bank hereunder, it shall not, nor in the case of
subsections 6.2 and 6.3 shall it permit any Restricted Subsidiary
to (unless the Required Banks shall otherwise consent in
writing):
6.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS. Consolidate with or merge with or into any other
corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(a) either the Company shall be the continuing
corporation, or the corporation (if other than the Company)
formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance or
transfer the properties and assets of the Company
substantially as an entirety shall expressly assume, by an
assumption agreement, executed and delivered to the
Administrative Agent, in form satisfactory to the Required
Banks, the due and punctual payment of the principal of and
interest on the Loans to the Company and the performance of
every covenant of this Agreement on the part of the Company
to be performed or observed;
(b) immediately after giving effect to such
transaction, no Default or Event of Default, shall have
happened and be continuing;
(c) if as a result thereof any property or assets of
the Company or a Restricted Subsidiary would become subject
to any Mortgage not permitted by (i) through (xii) of
subsection 6.2(a) or subsection 6.2(b), compliance shall be
effected with the first clause of subsection 6.2(a); and
(d) the Company and the successor Person have
delivered to the Administrative Agent an officers'
certificate signed by two Responsible Officers stating that
such consolidation, merger, conveyance or transfer and such
assumption agreement comply with this subsection 6.1 and
that all conditions precedent herein provided for relating
to such transaction have been complied with.
6.2 LIMITATION ON LIENS. (a) Issue, incur, assume or
guarantee any debt (hereinafter in this subsection referred to as
"DEBT") secured by any mortgage, security interest, pledge, lien
or other encumbrance (hereinafter called "MORTGAGE" or
"MORTGAGES") upon any Important Property of the Company or of a
Restricted Subsidiary, or upon any shares of stock or
indebtedness issued or incurred by any Restricted Subsidiary
(whether such Important Property, shares of stock or indebtedness
is now owned or hereafter acquired) without in any such case
effectively providing, concurrently with the issuance,
incurrence, assumption or guaranty of any such Debt, that the
Loans and all other amounts hereunder (together with, if the
Company shall so determine, any other indebtedness of or guaranty
<PAGE>
46
by the Company or such Restricted Subsidiary ranking equally with
the Loans then existing or thereafter created) shall be secured
equally and ratably with or prior to such Debt; PROVIDED,
HOWEVER, that the foregoing restrictions shall not apply to:
(i) Mortgages on any property acquired, constructed or
improved by the Company or any Restricted Subsidiary after
the date of this Agreement which are created or assumed
contemporaneously with, or within 120 days after, such
acquisition, construction or improvement to secure or
provide for the payment of all or any part of the purchase
price of such property or the cost of such construction or
improvement incurred after the date of this Agreement, or
(in addition to Mortgages contemplated by clauses (ii),
(iii) and (iv) below) Mortgages on any property existing at
the time of acquisition thereof; PROVIDED that such
Mortgages shall not apply to any Important Property
theretofore owned by the Company or any Restricted
Subsidiary other than, in the case of any such construction
or improvement, any theretofore unimproved real property on
which the property so constructed, or the improvement, is
located;
(ii) Mortgages on any property, shares of stock, or
indebtedness existing at the time of acquisition thereof
from a corporation which is consolidated with or merged
into, or substantially all of the assets of which are
acquired by, the Company or a Restricted Subsidiary;
(iii) Mortgages on property of a corporation existing
at the time such corporation becomes a Restricted
Subsidiary;
(iv) Mortgages to secure Debt of a Restricted
Subsidiary to the Company or to another Restricted
Subsidiary;
(v) Mortgages in favor of the United States of
America or any State thereof, or any department, agency or
instrumentality or political subdivision of the United
States of America or any State thereof, to secure partial,
progress, advance or other payments pursuant to any contract
or statute or to secure any indebtedness incurred for the
purpose of financing all or any part of the purchase price
or the cost of constructing or improving the property
subject to such Mortgages and Mortgages given to secure
indebtedness incurred in connection with the financing of
construction of pollution control facilities, the interest
on which indebtedness is exempt from income taxes under the
Code;
(vi) any deposit or pledge of assets (1) with any
surety company or clerk of any court, or in escrow, as
collateral in connection with, or in lieu of, any bond on
<PAGE>
47
appeal from any judgment or decree against the Company or a
Restricted Subsidiary, or in connection with other
proceedings or actions at law or in equity by or against the
Company or a Restricted Subsidiary, or (2) as security for
the performance of any contract or undertaking not directly
related to the borrowing of money or the securing of
indebtedness, if made in the ordinary course of business, or
(3) with any governmental agency, which deposit or pledge is
required or permitted to qualify the Company or a Restricted
Subsidiary to conduct business, to maintain self-insurance,
or to obtain the benefits of any law pertaining to worker's
compensation, unemployment insurance, old age pensions,
social security, or similar matters, or (4) made in the
ordinary course of business to obtain the release of
mechanics', workmen's, repairmen's, warehousemen's or
similar liens, or the release of property in the possession
of a common carrier;
(vii) Mortgages existing on property acquired by the
Company or a Restricted Subsidiary through the exercise of
rights arising out of defaults on receivables acquired in
the ordinary course of business;
(viii) judgment liens, so long as the finality of such
judgment is being contested in good faith and execution
thereon is stayed;
(ix) Mortgages for the sole purpose of extending,
renewing or replacing in whole or in part Debt secured by
any Mortgage referred to in the foregoing clauses (i) to
(viii), inclusive, or in this clause (ix), PROVIDED,
HOWEVER, that the principal amount of Debt secured thereby
shall not exceed the principal amount of Debt so secured at
the time of such extension, renewal or replacement, and that
such extension, renewal or replacement shall be limited to
all or a part of the property which secured the Mortgage so
extended, renewed or replaced (plus improvements on such
property);
(x) liens for taxes or assessments or governmental
charges or levies not yet due or delinquent, or which can
thereafter be paid without penalty, or which are being
contested in good faith by appropriate proceedings;
landlord's liens on property held under lease; and any other
liens of a nature similar to those hereinabove described in
this clause (x) which do not, in the opinion of the Company,
materially impair the use of such property in the operation
of the business of the Company or a Restricted Subsidiary or
the value of such property for the purposes of such
business;
(xi) Mortgages on Margin Stock owned by the Company
and its Restricted Subsidiaries to the extent such Margin
Stock so Mortgaged exceeds 25% of the fair market value of
<PAGE>
48
the sum of the Important Property of the Company and the
Restricted Subsidiaries plus the shares of stock (including
Margin Stock) and indebtedness issued or incurred by the
Restricted Subsidiaries; and
(xii) Mortgages on any Important Property of, or any
shares of stock or indebtedness issued or incurred by, any
Restricted Subsidiary organized under the laws of Canada.
(b) (i) The provisions of subsection 6.2(a) shall not
apply to the issuance, incurrence, assumption or guarantee by the
Company or any Restricted Subsidiary of Debt secured by a
Mortgage which would otherwise be subject to the foregoing
restrictions up to an aggregate amount which, together with the
sum of (A) all other Debt issued or incurred by the Company and
its Restricted Subsidiaries secured by Mortgages (other than
Mortgages permitted by subsection 6.2(a)) which would otherwise
be subject to the foregoing restrictions and (B) the Attributable
Debt in respect of Sale and Lease-back Transactions in existence
at such time (other than Sale and Lease-back Transactions which,
if the Attributable Debt in respect of such Sale and Lease-back
had been a Mortgage, would have been permitted by clause (i) of
subsection 6.2(a) and other than Sale and Lease-back Transactions
the proceeds of which have been applied in accordance with
subsection 6.3(b)) does not at the time exceed 5% of Consolidated
Net Worth, as shown on the audited consolidated balance sheet
contained in the latest annual report to stockholders of the
Company.
(ii) For purposes of subsection 6.2(b)(i) above, the
term "CONSOLIDATED NET WORTH" shall mean the aggregate of capital
and surplus of the Company and its consolidated Subsidiaries,
less minority interests in Subsidiaries, determined in accordance
with GAAP; and the term "ATTRIBUTABLE DEBT" shall mean, as of any
particular time, the present value, discounted at a rate per
annum equal to the interest rate set forth in the form of
Debenture set forth in the Indenture, compounded semi-annually,
of the obligation of a lessee for rental payments during the
remaining term of any lease (including any period for which such
lease has been extended or may, at the option of the lessor, be
extended); the net amount of rent required to be paid for any
such period shall be the total amount of the rent payable by the
lessee with respect to such period, but may exclude amounts
required to be paid on account of maintenance and repairs,
insurance, taxes, assessments, water rates and similar charges;
and, in the case of any lease which is terminable by the lessee
upon the payment of a penalty, such net amount shall also include
the amount of such penalty, but no rent shall be considered as
required to be paid under such lease subsequent to the first date
upon which it may be so terminated.
(c) If, upon any consolidation or merger of any
Restricted Subsidiary with or into any other corporation, or upon
any consolidation or merger of any other corporation with or into
<PAGE>
49
the Company or any Restricted Subsidiary or upon any sale or
conveyance of the property of any Restricted Subsidiary as an
entirety or substantially as an entirety to any other Person, or
upon any acquisition by the Company or any Restricted Subsidiary
by purchase or otherwise of all or any part of the property of
any other Person, any Important Property theretofore owned by the
Company or such Restricted Subsidiary would thereupon become
subject to any Mortgage not permitted by the terms of subsection
(a) or (b) of this subsection 6.2, the Company, prior to such
consolidation, merger, sale or conveyance, or acquisition, will,
or will cause such Restricted Subsidiary to, secure payment of
the principal of and interest on the Loans (equally and ratably
with or prior to any other indebtedness of the Company or such
Subsidiary then entitled thereto) by a direct lien on all such
property prior to all liens other than any liens theretofore
existing thereon by an assumption agreement or otherwise.
(d) If at any time the Company or any Restricted
Subsidiary shall issue, incur, assume or guarantee any Debt
secured by any Mortgage not permitted by this subsection 6.2, to
which the covenant in subsection 6.2(a) is applicable, the
Company will promptly deliver to the Administrative Agent (with
counterparts for each Bank):
(i) an officers' certificate signed by two Responsible
Officers stating that the covenant of the Company contained
in subsections (a) or (c) of this subsection 6.2 has been
complied with; and
(ii) An opinion of counsel satisfactory to the
Administrative Agent to the effect that such covenant has
been complied with, and that any instruments executed by the
Company in the performance of such covenant comply with the
requirements of such covenant.
6.3 LIMITATIONS ON SALE AND LEASE-BACK TRANSACTIONS.
Enter into any arrangement with any Person providing for the
leasing to the Company or any Restricted Subsidiary of any
Important Property owned or hereafter acquired by the Company or
such Restricted Subsidiary (except for temporary leases for a
term, including any renewal thereof, of not more than three years
and except for leases between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries), which Important
Property has been or is to be sold or transferred by the Company
or such Restricted Subsidiary to such Person (herein referred to
as a "SALE AND LEASE-BACK TRANSACTION") unless the net proceeds
of such sale are at least equal to the fair value (as determined
by the Board of Directors) of such property and either (a) the
Company or such Restricted Subsidiary would be entitled, pursuant
to the provisions of (1) subsection 6.2(a)(i) or (2) subsection
6.2(b), to incur Debt secured by a Mortgage on the Important
Property to be leased without equally and ratably securing the
Loans, or (b) the Company shall, and in any such case the Company
covenants that it will, within 120 days of the effective date of
<PAGE>
50
any such arrangement, apply an amount equal to the fair value (as
so determined) of such property to the reduction of the
Commitments (to be accompanied by prepayment of the Loans in
accordance with subsection 2.6 to the extent that the principal
amount thereof outstanding prior to such prepayment would exceed
the Commitments as so reduced) or to the payment or other
retirement of funded debt for money borrowed, incurred or assumed
by the Company which ranks senior to or PARI PASSU with the Loans
or of funded debt for money borrowed, incurred or assumed by any
Restricted Subsidiary (other than, in either case, funded debt
owned by the Company or any Restricted Subsidiary). For this
purpose, funded debt means any Debt which by its terms matures at
or is extendable or renewable at the sole option of the obligor
without requiring the consent of the obligee to a date more than
twelve months after the date of the creation of such Debt.
6.4 CONSOLIDATED TANGIBLE NET WORTH. Permit
Consolidated Tangible Net Worth as at the end of any fiscal
quarter of the Company and its consolidated Subsidiaries
(including the last quarter of any fiscal year of the Company and
its consolidated Subsidiaries) to be less than $1,600,000,000.
SECTION 7. NEGATIVE COVENANTS OF THE CAPITAL
CORPORATION
The Capital Corporation hereby agrees that, so long as
there is any obligation by any Bank to make Loans to the Capital
Corporation hereunder, any Loan of the Capital Corporation
remains outstanding and unpaid or any other amount is owing by
the Capital Corporation to any Bank or either Agent hereunder,
the Capital Corporation shall not, nor in the case of the
agreements set forth in subsection 7.3 shall it permit any of its
Subsidiaries to, directly or indirectly (unless the Required
Banks shall otherwise consent in writing):
7.1 FIXED CHARGES RATIO. Permit the ratio of Net
Earnings Available for Fixed Charges to Fixed Charges for any
fiscal quarter of the Capital Corporation and its consolidated
Subsidiaries (including the last quarter of any fiscal year of
the Capital Corporation and its consolidated Subsidiaries) to be
less than 1.05 to 1.
7.2 CONSOLIDATED SENIOR DEBT TO CONSOLIDATED CAPITAL
BASE. Permit the ratio of Consolidated Senior Debt to
Consolidated Capital Base as at the end of any fiscal quarter of
the Capital Corporation and its consolidated Subsidiaries
(including the end of any fiscal year of the Capital Corporation
and its consolidated Subsidiaries) to be more than 8 to 1.
7.3 LIMITATION ON LIENS. Issue, incur, assume or
guarantee any Debt secured by any Mortgage upon any of its
property or assets, or any of the property or assets of any of
its Subsidiaries (whether any such property or assets is now
<PAGE>
51
owned or hereafter acquired) without in any such case effectively
providing, concurrently with the issuance, incurrence, assumption
or guaranty of any such Debt, that the Loans and all other
amounts hereunder (together with, if the Capital Corporation
shall so determine, any other indebtedness of or guaranty by such
Borrower or such Subsidiary ranking equally with the Loans then
existing or thereafter created) shall be secured equally and
ratably with or prior to such Debt; PROVIDED, HOWEVER, that the
foregoing restrictions shall not apply to:
(a) Mortgages on fixed assets or other physical
properties hereafter acquired to secure all or part of the
purchase price thereof or the acquiring hereafter of such assets
or properties subject to any existing lien or charge securing
indebtedness (whether or not assumed);
(b) easements, liens, franchises or other minor
encumbrances on or over any real property which do not materially
detract from the value of such property or its use in the
business of the Capital Corporation or a Subsidiary of the
Capital Corporation;
(c) any deposit or pledge of assets (i) with any
surety company or clerk of any court, or in escrow, as collateral
in connection with or in lieu of, any bond on appeal from any
judgment or decree against the Capital Corporation or a
Subsidiary of the Capital Corporation, or in connection with
other proceedings or actions at law or in equity by or against
the Capital Corporation or a Subsidiary of the Capital
Corporation or (ii) as security for the performance of any
contract or undertaking not directly or indirectly related to the
borrowing of money or the securing of indebtedness, if made in
the ordinary course of business, or (iii) with any governmental
agency, which deposit or pledge is required or permitted to
qualify the Capital Corporation or a Subsidiary of the Capital
Corporation to conduct business, to maintain self-insurance, or
to obtain the benefits of any law pertaining to workmen's
compensation, unemployment insurance, old age pensions, social
security, or similar matters, or (iv) made in the ordinary course
of business to obtain the release of mechanics', workmen's,
repairmen's, warehousemen's or similar liens, or the release of
property in the possession of a common carrier;
(d) Mortgages by a Subsidiary as security for
indebtedness owed to the Capital Corporation;
(e) liens for taxes and governmental charges not yet
due or contested by appropriate proceedings in good faith;
(f) Mortgages existing on property acquired by the
Capital Corporation or a Subsidiary of the Capital Corporation
through the exercise of rights arising out of defaults on
receivables acquired in the ordinary course of business;
<PAGE>
52
(g) judgment liens, so long as the finality of such
judgment is being contested in good faith and execution thereon
is stayed;
(h) any Mortgage (other than directly or indirectly to
secure borrowed money) if, after giving effect thereto, the
aggregate principal sums secured by pledges or liens otherwise
within the restrictions in clauses (a) through (h) of this
subsection 7.3 do not exceed $500,000;
(i) any transaction characterized as a sale of
receivables (retail or wholesale) but reflected as secured
indebtedness on a balance sheet in conformity with generally
accepted accounting principles in the United States of America;
and
(j) Mortgages on Margin Stock owned by the Capital
Corporation and its Subsidiaries to the extent such Margin Stock
exceeds 25% of the fair market value of property and assets of
the Capital Corporation and its Subsidiaries (including Margin
Stock).
7.4 CONSOLIDATION; MERGER. Merge or consolidate with,
or sell or convey (other than a conveyance by way of lease) all
or substantially all of its assets to, any other corporation,
unless (a) the Capital Corporation shall be the surviving
corporation in the case of a merger or the surviving, resulting
or transferee corporation (the "SUCCESSOR CORPORATION") shall be
a corporation organized under the laws of the United States or
any State thereof or the District of Columbia and shall expressly
assume the due and punctual performance of all of the agreements,
covenants and obligations of the Capital Corporation under this
Agreement by supplemental agreement satisfactory to the
Administrative Agent and executed and delivered to the
Administrative Agent by the successor corporation and (b) the
Capital Corporation or such successor corporation, as the case
may be, shall not, immediately after such merger, consolidation,
sale or conveyance, be in default in the performance of any such
agreements, covenants or obligations; PROVIDED, HOWEVER, that the
Capital Corporation may merge or consolidate with, or sell or
convey substantially all of its assets to, the Company, if (i)
the Company is the successor corporation (as defined above) and
(ii) subclause (b) above is complied with. Upon any such merger,
consolidation, sale or conveyance, the successor corporation
shall succeed to and be substituted for, and may exercise every
right and power of and shall be subject to all the obligations
of, the Capital Corporation under this Agreement, with the same
effect as if the successor corporation had been named as the
Capital Corporation herein and therein.
<PAGE>
53
SECTION 8. EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any
of the following events:
(a) Either Borrower shall fail to pay any principal of
any Loan when due in accordance with the terms hereof or to
pay any interest on any Loan, in each case within two
Business Days after any such amount becomes due in
accordance with the terms hereof or shall fail to pay any
other amount payable hereunder within five Business Days
after any such other amount becomes due in accordance with
the terms thereof or hereof; or
(b) Any representation or warranty made or pursuant to
subsection 4.2 deemed made by either Borrower herein or
which is contained in any material certificate, material
document or material financial statement or other material
statement furnished at any time under or in connection with
this Agreement shall prove to have been incorrect in any
material respect on or as of the date made or deemed made;
or
(c) The Company shall default in the observance or
performance of any agreement contained in subsections 5.6,
6.1 or 6.4, or the Capital Corporation shall default in the
observance or performance of any agreement contained in
subsections 7.1, 7.2 or 7.4; or
(d) Either Borrower shall default in the observance or
performance of any agreement contained in this Agreement
(other than those agreements referred to above in this
Section 8), and such default shall continue unremedied for a
period of 30 days after written notice thereof shall have
been given to such Borrower by the Administrative Agent or
any of the Banks through the Administrative Agent; or
(e) (i) Either Borrower or any of its Significant
Subsidiaries shall default in any payment of principal of or
interest on any indebtedness for borrowed money (other than
the Loans) in a principal amount in excess of $15,000,000 in
the aggregate, or any interest or premium thereon, when due
(whether at scheduled maturity or by required prepayment,
acceleration, demand or otherwise) and such failure shall
continue beyond the period of grace, if any, provided in the
instrument or agreement under which such indebtedness was
created; or (ii) any other default (other than any default
arising solely out of either Borrower's, or any of its
Significant Subsidiaries', violation of any arrangement with
any Bank, or any affiliate of any Bank, in any way
restricting such Borrower's, or such Significant
Subsidiary's, right or ability to sell, pledge or otherwise
dispose of Margin Stock other than Restricted Margin Stock),
or any other event that with notice or the lapse of time, or
<PAGE>
54
both, would constitute such a default, under any agreement
or instrument relating to any such indebtedness for borrowed
money (other than the Loans), shall occur and shall continue
after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such default or
event is to accelerate the maturity of such indebtedness; or
(iii) any such indebtedness shall, by reason of default, be
declared to be due and payable, or required to be prepaid,
prior to the stated maturity thereof (unless such
indebtedness is declared due and payable, or required to be
prepaid, solely by reason of either Borrower's, or any of
its Significant Subsidiaries', violation of any arrangement
with any Bank, or any affiliate of any Bank, in any way
restricting such Borrower's, or such Significant
Subsidiary's, right or ability to sell, pledge or otherwise
dispose of Margin Stock other than Restricted Margin Stock);
or
(f) (i) Either Borrower or any of its Significant
Subsidiaries shall commence any case, proceeding or other
action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for
it or for all or any substantial part of its assets, or such
Borrower or any of its Significant Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii)
there shall be commenced against either Borrower or any of
its Significant Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 90 days; or
(g) Any action is undertaken to terminate any Plan as
to which either Borrower, or any Subsidiary of either
Borrower, may have liability, or any such Plan is terminated
or such Borrower or Subsidiary withdraws from such Plan, or
any Reportable Event as to any such Plan shall occur, and
there shall exist a deficiency in the assets available to
satisfy the benefits guaranteeable under ERISA with respect
to such Plan, in the aggregate for all such Plans with
respect to which any of the foregoing shall have occurred in
the immediately preceding 12 consecutive months, of more
than 25% of the Consolidated Tangible Net Worth of such
Borrower; or
(h) Any Person shall own beneficially, directly or
indirectly, 30% or more of the common stock of the Company;
<PAGE>
55
or any Person shall have the power, direct or indirect, to
vote securities having 30% or more of the ordinary voting
power for the election of directors of the Company or shall
own beneficially, directly or indirectly, securities having
such power, PROVIDED that there shall not be included among
the securities as to which any such Person has such power to
vote or which such Person so owns securities owned by such
Person as nominee for the direct or indirect beneficial
owner thereof or securities as to which such power to vote
arises by virtue of proxies solicited by the management of
the Company;
then, and in any such event, (a) if such event is an Event of
Default specified in paragraph (f) above, automatically the
Commitments shall immediately terminate and the Loans hereunder
(with accrued interest thereon) and all other amounts owing under
this Agreement and the Loans shall immediately become due and
payable, and (b) if such event is any Event of Default specified
in paragraphs (a) or (e), then with the consent of the Majority
Banks, the Administrative Agent may, or upon the request of the
Majority Banks, the Administrative Agent shall, or if such Event
is an Event of Default specified in paragraphs (b), (c), (d), (g)
or (h), then with the consent of the Required Banks, the
Administrative Agent may, or upon the request of the Required
Banks, the Administrative Agent shall, take either or both of the
following actions: (i) by notice to the Borrowers, declare the
Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) by notice of default to the
Borrowers, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement to be
due and payable forthwith, whereupon the same shall immediately
become due and payable. Except as expressly provided above in
this Section, presentment, demand, protest and all other notices
of any kind are hereby expressly waived with respect to this
Agreement.
SECTION 9. THE AGENTS
9.1 APPOINTMENT. (a) Each Bank hereby irrevocably
designates and appoints Chemical as the Administrative Agent of
such Bank under this Agreement, and each Bank hereby irrevocably
authorizes Chemical, as the Administrative Agent for such Bank,
to take such action on its behalf under the provisions of this
Agreement and to exercise such powers and perform such duties as
are expressly delegated to the Administrative Agent by the terms
of this Agreement, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement, the Administrative
Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with
any Bank, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
<PAGE>
56
(b) Each Bank hereby irrevocably designates and
appoints Deutsche Bank AG as the Auction Agent of such Bank under
this Agreement, and each Bank hereby irrevocably authorizes
Deutsche Bank AG, as the Auction Agent for such Bank, to take
such action on its behalf under the provisions of this Agreement
and to exercise such powers and perform such duties as are
expressly delegated to the Auction Agent by the terms of this
Agreement, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Auction Agent shall not
have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or
otherwise exist against the Auction Agent.
(c) Notwithstanding anything to the contrary contained
in this Agreement, the parties hereto hereby agree that no
Managing Agent or Co-Agent shall have any rights, duties or
responsibilities in its capacity as a Managing Agent or a Co-
Agent, as the case may be, and that no Managing Agent or Co-Agent
shall have the authority to take any action hereunder in its
capacity as such.
9.2 DELEGATION OF DUTIES. Each Agent may execute any
of its duties under this Agreement by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Each Agent
shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
9.3 EXCULPATORY PROVISIONS. Neither Agent nor any of
their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable to any Bank
for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with this Agreement (except
for its or such Person's own gross negligence or wilful
misconduct), or (ii) responsible in any manner to any of the
Banks for any recitals, statements, representations or warranties
made by the Borrowers or any officer thereof contained in this
Agreement or in any certificate, report, statement or other
document referred to or provided for in, or received by any Agent
under or in connection with, this Agreement or for the value,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or for any failure of the Borrowers
to perform their obligations hereunder. Neither Agent shall be
under any obligation to any Bank to ascertain or to inquire as to
the observance or performance of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrowers.
9.4 RELIANCE BY AGENTS. Each Agent shall be entitled
to rely, and shall be fully protected in relying, upon any Loan,
writing, resolution, notice, consent, certificate, affidavit,
<PAGE>
57
letter, cablegram, telegram, facsimile, telex or teletype
message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation,
counsel to the Borrowers), independent accountants and other
experts selected by such Agent. Each Agent may deem and treat
the payee of any Loan as the owner thereof for all purposes
except as provided in subsections 10.5(c) and 10.5(d). Each
Agent shall be fully justified in failing or refusing to take any
discretionary action under this Agreement unless it shall first
receive such advice or concurrence of the Required Banks as it
deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action. Each Agent shall in all
cases be fully protected in acting, or in refraining from acting,
under this Agreement in accordance with a request of the Required
Banks, or all of the Banks (if the consent of all of the Banks is
required), and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Banks.
9.5 NOTICE OF DEFAULT. The Administrative Agent shall
not be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Bank or either
Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives
such a notice, the Administrative Agent shall give notice thereof
to the Banks. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be
reasonably directed by the Majority Banks or the Required Banks,
as applicable; PROVIDED that, unless and until the Administrative
Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests
of the Banks.
9.6 NON-RELIANCE ON AGENTS AND OTHER BANKS. Each Bank
expressly acknowledges that neither Agent nor any of its
respective officers, directors, employees, agents, attorneys-in-
fact or affiliates has made any representations or warranties to
it and that no act by such Agent hereinafter taken, including any
review of the affairs of the Borrowers, shall be deemed to
constitute any representation or warranty by such Agent to any
Bank. Each Bank represents to each Agent that it has,
independently and without reliance upon such Agent or any other
Bank, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation
into the business, operations, property, financial and other
condition and creditworthiness of each Borrower and made its own
decision to make its Loans hereunder and enter into this
<PAGE>
58
Agreement. Each Bank also represents that it will, independently
and without reliance upon each Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this
Agreement, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the
Borrowers. Except for notices, reports and other documents
expressly required to be furnished to the Banks by either Agent
hereunder, such Agent shall not have any duty or responsibility
to provide any Bank with any credit or other information
concerning the business, operations, property, financial and
other condition or creditworthiness of either Borrower which may
come into the possession of such Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
9.7 INDEMNIFICATION. The Banks agree to indemnify
each Agent in its capacity as such (to the extent not reimbursed
by the Borrowers and without limiting the obligation of the
Borrowers to do so), ratably (as reasonably determined by the
Administrative Agent), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever
which may at any time (including without limitation at any time
following the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out
of this Agreement, or any documents contemplated by or referred
to herein or the transactions contemplated hereby or any action
taken or omitted by such Agent under or in connection with any of
the foregoing; PROVIDED that no Bank shall be liable for the
payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from such Agent's gross negligence
or wilful misconduct. The agreements in this subsection 9.7
shall survive the payment of the Loans and all other amounts
payable hereunder.
9.8 AGENTS IN THEIR INDIVIDUAL CAPACITIES. Each Agent
and its respective affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the
Borrowers as though such Agent were not an Agent hereunder. With
respect to its Loans made by it, each Agent shall have the same
rights and powers under this Agreement as any Bank and may
exercise the same as though it were not an Agent, and the terms
"Bank" and "Banks" shall include the Administrative Agent and the
Auction Agent in their respective individual capacity.
9.9 SUCCESSOR AGENTS. Each Agent may resign as Agent
upon 30 days' notice thereof to the Borrowers and the Banks. If
any Agent shall resign as Agent under this Agreement, then the
Required Banks shall appoint from among the Banks a successor
agent for the Banks which successor agent shall be approved by
the Borrowers, whereupon such successor agent shall succeed to
<PAGE>
59
the rights, powers and duties of the Administrative Agent or the
Auction Agent, as the case may be, and the term "Administrative
Agent" or "Auction Agent", as the case may be, shall mean such
successor agent effective upon its appointment, and the former
Agent's rights, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such
former Agent or any of the parties to this Agreement. After any
retiring Agent's resignation hereunder as Agent, the provisions
of this Section 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this
Agreement.
SECTION 10. MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. With the written consent
of the Required Banks, the Administrative Agent and the Borrowers
may, from time to time, enter into written amendments,
supplements or modifications hereto for the purpose of adding any
provisions to this Agreement or changing in any manner the rights
of the Banks or of the Borrowers hereunder, and with the consent
of the Required Banks the Administrative Agent on behalf of the
Banks may execute and deliver to the Borrowers a written
instrument waiving, on such terms and conditions as the
Administrative Agent may specify in such instrument, any of the
requirements of this Agreement or any Default or Event of Default
and its consequences; PROVIDED, HOWEVER, that no such waiver,
amendment, supplement or modification shall (a) extend the
maturity of any Loan, or reduce the rate or extend the time of
payment of interest thereon, or reduce the principal amount
thereof, or reduce the rate of any fee payable hereunder or
extend the time of payment thereof, in each case, without the
written consent of (i) with respect to any such change to any
Committed Rate Loan, each Bank and (ii) with respect to any such
change to any Bid Loan, the Bank which made such Bid Loan, or (b)
change the amount of any Bank's Commitment or the terms of its
obligation to make Loans hereunder or amend, modify or waive any
provision of this subsection 10.1 or reduce the percentage
specified in the definition of Majority Banks or Required Banks,
or consent to the assignment or transfer by either Borrower of
any of its rights and obligations under this Agreement, in each
case without the written consent of each Bank, or (c) amend,
modify or waive any provision of Section 9 without the written
consent of the then Administrative Agent and Auction Agent, or
(d) extend the Termination Date with respect to any Bank without
the written consent of such Bank. Any such waiver and any such
amendment, supplement or modification shall apply equally to each
of the Banks and shall be binding upon the Borrowers, the Banks
and the Agents. In the case of any waiver, the Borrowers, the
Banks and the Agents shall be restored to their former position
and rights hereunder, and any Default or Event of Default waived
shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event
of Default, or impair any right consequent thereon. Anything
<PAGE>
60
contained in the foregoing to the contrary notwithstanding, the
relevant Borrower and the relevant Bank with respect to a
Negotiated Rate Loan may, from time to time, enter into
amendments, supplements or modifications for the purpose of
adding any provisions to such Negotiated Rate Loans or changing
in any manner the rights of such Bank and such Borrower
thereunder and such Bank may waive any of the requirements of
such Negotiated Rate Loan; PROVIDED, HOWEVER, that such Borrower
and such Bank shall notify the Administrative Agent in writing of
any extension of the maturity of such Negotiated Rate Loan or
reduction of the principal amount thereof; PROVIDED, FURTHER,
that such Borrower and such Bank shall not extend the maturity of
such Negotiated Rate Loan beyond the last day of the Commitment
Period.
10.2 NOTICES. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in
writing, by facsimile transmission, by telephone confirmed in
writing or by telegraph and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when
delivered by hand, or when deposited in the mail, air postage
prepaid, or, in the case of facsimile transmission, when
received, or, in the case of telegraphic notice, when delivered
to the telegraph company or department, addressed as follows in
the case of the Borrowers, the Administrative Agent and the
Auction Agent, and as set forth on Schedule III in the case of
the other parties hereto, or to such address or other address as
may be hereafter notified by the respective parties hereto:
The Borrowers:
The Company: Deere & Company
John Deere Road
Moline, Illinois 61265
Attention: Treasurer
Telephone: 309-765-4423
Facsimile: 309-765-5021
The Capital
Corporation: John Deere Capital Corporation
First National Bank Building
1 East First Street
Reno, Nevada 89501
Attention: Manager
Telephone: 702-786-5527
Facsimile: 702-786-4145
with a copy to: Deere & Company
John Deere Road
Moline, Illinois 61265
Attention: Treasurer
Facsimile: 309-765-5021
<PAGE>
61
The Administrative
Agent: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: John J. Huber, III
Telephone: 212-270-1402
Facsimile: 212-270-2625
The Auction Agent: Deutsche Bank AG Chicago Branch
c/o Deutsche Bank AG New York Branch
31 West 52nd Street
New York, New York 10019
Attention: Loan Syndications
Telephone: 212-474-7041
Facsimile: 212-474-7048
provided that any notice, request or demand to or upon the
Administrative Agent, the Auction Agent or the Banks pursuant to
subsections 2.1, 2.2, 2.5, 2.6, 2.9, 2.11 and 9.9 shall not be
effective until received (including receipt by telephone if
permitted hereby).
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of either
Borrower, the Administrative Agent, the Auction Agent or any
Bank, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative
and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 PAYMENT OF EXPENSES AND TAXES. (a) The Company
agrees (i) to pay or reimburse the Administrative Agent for all
its out-of-pocket costs and expenses incurred in connection with
the preparation and execution of, and any amendment, supplement
or modification to, this Agreement and any other documents
prepared in connection herewith, and the consummation of the
transactions contemplated hereby and thereby in such manner and
in such amounts as shall be agreed to in writing by the Company
and the Administrative Agent, (ii) to pay or reimburse the
Administrative Agent for the reasonable fees and disbursements of
counsel to the Administrative Agent incurred in connection with
the preparation and execution of, and any amendment, supplement,
modification to, this Agreement and other documents prepared in
connection herewith, and the consummation of the transaction
contemplated hereby and thereby, and (iii) to pay or reimburse
each Bank, the Administrative Agent and the Auction Agent for all
its out-of-pocket costs and expenses incurred in connection with
the enforcement or preservation of any rights under this
Agreement and any such other documents, including, without
limitation, fees and disbursements of counsel to the
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62
Administrative Agent and the Auction Agent and one counsel
representing the Banks.
(b) The Borrowers agree jointly and severally to
indemnify and hold harmless the Administrative Agent, the Auction
Agent and each Bank against any and all losses, claims, damages
and liabilities (other than in connection with actions, suits and
proceedings by any of the Banks against any of the other Banks),
joint or several, to which they or any of them may become subject
insofar as such losses, claims, damages and liabilities arise out
of, relate to or are based on this Agreement (including the
responsibilities, duties and obligations of the Banks hereunder
and their agreement to make Loans hereunder) in connection with
any acquisition or proposed acquisition of any securities or
assets by a Borrower or any of its Subsidiaries, and shall
reimburse each such indemnified party for any legal or other
expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage or
liability, subject to the following paragraph. This indemnity
agreement shall be in addition to any liability which either
Borrower may otherwise have.
(c) Promptly after receipt by an indemnified party under
subsection 10.4(b) of written notice of any loss, claim, damage
or liability in respect of which indemnity may be sought by it
hereunder, such indemnified party will, if a claim is to be made
against the Borrowers, notify the Borrowers thereof in writing;
but the omission so to notify the Borrowers will not relieve the
Borrowers from any liability (otherwise than under this
subsection 10.4) which they may have to any indemnified party
except as may be required or provided otherwise than under this
subsection 10.4. Thereafter, the indemnified party and the
Borrowers shall consult, to the extent appropriate, with a view
to minimizing the cost to the Borrowers of their obligations
hereunder. In case any indemnified party receives written notice
of any loss, claim, damage or liability in respect of which
indemnity may be sought hereunder by it and it notifies the
Borrowers thereof, the Borrowers will be entitled to participate
therein and, to the extent that they may elect by written notice
delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel reasonably satisfactory at all
times to such indemnified party; PROVIDED, HOWEVER, that (i) if
the parties against whom any loss, claim, damage or liability
arises include both the indemnified party and a Borrower or any
Subsidiary of a Borrower and the indemnified party shall have
reasonably concluded that there may be legal defenses available
to it or other indemnified parties which are different from or
additional to those available to a Borrower or any Subsidiary of
a Borrower and may conflict therewith, the indemnified party or
parties shall have the right to select one separate counsel for
such indemnified party or parties to assume such legal defenses
and to otherwise participate in the defense of such loss, claim,
damage or liability on behalf of such indemnified party or
<PAGE>
63
parties and (ii) if any loss, claim, damage or liability arises
out of actions brought by or for the benefit of a Borrower or any
Subsidiary of a Borrower, the indemnified party or parties shall
have the right to select their counsel and to assume and direct
the defense thereof and neither Borrower shall be entitled to
participate therein or assume the defense thereof. Upon receipt
of notice from the Borrowers to such indemnified party of their
election so to assume the defense of such loss, claim, damage or
liability and approval by the indemnified party of counsel, the
Borrowers shall not be liable to such indemnified party under
this subsection 10.4 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such
counsel in connection with the assumption of legal defenses in
accordance with the proviso to the next preceding sentence, (ii)
the Borrowers shall not have employed and continued to employ
counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of
commencement of the action or (iii) the Borrowers shall have
authorized the employment of counsel for the indemnified party at
the expense of the Borrowers.
(d) Notwithstanding any other provision contained in
this subsection 10.4, (i) the Borrowers shall not be liable for
any settlement, compromise or consent to the entry of any order
adjudicating or otherwise disposing of any loss, claim, damage or
liability effected without their consent and (ii) after the
Borrowers have assumed the defense of any loss, claim, damage or
liability under the preceding paragraph with respect to any Bank,
they will not settle, compromise or consent to entry of any order
adjudicating or otherwise disposing thereof (1) if such
settlement, compromise or order involves the payment of money
damages, except if the Borrowers agree with such Bank to pay such
money damages, and, if not simultaneously paid, to furnish such
Bank with satisfactory evidence of their ability to pay such
money damages, and (2) if such settlement, compromise or order
involves any relief against such Bank, other than the payment of
money damages, except with the prior written consent of such
Bank.
(e) The agreements in this subsection 10.4 shall survive
repayment of the Loans and all other amounts payable hereunder.
10.5 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING
BANKS. (a) This Agreement shall be binding upon and inure to
the benefit of the Borrowers, the Banks, the Administrative
Agent, the Auction Agent and their respective successors and
assigns, EXCEPT THAT the Borrowers may not assign or transfer any
of their rights or obligations under this Agreement without the
prior written consent of each Bank.
(b) Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable
law, at any time sell to one or more banks or other financial
<PAGE>
64
institutions ("PARTICIPANTS") participating interests in the
Loans, Commitments and other interest of such Bank hereunder. In
the event of any such sale by a Bank of participating interests
to a Participant, such Bank's obligations under this Agreement to
the other parties to this Agreement shall remain unchanged, such
Bank shall remain solely responsible for the performance thereof,
such Bank shall remain the holder of any such Loan for all
purposes under this Agreement, and the Borrowers, the
Administrative Agent and the Auction Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's
rights and obligations under this Agreement.
(c) Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable
law, at any time assign to one or more banks or other financial
institutions ("LOAN ASSIGNEES") any Bid Loan or Negotiated Rate
Loan or portion thereof owing to such Bank, pursuant to a Loan
Assignment executed by the assignor Bank and the Loan Assignee.
Upon such execution, from and after the Transfer Effective Date
specified in such Loan Assignment, the Loan Assignee shall, to
the extent of the assignment provided for in such Loan Assignment
and to the extent permitted by applicable law, be deemed to have
the same rights and benefits with respect to such Bid Loans and
Negotiated Rate Loans and the same obligation to share pursuant
to subsection 10.6 as it would have had if it were a Bank
hereunder; PROVIDED, that unless such Loan Assignment shall
otherwise specify and a copy of such Loan Assignment shall have
been delivered to the Administrative Agent for its acceptance and
recording in the Register in accordance with subsection 10.5(f),
the assignor Bank shall act as collection agent for the Loan
Assignee, and in the case of Bid Loans, the Administrative Agent
shall pay all amounts received from the relevant Borrower which
are allocable to the assigned Bid Loan directly to the assignor
Bank without any further liability to the relevant Loan Assignee,
and, in the case of Negotiated Rate Loans, the relevant Borrower
shall pay all amounts due under the assigned Negotiated Rate Loan
directly to the assignor Bank without any further liability to
the Loan Assignee. At the request of any Loan Assignee, on or
promptly after the Transfer Effective Date specified in such Loan
Assignment, the relevant Borrower, at its own expense, shall
execute and deliver to the Loan Assignee a promissory note with
respect to the Bid Loans or Negotiated Rate Loans to the order of
such Loan Assignee in an amount equal to the Bid Loan or
Negotiated Rate Loan assigned. Such note shall be dated the
Borrowing Date in respect of such Bid Loan or Negotiated Rate
Loan and shall otherwise be in the form of Exhibit M hereto;
PROVIDED, HOWEVER, that such Borrower shall not be required to
execute and deliver more than an aggregate of two notes with
respect to the Bid Loans of any Bank with the same Interest
Period at any time outstanding. The Loan Assignee shall not, by
virtue of such Loan Assignment, become a party to this Agreement
or have any rights to consent to or refrain from consenting to
any amendment, waiver or other modification of any provision of
this Agreement or any related document; PROVIDED, that (i) the
<PAGE>
65
assignor Bank and the Loan Assignee may, in their discretion,
agree between themselves upon the manner in which the assignor
Bank will exercise its rights under this Agreement and any
related document, and (ii) if a copy of such Loan Assignment
shall have been delivered to the Administrative Agent for its
acceptance and recording in the Register in accordance with
subsection 10.5(f), neither the principal amount of, the interest
rate on, nor the maturity date of any Bid Loan or Negotiated Rate
Loan assigned to a Loan Assignee will be modified without written
consent of such Loan Assignee.
(d) Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable
law, with the consent of the Borrowers, sell to any Bank or any
affiliate thereof and to one or more additional banks or other
financial institutions ("PURCHASING BANKS"), portions (subject to
the last sentence of this subsection 10.5(d)) of its rights and
obligations under this Agreement, pursuant to a Commitment
Transfer Supplement, executed by such Purchasing Bank and such
transferor Bank (and, in the case of a Purchasing Bank that is
not then a Bank or an affiliate thereof, by the Borrowers and the
Administrative Agent), and delivered to the Administrative Agent
for its acceptance and recording in the Register. Upon such
execution, delivery, acceptance and recording, from and after the
Transfer Effective Date specified in such Commitment Transfer
Supplement, (i) the Purchasing Bank thereunder shall be a party
hereto and, to the extent provided in such Commitment Transfer
Supplement, have the rights and obligations of a Bank hereunder
with a Commitment as set forth therein, and (ii) the transferor
Bank thereunder shall cease to have rights and obligations under
this Agreement to which the Purchasing Bank has succeeded (and,
in the case of a Commitment Transfer Supplement covering all or
the remaining portion of a transferor Bank's rights and
obligations under this Agreement, such transferor Bank shall
cease to be a party hereto). Such Commitment Transfer Supplement
shall be deemed to amend this Agreement to the extent, and only
to the extent, necessary to reflect the addition of such
Purchasing Bank and the resulting adjustment of Commitment
Percentages arising from the purchase by such Purchasing Bank of
a portion of the rights and obligations of such transferor Bank
under this Agreement. On or promptly after the Transfer
Effective Date specified in such Commitment Transfer Supplement,
the Purchasing Bank and the Administrative Agent, on behalf of
such Purchasing Bank, shall open and maintain in the name of each
Borrower a Loan Account with respect to such Purchasing Bank's
Committed Rate Loans and Bid Loans to such Borrower. Anything
contained in this Agreement to the contrary notwithstanding, no
Bank may sell any portion of its rights and obligations under
this subsection 10.5(d) to any bank or financial institution if
after giving effect to such sale the Commitment of either of the
selling and purchasing institutions would be less than
$5,000,000.
<PAGE>
66
(e) The Administrative Agent shall maintain at its
address referred to in subsection 10.2 a copy of each Loan
Assignment and each Commitment Transfer Supplement delivered to
it and a register (the "REGISTER") for the recordation of (i) the
names and addresses of the Banks and the Commitment of, and
principal amount of the Loans (other than Negotiated Rate Loans)
owing to, each Bank from time to time, and (ii) with respect to
each Loan Assignment delivered to the Administrative Agent, the
name and address of the Loan Assignee and the principal amount of
each Bid Loan owing to such Loan Assignee. The entries in the
Register shall constitute PRIMA FACIE evidence of the accuracy of
the information so recorded, and the Borrowers, the
Administrative Agent and the Banks may treat each Person whose
name is recorded in the Register as the owner of the Loan
recorded therein for all purposes of this Agreement. The
Register shall be available for inspection by the Company or any
Bank or Loan Assignee at any reasonable time and from time to
time upon reasonable prior notice.
(f) Upon its receipt of a Loan Assignment executed by an
assignor Bank and a Loan Assignee, together with payment to the
Administrative Agent (by the assignor Bank or the Loan Assignee,
as agreed between them) of a registration and processing fee of
$2,500, the Administrative Agent shall (i) accept such Loan
Assignment, (ii) record the information contained therein in the
Register and (iii) give prompt notice of such acceptance and
recordation to the assignor Bank, the Loan Assignee and the
Borrowers. Upon its receipt of a Commitment Transfer Supplement
executed by a transferor Bank and a Purchasing Bank (and, in the
case of a Purchasing Bank that is not then a Bank or an affiliate
thereof, by the Borrowers and the Administrative Agent) together
with payment to the Administrative Agent (by the transferor Bank
or the Purchasing Bank, as agreed between them) of a registration
and processing fee of $2,500 for each Purchasing Bank listed in
such Commitment Transfer Supplement, the Administrative Agent
shall (A) accept such Commitment Transfer Supplement, (B) record
the information contained therein in the Register and (C) give
prompt notice of such acceptance and recordation to the Banks and
the Borrowers.
(g) The Company authorizes each Bank to disclose to any
Participant, Loan Assignee or Purchasing Bank (each, a
"TRANSFEREE") and any prospective Transferee any and all
financial information in such Bank's possession concerning the
Borrowers and their Subsidiaries which has been delivered to such
Bank by or on behalf of the Borrowers pursuant to this Agreement
or in connection with such Bank's credit evaluation of the
Borrowers and their Subsidiaries prior to becoming a party to
this Agreement, PROVIDED that with respect to confidential data
or information described in subsection 10.7, such confidential
data may be disclosed only to (i) a Purchasing Bank and/or (ii)
any other Transferee or prospective Transferee with the
Borrowers' prior written consent, which consent shall not be
unreasonably withheld with respect to prospective Participants,
<PAGE>
67
Participants, prospective Loan Assignees and Loan Assignees;
PROVIDED, HOWEVER, that such Bank shall not disclose any such
confidential data or information pursuant to this subsection
10.5(g) unless (i) it has notified the Purchasing Bank or other
Transferee or potential Transferee that such data or information
are confidential, such notification to be in writing if such data
or information are disclosed in writing and orally if such data
or information are disclosed orally, and (ii) such Purchasing
Bank, Transferee or potential Transferee has agreed in writing to
be bound by the provisions of subsection 10.7.
(h) If, pursuant to this subsection, any loan
participation or series of loan participations is sold or any
interest in this Agreement is transferred to any Transferee, the
transferor Bank shall cause such Transferee, concurrently with
the effectiveness of such transfer or the first transfer to occur
in a series of transfers between such transferor Bank and such
Transferee, (i) to represent to the transferor Bank (for the
benefit of the transferor Bank, the Administrative Agent and the
Borrowers) either (A) that it is incorporated under the laws of
the United States or a state thereof or (B) that under applicable
law and treaties no taxes will be required to be withheld by the
Administrative Agent, the Borrowers or the transferor Bank with
respect to any payments to be made to such Transferee in respect
of the Loans, (ii) to furnish to the transferor Bank, the
Administrative Agent and the Borrowers (A) either (I) a statement
that it is incorporated under the laws of the United States or a
state thereof or (II) if it is not so incorporated, a letter in
duplicate in the form of Exhibit J or Exhibit K, as appropriate,
and two duly completed copies of United States Internal Revenue
Service Form 4224 or 1001 or successor applicable form, as the
case may be, certifying in each case that such Transferee is
entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income
taxes, and (B) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be, to establish an
exemption from United States backup withholding tax, and (iii) to
agree (for the benefit of the transferor Bank, the Administrative
Agent and the Borrowers) to provide the transferor Bank, the
Administrative Agent and the Borrowers a new Form 4224 or 1001
and Form W-8 or W-9, or successor applicable form or other manner
of certification, on or before the date that any such letter or
form expires or becomes obsolete or after the occurrence of any
event requiring a change in the most recent letter and form
previously delivered by it, certifying in the case of a Form 1001
or 4224 that such Transferee is entitled to receive payments
under this Agreement without deduction or withholding of any
United States federal income tax, and in the case of a Form W-8
or W-9 establishing exemption from United States backup
withholding tax. The Administrative Agent shall not be
responsible for obtaining such documentation except from its own
Transferees.
<PAGE>
68
(i) Nothing in this subsection 10.5 shall prohibit any
Bank from pledging or assigning its Loans to any Federal Reserve
Bank in accordance with applicable law.
10.6 ADJUSTMENTS. If any Bank other than a Cancelled
Bank (a "BENEFITTED BANK") shall at any time receive any payment
of all or part of its Committed Rate Loans, or interest thereon
or facility fee in respect thereof, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-
off, pursuant to events or proceedings of the nature referred to
in clause (e) of Section 8, or otherwise) in a greater proportion
than any such payment to and collateral received by any other
Bank, if any, in respect of such other Bank's Committed Rate
Loans, or interest thereon, such benefitted Bank shall purchase
for cash from the other Banks such portion of each such other
Bank's Committed Rate Loans, or shall provide such other Banks
with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefitted Bank to
share the excess payment or benefits of such collateral or
proceeds ratably with each of the Banks; PROVIDED, HOWEVER, that
if all or any portion of such excess payment or benefits is
thereafter recovered from such benefitted Bank, such purchase
shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. The
Borrowers agree that each Bank so purchasing a portion of another
Bank's Committed Rate Loans may exercise all rights of payment
(including, without limitation, rights of set-off) with respect
to such portion as fully as if such Bank were the direct holder
of such portion.
10.7 CONFIDENTIALITY. (a) Each of the Administrative
Agent, the Auction Agent and the Banks shall, subject as
hereinafter provided, keep confidential from any third party any
data or information received by them from the Borrowers pursuant
to this Agreement which, if provided in writing, is designated in
writing as such, and if provided orally, is designated orally as
such by the Borrowers except:
(i) any such data or information as is or becomes
publicly available or generally known otherwise than as a
result of any breach of the provisions of this subsection
10.7;
(ii) as required by law, rule, regulation or official
direction;
(iii) as may be necessary to protect as against the
Borrowers or either of them the interests of the Banks or
any of them under this Agreement;
(iv) to the extent permitted under subsection 10.5; and
(v) to the attorneys, accountants and regulators of
such Banks, and to each other Bank.
<PAGE>
69
(b) Each of the Administrative Agent, the Auction Agent
and the Banks shall use their reasonable efforts to ensure that
any confidential data or information received by them from the
Borrowers pursuant to this Agreement which is disclosed to
employees of the Administrative Agent, the Auction Agent and the
Banks (as the case may be) is so disclosed only to the extent
necessary for purpose of the administration of this Agreement
and, in all cases, on the condition that such information and
data shall be kept confidential except for such purpose.
(c) The provisions of this subsection 10.7 shall survive
the payment in full of all amounts payable hereunder and the
termination of this Agreement.
10.8 COUNTERPARTS. This Agreement may be executed by
one or more of the parties to this Agreement on any number of
separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall
be lodged with the Borrowers and the Administrative Agent.
10.9 GOVERNING LAW. This Agreement and the rights and
obligations of the parties under this Agreement shall be governed
by, and construed and interpreted in accordance with, the law of
the State of New York.
<PAGE>
70
10.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
All judicial proceedings brought against the Borrowers with
respect to this Agreement may be brought in any state or federal
court of competent jurisdiction in the State of New York, and, by
execution and delivery of this Agreement, the Borrowers accept,
for themselves and in connection with their properties, generally
and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts and irrevocably agree to be bound by any final
judgment rendered thereby in connection with this Agreement from
which no appeal has been taken or is available. The Borrowers
irrevocably agree that all process in any such proceedings in any
such court may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form
of mail), postage prepaid, to them at their addresses set forth
in subsection 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto,
such service being hereby acknowledged by the Borrowers to be
effective and binding service in every respect. Each of the
Borrowers, the Administrative Agent, the Auction Agent and the
Banks irrevocably waives any objection, including without
limitation, any objection to the laying of venue or based on the
grounds of forum non conveniens which it may now or hereafter
have to the bringing of any such action or proceeding in any such
jurisdiction. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the
right of the Administrative Agent, the Auction Agent or any Bank
to bring proceedings against the Borrowers in the courts of any
other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
DEERE & COMPANY
Attested by:
/s/ Michael A. Harring By: /s/ Nathan J. Jones
- --------------------------- -------------------------------
Title: Assistant Secretary Title: Assistant Treasurer
JOHN DEERE CAPITAL CORPORATION
Attested by:
/s/ Michael A. Harring By: /s/ Nathan J. Jones
- --------------------------- -------------------------------
Title: Assistant Secretary Title: Assistant Treasurer
<PAGE>
71
CHEMICAL BANK, as Administrative
Agent, as a Managing Agent and as
a Bank
By: /s/ Jeffrey A. Marcks
--------------------------------
Title: Managing Director
DEUTSCHE BANK AG CHICAGO BRANCH, as
Auction Agent and as a Managing
Agent
By: /s/ Dirk A. Quayle
--------------------------------
Title: Corp. Fin. Director
By: /s/ Thomas L. Newberry
--------------------------------
Title: Vice President
DEUTSCHE BANK AG CHICAGO AND/OR
CAYMAN ISLAND BRANCHES, as a
Managing Agent and as a Bank
By: /s/ Dirk A. Quayle
-------------------------------
Title: Corp. Fin. Director
By: /s/ Thomas L. Newberry
-------------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a
Co-Agent and as a Bank
By: /s/ Patricia DelGrande
-------------------------------
Title: Vice President
<PAGE>
72
THE BANK OF NEW YORK, as a Co-Agent
and as a Bank
By: /s/ Charlotte Sohn
--------------------------------
Title: Assistant Vice President
BANQUE NATIONALE DE PARIS CHICAGO
BRANCH, as a Co-Agent and as a
Bank
By: /s/ Alain Benard
--------------------------------
Title: Executive Vice President
THE CHASE MANHATTAN BANK N.A., as a
Co-Agent and as a Bank
By: /s/ Robert P. Jankowitz
--------------------------------
Title: Managing Director
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as a Co-Agent and as a
Bank
By: /s/ William J. Stevenson
--------------------------------
Title: Vice President
SOCIETE GENERALE, as a Co-Agent and
as a Bank
By: /s/ Eric E.O. Siebert, Jr.
--------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. Ashby
--------------------------------
Title: Senior Manager Loan
Operations
<PAGE>
73
CIBC INC.
By: /s/ Stephanie E. Johnson
--------------------------------
Title: Vice President
COMMERZBANK AKTIENGESELLSCHAFT,
GRAND CAYMAN BRANCH
By: /s/ Paul F. Karlin
--------------------------------
Title: Assistant Cashier
CREDIT SUISSE
By: /s/ Charles R. Shaw
--------------------------------
Title: Member of Senior
Management
By: /s/ Kristinn R. Kristinsson
--------------------------------
Title: Associate
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Michael W. McCorkle
--------------------------------
Title: Vice President
THE FUJI BANK, LIMITED
By: /s/ Peter L. Chinnici
--------------------------------
Title: Joint General Manager
<PAGE>
74
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD. CHICAGO BRANCH
By: /s/ Richard E. Stahl
--------------------------------
Title: Senior Vice President
MELLON BANK, N.A.
By: /s/ Jeffrey M. Anderson
--------------------------------
Title: Vice President
NBD BANK, N.A.
By: /s/ Timothy M. Monahan
--------------------------------
Title: Second Vice President
NATIONSBANK OF TEXAS, N.A.
By: /s/ Ellis E. Moseley
--------------------------------
Title: Senior Vice President
ROYAL BANK OF CANADA
By: /s/ G. David Cole
--------------------------------
Title: Senior Manager
TORONTO DOMINION (TEXAS), INC.
By: /s/ James J. McCarthy
--------------------------------
Title: Director
<PAGE>
75
UNION BANK OF SWITZERLAND, CHICAGO
BRANCH
By: /s/ Robert H. Riley III
--------------------------------
Title: Vice President
By: /s/ Martin Frey
--------------------------------
Title: Assistant Treasurer
WACHOVIA BANK OF GEORGIA, N.A.
By: /s/ Edward D. Ridenhour
--------------------------------
Title: Senior Vice President
<PAGE>
SCHEDULE I
TERMS OF SUBORDINATION
"SENIOR INDEBTEDNESS" means the principal of (and
premium, if any) and unpaid interest on (a) indebtedness of John
Deere Capital Corporation (the "Capital Corporation") (including
indebtedness of others guaranteed by the Capital Corporation),
other than the indebtedness evidenced by the Securities [such
term to be defined as the debt to be issued under the indenture
or agreement to which this Schedule relates], the 9.35%
Subordinated Debentures due 2003, the 8-5/8% Subordinated
Debentures due 2019 and the 9-5/8% Subordinated Notes due 1998 of
the Capital Corporation, whether outstanding on the date hereof
or hereafter created, incurred, assumed or guaranteed, for money
borrowed, unless in the instrument creating or evidencing the
same or pursuant to which the same is outstanding it is provided
that such indebtedness is not senior or prior in right of payment
to the Securities, and (b) renewals, extensions, modifications
and refundings of any such indebtedness.
SUBORDINATION
Section 1. AGREEMENT TO SUBORDINATE.
The Capital Corporation, for itself, its successors and
assigns, covenants and agrees, and each holder of Securities, by
such holder's acceptance thereof, likewise covenants and agrees,
that the payment of the principal of (and premium, if any) and
interest on each and all of the Securities is hereby expressly
subordinated, to the extent and in the manner hereinafter set
forth, in right of payment to the prior payment in full of all
Senior Indebtedness.
Section 2. DISTRIBUTION ON DISSOLUTION, LIQUIDATION AND
REORGANIZATION; SUBROGATION OF SECURITIES.
Upon any distribution of assets of the Capital
Corporation upon any dissolution, winding up, liquidation or
reorganization of the Capital Corporation, whether in bankruptcy,
insolvency, reorganization or receivership proceedings or upon an
assignment for the benefit of creditors or any other marshalling
of the assets and liabilities of the Capital Corporation or
otherwise (subject to the power of a court of competent
jurisdiction to make other equitable provisions reflecting the
rights conferred in this Agreement upon the Senior Indebtedness
and the holders thereof with respect to the Securities by a
lawful plan of reorganization under applicable bankruptcy law),
<PAGE>
2
(a) the holders of Senior Indebtedness shall be entitled
to receive payment in full of the principal thereof (and
premium if any) and the interest due on the Senior
Indebtedness before the holders of the Securities are entitled
to receive any payment upon the principal of (or premium, if
any) or interest on indebtedness evidenced by the Securities;
and
(b) any payment or distribution of assets of the Capital
Corporation of any kind or character, whether in cash,
property or securities, to which the holders of the Securities
or any trustee therefor would be entitled except for the
provisions of this Article shall be paid by the liquidating
trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the holders of
Senior Indebtedness or their representative or representatives
or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may
have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the principal of (and premium,
if any) and interest on the Senior Indebtedness held or
represented by each holder of Senior Indebtedness, to the
extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such
Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing,
any payment or distribution of assets of the Capital
Corporation of any kind or character, whether in cash,
property or securities, shall be received by any trustee for
the holders of the Securities or the holders of the Securities
before all Senior Indebtedness is paid in full, such payment
or distribution shall be paid over, upon written notice to any
trustee for the holders of the Securities, to the holders of
Senior Indebtedness or their representative or representatives
or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may
have been issued, ratably as aforesaid, for application to the
payment of all Senior Indebtedness remaining unpaid until all
such Senior Indebtedness shall have been paid in full, after
giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the
holders of the Securities shall be subrogated to the rights of
the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Capital
Corporation applicable to Senior Indebtedness until the principal
of (and premium, if any) and interest on the Securities shall be
paid in full and no such payments or distributions to the holders
of the Securities of cash, property or securities otherwise
distributable to the holders of Senior Indebtedness shall, as
<PAGE>
3
between the Capital Corporation, its creditors other than the
holders of Senior Indebtedness, and the holders of the
Securities, be deemed to be a payment by the Capital Corporation
to or on account of the Securities. It is understood that the
provisions of this Article are, and are intended, solely for the
purpose of defining the relative rights of the holders of the
Securities, on the one hand, and the holders of Senior
Indebtedness, on the other hand. Nothing contained in this
Article or elsewhere in this Agreement or in the Securities is
intended to or shall impair, as between the Capital Corporation,
its creditors other than the holders of Senior Indebtedness, and
the holders of the Securities, the obligation of the Capital
Corporation, which is unconditional and absolute, to pay to the
holders of the Securities the principal of (and premium, if any)
and interest on the Securities as and when the same shall become
due and payable in accordance with their terms, or to affect the
relative rights of the holders of the Securities and creditors of
the Capital Corporation other than the holders of Senior
Indebtedness, nor shall anything herein or in the instruments or
other evidence of the Securities prevent any trustee for the
holders of the Securities or the holder of any Securities from
exercising all remedies otherwise permitted by applicable law
upon default under this Agreement or such instrument or other
evidence, subject to the rights, if any, under this Article of
the holders of Senior Indebtedness in respect of cash, property
or securities of the Capital Corporation received upon the
exercise of any such remedy.
Section 3. NO PAYMENT ON SECURITIES IN EVENT OF NON-
PAYMENT WHEN DUE OF SENIOR INDEBTEDNESS.
No payment by the Capital Corporation on account of
principal (or premium, if any), sinking funds, or interest on the
Securities shall be made unless full payment of amounts then due
for principal, premium, if any, sinking funds and interest on
Senior Indebtedness has been made or duly provided for in money
or money's worth.
<PAGE>
SCHEDULE II
COMMITMENTS
<TABLE>
<CAPTION>
Bank Commitment
- ---- ----------
<S> <C>
Chemical Bank $134,000,000
Deutsche Bank AG Chicago and/or
Cayman Island Branches 134,000,000
Bank of America National Trust and
Savings Association 93,800,000
The Bank of New York 93,800,000
Banque Nationale de Paris Chicago Branch 93,800,000
The Chase Manhattan Bank N.A. 93,800,000
Morgan Guaranty Trust Company of New York 93,800,000
Societe Generale 93,800,000
The Bank of Nova Scotia 60,300,000
CIBC Inc. 60,300,000
Commerzbank Aktiengesellschaft,
Grand Cayman Branch 60,300,000
Credit Suisse 60,300,000
The First National Bank of Chicago 60,300,000
The Fuji Bank, Limited 60,300,000
The Long-Term Credit Bank of Japan, Ltd.,
Chicago Branch 60,300,000
Mellon Bank, N.A. 60,300,000
NBD Bank, N.A. 60,300,000
NationsBank of Texas, N.A. 60,300,000
Royal Bank of Canada 60,300,000
Toronto Dominion (Texas), Inc. 60,300,000
Union Bank of Switzerland, Chicago Branch 60,300,000
Wachovia Bank of Georgia, N.A. 60,300,000
----------
Total $1,675,000,000
--------------
--------------
</TABLE>
<PAGE>
SCHEDULE III
ADDRESSES FOR NOTICES
CHEMICAL BANK
270 Park Avenue
New York, New York 10017
Attention: John J. Huber, III
Telephone: (212) 270-1402
Facsimile: (212) 270-2625
DEUTSCHE BANK AG
Suite 4350
227 West Monroe Street
Chicago, Illinois 60606
Attention: Dirk A. Quayle
Telephone: (312) 578-4108
Facsimile: (312) 578-4111
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
4th Floor
1850 Gateway Boulevard
Concord, California 94520
Attention: Sandy Schwartzkopf
Telephone: (510) 675-7762
Facsimile: (510) 675-7531
THE BANK OF NEW YORK
Central Division - 19th Floor
One Wall Street
New York, New York 10286
Attention: Charlotte Sohn
Telephone: (212) 635-1147
Facsimile: (212) 635-1208/09
BANQUE NATIONALE DE PARIS
CHICAGO BRANCH
5th Floor
209 South LaSalle Street
Chicago, Illinois 60604
Attention: Chris Howatt
Telephone: (312) 977-1383
Facsimile: (312) 977-1380
<PAGE>
2
THE CHASE MANHATTAN BANK N.A.
One Chase Manhattan Plaza
New York, New York 10081
Attention: Barbara Hail
Don Stewart
Telephone: (212) 552-5407 (Barbara)
(212) 552-2662 (Don)
Facsimile: (212) 552-6731
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
60 Wall Street
New York, New York 10260
Attention: Kit C. Wong
Telephone: (212) 648-7340
Facsimile: (212) 648-5336
SOCIETE GENERALE
Suite 3400
181 West Madison Street
Chicago, Illinois 60602
Attention: Eric E.O. Siebert
Donna L. Benson
Telephone: (312) 578-5003 (Eric)
(312) 578-5112 (Donna)
Facsimile: (312) 578-5099
THE BANK OF NOVA SCOTIA
Suite 2700
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Attention: Claude Ashby
Telephone: (404) 877-1500
Facsimile: (404) 888-8998
CIBC INC.
Suite 2300
200 West Madison Street
Chicago, Illinois 60606
Attention: Stephanie Johnson
Telephone: (312) 750-8725
Facsimile: (312) 726-8884
with a copy to:
<PAGE>
3
CIBC INC.
Two Paces West
Suite 1200
2727 Paces Ferry road
Atlanta, Georgia 30339
Attention: Carrie Modica
Telephone: (404) 319-4816
Facsimile: (404) 319-4950
COMMERZBANK
AKTIENGESELLSCHAFT, GRAND
CAYMAN BRANCH
c/o Chicago Branch
Suite 5800
311 South Wacker Drive
Chicago, Illinois 60606
Attention: Anthony Giraldi
Telephone: (312) 435-1000
Facsimile: (312) 435-1486
CREDIT SUISSE
41st Floor
12 East 49th Street
New York, New York 10017
Attention: Hazel Leslie
Telephone: (212) 238-5218
Facsimile: (212) 238-5246
THE FIRST NATIONAL BANK OF
CHICAGO
Suite 0324
One First National Plaza
Chicago, Illinois 60670
Attention: Michael McCorkle
Telephone: (312) 732-3568
Facsimile: (312) 732-5296
THE FUJI BANK, LIMITED
c/o Chicago Branch
Suite 2000
225 West Wacker Drive
Chicago, Illinois 60606
Attention: Richard J. Dunning
Telephone: (312) 621-9485
Facsimile: (312) 621-0539
<PAGE>
4
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD. CHICAGO BRANCH
Suite 800
190 South LaSalle Street
Chicago, Illinois 60603
Attention: Richard E. Stahl
Telephone: (312) 704-5453
Facsimile: (312) 704-8505
MELLON BANK, N.A.
Suite 2600
55 West Monroe Street
Chicago, Illinois 60603
Attention: Jeffrey Anderson
Telephone: (312) 357-3405
Facsimile: (312) 357-3414
NBD BANK, N.A.
611 Woodward Avenue
Detroit, Michigan 48224
Attention: Timothy Monahan
Telephone: (313) 225-2762
Facsimile: (313) 225-167117
NATIONSBANK OF TEXAS, N.A.
67th Floor
901 Main Street
Dallas, Texas 75202-3707
Attention: Ellis Mosely
Telephone: (214) 508-0913
Facsimile: (214) 508-0980
ROYAL BANK OF CANADA
New York Branch
c/o New York Operations Center
Pierrepont Plaza
300 Cadman Plaza West
Brooklyn, New York 11201-2701
Attention: Manager, Loans Administration
Telephone: (212) 858-7168
Facsimile: (718) 522-6292/3
with a copy to:
<PAGE>
5
ROYAL BANK OF CANADA
Suite 2300
33 North Dearborn
Chicago, Illinois 60602
Attention: G. David Cole
Telephone: (312) 372-4404
Facsimile: (312) 782-3429
TORONTO DOMINION
(TEXAS),INC.
c/o The Toronto-Dominion
Bank
Suite 5430
70 West Madison Street
Chicago, Illinois 60602
Attention: David Lewing
Telephone: (312) 977-2105
Facsimile: (312) 782-6337
UNION BANK OF SWITZERLAND,
CHICAGO BRANCH
30 South Wacker Drive
Chicago, Illinois 60606
Attention: Martin A. Frey
Telephone: (312) 993-5476
Facsimile: (312) 993-5530
WACHOVIA BANK OF GEORGIA, N.A.
INC.
c/o Wachovia Corporate Services,
Inc.
Suite 1740
55 West Monroe Street
Chicago, Illinois 60603
Attention: Scott D. Bjelde
Telephone: (312) 853-0191
Facsimile: (312) 853-0693
<PAGE>
EXHIBIT A
[FORM OF BORROWING NOTICE]
___________, _____
Chemical Bank
as Administrative Agent under the
Credit Agreement referred to below
270 Park Avenue
New York, New York 10017
Gentlemen:
Pursuant to subsection 2.1(c) of the $1,675,000,000
Credit Agreement, dated as of December 15, 1993, among DEERE &
COMPANY, JOHN DEERE CAPITAL CORPORATION, the Banks parties
thereto, CHEMICAL BANK, as Administrative Agent, DEUTSCHE BANK AG
CHICAGO BRANCH, as Auction Agent, the Managing Agents named
therein and the Co-Agents named therein (as the same may be
amended, supplemented or otherwise modified from time to time,
the "CREDIT AGREEMENT"), the undersigned hereby requests that the
following Committed Rate Loans be made on __________, ____ as
follows:
<TABLE>
<S> <C> <C>
(1). Total Amount of Committed Rate
Loans.......................... $
----------
(2). Amount of (1) to be allocated to
Eurodollar Loans............... $
----------
(3). Amount of (1) to be allocated to
C/D Rate Loans................. $
----------
(4). Amount of (1) to be allocated to
ABR Loans..................... $
----------
(5A). Interest Periods and amounts to be
allocated thereto in respect of
Eurodollar Loans (amounts must total (2)):
(i) one month................ $
----------
(ii) two months............... $
----------
(iii) three months............. $
----------
(iv) six months............... $
----------
Total Eurodollar Loans.......... $
----------
</TABLE>
<PAGE>
A-2
<TABLE>
<S> <C> <C>
(5B). Interest Periods and amounts to
be allocated thereto in respect
of C/D Rate Loans (amounts must
total (3)):
(i) 30 days.................. $
----------
(ii) 60 days.................. $
----------
(iii) 90 days.................. $
----------
(iv) 180 days................. $
----------
Total C/D Rate Loans........... $
----------
</TABLE>
NOTE: THE AMOUNT APPEARING IN LINE (1) ABOVE
MUST BE AT LEAST EQUAL TO $25,000,000 AND
IN A WHOLE MULTIPLE OF $5,000,000 AND THE
AMOUNTS APPEARING IN EACH OTHER LINE ABOVE
MUST BE AT LEAST EQUAL TO $10,000,000 AND IN
A WHOLE MULTIPLE OF $1,000,000.
Terms defined in the Credit Agreement shall have the same meanings
when used herein.
Very truly yours,
[DEERE & COMPANY]
[JOHN DEERE CAPITAL CORPORATION]
By:
----------------------------
Title:
<PAGE>
EXHIBIT B
[FORM OF BID LOAN REQUEST]
_______________, _____
Deutsche Bank AG Chicago Branch,
as Auction Agent under the Credit
Agreement referred to below
c/o Deutsche Bank AG New York Branch
31 West 52nd Street
New York, New York 10019
Dear Sirs:
Reference is made to the $1,675,000,000 Credit Agreement,
dated as of December 15, 1993, among DEERE & COMPANY, JOHN DEERE
CAPITAL CORPORATION, the Banks parties thereto, CHEMICAL BANK, as
Administrative Agent, DEUTSCHE BANK AG CHICAGO BRANCH, as Auction
Agent, the Managing Agents named therein and the Co-Agents named
therein (as the same may be amended, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"). Terms
defined in the Credit Agreement are used herein as therein
defined.
This is an [Index Rate] [Absolute Rate] Bid Loan Request
pursuant to subsection 2.2 of the Credit Agreement requesting
quotes for the following Bid Loans:
<TABLE>
<S> <C> <C> <C>
Aggregate Principal Amount $ $ $
------- ------- -------
Borrowing Date
------- ------- -------
Interest Period
------- ------- -------
Maturity Date
------- ------- -------
Interest Payment Dates
------- ------- -------
Interest Rate Basis 360 day year
</TABLE>
<PAGE>
B-2
NOTE: THE AGGREGATE PRINCIPAL AMOUNTS APPEARING ABOVE
MUST BE IN THE AGGREGATE AT LEAST EQUAL TO
$25,000,000 AND IN A WHOLE MULTIPLE OF
$5,000,000.
Very truly yours,
[DEERE & COMPANY]
[JOHN DEERE CAPITAL CORPORATION]
By:____________________________
Title:
- ---------------------
Note: Pursuant to the Credit Agreement, a Bid Loan Request may
be transmitted by facsimile transmission, or by
telephone, immediately confirmed by facsimile
transmission. In any case, a Bid Loan Request shall
contain the information specified in the second paragraph
of this form.
<PAGE>
EXHIBIT C
[FORM OF BID LOAN OFFER]
_______________, _____
Deutsche Bank AG Chicago Branch, as Auction
Agent under the Credit Agreement
referred to below
c/o Deutsche Bank AG New York Branch
31 West 52nd Street
New York, New York 10019
Dear Sirs:
Reference is made to the $1,675,000,000 Credit
Agreement, dated as of December 15, 1993, among DEERE & COMPANY,
JOHN DEERE CAPITAL CORPORATION, the Banks parties thereto,
CHEMICAL BANK, as Administrative Agent, DEUTSCHE BANK AG CHICAGO
BRANCH, as Auction Agent, the Managing Agents named therein and
the Co-Agents named therein (as the same may be amended,
supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"). Terms defined in the Credit Agreement are used
herein as therein defined.
In accordance with subsection 2.2 of the Credit Agreement,
the undersigned Bid Loan Bank offers to make Bid Loans thereunder
in the following amounts with the following maturity dates:
Borrowing Date: _______, 19___
Aggregate Maximum Amount: $_______
<TABLE>
<CAPTION>
Maturity Date 1: ___: Maturity Date 2:___: Maturity Date 3:___:
- ---------------- ---------------- ----------------
<S> <C> <C>
Maximum Amount $___ Maximum Amount $___ Maximum Amount $___
Rate*___ Amount $___ Rate*___ Amount $___ Rate*___ Amount $___
Rate*___ Amount $___ Rate*___ Amount $___ Rate*___ Amount $___
</TABLE>
Very truly yours,
[NAME OF BID LOAN BANK]
By:_________________________
Name:
Title:
Telephone:
Facsimile:
* If Index Rate Bid Loan, insert percentage above or below
Eurodollar Rate.
<PAGE>
EXHIBIT D
[FORM OF BID LOAN CONFIRMATION]
________________, _____
Deutsche Bank AG Chicago Branch, as Auction Agent
under the Credit Agreement referred
to below
c/o Deutsche Bank AG New York Branch
31 West 52nd Street
New York, New York 10019
Dear Sirs:
Reference is made to the $1,675,000,000 Credit
Agreement, dated as of December 15, 1993, among DEERE &
COMPANY, JOHN DEERE CAPITAL CORPORATION, the Banks parties
thereto, CHEMICAL BANK, as Administrative Agent, DEUTSCHE
BANK AG CHICAGO BRANCH, as Auction Agent, the Managing Agents
named therein and the Co-Agents named therein (as the same
may be amended, supplemented or otherwise modified from time
to time, the "CREDIT AGREEMENT"). Terms defined in the
Credit Agreement are used herein as therein defined.
In accordance with subsection 2.2 of the Credit
Agreement, the undersigned accepts and confirms the offers by
Bid Loan Bank(s) to make Bid Loans to the undersigned on
_________, ____ [Borrowing Date] under said subsection 2.2 in
the (respective) amount(s) set forth on the attached list of
Bid Loans offered.
Very truly yours,
[DEERE & COMPANY]
[JOHN DEERE CAPITAL CORPORATION]
By:____________________________
Title:
[Borrower to attach Bid Loan Offer list prepared by Auction
Agent with accepted amount entered by the Borrower to right
of each Bid Loan Offer].
<PAGE>
EXHIBIT E
[FORM OF LOAN ASSIGNMENT]
LOAN ASSIGNMENT
LOAN ASSIGNMENT, dated as of the date set forth in
Item 1 of Schedule I hereto, among the Assignor Bank set
forth in Item 2 of Schedule I hereto (the "ASSIGNOR BANK"),
the Loan Assignee set forth in Item 3 of Schedule I hereto
(the "LOAN ASSIGNEE"), and CHEMICAL BANK, as administrative
agent for the Banks under the Credit Agreement described
below (in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H :
WHEREAS, this Loan Assignment is being executed and
delivered in accordance with subsection 10.5(c) of the
$1,675,000,000 Credit Agreement, dated as of December 15,
1993 among DEERE & COMPANY (the "COMPANY"), JOHN DEERE
CAPITAL CORPORATION (the "CAPITAL CORPORATION"), the Assignor
Bank and the other Banks party thereto, the Administrative
Agent, DEUTSCHE BANK AG CHICAGO BRANCH, as Auction Agent, the
Managing Agents named therein and the Co-Agents named therein
(as from time to time amended, supplemented or otherwise
modified in accordance with the terms thereof, the "CREDIT
AGREEMENT"; terms defined therein being used herein as
therein defined); and
WHEREAS, the Assignor Bank has advanced to [the
Company] [the Capital Corporation] the Bid Loan or Negotiated
Rate Loan or portion thereof described in Item 5 of Schedule
I hereto (the "LOAN"), and the Assignor Bank is assigning the
Loan to the Loan Assignee pursuant to this Loan Assignment;
NOW, THEREFORE, the parties hereto hereby agree as
follows:
1. The Assignor Bank acknowledges receipt from the
Loan Assignee of an amount equal to the purchase price, as
agreed between the Assignor Bank and the Loan Assignee, of
the outstanding principal amount of, and accrued interest on,
the Loan. The Assignor Bank hereby irrevocably sells,
assigns and transfers to the Loan Assignee without recourse,
representation or warranty, and the Loan Assignee hereby
irrevocably purchases, takes and acquires from the Assignor
<PAGE>
E-2
Bank, the Loan, together with all instruments, documents and
collateral security pertaining thereto.
2. (a) From and after the date set forth in Item
4 of Schedule I hereto (the "TRANSFER EFFECTIVE DATE"),
principal and interest that would otherwise be payable to or
for the account of the Assignor Bank pursuant to the Loan
shall, instead, be payable to or for the account of the Loan
Assignee, whether such amounts have accrued prior to the
Transfer Effective Date or accrue subsequent to the Transfer
Effective Date.
(b) If Item 6 of Schedule I hereto contains
payment instructions for the Loan Assignee and if the Loan
Assignee delivers a copy of this Loan Assignment to the
Administrative Agent in accordance with subsection 10.5(f) of
the Credit Agreement at least 5 Business Days prior to the
due date of any payment to the Loan Assignee, the Loan
Assignee hereby instructs the Administrative Agent to pay all
such amounts payable to it pursuant to the provision of
subparagraph (a) of this paragraph 2, in accordance with such
payment instructions. If Item 6 of Schedule I hereto does
not contain payment instructions for the Loan Assignee (or a
copy hereof is not delivered to the Administrative Agent as
aforesaid), the Assignor Bank and the Loan Assignee agree
that, notwithstanding the provisions of subparagraph (a) of
this paragraph 2, the Assignor Bank is hereby appointed by
the Loan Assignee as its collection agent to receive from the
Administrative Agent, for and on behalf of and for the
account of the Loan Assignee, all amounts payable to or for
the account of the Loan Assignee under the Loan; the Assignor
Bank will immediately pay over to the Loan Assignee any such
amounts received by it, in like funds as received.
3. Each of the parties to this Loan Assignment
agrees that at any time and from time to time upon the
written request of any other party, it will execute and
deliver such further documents and do such further acts and
things as such other party may reasonably request in order to
effect the purposes of this Loan Assignment.
4. By executing and delivering this Loan
Assignment, the Assignor Bank and the Loan Assignee confirm
to and agree with each other and the Administrative Agent and
the Banks as follows: (i) other than the representation and
warranty that it is the legal and beneficial owner of the
interest being assigned hereby free and clear of any adverse
claim, the Assignor Bank makes no representation or warranty
and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with
the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the
Credit Agreement or any other instrument or document
furnished pursuant thereto; (ii) the Assignor Bank makes no
<PAGE>
E-3
representation or warranty and assumes no responsibility with
respect to the financial condition of the Company or the
Capital Corporation or the performance or observance by the
Company or the Capital Corporation of any of its obligations
under the Credit Agreement or any other instrument or
document furnished pursuant hereto; (iii) the Loan Assignee
confirms that it has received a copy of the Credit Agreement,
together with copies of the financial statements referred to
in subsection 3.1 (unless financial statements referred to in
subsection 5.1(a) have become available), the financial
statements delivered pursuant to subsection 5.1, if any, and
such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to
enter into this Loan Assignment; (iv) the Loan Assignee will,
independently and without reliance upon the Administrative
Agent, the Assignor Bank or any other Bank and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in respect of
the Credit Agreement; and (v) the Loan Assignee appoints and
authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to the Administrative Agent
by the terms thereof, together with such powers as are
reasonably incidental thereto, all in accordance with Section
9 of the Credit Agreement.
5. The Loan Assignee represents that it is
organized under the laws of______________. If the Loan
Assignee is organized under the laws of any jurisdiction
other than the United States or any State thereof, the Loan
Assignee (i) represents to the Assignor Bank (for the benefit
of the Assignor Bank, the Administrative Agent and [the
Company] [the Capital Corporation]) that under applicable law
and treaties no taxes will be required to be withheld by the
Administrative Agent, [the Company] [the Capital Corporation]
or the Assignor Bank with respect to any payments to be made
to the Loan Assignee in respect of the Loan, (ii) will
furnish to the Assignor Bank, the Administrative Agent and
[the Company] [the Capital Corporation], on or prior to the
Transfer Effective Date, a letter in duplicate in the form of
Exhibit J or Exhibit K, as appropriate, to the Credit
Agreement and two duly completed copies of either U.S.
Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein the Loan Assignee claims
entitlement to complete exemption from U.S. federal
withholding tax on all interest payments under the Loan),
(iii) will furnish to the Assignor Bank, the Administrative
Agent and [the Company] [the Capital Corporation], on or
prior to the Transfer Effective Date either U.S. Internal
Revenue Service Form W-8 or U.S. Internal Revenue Service
Form W-9 (wherein the Loan Assignee claims entitlement to
complete exemption from U.S. federal backup withholding tax
on all interest payments under the Loan) and (iv) agrees (for
the benefit of the Assignor Bank, the Administrative Agent
<PAGE>
E-4
and [the Company] [the Capital Corporation]) to provide the
Assignor Bank, the Administrative Agent and [the Company]
[the Capital Corporation] a new Form 4224 or Form 1001 and
Form W-8 or W-9 or successor applicable form or other manner
of certification on or before the expiration or obsolescence
of, or after the occurrence of any event requiring a change
in, any previously delivered letter or form and comparable
statements in accordance with applicable U.S. laws and
regulations and amendments duly executed and completed by the
Loan Assignee, and comply from time to time with all
applicable U.S. laws and regulations with regard to such
withholding tax exemption and such backup withholding tax
exemption.
6. The Loan Assignee agrees to be bound by
subsection 10.7 of the Credit Agreement relating to
confidentiality.
7. This Loan Assignment shall be governed by, and
construed and interpreted in accordance with, the law of the
State of New York.
IN WITNESS WHEREOF, the parties hereto have caused
this Loan Assignment to be executed by their respective duly
authorized officers on Schedule I hereto as of the date set
forth in Item 1 of Schedule I hereto.
<PAGE>
SCHEDULE I
TO LOAN
ASSIGNMENT
<TABLE>
<S> <C> <C>
Item 1 (Date of Loan
Assignment): [Insert date of Loan
Assignment]
Item 2 (Assignor Bank): [Insert name of Assignor
Bank]
Item 3 (Loan Assignee): [Insert name, address,
telephone and telex
numbers and name of
contact party of Loan
Assignee]
Item 4 (Transfer Effective
Date): [Insert Transfer Effective
Date] [To be a date not
less than five business
days after date of Loan
Assignment]
Item 5 (Description of Loan):
a. Borrowing Date and Maturity Date of Bid
Loan or Negotiated Rate Loan:
b. Principal Amount of Loan:
Item 6 (Payment Instructions): [Complete only if
payments are to be
made by
Administrative Agent
to Loan Assignee
rather than to
Assignor Bank as
collection agent for
Loan Assignee; leave
blank if Assignor
Bank is to act as
such collection
agent]
Item 7 (Signatures):
</TABLE>
____________________, as
Assignor Bank
By:_______________________
Title:
<PAGE>
2
____________________, as
Loan Assignee
By:_______________________
Title:
ACCEPTED FOR RECORDATION
IN REGISTER:
CHEMICAL BANK, as Administrative
Agent
By:________________________
Title:
<PAGE>
EXHIBIT F
[FORM OF COMMITMENT TRANSFER SUPPLEMENT]
COMMITMENT TRANSFER SUPPLEMENT
COMMITMENT TRANSFER SUPPLEMENT, dated as of the
date set forth in Item 1 of Schedule I hereto, among the
Transferor Bank set forth in Item 2 of Schedule I hereto (the
"TRANSFEROR BANK"), each Purchasing Bank set forth in Item 3
of Schedule I hereto (each, a "PURCHASING BANK"), DEERE &
COMPANY, a Delaware corporation (the "COMPANY"), JOHN DEERE
CAPITAL CORPORATION, a Delaware corporation (the "CAPITAL
CORPORATION"), and CHEMICAL BANK, as administrative agent for
the Banks under the Credit Agreement described below (in such
capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H :
WHEREAS, this Commitment Transfer Supplement is
being executed and delivered in accordance with subsection
10.5(d) of the $1,675,000,000 Credit Agreement, dated as of
December 15, 1993, among the Company, the Capital
Corporation, the Transferor Bank and the other Banks party
thereto, the Administrative Agent, Deutsche Bank AG Chicago
Branch, as Auction Agent the Managing Agents named therein
and the Co-Agents named therein (as from time to time
amended, supplemented or otherwise modified in accordance
with the terms thereof, the "CREDIT AGREEMENT"; terms defined
therein being used herein as therein defined);
WHEREAS, each Purchasing Bank (if it is not already
a Bank party to the Credit Agreement) wishes to become a Bank
party to the Credit Agreement; and
WHEREAS, the Transferor Bank is selling and
assigning to each Purchasing Bank, rights, obligations and
commitments under the Credit Agreement;
NOW, THEREFORE, the parties hereto hereby agree as
follows:
1. From and after the Transfer Effective Date set
forth in Item 4 of Schedule I hereto (the "TRANSFER EFFECTIVE
DATE"), each Purchasing Bank shall be a Bank party to the
Credit Agreement for all purposes thereof.
<PAGE>
F-2
2. The Transferor Bank acknowledges receipt from
each Purchasing Bank of an amount equal to the purchase
price, as agreed between the Transferor Bank and such
Purchasing Bank (the "PURCHASE PRICE"), of the portion being
purchased by such Purchasing Bank (such Purchasing Bank's
"PURCHASED PERCENTAGE") of the outstanding Committed Rate
Loans and other amounts owing to the Transferor Bank under
the Credit Agreement (other than any Bid Loans and Negotiated
Rate Loans owing to the Transferor Bank). The Transferor
Bank hereby irrevocably sells, assigns and transfers to each
Purchasing Bank, without recourse, representation or
warranty, and each Purchasing Bank hereby irrevocably
purchases, takes and assumes from the Transferor Bank, such
Purchasing Bank's Purchased Percentage of the Commitments and
the presently outstanding Committed Rate Loans and other
amounts owing to the Transferor Bank under the Credit
Agreement (other than any Bid Loans and Negotiated Rate Loans
owing to the Transferor Bank) together with all instruments,
documents and collateral security pertaining thereto.
3. The Transferor Bank has made arrangements with
each Purchasing Bank with respect to (i) the portion, if any,
to be paid, and the date or dates for payment, by the
Transferor Bank to such Purchasing Bank of any fees
heretofore received by the Transferor Bank pursuant to the
Credit Agreement prior to the Transfer Effective Date and
(ii) the portion, if any, to be paid, and the date or dates
for payment, by such Purchasing Bank to the Transferor Bank
of fees or interest received by such Purchasing Bank pursuant
to the Credit Agreement from and after the Transfer Effective
Date.
4. (a) From and after the Transfer Effective
Date, principal, interest, fees and other amounts that would
otherwise be payable to or for the account of the Transferor
Bank pursuant to the Credit Agreement and the Committed Rate
Loans (other than any Bid Loans and Negotiated Rate Loans
owing to the Transferor Bank) shall, instead, be payable to
or for the account of the Transferor Bank and the Purchasing
Banks, as the case may be, in accordance with their
respective interests as reflected in this Commitment Transfer
Supplement, whether such amounts have accrued prior to the
Transfer Effective Date or accrue subsequent to the Transfer
Effective Date.
(b) The Transferor Bank and each Purchasing Bank
hereby agree and instruct the Administrative Agent that,
notwithstanding the provisions of subparagraph (a) of this
paragraph 4, on each date hereafter on which interest or fees
are payable under the Credit Agreement and the Committed Rate
Loans in respect of any period (an "ACCRUAL PERIOD") ending
on or prior to the Transfer Effective Date, any such interest
or fees payable to the Purchasing Bank on account of such
Accrual Period in respect of its interests as reflected in
<PAGE>
F-3
this Commitment Transfer Supplement shall be paid over to the
Transferor Bank (and, if such interest or fees are not paid
in full when due, the payment over to the Transferor Bank
shall be ratable), and the Transferor Bank and such
Purchasing Bank will make appropriate arrangements for the
payment to such Purchasing Bank of the portion thereof owing
to it to reflect the amount, if any, included in the Purchase
Price for interest and fees in respect of any Accrual Period.
5. On or promptly after the Transfer Effective
Date specified in this Commitment Transfer Supplement, the
Purchasing Bank and the Administrative Agent, on behalf of
such Purchasing Bank, shall open and maintain in the name of
each Borrower a Loan Account with respect to such Purchasing
Bank's Committed Rate Loans and Bid Loans to such Borrower.
6. Concurrently with the execution and delivery
hereof, the Administrative Agent will, at the expense of the
Transferor Bank, provide to each Purchasing Bank (if it is
not already a Bank party to the Credit Agreement) conformed
copies of all documents delivered to the Administrative Agent
on the Closing Date in satisfaction of the conditions
precedent set forth in the Credit Agreement.
7. Each of the parties to this Commitment Transfer
Supplement agrees that at any time and from time to time upon
the written request of any other party, it will execute and
deliver such further documents and do such further acts and
things as such other party may reasonably request in order to
effect the purposes of this Commitment Transfer Supplement.
8. By executing and delivering this Commitment
Transfer Supplement, the Transferor Bank and each Purchasing
Bank confirm to and agree with each other and the
Administrative Agent and the Banks as follows: (i) other
than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned hereby free
and clear of any adverse claim, the Transferor Bank makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made
in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, the Committed
Rate Loans or any other instrument or document furnished
pursuant thereto; (ii) the Transferor Bank makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of the Company or the
Capital Corporation or the performance or observance by the
Company or the Capital Corporation of any of its obligations
under the Credit Agreement or any other instrument or
document furnished pursuant hereto; (iii) each Purchasing
Bank confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements
referred to in subsection 3.1, the financial statements
<PAGE>
F-4
delivered pursuant to subsection 5.1, if any, and such other
documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this
Commitment Transfer Supplement; (iv) each Purchasing Bank
will, independently and without reliance upon the
Administrative Agent, the Transferor Bank or any other Bank
and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit
Agreement; (v) each Purchasing Bank appoints and authorizes
the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under the Credit Agreement
as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably
incidental thereto, all in accordance with Section 9 of the
Credit Agreement; and (vi) each Purchasing Bank agrees that
it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are
required to be performed by it as a Bank.
9. The Purchasing Bank represents that it is
organized under the laws of _____________. If the Purchasing
Bank is organized under the laws of any jurisdiction other
than the United States or any State thereof, the Purchasing
Bank (i) represents to the Transferor Bank (for the benefit
of the Transferor Bank, the Administrative Agent and the
Borrowers) that under applicable law and treaties no taxes
will be required to be withheld by the Administrative Agent,
the Borrowers or the Transferor Bank with respect to any
payments to be made to the Purchasing Bank in respect of the
Loans, (ii) will furnish to the Transferor Bank, the
Administrative Agent and the Borrowers, on or prior to the
Transfer Effective Date, a letter in duplicate in the form of
Exhibit J or Exhibit K, as appropriate, to the Credit
Agreement and two duly completed copies of either U.S.
Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein the Purchasing Bank claims
entitlement to complete exemption from U.S. federal
withholding tax on all interest payments under the Loan),
(iii) will furnish to the Transferor Bank, the Administrative
Agent and the Borrowers, on or prior to the Transfer
Effective Date either U.S. Internal Revenue Service Form W-8
or U.S. Internal Revenue Service Form W-9 (wherein the
Purchasing Bank claims entitlement to complete exemption from
U.S. federal backup withholding tax on all interest payments
under the Loan) and (iv) agrees (for the benefit of the
Transferor Bank, the Administrative Agent and the Borrowers),
to provide the Transferor Bank, the Administrative Agent and
the Borrowers a new Form 4224 or Form 1001 and Form W-8 or W-
9 or successor applicable form or other manner of
certification on or before the expiration or obsolescence of,
or after the occurrence of any event requiring a change in,
any previously delivered letter or form and comparable
statements in accordance with applicable U.S. laws and
<PAGE>
F-5
regulations and amendments duly executed and completed by the
Purchasing Bank, and comply from time to time with all
applicable U.S. laws and regulations with regard to such
withholding tax exemption and such backup withholding tax
exemption.
10. The Purchasing Bank agrees to be bound by
subsection 10.7 of the Credit Agreement relating to
confidentiality.
11. Schedule II hereto sets forth the revised
Commitments and Commitment Percentages of the Transferor Bank
and each Purchasing Bank as well as administrative
information with respect to each Purchasing Bank.
12. This Commitment Transfer Supplement shall be
governed by, and construed and interpreted in accordance
with, the law of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused
this Commitment Transfer Supplement to be executed by their
respective duly authorized officers on Schedule I hereto as
of the date set forth in Item 1 of Schedule I hereto.
<PAGE>
SCHEDULE I
TO
COMMITMENT
TRANSFER
SUPPLEMENT
COMPLETION OF INFORMATION AND
SIGNATURES FOR COMMITMENT
TRANSFER SUPPLEMENT
<TABLE>
<S> <C> <C>
Item 1 (Date of Commitment [Insert date of Commitment
Transfer Supplement): Transfer Supplement]
Item 2 (Transferor Bank): [Insert name of Transferor
Bank]
Item 3 (Purchasing Bank[s]): [Insert name[s] of
Purchasing Bank[s]]
Item 4 (Transfer Effective [Insert Transfer Effective
Date): Date] [To be a date not
less than five business
days after date of
Commitment Transfer
Supplement]
Item 5 (Signatures of Parties
to Commitment Transfer
Supplement):
____________________,
as Transferor Bank
By:_______________________
Title:
____________________,
as a Purchasing Bank
By:_______________________
Title:
____________________,
as a Purchasing Bank
By:_______________________
Title:
</TABLE>
<PAGE>
2
CONSENTED TO AND ACKNOWLEDGED:
DEERE & COMPANY
By:_______________________
JOHN DEERE CAPITAL CORPORATION
By:_______________________
Title:
ACCEPTED FOR RECORDATION
IN REGISTER:
CHEMICAL BANK, as Administrative
Agent
By:______________________
Title:
<PAGE>
SCHEDULE II
TO COMMITMENT
TRANSFER
SUPPLEMENT
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
[Name of Transferor Bank] REVISED COMMITMENT AMOUNTS: $_______
REVISED COMMITMENT PERCENTAGE: _______
[Name of Purchasing Bank] NEW COMMITMENT AMOUNTS: $_______
ADDRESS FOR NOTICES:
NEW COMMITMENT PERCENTAGE: _______
___________________
___________________
___________________
Attn: _____________
Telephone: __________________
Facsimile: __________________
[Name of Purchasing Bank] NEW COMMITMENT AMOUNTS: $_______
ADDRESS FOR NOTICES:
___________________ NEW COMMITMENT PERCENTAGE: _______
___________________
___________________
Attn: _____________
Telephone: ____________________
Facsimile: ____________________
<PAGE>
EXHIBIT G
[FORM OF OPINION OF GENERAL COUNSEL
TO THE BORROWERS]
To each of the Banks parties to
the Credit Agreement referred
to below, to Chemical Bank,
as Administrative Agent, and
Deutsche Bank AG Chicago Branch,
as Auction Agent
DEERE & COMPANY AND
JOHN DEERE CAPITAL CORPORATION
Gentlemen:
This opinion is furnished to you pursuant to
subsection 4.1(c) of the $1,675,000,000 Credit Agreement,
dated as of December 15, 1993 (the "Credit Agreement"), among
Deere & Company (the "Company"), John Deere Capital
Corporation (the "Capital Corporation", the Company and the
Capital Corporation being referred to herein individually as
a "Borrower" and collectively as the "Borrowers"), the Banks
parties thereto, Chemical Bank, as Administrative Agent,
Deutsche Bank AG Chicago Branch, as Auction Agent, the
Managing Agents named therein and the Co-Agents named
therein. Terms defined in the Credit Agreement are used
herein as therein defined.
As General Counsel to the Borrowers, I am familiar
with the corporate history and organization of each Borrower
and of its Subsidiaries and the proceedings relating to the
authorization, execution and delivery by each Borrower of the
Credit Agreement. In that connection I have examined:
1. The Credit Agreement;
2. The documents furnished by each of the
Borrowers pursuant to Section 4 of the Credit
Agreement;
3. The Certificates of Incorporation of the
Borrowers and all amendments thereto (the
"Charters");
4. The bylaws of the Borrowers and all amendments
thereto (the "Bylaws"); and
<PAGE>
G-2
5. Certificates of the Secretary of State of
Delaware, each dated a recent date, attesting
to the continued corporate existence and good
standing of the Borrowers in that State.
In addition, I have reviewed such of the corporate
proceedings of the Borrowers, and have examined such
documents, corporate records, and other instruments relating
to the organization of the Borrowers and their respective
Subsidiaries and such other agreements and instruments to
which the Borrowers and their respective Subsidiaries are
parties, as I have deemed necessary for the purpose of this
opinion. I have assumed the due execution and delivery,
pursuant to due authorization, of the Credit Agreement by the
Banks, the Administrative Agent, the Auction Agent and the
Managing Agents, and the authenticity of all documents
submitted to me as originals and the conformity to the
original documents of all documents submitted to me as
certified, conformed or photostatic copies.
I am qualified to practice law in the State of
Illinois and do not purport to be an expert on, and do not
express any opinion herein concerning, any laws other than
the laws of the State of Illinois, the General Corporation
Law of the State of Delaware and the Federal laws of the
United States.
Based upon the foregoing and upon such
investigation as I have deemed necessary, I am of the
following opinion:
1. Each Borrower is a corporation duly organized,
validly existing and in good standing under
the laws of the State of Delaware and has the
corporate power and authority to carry on its
business as now being conducted and to own its
properties.
2. The execution, delivery and performance by
each Borrower of the Credit Agreement are
within such Borrower's corporate powers, have
been duly authorized by all necessary
corporate action, and (i) do not contravene,
or constitute a default under the Charter or
the Bylaws of such Borrower, any judgment,
law, rule or regulation applicable to such
Borrower, or any Contractual Obligation by
which such Borrower is bound or (ii) result in
the creation of any lien, charge or
encumbrance upon any of its property or
assets. The Credit Agreement has been duly
executed and delivered on behalf of each
Borrower.
<PAGE>
G-3
3. No authorization, approval, or other action
by, and no notice to or filing with, any
governmental authority or regulatory body is
required for the due execution, delivery and
performance by each Borrower of the Credit
Agreement.
4. There is no pending or, to the best of my
knowledge, threatened action or proceeding
against either Borrower or any of its
Subsidiaries before any court, governmental
agency or arbitrator which is likely to have a
materially adverse effect upon the financial
condition or operations of such Borrower and
its Subsidiaries taken as a whole.
I am aware that Shearman & Sterling will rely upon
the opinions set forth in paragraphs 1, 2, and 3 of this
opinion in rendering their opinion furnished pursuant to
Section 4.1(c) of the Credit Agreement and consent thereto.
Very truly yours,
Frank S. Cottrell
<PAGE>
EXHIBIT H
[FORM OF OPINION OF SPECIAL NEW YORK COUNSEL
TO THE BORROWERS]
To each of the Banks parties to the
Credit Agreement referred to below,
to Chemical Bank, as Administrative
Agent, and Deutsche Bank AG Chicago Branch,
as Auction Agent
DEERE & COMPANY
JOHN DEERE CAPITAL CORPORATION
Ladies and Gentlemen:
This opinion is furnished to you pursuant to
subsection 4.1(c) of the $1,675,000,000 Credit Agreement,
dated as of December 15, 1993 (the "Credit Agreement"), among
Deere & Company (the "Company"), John Deere Capital
Corporation (the "Capital Corporation", the Company and the
Capital Corporation being referred to herein individually as
a "Borrower" and collectively as the "Borrowers"), the Banks
parties thereto, Chemical Bank, as Administrative Agent,
Deutsche Bank AG Chicago Branch, as Auction Agent, the
Managing Agents named therein and the Co-Agents named
therein. Terms defined in the Credit Agreement are used
herein as therein defined.
We have acted as special New York counsel for the
Borrowers in connection with the preparation, execution and
delivery of the Credit Agreement.
In that connection we have examined:
(1) the Credit Agreement; and
(2) the documents furnished by each of the
Borrowers pursuant to Section 4 of the Credit Agreement.
We have assumed the due execution and delivery,
pursuant to due authorization, of the Credit Agreement by the
Banks, the Administrative Agent, the Auction Agent and the
Managing Agents, the authenticity of all documents submitted
to us as originals and the conformity to the original
documents of all documents submitted to us as certified,
<PAGE>
H-2
conformed or photostatic copies. We have also assumed that
the Banks, the Administrative Agent and the Auction Agent
will perform the Credit Agreement reasonably and in good
faith and will act reasonably and in good faith in taking
action, exercising discretion and making determinations
thereunder. We have also assumed that no Bid Loan or
Negotiated Rate Loan made in an amount of less than
$2,500,000 will bear interest at a rate greater than 25% per
annum.
We are qualified to practice law in the State of
New York. We do not express any opinion herein concerning
any laws other than the laws of the State of New York and the
Federal laws of the United States. To the extent our
opinions expressed below involve conclusions as to matters
set forth in paragraph 1, 2 or 3 of the opinion of Frank S.
Cottrell, General Counsel to the Borrowers, a copy of which
is attached hereto, we have, with your permission, relied on
such opinion.
Based upon the foregoing and upon such
investigation as we have deemed necessary, we are of the
opinion that the Credit Agreement constitutes the legal,
valid and binding obligation of each Borrower enforceable
against such Borrower in accordance with its terms, except as
such enforceability may be subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium
or similar law affecting creditors' rights generally and to
the effect of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law).
Very truly yours,
<PAGE>
EXHIBIT I
[FORM OF EXTENSION REQUEST]
_______________, _____
Chemical Bank, as Administrative Agent
270 Park Avenue
New York, New York 10017
Attention: _________________________
Dear Sirs:
Reference is made to the $1,675,000,000 Credit
Agreement, dated as of December 15, 1993 among Deere &
Company, John Deere Capital Corporation, the Banks parties
thereto, Chemical Bank, as Administrative Agent, Deutsche
Bank AG Chicago Branch, as Auction Agent, the Managing Agents
named therein and the Co-Agents named therein (as the same
may be amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"). Terms defined in the
Credit Agreement are used herein as therein defined.
<PAGE>
I-2
This is an Extension Request pursuant to subsection
2.16 of the Credit Agreement requesting an extension of the
Termination Date to [requested Termination Date]. Please
transmit a copy of this Extension Request to each of the
Banks.
Very truly yours,
DEERE & COMPANY
By:_____________________
Title:
JOHN DEERE CAPITAL CORPORATION
By:_____________________
Title:
<PAGE>
EXHIBIT J
[FORM OF TAX LETTER]
[To be sent in DUPLICATE and accompanied
by TWO executed copies of Form 1001 of
the Internal Revenue Service]
[Bank's Letterhead]
________________, _____
Deere & Company
John Deere Road
Moline, Illinois 61265
Attention: Treasurer
John Deere Capital Corporation
First National Bank Building
1 East First Street
Reno, Nevada 89501
Attention: Manager
Re: $1,675,000,000 Credit Agreement dated
as of December 15, 1993 with Deere &
Company and John Deere Capital Corporation
------------------------------------------
Dear Sirs:
In connection with the $1,675,000,000 Credit
Agreement, dated as of December 15, 1993, among Deere &
Company, John Deere Capital Corporation, the Banks parties
thereto, Chemical Bank, as Administrative Agent, Deutsche
Bank AG Chicago Branch, as Auction Agent, the Managing Agents
named therein and the Co-Agents named therein, we hereby
represent and warrant that [name of Bank, address] is a [name
of Country] corporation and is currently exempt from any U.S.
federal withholding tax on payments to it from U.S. sources
by virtue of compliance with the provisions of the Income Tax
Convention between the United States and [name of Country]
signed [date], [as amended]. Our fiscal year is the twelve
months ending [_______________].
<PAGE>
J-2
The undersigned (a) is a corporation organized
under the laws of [_______________] whose registered business
is managed or controlled in [_______________], (b) [does not
have a permanent establishment or fixed base in the United
States] [does have a permanent establishment or fixed base in
the United States but the above Agreement is not effectively
connected with such permanent establishment or fixed base],
(c) is not exempt from tax on the income in [______________]
and (d) is the beneficial owner of the income.
We enclose herewith two copies of From 1001 of the
U.S. Internal Revenue Service.
Yours faithfully,
[NAME OF BANK]
By:_____________________________
Title:
cc: Chemical Bank, as Administrative Agent
<PAGE>
EXHIBIT K
[FORM OF TAX LETTER]
[To be sent in DUPLICATE and accompanied
by TWO executed copies of Form 4224 of
the Internal Revenue Service]
[Bank's Letterhead]
____________, _____
Deere & Company
John Deere Road
Moline, Illinois 61265
Attention: Treasurer
John Deere Capital Corporation
First National Bank Building
Reno, Nevada 89501
Attention: Manager
Re: $1,675,000,000 Credit Agreement dated as
of December 15, 1993 with Deere & Company
and John Deere Capital Corporation
-----------------------------------------
Dear Sirs:
In connection with the above $1,675,000,000 Credit
Agreement, dated as of December 15, 1993, among Deere &
Company, John Deere Capital Corporation, the Banks parties
thereto, Chemical Bank, as Administrative Agent, Deutsche
Bank AG Chicago Branch, as Auction Agent, the Managing Agents
named therein and the Co-Agents named therein, we hereby
represent and warrant that [name of Bank, address] is a
corporation and is entitled to exemption from U.S. federal
withholding tax on payments to it under the Agreement by
virtue of Section 1441(c)(1) of the Internal Revenue Code of
the United States of America and Treasury Regulation Section
1.1441-4(a) thereunder.
<PAGE>
K-2
We enclose herewith two copies of Form 4224 of the
U.S. Internal Revenue Service.
Yours faithfully,
[NAME OF BANK]
By_____________________________
Title:
cc: Chemical Bank, as Administrative Agent
<PAGE>
EXHIBIT L
[FORM OF AGREEMENT]
THIS AGREEMENT, dated as of __________, _____
("AGREEMENT"), among Deere & Company (the "COMPANY"), John
Deere Capital Corporation (the "CAPITAL CORPORATION"),
____________ ("NEW BANK") and Chemical Bank, as
Administrative Agent for the Existing Banks referred to
below.
W I T N E S S E T H :
WHEREAS, the Company, the Capital Corporation, the
several financial institutions parties thereto (the "EXISTING
BANKS") Chemical Bank, as Administrative Agent, Deutsche Bank
AG Chicago Branch, as Auction Agent, the Managing Agents
named therein and the Co-Agents named therein are parties to
a $1,675,000,000 Credit Agreement, dated as of December 15,
1993 (as the same may have been or may hereafter be amended,
supplemented or otherwise modified, the "CREDIT AGREEMENT";
terms defined therein being used herein as therein defined);
WHEREAS, subsection 2.19 of the Credit Agreement
provides that one or more financial institutions (which may
be Existing Banks) may be added as a "Bank" or "Banks" for
purposes of the Credit Agreement upon the cancellation of all
or a portion of the Commitments pursuant to subsection
2.13(a), (b) or (c), 2.16(c) or 2.17(b) of the Credit
Agreement or the expiration of all or a portion of the
Commitments pursuant to subsection 2.16(b) of the Credit
Agreement and the execution of an agreement in substantially
the form of this Agreement;
WHEREAS, the Borrowers have cancelled or there have
expired an aggregate principal amount of Commitments equal to
$___________ which have not heretofore been replaced (the
"CANCELLED COMMITMENTS"; the Banks that are maintaining or
have maintained the Cancelled Commitments being collectively
referred to as "CANCELLED BANKS"); such Cancelled Commitments
being on the date hereof, or on the date of notice of
cancellation hereof having been, utilized as follows:
<TABLE>
<CAPTION>
Last day of
Principal Amount Interest Period
---------------- ---------------
<S> <C> <C>
I UNUSED PORTION N/A
</TABLE>
<PAGE>
L-2
<TABLE>
<CAPTION>
Last day of
Principal Amount Interest Period
---------------- ---------------
<S> <C> <C>
II COMMITTED RATE LOANS
C/D Rate Loans
1
2
3
Eurodollar Loans
1
2
3
ABR Loans N/A
III BID LOANS
1
2
3
IV NEGOTIATED RATE LOANS
1
2
3
</TABLE>
WHEREAS, the cancellation of the Cancelled
Commitments is effective in accordance with the Credit
Agreement; and
WHEREAS, [the Borrowers desire the New Bank to
become, and the New Bank is agreeable, to becoming, a "Bank"
for purposes of the Credit Agreement] [the New Bank is an
Existing Bank and the Borrowers desire the New Bank to
<PAGE>
L-3
increase, and the New Bank is agreeable to increasing, its
Commitment]* on the terms contained herein.
NOW, THEREFORE, in consideration of the premises
and mutual covenants contained herein, the parties hereto
agree as follows:
1. BENEFITS OF AGREEMENT. The Borrowers, the
Administrative Agent and the New Bank hereby [agree that on
and as of the date hereof the New Bank shall be] [confirm
that the New Bank is] a "Bank" for all purposes and shall
[continue to] be bound by and entitled to the benefits of the
Credit Agreement [as if the New Bank had been named on the
signature pages thereof], PROVIDED that the New Bank shall
not assume and shall, except as herein provided, have no
obligations in respect of any Loans outstanding on the date
hereof and made by any [Existing Bank.] [Cancelled Bank.]*
2. COMMITMENT OF NEW BANK. The Borrowers, the
Administrative Agent and the New Bank hereby agree that on
and as of the dates set forth below the New Bank shall
replace, as specified herein, ___% (such percentage being
referred to as the New Bank's "Percentage") of each
utilization of the Cancelled Commitments [set forth in the
third recital hereof] [set forth under the caption "Committed
Rate Loans"] and that the aggregate Commitment of the New
Bank shall on and as of the date hereof be $__________**. In
connection therewith, the Borrowers, the Administrative Agent
and the New Bank hereby agree as follows***:
(i) for purposes of determining such New Bank's
pro rata share of each Committed Rate Loan borrowing
advanced on or after the date hereof such Bank's
Commitment shall be equal to $[SAME AS ABOVE];
(ii) the unused and available portion of such New
Bank's Commitment shall be deemed utilized by its
Percentage of the Committed Rate Loans made by the
Cancelled Banks and listed in the third recital hereof.
In furtherance thereof, the unused and available portion
of such New Bank's Commitment shall, on the earlier of
_____________________
* As appropriate for New or Existing Banks.
** Insert amount equal to sum of New Bank's existing
Commitment, if any, plus New Bank's Percentage of
Cancelled Commitments.
*** The following clauses (ii)-(iii) may be altered to
reflect the agreements among the Cancelled Bank, the New
Bank and the Borrowers provided such agreements do not
adversely affect any Existing Bank or the Administrative
Agent.
<PAGE>
L-4
(x) the last day of each Interest Period specified for
each outstanding Committed Rate Loan in the third
recital hereof (and the payment in full to the Cancelled
Banks of the principal thereof and accrued interest
thereon) and (y) the prepayment of the principal of such
Loans together with accrued interest thereon,
automatically and without any further action by any
party increase by an amount equal to the New Bank's
Percentage of such Loan; and
(iii) [(A)] [concurrently with the execution
hereof the New Bank shall disburse to each Borrower in
immediately available funds such amount as shall be
necessary so that the ratio which each Bank's
outstanding ABR Loans bears to all of the outstanding
ABR Loans equals the ratio which each Bank's Commitment
(determined, for the New Bank, in accordance with clause
(i) above) bears to all of the Commitments (determined,
for the New Bank, in accordance with the immediately
foregoing parenthetical);]
[(B)] [on the last day of each Interest Period for
each outstanding Eurodollar Loan and C/D Rate Loan,
automatically and without any further action by either
Borrower, the New Bank shall disburse to each Borrower in
immediately available funds such amounts as shall be
necessary so that the ratio which each Bank's outstanding
Eurodollar Loans and C/D Rate Loans, bears to all of the
outstanding Eurodollar Loans and C/D Rate Loans respectively,
equals the ratio which each Bank's Commitment (determined,
for the New Bank, in accordance with clause (i) hereof) bears
to all of the Commitments (determined, for the New Bank, in
accordance with the immediately foregoing parenthetical);]
[(C)] [Funding of outstanding Bid Loans of
Cancelled Banks]*
[(D)] [Funding of outstanding Negotiated Rate Loans
of Cancelled Banks].*
3. REPRESENTATION AND WARRANTY OF BORROWERS. The
Borrowers hereby represent and warrant that after giving
effect to the provisions of paragraph 2 hereof the aggregate
principal amount of the Commitments of all Banks (including,
without limitation, the Commitment of the New Bank but
excluding the cancelled or expired portion of the Commitments
of the Cancelled Banks) under the Credit Agreement do not
exceed the aggregate principal amount of the Commitments in
effect immediately prior to the cancellation referred to in
the third recital hereof.
____________________
* To be completed upon agreement of Borrowers and New
Bank.
<PAGE>
L-5
4. CONFIDENTIALITY. The New Bank agrees to
[continue to] be bound by the provisions of subsection 10.7
of the Credit Agreement.
[5. TAXES. The New Bank (i) represents to the
Administrative Agent and the Borrowers that [it is
incorporated under the laws of the United States or a state
thereof][under applicable law and treaties no taxes will be
required to be withheld by the Administrative Agent or the
Borrowers with respect to any payments to be made to such New
Bank in respect of the Loans], (ii) represents that it has
furnished to the Administrative Agent and the Borrowers (A)
[a statement that it is incorporated under the laws of the
United States or a state thereof][a letter in duplicate in
the form of Exhibit [J][K] to the Credit Agreement and two
duly completed copies of United States Internal Revenue
Service Form [4224][1001][successor applicable form],
certifying that such New Bank is entitled to receive payments
under the Credit Agreement without deduction or withholding
of any United States federal income taxes], and (B) [an
Internal Revenue Service Form [W-8][W-9]] [successor
applicable form] to establish an exemption from United States
backup withholding tax, and (iii) agrees to provide the
Administrative Agent and the Borrowers a new Form
[4224][1001] and Form [W-8][W-9], or successor applicable
form or other manner of certification, on or before the date
that any such letter or form expires or becomes obsolete or
after the occurrence of any event requiring a change in the
most recent letter and form previously delivered by it,
certifying in the case of a Form [1001][4224] that it is
entitled to receive payments under the Credit Agreement
without deduction or withholding of any United States federal
income tax, and in the case of a Form [W-8][W-9] establishing
exemption from United States backup withholding tax.]*
[5][6]. MISCELLANEOUS. (a) This Agreement may be
executed by the parties hereto in separate counterparts and
all of the counterparts taken together shall constitute one
and the same instrument and shall be effective only upon
receipt by the Administrative Agent of all of the
counterparts.
(b) This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the
State of New York.
- ---------------------
* Use for non-Existing Banks.
<PAGE>
L-6
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered as of the day and year
first above written.
DEERE & COMPANY
By:______________________
Title:
JOHN DEERE CAPITAL CORPORATION
By:______________________
Title:
[NAME OF NEW BANK]
By:______________________
Title:
[Address]
Telephone:
Facsimile:
CHEMICAL BANK, as
Administrative Agent
By:______________________
Title:
<PAGE>
EXHIBIT M
[FORM OF BID LOAN OR NEGOTIATED RATE LOAN NOTE]
PROMISSORY NOTE
$__________ New York, New York
___________ __, _____
FOR VALUE RECEIVED, the undersigned, [DEERE &
COMPANY] [JOHN DEERE CAPITAL CORPORATION], a Delaware
corporation (the "BORROWER"), hereby promises to pay on
[insert maturity date or dates] to the order of
________________ (the "BANK") at the office of [Chemical Bank
located at 270 Park Avenue, New York, New York 10017 -- for
Bid Loan Note] [Name and address of Bank -- for Negotiated
Rate Loan Note], in lawful money of the United States of
America and in immediately available funds, the principal sum
of ______________DOLLARS ($____________). The undersigned
further agrees to pay interest in like money at such office
on the unpaid principal amount hereof from time to time from
the date hereof [at the rate of ___% per annum -- for Bid
Loan Note] [specify rate for Negotiated Rate Loan Note]
(calculated on the basis of a year of 360 days and actual
days elapsed) until the due date hereof (whether at the
stated maturity, by acceleration, or otherwise) and
thereafter at the rates determined or agreed in accordance
with subsection 2.2(e) of the $1,675,000,000 Credit
Agreement, dated as of December 15, 1993 (the "CREDIT
AGREEMENT"), among the Borrower, [Deere & Company] [John
Deere Capital Corporation], the Bank, the other financial
institutions parties thereto, Chemical Bank, as
Administrative Agent, Deutsche Bank AG Chicago Branch, as
Auction Agent, the Managing Agents named therein and the Co-
Agents named therein. Interest shall be payable on
_______________. This Note may be prepaid pursuant to the
provisions of subsection 2.6 of the Credit Agreement.
This Note is one of the [Bid] [Negotiated Rate
Loan] Notes referred to in, is subject to and is entitled to
the benefits of, the Credit Agreement, which Credit
Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the occurrence of
any one or more of the Events of Default specified in the
Credit Agreement.
<PAGE>
M-2
Terms defined in the Credit Agreement are used
herein with their defined meanings unless otherwise defined
herein. This Note shall be governed by, and construed and
interpreted in accordance with, the law of the State of
New York.
[DEERE & COMPANY]
[JOHN DEERE CAPITAL CORPORATION]
By:_________________________
Title:
<PAGE>
[CONFORMED COPY]
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
DEERE & COMPANY
JOHN DEERE CAPITAL CORPORATION
------------------
$825,000,000
CREDIT AGREEMENT
Dated as of December 15, 1993
------------------
CHEMICAL BANK,
as Administrative Agent and as a Managing Agent
DEUTSCHE BANK AG CHICAGO BRANCH,
as Auction Agent and as a Managing Agent
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . 15
SECTION 2. THE COMMITTED RATE LOANS; THE BID
LOANS; THE NEGOTIATED RATE LOANS;
AMOUNT AND TERMS . . . . . . . . . . . . . . 15
2.1 The Committed Rate Loans . . . . . . . . . . . 15
2.2 The Bid Loans; the Negotiated Rate Loans . . . 17
2.3 Loan Accounts . . . . . . . . . . . . . . . . . 21
2.4 Fees . . . . . . . . . . . . . . . . . . . . . 22
2.5 Termination or Reduction of Commitments;
Cancellation of Capital Corporation as
Borrower . . . . . . . . . . . . . . . . . . 22
2.6 Optional Prepayments . . . . . . . . . . . . . 23
2.7 Minimum Amount of Certain Loans . . . . . . . . 24
2.8 Committed Rate Loan Interest Rate and
Payment Dates . . . . . . . . . . . . . . . . 24
2.9 Conversion and Continuation Options . . . . . . 25
2.10 Computation of Interest and Fees . . . . . . . 26
2.11 Inability to Determine Interest Rate . . . . . 27
2.12 Pro Rata Treatment and Payments . . . . . . . . 28
2.13 Requirements of Law . . . . . . . . . . . . . . 31
2.14 Indemnity . . . . . . . . . . . . . . . . . . . 34
2.15 Non-Receipt of Funds by the Administrative
Agent . . . . . . . . . . . . . . . . . . . . 35
2.16 Extension of Termination Date . . . . . . . . . 35
2.17 Foreign Taxes . . . . . . . . . . . . . . . . . 36
2.18 Confirmations . . . . . . . . . . . . . . . . . 38
2.19 Replacement of Cancelled Banks . . . . . . . . 39
SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . 39
3.1 Financial Condition . . . . . . . . . . . . . . 39
3.2 Corporate Existence . . . . . . . . . . . . . . 40
3.3 Corporate Power; Authorization;
Enforceable Obligations . . . . . . . . . . . 40
3.4 No Legal Bar . . . . . . . . . . . . . . . . . 40
3.5 No Material Litigation . . . . . . . . . . . . 40
3.6 Taxes . . . . . . . . . . . . . . . . . . . . . 41
3.7 Margin Regulations . . . . . . . . . . . . . . 41
3.8 Pari Passu Ranking . . . . . . . . . . . . . . 41
3.9 No Defaults . . . . . . . . . . . . . . . . . . 41
3.10 Use of Proceeds . . . . . . . . . . . . . . . . 41
-i-
<PAGE>
Page
----
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . 42
4.1 Conditions to Initial Loan . . . . . . . . . . 42
4.2 Conditions to All Loans . . . . . . . . . . . . 43
SECTION 5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . 43
5.1 Financial Statements . . . . . . . . . . . . . 44
5.2 Certificates; Other Information . . . . . . . . 44
5.3 Company Indenture Documents . . . . . . . . . . 45
5.4 Capital Corporation Indenture Documents . . . . 45
5.5 Notice of Default . . . . . . . . . . . . . . . 45
5.6 Ownership of Capital Corporation Stock . . . . 45
5.7 Employee Benefit Plans . . . . . . . . . . . . 45
SECTION 6. NEGATIVE COVENANTS OF THE COMPANY . . . . . . . 45
6.1 Company May Consolidate, etc., Only on
Certain Terms . . . . . . . . . . . . . . . . 46
6.2 Limitation on Liens . . . . . . . . . . . . . . 46
6.3 Limitations on Sale and Lease-back
Transactions . . . . . . . . . . . . . . . . 50
6.4 Consolidated Tangible Net Worth . . . . . . . . 51
SECTION 7. NEGATIVE COVENANTS OF THE CAPITAL
CORPORATION . . . . . . . . . . . . . . . . . 51
7.1 Fixed Charges Ratio . . . . . . . . . . . . . . 51
7.2 Consolidated Senior Debt to Consolidated
Capital Base . . . . . . . . . . . . . . . . 51
7.3 Limitation on Liens . . . . . . . . . . . . . . 51
7.4 Consolidation; Merger . . . . . . . . . . . . . 53
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . 53
SECTION 9. THE AGENTS . . . . . . . . . . . . . . . . . . 56
9.1 Appointment . . . . . . . . . . . . . . . . . . 56
9.2 Delegation of Duties . . . . . . . . . . . . . 57
9.3 Exculpatory Provisions . . . . . . . . . . . . 57
9.4 Reliance by Agents . . . . . . . . . . . . . . 57
9.5 Notice of Default . . . . . . . . . . . . . . . 58
9.6 Non-Reliance on Agents and Other Banks . . . . 58
9.7 Indemnification . . . . . . . . . . . . . . . . 59
9.8 Agents in their Individual Capacities . . . . . 59
9.9 Successor Agents . . . . . . . . . . . . . . . 59
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . 60
10.1 Amendments and Waivers . . . . . . . . . . . . 60
10.2 Notices . . . . . . . . . . . . . . . . . . . . 61
10.3 No Waiver; Cumulative Remedies . . . . . . . . 62
-ii-
<PAGE>
Page
----
10.4 Payment of Expenses and Taxes . . . . . . . . . 62
10.5 Successors and Assigns; Participations;
Purchasing Banks . . . . . . . . . . . . . . 64
10.6 Adjustments . . . . . . . . . . . . . . . . . . 68
10.7 Confidentiality . . . . . . . . . . . . . . . . 69
10.8 Counterparts . . . . . . . . . . . . . . . . . 70
10.9 Governing Law . . . . . . . . . . . . . . . . . 70
10.10 Consent to Jurisdiction and Service of
Process . . . . . . . . . . . . . . . . . . . 71
-iii-
<PAGE>
SCHEDULES:
Schedule I Terms of Subordination
Schedule II Commitments
Schedule III Addresses for Notices
EXHIBITS:
Exhibit A Form of Borrowing Notice
Exhibit B Form of Bid Loan Request
Exhibit C Form of Bid Loan Offer
Exhibit D Form of Bid Loan Confirmation
Exhibit E Form of Loan Assignment
Exhibit F Form of Commitment Transfer Supplement
Exhibit G Form of Opinion of General Counsel to the
Borrowers
Exhibit H Form of Opinion of Special New York Counsel to
the Borrowers
Exhibit I Form of Extension Request
Exhibit J Form of Form 1001 Tax Letter
Exhibit K Form of Form 4224 Tax Letter
Exhibit L Form of Agreement
Exhibit M Form of Promissory Note
-iv-
<PAGE>
CREDIT AGREEMENT, dated as of December 15, 1993, among
DEERE & COMPANY, a Delaware corporation (the "COMPANY"), JOHN
DEERE CAPITAL CORPORATION, a Delaware corporation (the "CAPITAL
CORPORATION"), the several financial institutions parties hereto
(collectively, the "BANKS", and individually, a "BANK"), CHEMICAL
BANK, a New York banking corporation, as administrative agent for
the Banks hereunder (in such capacity, the "ADMINISTRATIVE
AGENT"), DEUTSCHE BANK AG CHICAGO BRANCH, an Illinois state
licensed branch of a German banking corporation, as auction agent
for the Banks hereunder (in such capacity, the "AUCTION AGENT"),
CHEMICAL BANK and DEUTSCHE BANK AG CHICAGO BRANCH, as managing
agents (together, the "MANAGING AGENTS"), and the co-agents
identified on the signature pages hereof (collectively, the "CO-
AGENTS").
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement,
the following terms have the following meanings:
"ABR": at any particular date, the higher of (a) the
rate of interest per annum publicly announced by Chemical
for such date as its prime rate in effect at its principal
office in New York City and (b) .5% per annum above the rate
set forth for such date or, if such date is not a Business
Day, the next preceding Business Day, opposite the caption
"Federal Funds (Effective)" in the weekly statistical
release designated as "H.15(519)" (or any successor
publication) published by the Board of Governors of the
Federal Reserve System. The prime rate is not intended to
be the lowest rate of interest charged by Chemical in
connection with extensions of credit to debtors.
"ABR LOANS": Committed Rate Loans at such time as they
are made and/or being maintained at a rate of interest based
upon the ABR.
"ABSOLUTE RATE BID LOAN": any Bid Loan made pursuant
to an Absolute Rate Bid Loan Request.
"ABSOLUTE RATE BID LOAN REQUEST": any Bid Loan Request
requesting the Banks to offer to make Bid Loans at an
absolute rate (as opposed to a rate composed of the
Applicable Index Rate PLUS (or MINUS) a margin).
"ADMINISTRATIVE AGENT": as defined in the preamble
hereto.
"AGENT": the Administrative Agent or the Auction
Agent, as the context shall require; together, the "AGENTS".
<PAGE>
2
"AGREEMENT": this Credit Agreement, as amended,
supplemented or modified from time to time.
"APPLICABLE INDEX RATE": in respect of any Bid Loan
requested pursuant to an Index Rate Bid Loan Request, the
Eurodollar Rate applicable to the Interest Period for such
Bid Loan.
"APPLICABLE MARGIN": for each Type of Committed Rate
Loan the rate per annum set forth below:
<TABLE>
<CAPTION>
ABR Eurodollar C/D Rate
Loans Loans Loans
----- ---------- --------
<S> <C> <C>
0% .25% .375%
</TABLE>
"ASSESSMENT RATE": with respect to each day during
each Interest Period for a C/D Rate Loan, the net annual
assessment rate in effect two Business Days prior to the
first day of such Interest Period which is payable by a
member of the Bank Insurance Fund classified as well
capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within
the meaning of 12 C.F.R. SECTION 327.3(d) (or any successor
provision) to the Federal Deposit Insurance Corporation (or
any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of such institution in the
United States.
"ATTRIBUTABLE DEBT": as defined in subsection
6.2(b)(ii).
"AUCTION AGENT": as defined in the preamble hereto.
"AVAILABLE COMMITMENT": as to any Bank, at a
particular time, an amount equal to the difference between
(a) the amount of such Bank's Commitment at such time and
(b) the aggregate unpaid principal amount at such time of
all Loans made by such Bank; collectively, as to all the
Banks, the "AVAILABLE COMMITMENTS".
"BANK" and "BANKS": as defined in the preamble hereto.
"BASE RATE": with respect to each day during each
Interest Period for a C/D Rate Loan, (a) the rate determined
by the Administrative Agent to be the rate set forth in
H.15(519) (published by the Federal Reserve Bank of New
York) for such Interest Period under the caption "CDs
(Secondary Market)", or, if on the first day of such
Interest Period such rate for such Interest Period is not
yet published in H.15(519), the rate for such Interest
Period will be the rate determined by the Administrative
Agent to be the rate set forth in Composite 3:30 P.M.
<PAGE>
3
Quotations for U.S. Government Securities (published by the
Federal Reserve Bank of New York) for that day in respect of
such Interest Period under the caption "Certificates of
Deposit" or (b), if on the first day of such Interest
Period, the appropriate rate for such Interest Period is not
yet published in either H.15(519) or Composite 3:30 P.M.
Quotations for U.S. Government Securities, the rate for such
Interest Period will be the arithmetic average (rounded
upward to the nearest 1/100 of 1%) of the respective rates
notified to the Administrative Agent by the Reference Banks
as the rates per annum bid at 10:00 A.M. (New York City
time) (or as soon thereafter as practicable) on the first
day of such Interest Period by a total of three certificate
of deposit dealers located in New York City and of
recognized standing selected by each Reference Bank for the
purchase at face value from such Reference Bank of its
certificates of deposit in an amount comparable to the C/D
Rate Loan of such Reference Bank to which such Interest
Period applies and having a maturity comparable to such
Interest Period.
"BENEFITTED BANK": as defined in subsection 10.6.
"BID LOAN": each loan (other than Negotiated Rate
Loans) made pursuant to subsection 2.2; the aggregate amount
advanced by a Bid Loan Bank pursuant to subsection 2.2 on
each Borrowing Date shall constitute one Bid Loan, or more
than one Bid Loan if so specified by the relevant Loan
Assignee in its request for promissory notes pursuant to
subsection 10.5(c).
"BID LOAN BANKS": the collective reference to each
Bank designated from time to time as a Bid Loan Bank by a
Borrower (for purposes of Bid Loans to such Borrower) by
written notice to the Auction Agent and the Administrative
Agent and which has not been removed as a Bid Loan Bank by
such Borrower by written notice to the Auction Agent and the
Administrative Agent (each of which notices the Auction
Agent shall transmit to each such affected Bank).
"BID LOAN CONFIRMATION": each confirmation by the
Company or the Capital Corporation of its acceptance of Bid
Loan Offers, which Bid Loan Confirmation shall be
substantially in the form of Exhibit D and shall be
delivered to the Auction Agent by facsimile transmission or
by telephone, immediately confirmed by facsimile
transmission.
"BID LOAN OFFER": each offer by a Bid Loan Bank to
make Bid Loans pursuant to a Bid Loan Request, which Bid
Loan Offer shall contain the information specified in
Exhibit C, and shall be delivered to the Auction Agent by
facsimile transmission or by telephone, immediately
confirmed by facsimile transmission.
<PAGE>
4
"BID LOAN REQUEST": each request by a Borrower for Bid
Loan Banks to submit bids to make Bid Loans, which shall
contain the information in respect of such requested Bid
Loans specified in Exhibit B and shall be delivered to the
Auction Agent by facsimile transmission or by telephone,
immediately confirmed by facsimile transmission.
"BORROWER": the Company or the Capital Corporation;
collectively, the "BORROWERS".
"BORROWING DATE": in respect of any Loan, the date
such Loan is made.
"BUSINESS DAY": 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.
"CANCELLED BANK": any Bank that has the whole or any
part of its Commitment cancelled under subsection 2.13(a),
(b) or (c), subsection 2.16(c) or subsection 2.17(b) or the
Commitment of which has expired under subsection 2.16(a).
"CAPITAL CORPORATION": as defined in the preamble
hereto.
"C/D RATE": with respect to each day during the
Interest Period for a C/D Rate Loan, a rate per annum equal
to the following determined for such day:
Base Rate
------------------------- + Assessment Rate
1.00 - Reserve Percentage
"C/D RATE LOANS": Committed Rate Loans at such time as
they are made and/or being maintained at a rate of interest
based upon a C/D Rate.
"CHEMICAL": Chemical Bank, a New York banking
corporation.
"CLOSING DATE": the date on which each of the
conditions precedent specified in subsection 4.1 shall have
been satisfied (or compliance therewith shall have been
waived by the Required Banks hereunder).
"CO-AGENT": as defined in the preamble hereto.
"CODE": the Internal Revenue Code of 1986, as amended
from time to time.
"COMMITMENT": as to any Bank, the amount set opposite
such Bank's name on Schedule II, as such amount may be
reduced as provided herein; collectively, as to all the
Banks, the "COMMITMENTS".
<PAGE>
5
"COMMITMENT EXPIRATION DATE": as defined in
subsection 2.16(a).
"COMMITMENT PERCENTAGE": as to any Bank at any time,
the percentage which such Bank's Commitment at such time
constitutes of all the Commitments at such time;
collectively, as to all the Banks, the "COMMITMENT
PERCENTAGES".
"COMMITMENT PERIOD": the period from and including the
Closing Date to but not including the Termination Date or
such earlier date on which the Commitments shall terminate
as provided herein.
"COMMITMENT TRANSFER SUPPLEMENT": a Commitment
Transfer Supplement, substantially in the form of Exhibit F.
"COMMITTED RATE LOANS": each loan made pursuant to
subsection 2.1.
"COMMONLY CONTROLLED ENTITY": in relation to a
Borrower, an entity, whether or not incorporated, which is
under common control with such Borrower within the meaning
of Section 414(b) or (c) of the Code.
"COMPANY": as defined in the preamble hereto.
"CONSOLIDATED CAPITAL BASE": at a particular time for
the Capital Corporation and its consolidated Subsidiaries,
the sum of (a) the amount shown opposite the item "Total
stockholder's equity" on the consolidated balance sheet of
the Capital Corporation and its consolidated Subsidiaries
PLUS (b) the principal amounts outstanding under the 9.35%
Subordinated Debentures due 2003, the 8-5/8% Subordinated
Debentures due 2019 and the 9-5/8% Subordinated Notes due
1998 of the Capital Corporation (in each case so long as the
subordination terms thereof continue to be as favorable to
the Administrative Agent and the Banks as in existence on
the Closing Date) and all indebtedness of the Capital
Corporation and its consolidated Subsidiaries for borrowed
money subordinated (on terms no less favorable to the
Administrative Agent and the Banks than the terms of
subordination set forth on Schedule I) to the indebtedness
which may be incurred hereunder by the Capital Corporation,
PROVIDED that the sum of clauses (a) and (b) hereof as at
the end of a fiscal quarter of the Capital Corporation and
its consolidated Subsidiaries (including the last quarter of
a fiscal year of the Capital Corporation and its
consolidated Subsidiaries) shall be determined by reference
to the publicly available consolidated balance sheet of the
Capital Corporation and its consolidated Subsidiaries as at
the end of such fiscal quarter and after such adjustments,
if any, as may be required so that the sum of the amounts
<PAGE>
6
referred to in clauses (a) and (b) is determined in
accordance with GAAP.
"CONSOLIDATED NET WORTH": as defined in subsection
6.2(b)(ii).
"CONSOLIDATED SENIOR DEBT": at a particular time for
the Capital Corporation and its consolidated Subsidiaries,
indebtedness for borrowed money other than the 9.35%
Subordinated Debentures due 2003, the 8-5/8% Subordinated
Debentures due 2019 and the 9-5/8% Subordinated Notes due
1998 of the Capital Corporation (in each case so long as the
subordination terms thereof continue to be as favorable to
the Administrative Agent and the Banks as such terms in
existence on the Closing Date) and any such indebtedness
that is subordinated, on terms no less favorable to the
Administrative Agent and the Banks than the terms of
subordination set forth on Schedule I, to the indebtedness
which may be incurred hereunder by the Capital Corporation,
PROVIDED that the amount of such indebtedness for borrowed
money (other than such subordinated indebtedness) as at the
end of a fiscal quarter of the Capital Corporation and its
consolidated Subsidiaries (including the last quarter of a
fiscal year of the Capital Corporation and its consolidated
Subsidiaries) shall be determined by reference to the
publicly available consolidated balance sheet of the Capital
Corporation and its consolidated Subsidiaries as at the end
of such fiscal quarter and after such adjustments, if any,
as may be required so that such amount is determined in
accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH": at a particular
time for a Borrower and its consolidated Subsidiaries, the
excess of the amount shown opposite the item "Total
stockholder's equity" on the consolidated balance sheet of
such Borrower and its consolidated Subsidiaries over the
aggregate amount shown on such balance sheet for any
intangible assets, including, without limitation, goodwill,
franchises, licenses, patents, trademarks, trade-names,
copyrights, service marks and brand names, PROVIDED that
such excess amount shall be determined (a) with respect to
the Company and its consolidated Subsidiaries as at the end
of any of their fiscal quarters (including the last quarter
of any of their fiscal years), by reference to the publicly
available consolidated balance sheet of the Company and its
consolidated Subsidiaries as at the end of such fiscal
quarter and (b) with respect to the Capital Corporation and
its consolidated Subsidiaries as at the end of any of their
fiscal quarters (including the last quarter of any of their
fiscal years), by reference to the publicly available
consolidated balance sheet of the Capital Corporation and
its consolidated Subsidiaries as at the end of such fiscal
quarter, in each such case after such adjustments, if any,
<PAGE>
7
as may be required so that such excess is determined in
accordance with GAAP.
"CONTRACTUAL OBLIGATION": as to any Person, any
provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is
a party or by which it or any of its property is bound.
"DEBT": as defined in subsection 6.2.
"DEFAULT": any of the events specified in Section 8,
whether or not any requirement for the giving of notice, the
lapse of time, or both, or any other condition, event or act
has been satisfied.
"DOLLARS" and "$": dollars in lawful currency of the
United States of America.
"DOMESTIC DOLLAR LOANS": the collective reference to
C/D Rate Loans and ABR Loans.
"ERISA": the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"EURODOLLAR LOANS": Committed Rate Loans at such time
as they are made and/or being maintained at a rate of
interest based upon a Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during
each Interest Period for a Eurodollar Loan and for each
Index Rate Bid Loan, (a) the rate determined by the
Administrative Agent to be the arithmetic mean of the
offered rates for deposits in Dollars for a period of such
Interest Period which appear on the Reuters Screen LIBO Page
as of 11:00 a.m., London time, on the date that is two
Working Days prior to the beginning of such Interest Period
or (b) if fewer than two offered rates appear, the rate in
respect of such Interest Period will be the rate per annum
equal to the average (rounded upwards, if necessary, to the
nearest whole multiple of one sixteenth of one percent) of
the respective rates notified to the Administrative Agent by
the Reference Banks as the rate at which such Reference Bank
is offered Dollar deposits two Working Days prior to the
beginning of such Interest Period in the interbank
eurodollar market where the eurodollar and foreign currency
and exchange operations in respect of its Eurodollar Loans
are customarily conducted at or about 10:00 a.m., New York
City time, for delivery on the first day of such Interest
Period for the number of days comprised therein and in an
amount (i) in the case of Eurodollar Loans, comparable to
the amount of the Eurodollar Loan of such Reference Bank to
be outstanding during such Interest Period and (ii) in the
case of an Index Rate Bid Loan by any Bank, equal to the
<PAGE>
8
principal amount of all Index Rate Bid Loans to which such
Interest Period applies.
"EVENT OF DEFAULT": any of the events specified in
Section 8, PROVIDED that any requirement for the giving of
notice, the lapse of time, or both, or any other condition,
event or act has been satisfied.
"EXTENSION REQUEST": each request by the Borrowers
made pursuant to subsection 2.16 for the Banks to extend
this Agreement, which shall contain the information in
respect of such extension specified in Exhibit I and shall
be delivered to the Administrative Agent in writing.
"FIXED CHARGES": for any particular period for the
Capital Corporation and its consolidated Subsidiaries, all
of the Capital Corporation's and its consolidated
Subsidiaries' consolidated interest on indebtedness for
borrowed money, amortization of discounts of indebtedness
for borrowed money, the portion of rentals under financing
leases deemed to represent interest and rentals under
operating leases, PROVIDED that such amounts for a fiscal
quarter of the Capital Corporation and its consolidated
Subsidiaries (including the last quarter of a fiscal year of
the Capital Corporation and its consolidated Subsidiaries)
shall be determined by reference to the publicly available
consolidated statement of income of the Capital Corporation
and its consolidated Subsidiaries for or covering such
fiscal quarter and after such adjustments, if any, as may be
required so that such amounts are determined in accordance
with GAAP.
"FOREIGN TAXES": as defined in subsection 2.17(a).
"GAAP": generally accepted accounting principles in
the United States of America as applied in the preparation
of financial statements of the Company or the Capital
Corporation, respectively, as of the fiscal year ended
October 31, 1992.
"GOVERNMENTAL AUTHORITY": any nation or government,
any state or other political subdivision thereof, and any
entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"IMPORTANT PROPERTY": (a) any manufacturing plant,
including land, all buildings and other improvements
thereon, and all manufacturing machinery and equipment
located therein, owned and used by the Company or a
Restricted Subsidiary primarily for the manufacture of
products to be sold by the Company or such Restricted
Subsidiary, (b) the executive office and administrative
building of the Company in Moline, Illinois, and (c)
<PAGE>
9
research and development facilities, including land and
buildings and other improvements thereon and research and
development machinery and equipment located therein, in each
case, owned and used by the Company or a Restricted
Subsidiary; except in any case property of which the
aggregate fair value as determined by the Board of Directors
of the Company does not at the time exceed 1% of
Consolidated Net Worth, as shown on the audited consolidated
balance sheet contained in the latest annual report to
stockholders of the Company.
"INDENTURE": the Indenture dated February 1, 1991
between the Company and Continental Bank, National
Association, as Trustee.
"INDEX RATE BID LOAN": any Bid Loan made at an
interest rate based upon the Applicable Index Rate.
"INDEX RATE BID LOAN REQUEST": any Bid Loan Request
requesting the Banks to offer to make Index Rate Bid Loans
at an interest rate equal to the Applicable Index Rate PLUS
(or MINUS) a margin.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the
last Business Day of each March, June, September and
December, commencing on the first of such days to occur
after such ABR Loan is made or a C/D Rate Loan or a
Eurodollar Loan is converted to an ABR Loan and (b) as to
any Eurodollar Loan or C/D Rate Loan, the last day of each
Interest Period applicable thereto, PROVIDED that as to any
Eurodollar Loan in respect of which a Borrower has selected
an Interest Period of six months and any C/D Rate Loan in
respect of which a Borrower has selected an Interest Period
of 180 days, interest shall also be paid on the day which is
three months or 90 days, as the case may be, after the
beginning of such Interest Period.
"INTEREST PERIOD": (a) with respect to any Eurodollar
Loan, the period commencing on the Borrowing Date, the date
any ABR Loan or C/D Rate Loan is converted to a Eurodollar
Loan or the date any Eurodollar Loan is continued as a
Eurodollar Loan, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by a Borrower in its notice of
borrowing as provided in subsection 2.1(c);
(b) with respect to any C/D Rate Loan, the period
commencing on the Borrowing Date, the date any ABR Loan or
Eurodollar Loan is converted to a C/D Rate Loan or the date
any C/D Rate Loan is continued as a C/D Rate Loan, as the
case may be, with respect to such C/D Rate Loan and ending
30, 90 or 180 days thereafter, as selected by a Borrower in
its notice of borrowing as provided in subsection 2.1(c);
<PAGE>
10
(c) with respect to any Bid Loan, the period commencing
on the Borrowing Date with respect to such Bid Loan and
ending on the date not less than seven days nor more than
six months thereafter, as specified by a Borrower in its Bid
Loan Request as provided in subsection 2.2(b); and
(d) with respect to any Negotiated Rate Loan, the
period or periods commencing on the Borrowing Date with
respect to such Negotiated Rate Loan or the last day of any
Interest Period with respect thereto and ending on the dates
as shall be mutually agreed upon between the relevant
Borrower and the relevant Bank;
PROVIDED THAT, all of the foregoing provisions relating to
Interest Periods are subject to the following:
(i) if any Interest Period pertaining to a
Eurodollar Loan or an Index Rate Bid Loan would
otherwise end on a day which is not a Working Day, that
Interest Period shall be extended to the next
succeeding Working Day unless the result of such
extension would be to carry such Interest Period into
another calendar month in which event such Interest
Period shall end on the immediately preceding Working
Day;
(ii) if any Interest Period pertaining to an ABR
Loan, a C/D Rate Loan or an Absolute Rate Bid Loan
would otherwise end on a day which is not a Business
Day, that Interest Period shall be extended to the next
succeeding Business Day;
(iii) any Interest Period pertaining to a
Eurodollar Loan having an Interest Period of one, two,
three or six months or an Index Rate Bid Loan having an
Interest Period of one, two, three, four, five or six
months, that begins on the last Working Day of a
calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Working Day of a calendar month;
(iv) Interest Periods shall be deemed available
only if the Required Banks shall not have advised the
Administrative Agent that the C/D Rate or the
Eurodollar Rate, as the case may be, determined by the
Administrative Agent on the basis of the applicable
quotes will not adequately and fairly reflect the cost
to such Banks of maintaining or funding their Committed
Rate Loans bearing interest based on the C/D Rate or
the Eurodollar Rate, as the case may be, determined for
such Interest Period. The Administrative Agent shall
notify the Borrowers and each Bank promptly after
having been advised by the Required Banks that a C/D
<PAGE>
11
Rate or Eurodollar Rate will not so adequately and
fairly reflect such Banks' costs as aforesaid. If a
requested Interest Period shall be unavailable in
accordance with the foregoing sentence, the proposed
Borrower may (A) in accordance with the provisions
(including any requirements for notification) of
subsection 2.1 request, at its option, that the
requested Committed Rate Loans be made or maintained as
C/D Rate Loans, if applicable, or ABR Loans or (B)
withdraw the request for such Committed Rate Loans for
which the Interest Period was unavailable by giving
notice of such election to the Administrative Agent in
accordance with subsection 2.11; PROVIDED, that if the
Administrative Agent does not receive any notice
hereunder, such Borrower shall be deemed to have
requested ABR Loans;
(v) with respect to Loans made by an Objecting
Bank, no Interest Periods with respect to such Loans
shall end after the second anniversary of such
Objecting Bank's Commitment Expiration Date; and
(vi) no Interest Periods shall end after the
second anniversary of the Termination Date.
"LOANS": the collective reference to the Committed
Rate Loans, the Bid Loans and the Negotiated Rate Loans.
"LOAN ACCOUNT": as defined in subsection 2.3;
collectively, the "LOAN ACCOUNTS".
"LOAN ASSIGNEES": as defined in subsection 10.5(c).
"LOAN ASSIGNMENT": a Loan Assignment, substantially in
the form of Exhibit E.
"MAJORITY BANKS": at any particular time, Banks having
Commitment Percentages aggregating more than fifty percent;
PROVIDED that at any time after the Commitment Expiration
Date with respect to any Objecting Bank, "MAJORITY BANKS"
means Banks whose Exposure aggregates more than fifty
percent of the aggregate Exposure of all the Banks. For
purposes of this definition, the "EXPOSURE" of (x) an
Objecting Bank at any time shall be the aggregate
outstanding principal amount of its Loans and (y) any other
Bank at any time shall be the Commitment of such Bank.
"MANAGING AGENTS": as defined in the preamble hereto.
"MARGIN STOCK": as defined in Regulation U of the
Board of Governors of the Federal Reserve System.
"MORTGAGE": as defined in subsection 6.2.
<PAGE>
12
"NEGOTIATED RATE LOAN": each Loan made to a Borrower
by a Bank pursuant to a Negotiated Rate Loan Request in such
principal amount, for such number of Interest Periods
(subject to the proviso to the definition of "Interest
Period" in this subsection 1.1) and having such interest
rate(s) and repayment terms as shall, in each case, be
mutually agreed upon between such Borrower and such Bank.
"NEGOTIATED RATE LOAN REQUEST": each request by a
Borrower for a Bank to make Negotiated Rate Loans, which
shall be delivered to such Bank in writing, by facsimile
transmission, or by telephone, immediately confirmed in
writing, and which shall specify the amount to be borrowed
and the proposed Borrowing Date.
"NET EARNINGS AVAILABLE FOR FIXED CHARGES": for any
particular period for the Capital Corporation and its
consolidated Subsidiaries, consolidated net earnings of the
Capital Corporation and such Subsidiaries for such period
without deduction of Fixed Charges and without deduction of
federal, state or other income taxes, PROVIDED that such net
earnings for a fiscal quarter of the Capital Corporation and
its consolidated Subsidiaries (including the last quarter of
a fiscal year of the Capital Corporation and its
consolidated Subsidiaries) shall be determined by reference
to the publicly available statement of income of the Capital
Corporation and its consolidated Subsidiaries for or
covering such fiscal quarter and after such adjustments, if
any, as may be required so that such net earnings are
determined in accordance with GAAP, except that earned
investment tax credits may be included as revenue in the
consolidated income statement of the Capital Corporation and
its consolidated Subsidiaries, rather than as an offset
against the provision for income taxes.
"OBJECTING BANKS": as defined in subsection 2.16(a).
"PARTICIPANTS": as defined in subsection 10.5(b).
"PERSON": an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other
entity of whatever nature, PROVIDED that for purposes of
Section 8(h), Person shall also include two or more entities
acting as a syndicate or any other group for the purpose of
acquiring, holding or disposing of securities of the
Company.
"PLAN": any pension plan which is covered by Title IV
of ERISA and in respect of which either Borrower or a
Commonly Controlled Entity is an "employer" as defined in
Section 3(5) of ERISA.
"PURCHASING BANKS": as defined in subsection 10.5(d).
<PAGE>
13
"REFERENCE BANKS": Chemical, Deutsche Bank AG and
Morgan Guaranty Trust Company of New York.
"REGISTER": as defined in subsection 10.5(e).
"REPORT PERIOD": as defined in subsection 2.18.
"REPORTABLE EVENT": any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder.
"REQUIRED BANKS": at a particular time, Banks having
Commitment Percentages aggregating at least 66-2/3%;
PROVIDED that (a) as used in subsection 2.16, "Required
Banks" means with respect to any Extension Request, at a
particular time after the Termination Date has been extended
pursuant to such subsection, Banks (i) which are not
Objecting Banks with respect to any previous Extension
Request and (ii) which have Commitment Percentages
aggregating at least 66-2/3% of the aggregate Commitment
Percentages of such non-Objecting Banks and (b) as used in
any provision other than subsection 2.16 at any time after
the Commitment Expiration Date with respect to any Objecting
Bank, "REQUIRED BANKS" means Banks whose Exposure aggregates
at least 66-2/3% of the aggregate Exposure of all the Banks.
For purposes of this definition, the "EXPOSURE" of (x) an
Objecting Bank at any time shall be the aggregate
outstanding principal amount of its Loans and (y) any other
Bank at any time shall be the Commitment of such Bank.
"REQUIREMENT OF LAW": as to any Person, the
Certificate of Incorporation and By-Laws or other
organizational or governing documents of such Person, and
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 to which such Person or any of its
property is subject.
"RESERVES": as defined in subsection 2.13(c).
"RESERVE PERCENTAGE": for any day during the Interest
Period for a C/D Rate Loan, that percentage (expressed as a
decimal) which is in effect on the first day of such
Interest Period, as prescribed by the Board of Governors of
the Federal Reserve System (or any successor), for
determining the maximum reserve requirement for a member
bank of the Federal Reserve System in New York City with
deposits exceeding one billion Dollars in respect of new
non-personal time deposits in Dollars in New York City
having a maturity comparable to the Interest Period for the
relevant C/D Rate Loans and in an amount of $100,000 or
more.
<PAGE>
14
"RESPONSIBLE OFFICER": of a Borrower, the Chairman,
the President, any Executive, Senior or other Vice
President, the Treasurer and any Assistant Treasurer of such
Borrower.
"RESTRICTED MARGIN STOCK": any Margin Stock, the sale,
pledge or other disposition of which by the Company or any
of its Subsidiaries is in any way restricted by an
arrangement with any Bank or any affiliate thereof to the
extent that the value thereof (determined in accordance with
Regulation U of the Board of Governors of the Federal
Reserve System) does not exceed 25% of the value (determined
in accordance with such Regulation U) of all the assets
subject to such restriction.
"RESTRICTED SUBSIDIARY": any Subsidiary of the Company
incorporated in the United States of America or Canada (a)
which is engaged in, or whose principal assets consist of
property used by the Company or any Restricted Subsidiary
in, the manufacture of products within the United States of
America or Canada or in the sale of products principally to
customers located in the United States of America or Canada
except any corporation which is a retail dealer in which the
Company has, directly or indirectly, an investment, or (b)
which the Company shall designate as a Restricted Subsidiary
in an officers' certificate signed by two Responsible
Officers and delivered to the Administrative Agent.
"SALE AND LEASE-BACK TRANSACTION": as defined in
subsection 6.3.
"SIGNIFICANT SUBSIDIARY": of a Borrower, any
Subsidiary of such Borrower the assets, revenues or net
worth of which is, at the time of determination, equal to or
greater than ten percent of the assets, revenues or net
worth, respectively, of such Borrower at such time.
"SUBSIDIARY": of a Person, a corporation or other
entity of which securities or other ownership interests
having ordinary voting power (other than securities or other
ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the
board of directors or other Persons performing similar
functions are at the time directly or indirectly owned by
such Person or one or more Subsidiaries of such Person, or
by such Person and one or more Subsidiaries of such Person.
"TERMINATION DATE": the date which is 364 days after
the Closing Date or such later date as shall be determined
pursuant to the provisions of subsection 2.16 with respect
to non-Objecting Banks.
"TRANSFEREES": as defined in subsection 10.5(g).
<PAGE>
15
"TRANSFER EFFECTIVE DATE": as defined in each
Commitment Transfer Supplement and each Loan Assignment.
"TYPE": as to any Committed Rate Loan, its nature as
an ABR Loan, Eurodollar Loan or C/D Rate Loan.
"WORKING DAY": any day on which dealings in foreign
currencies and exchange between banks may be carried on in
London, England and New York, New York.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) All terms
defined in this Agreement shall have the defined meanings when
used in any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any certificate or other
document made or delivered pursuant hereto, accounting terms
relating to either Borrower and its Subsidiaries not defined in
subsection 1.1, and accounting terms partly defined in subsection
1.1 to the extent not defined, shall have the respective meanings
given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and Section, subsection, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(d) Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the relevant Borrower.
SECTION 2. THE COMMITTED RATE LOANS; THE BID
LOANS; THE NEGOTIATED RATE LOANS;
AMOUNT AND TERMS
2.1 THE COMMITTED RATE LOANS. (a) During the
Commitment Period, subject to the terms and conditions hereof,
each Bank severally agrees to make loans (individually, a
"COMMITTED RATE LOAN") to either Borrower from time to time in an
aggregate principal amount for both Borrowers at any one time
outstanding not to exceed such Bank's Commitment minus the
aggregate principal amount of Bid Loans and Negotiated Rate Loans
made by such Bank at such time outstanding unless such Bank shall
have notified the Administrative Agent in writing that it agrees
to make such Committed Rate Loans in an aggregate principal
amount for both Borrowers at any one time outstanding not to
exceed such Bank's Commitment minus the portion of the aggregate
principal amount of the Bid Loans and Negotiated Rate Loans made
by such Bank at such time outstanding specified in such notice,
PROVIDED, HOWEVER, that the aggregate principal amount of Loans
made by non-Objecting Banks at any time outstanding shall not
exceed the aggregate amount of the Commitments at such time.
<PAGE>
16
During the Commitment Period, either Borrower may use the
Commitments by borrowing, repaying and reborrowing, all in
accordance with the terms and conditions hereof.
(b) The Committed Rate Loans may be either (i)
Eurodollar Loans, (ii) ABR Loans, (iii) C/D Rate Loans or (iv) a
combination thereof as determined by the relevant Borrower.
(c) Either Borrower may borrow Committed Rate Loans on
any Working Day, if the borrowing is of Eurodollar Loans, or on
any Business Day, if the borrowing is of C/D Rate Loans or ABR
Loans; PROVIDED, HOWEVER, that a Responsible Officer of such
Borrower shall give the Administrative Agent irrevocable notice
thereof (which notice must be received by the Administrative
Agent (i) prior to 12:00 Noon, New York City time, three Working
Days prior to the requested Borrowing Date, in the case of
Eurodollar Loans, (ii) prior to 12:00 Noon, New York City time,
two Business Days prior to the requested Borrowing Date in the
case of C/D Rate Loans, (iii) except as provided in clause (iv)
hereof, prior to 12:00 Noon, New York City time, one Business Day
prior to the requested Borrowing Date, in the case of ABR Loans
and (iv) prior to 11:00 A.M., New York City time, on the
requested Borrowing Date in the case of ABR Loans up to an
aggregate principal amount for both Borrowers not to exceed 25%
of the Commitments on such Borrowing Date). Each such notice
shall be given in writing or by facsimile transmission
substantially in the form of Exhibit A (with appropriate
insertions) or shall be given by telephone (specifying the
information set forth in Exhibit A) promptly confirmed by notice
given in writing or by facsimile transmission substantially in
the form of Exhibit A (with appropriate insertions). On the day
of receipt of any such notice from either Borrower, the
Administrative Agent shall promptly notify each Bank thereof.
Subject to paragraph (e) below, each Bank will make the amount of
its share of each borrowing available to the Administrative Agent
for the account of such Borrower at the office of the
Administrative Agent set forth in subsection 10.2 at 11:00 A.M.
(or 2:00 P.M., in the case of ABR Loans requested pursuant to
clause (iv) above), New York City time, on the Borrowing Date
requested by such Borrower in funds immediately available to the
Administrative Agent as the Administrative Agent may direct. The
proceeds of all such Committed Rate Loans will be made available
promptly to such Borrower by the Administrative Agent at the
office of the Administrative Agent specified in subsection 10.2
by crediting the account of such Borrower on the books of such
office of the Administrative Agent with the aggregate of the
amount made available to the Administrative Agent by the Banks
and in like funds as received by the Administrative Agent.
(d) All Committed Rate Loans made to each Borrower
shall be repaid in full by such Borrower on or before the second
anniversary of the Termination Date; PROVIDED, that Committed
Rate Loans made by Objecting Banks shall be repaid as provided in
subsection 2.16(b).
<PAGE>
17
2.2 THE BID LOANS; THE NEGOTIATED RATE LOANS. (a)
Either Borrower may borrow Bid Loans or Negotiated Rate Loans
from time to time on any Business Day (in the case of Bid Loans
made pursuant to an Absolute Rate Bid Loan Request), any Working
Day (in the case of Bid Loans made pursuant to an Index Rate Bid
Loan Request) or, in the case of Negotiated Rate Loans, on such
days as shall be mutually agreed upon between the relevant
Borrower and the applicable Bank, in each case during the
Commitment Period and in the manner set forth in this subsection
2.2 and in amounts such that the aggregate principal amount of
Loans at any time outstanding shall not exceed the aggregate
amount of the Commitments at such time. Notwithstanding any
other provision of this Agreement, the aggregate principal amount
of the outstanding Bid Loans and/or Negotiated Rate Loans made by
any Bank may at any time (but shall not be required to) exceed
the Commitment of such Bank so long as the aggregate principal
amount of the Loans outstanding by all Banks does not exceed the
aggregate amount of the Commitments at such time.
(b)(i) Either Borrower shall request Bid Loans or
Negotiated Rate Loans by delivering (A) in the case of an Index
Rate Bid Loan, a Bid Loan Request to the Auction Agent, c/o
Deutsche Bank AG New York Branch, 31 West 52nd Street, New York,
New York 10019, Attention: Loan Syndications, Telephone:
(212) 474-7041, Facsimile: (212) 474-7048, not later than 12:00
Noon (New York City time) four Working Days prior to the proposed
Borrowing Date, (B) in the case of an Absolute Rate Bid Loan, a
Bid Loan Request to the Auction Agent at the address set forth in
clause (A) of this subsection 2.2(b)(i) not later than 10:00 A.M.
(New York City time) one Business Day prior to the proposed
Borrowing Date or (C) in the case of a Negotiated Rate Loan, a
Negotiated Rate Loan Request to any Bank at such time as the
applicable Borrower and the applicable Bank shall agree. Each
Bid Loan Request may solicit bids for Bid Loans in an aggregate
principal amount of $25,000,000 or an integral multiple of
$5,000,000 in excess thereof and for not more than three
alternative Interest Periods for such Bid Loans. The Auction
Agent shall promptly notify each Bid Loan Bank and the
Administrative Agent by facsimile transmission or by telephone,
immediately confirmed by facsimile transmission, of the contents
of each Bid Loan Request received by it.
(ii) In the case of an Index Rate Bid Loan Request,
upon receipt of notice from the Auction Agent of the contents of
such Bid Loan Request, any Bid Loan Bank that elects, in its sole
discretion, to do so, shall irrevocably offer to make one or more
Bid Loans at the Applicable Index Rate plus or minus a margin for
each such Bid Loan determined by such Bid Loan Bank, in its sole
discretion. Any such irrevocable offer shall be made by
delivering a Bid Loan Offer to the Auction Agent at the address
set forth in clause (i)(A) above before 10:30 A.M. (New York City
time) three Working Days before the proposed Borrowing Date,
setting forth the maximum amount of Bid Loans for each Interest
Period, and the aggregate maximum amount for all Interest
<PAGE>
18
Periods, which such Bank would be willing to make and the margin
above or below the Applicable Index Rate at which such Bid Loan
Bank is willing to make each such Bid Loan. The Auction Agent
shall advise the relevant Borrower before 11:00 A.M. (New York
City time) three Working Days before the proposed Borrowing Date
of the contents of each such Bid Loan Offer received by it. If
the Auction Agent in its capacity as a Bid Loan Bank shall, in
its sole discretion, elect to make any such offer, it shall
advise such Borrower of the contents of its Bid Loan Offer before
10:15 A.M. (New York City time) three Working Days before the
proposed Borrowing Date.
(iii) In the case of an Absolute Rate Bid Loan
Request, upon receipt of notice from the Auction Agent of the
contents of such Bid Loan Request, any Bid Loan Bank that elects,
in its sole discretion, to do so, shall irrevocably offer to make
one or more Bid Loans at a rate or rates of interest for each
such Bid Loan determined by such Bid Loan Bank in its sole
discretion. Any such irrevocable offer shall be made by
delivering a Bid Loan Offer to the Auction Agent at the address
set forth in clause (i)(A) of this subsection 2.2(b) before 9:30
A.M. (New York City time) on the proposed Borrowing Date, setting
forth the maximum amount of Bid Loans for each Interest Period,
and the aggregate maximum amount for all Interest Periods, which
such Bid Loan Bank would be willing to make and the rate or rates
of interest at which such Bid Loan Bank is willing to make each
such Bid Loan. The Auction 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 Bid Loan Offer
received by it. If the Auction Agent in its capacity as a Bid
Loan Bank shall, in its sole discretion, elect to make any such
offer, it shall advise such Borrower of the contents of its Bid
Loan Offer before 9:15 A.M. (New York City time) on the proposed
Borrowing Date.
(iv) The relevant Borrower shall before 11:30 A.M.
(New York City time) three Working Days before the proposed
Borrowing Date (in the case of Bid Loans requested by an Index
Rate Bid Loan Request) and before 10:30 A.M. (New York City time)
on the proposed Borrowing Date (in the case of Bid Loans
requested by an Absolute Rate Bid Loan Request) either, in its
absolute discretion:
(A) cancel such Bid Loan Request by giving the Auction
Agent telephone notice to that effect, or
(B) accept one or more of the offers made by any Bid
Loan Bank or Bid Loan Banks pursuant to clause (ii) or
clause (iii) of this subsection 2.2(b), as the case may be,
by giving telephone notice to the Auction Agent (immediately
confirmed by delivery to the Auction Agent at the address
set forth in clause (i)(A) of this subsection 2.2(b) of a
Bid Loan Confirmation) of the amount of Bid Loans for each
relevant Interest Period to be made by each Bid Loan Bank
<PAGE>
19
(which amount shall be equal to or less than the maximum
amount for such Interest Period specified in the Bid Loan
Offer of such Bid Loan Bank, and for all Interest Periods
included in such Bid Loan Offer shall be equal to or less
than the aggregate maximum amount specified in such Bid Loan
Offer for all such Interest Periods) and reject any
remaining offers made by Bid Loan Banks pursuant to clause
(ii) or clause (iii) above, as the case may be; PROVIDED,
HOWEVER, that (x) such Borrower may not accept offers for
Bid Loans for any Interest Period in an aggregate principal
amount in excess of the maximum principal amount requested
for such Interest Period in the related Bid Loan Request,
(y) if such Borrower accepts any such offers, it must accept
offers strictly based upon pricing for such relevant
Interest Period and upon no other criteria whatsoever and
(z) if two or more Bid Loan Banks submit offers for any
Interest Period at identical pricing and such Borrower
accepts any of such offers but does not wish to borrow the
total amount offered by such Bid Loan Banks with such
identical pricing, such Borrower shall accept offers from
all of such Bid Loan Banks in amounts allocated among them
PRO RATA according to the amounts offered by such Bid Loan
Banks (or as nearly PRO RATA as shall be practicable, after
giving effect to the requirement that Bid Loans made by a
Bid Loan Bank 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, it being
agreed that to the extent that it is not possible to make
allocations in accordance with the provisions of this clause
(z) such allocations shall be made in accordance with the
instructions of such Borrower, it being understood that in
no event shall any Bank be obligated to make any Bid Loan in
a principal amount less than $5,000,000).
(v) If such Borrower notifies the Auction Agent that a
Bid Loan Request is cancelled pursuant to clause (iv)(A) of this
subsection 2.2(b), the Auction Agent shall give prompt telephone
notice thereof to the Bid Loan Banks and the Administrative
Agent, and the Bid Loans requested thereby shall not be made.
(vi) (A) If such Borrower accepts pursuant to clause
(iv)(B) of this subsection 2.2(b) one or more of the offers
made by any Bid Loan Bank or Bid Loan Banks pursuant to a
Bid Loan Request, the Auction Agent shall promptly notify by
telephone the Administrative Agent and each Bid Loan Bank
which has made such an offer of the aggregate amount of such
Bid Loans to be made on such Borrowing Date for each
Interest Period and of the acceptance or rejection of any
offers to make such Bid Loans made by such Bid Loan Bank.
Each Bid Loan Bank which is to make a Bid Loan pursuant to a
Bid Loan Request shall, before 12:00 Noon (New York City
time) on the Borrowing Date specified in the Bid Loan
Request applicable thereto, make available to the
Administrative Agent at its office set forth in subsection
<PAGE>
20
10.2 the amount of Bid Loans to be made by such Bid Loan
Bank, in immediately available funds. The Administrative
Agent will make such funds available to such Borrower as
soon as practicable on such date at the Administrative
Agent's aforesaid address.
(B) If such Borrower and any Bank agree to the terms
of a Negotiated Rate Loan to be made on a Borrowing Date
pursuant to a Negotiated Rate Loan Request, such Borrower
and such Bank shall promptly notify by telephone the
Administrative Agent of the aggregate amount of Negotiated
Rate Loans to be made on such Borrowing Date and the
respective Interest Periods therefor. Each Bank which is to
make a Negotiated Rate Loan shall, at such time, on such
Borrowing Date and at such location as shall be mutually
agreed upon between such Borrower and such Bank, make avail-
able to such Borrower the amount of Negotiated Rate Loans to
be made by such Bank, in immediately available funds.
(C) As soon as practicable after each Borrowing Date
for Bid Loans and Negotiated Rate Loans, the Administrative
Agent shall notify each Bank of the aggregate amount of Bid
Loans or Negotiated Rate Loans advanced pursuant to a Bid
Loan Request or Negotiated Rate Loan Request on such
Borrowing Date and the respective Interest Periods therefor.
(c) Within the limits and on the conditions set forth
in this subsection 2.2, each Borrower may from time to time
borrow under this subsection 2.2, repay pursuant to paragraph (d)
below, and reborrow under this subsection 2.2.
(d) Each Borrower shall repay to the Administrative
Agent for the account of each Bid Loan Bank (or the Loan Assignee
in respect thereof, as the case may be) which has made a Bid Loan
to such Borrower on the last day of the Interest Period for each
Bid Loan (such Interest Period being that specified by such
Borrower for repayment of such Bid Loan in the related Bid Loan
Request) the then unpaid principal amount of such Bid Loan. Each
Borrower shall repay to each Bank which has made a Negotiated
Rate Loan to such Borrower (or the Loan Assignee in respect
thereof, as the case may be) the principal thereof as agreed by
such Borrower and such Bank.
(e) Each Borrower shall pay interest on the unpaid
principal amount of each Bid Loan and each Negotiated Rate Loan
borrowed by such Borrower from the applicable Borrowing Date to
the stated maturity date thereof, in the case of a Bid Loan, at
the rate of interest determined pursuant to paragraph (b) of this
subsection 2.2, and, in the case of a Negotiated Rate Loan, as
agreed by such Borrower and the relevant Bank (calculated on the
basis of a 360 day year for actual days elapsed), payable on the
interest payment date or dates (i) specified by such Borrower for
such Bid Loan in the related Bid Loan Request and (ii) mutually
agreed upon between such Borrower and such Bank in the case of
<PAGE>
21
Negotiated Rate Loans, PROVIDED that as to any Bid Loan in
respect of which the stated maturity date is more than three
months after such Borrowing Date, interest shall also be paid on
the day which occurs three months after such Borrowing Date. If
all or a portion of the principal amount of any Bid Loan shall
not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue principal amount shall,
without limiting any rights of any Bank under this Agreement,
bear interest from the date on which such payment was due at a
rate per annum which is 1% above the rate which would otherwise
be applicable to such Bid Loan until the scheduled maturity date
with respect thereto and for each day thereafter at a rate per
annum which is 1% above the ABR until paid in full (as well after
as before judgment). If all or any portion of the principal
amount of any Negotiated Rate Loan shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise),
such overdue principal amount shall, without limiting any rights
of any Bank under this Agreement, bear interest from the date on
which such payment was due at a rate per annum as shall be
mutually agreed upon between the relevant Borrower and the
relevant Bank.
(f) After the first Bid Loan Request has been given
hereunder, no Bid Loan Request or Negotiated Rate Loan Request
shall be given until at least one Business Day, in the case of an
Absolute Rate Bid Loan Request, or one Working Day, in the case
of an Index Rate Bid Loan Request, after the earliest to occur of
(i) the Borrowing Dates with respect to all prior Bid Loan
Requests made pursuant to subsection 2.2(b)(i), (ii) the date on
which all Bid Loan Banks have failed to submit Bid Loan Offers
with respect to any Bid Loan Requests within the time specified
in subsection 2.2(b)(ii) or (iii), as the case may be, and (iii)
the date on which the relevant Borrower has cancelled all prior
Bid Loan Requests pursuant to subsection 2.2(b)(iv).
2.3 LOAN ACCOUNTS. Each Bank, with respect to its
Committed Rate Loans, Bid Loans and Negotiated Rate Loans, and
the Administrative Agent, with respect to all Committed Rate
Loans and Bid Loans, shall open and maintain in the name of each
Borrower loan accounts (as to each Bank, its "LOAN ACCOUNT"
applicable to such Borrower) on its books and records setting
forth the amounts of principal, interest and other sums paid and
payable by such Borrower from time to time hereunder in respect
of such Loans, and the obligation of such Borrower to pay or
repay, as the case may be, such amounts to such Bank shall be
evidenced by such Bank's Loan Account. In case of any dispute,
action or proceeding relating to any Committed Rate Loan, Bid
Loan or Negotiated Rate Loan, the entries in such records shall
constitute PRIMA FACIE evidence of the accuracy of the
information set forth therein. In case of discrepancy between
the entries in the Administrative Agent's books and records and
any Bank's, the entries in the Administrative Agent's books and
records shall constitute PRIMA FACIE evidence of the accuracy of
the information set forth therein.
<PAGE>
22
2.4 FEES. (a) The Company and the Capital
Corporation jointly and severally agree to pay to the
Administrative Agent for the account of each Bank a facility fee
(i) from and including the Closing Date to but excluding the
Termination Date, computed at a rate of .08% per annum on the
average daily amount of the Commitment of such Bank in effect
during the period for which payment is made and (ii) from and
including the Termination Date to but excluding the second
anniversary of the Termination Date (or such other date on which
the Commitments shall be terminated and all Loans repaid in
full), computed at a rate of .125% per annum on the amount of the
Loans outstanding of such Bank, in each case, payable quarterly
in arrears on the first Business Day of each January, April, July
and October of each year, on the Termination Date or such earlier
date on which the Commitments shall terminate as provided herein,
and on the second anniversary of the Termination Date or such
earlier date on which the Loans are repaid in full, commencing on
the first of such dates to occur after the date hereof.
Notwithstanding the provisions of clause (i) of the immediately
preceding sentence, if at any time there are outstanding Loans
owing to any Objecting Bank after the Commitment Expiration Date
with respect to such Objecting Bank, (x) the facility fee payable
to such Objecting Bank in respect of the period after such
Commitment Expiration Date shall be computed at the rate of .125%
per annum on the outstanding amount of Loans of such Objecting
Bank and (y) the facility fee payable to any Bank other than an
Objecting Bank in respect of the period in which any Loans are
outstanding to Objecting Banks shall be computed at the rate of
(x) .125% on the outstanding amount of Loans of such Bank and (y)
.08% on the amount, if any, by which the Commitment of such Bank
exceeds the outstanding amount of Loans of such Bank.
(b) The Company and the Capital Corporation jointly
and severally agree to pay to the Auction Agent for its own
account all fees set forth in the letter agreement dated November
23, 1993 from the Auction Agent to the Borrowers.
(c) The Company and the Capital Corporation jointly
and severally agree to pay to the Administrative Agent for its
own account all fees set forth in the letter agreement dated
November 18, 1993 from the Administrative Agent to the Borrowers.
2.5 TERMINATION OR REDUCTION OF COMMITMENTS;
CANCELLATION OF CAPITAL CORPORATION AS BORROWER. (a) The
Borrowers, acting jointly, shall have the right, upon not less
than five Business Days' notice to the Administrative Agent, to
terminate the Commitments or, from time to time, reduce the
amount of the Commitments, provided that (i) any such reduction
shall be accompanied by prepayment of Loans made hereunder in
accordance with subsection 2.6, together with accrued interest on
the amount so prepaid to the date of such prepayment, to the
extent, if any, that the amount of such Loans then outstanding
exceeds the amount of the Commitments as then reduced, and (ii)
any such termination of the Commitments shall be accompanied by
<PAGE>
23
prepayment in full of the Loans then outstanding hereunder in
accordance with subsection 2.6, and any termination of a Bank's
Commitment pursuant to subsection 2.13, 2.16 or 2.17 shall, with
respect to each affected Loan, on the last day of the applicable
Interest Period therefor or, if earlier, on such earlier date as
shall be notified by the Borrowers, be accompanied by prepayment
in full of such Loan, together with, in each case, accrued
interest thereon to the date of such prepayment, the payment of
any unpaid facility fee then accrued hereunder, and the payment
of any amounts then payable pursuant to subsections 2.13, 2.14,
2.15 and 2.17. Upon receipt of such notice from the Borrowers
the Administrative Agent shall promptly notify each Bank thereof.
Any reduction of the Commitments pursuant to this subsection 2.5
shall be in an amount not less than $25,000,000, and shall be an
amount which is a whole multiple of $5,000,000, and shall reduce
permanently the amount of the Commitments then in effect.
(b) The Company may cancel the ability of the Capital
Corporation to borrow hereunder upon not less than five Business
Days' notice to the Administrative Agent. Upon receipt of such
notice from the Company the Administrative Agent shall promptly
notify each Bank thereof. On the first day following receipt of
such notice, on which all Loans to the Capital Corporation and
all interest thereon shall have been paid in full, and
notwithstanding any other provision of this Agreement, (i) the
Capital Corporation shall cease to be a party hereto or to have
any right or obligation hereunder, (ii) rights and obligations
expressed herein to be, in effect, of either the Company or the
Capital Corporation or of both of them, but not any such rights
and obligations expressed herein to be of the Capital Corporation
only, shall be deemed to be rights and obligations of the Company
only and (iii) the Banks shall cease to have any right or
obligation hereunder which depends or is contingent upon any
action, condition or performance, or the absence thereof, whether
past or present, of the Capital Corporation other than any
action, condition or performance, or the absence thereof, of the
Capital Corporation in its capacity as a Subsidiary, Significant
Subsidiary or Restricted Subsidiary hereunder; PROVIDED, HOWEVER,
that the obligation of the Capital Corporation to make any
payment pursuant to subsection 2.13, 2.14, 2.15 or 2.17 which
arises prior to the cancellation of the ability of the Capital
Corporation to borrow hereunder shall survive the cancellation of
the ability of the Capital Corporation to borrow hereunder.
2.6 OPTIONAL PREPAYMENTS. Either Borrower may at any
time and from time to time prepay its Committed Rate Loans in
whole or in part, without premium or penalty, but subject to the
provisions of subsection 2.14, upon at least three Business Days'
irrevocable notice, in the case of Eurodollar Loans, two Business
Days' irrevocable notice in the case of C/D Rate Loans, or one
Business Day's irrevocable notice in the case of ABR Loans, in
each case to the Administrative Agent, specifying the date and
amount of prepayment and whether the prepayment is of its
Eurodollar Loans, ABR Loans, C/D Rate Loans, or a combination
<PAGE>
24
thereof, and if of a combination thereof the amount of prepayment
allocable to each. Upon receipt of such notice the
Administrative Agent shall promptly notify each Bank thereof. If
such notice is given, the Borrower delivering such notice shall
make such prepayment, and the payment of 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 and any amounts payable pursuant to subsections
2.14 and 2.15. Except as provided in the immediately following
sentence, partial prepayments shall be in an aggregate principal
amount of $5,000,000, or a whole multiple thereof; PROVIDED,
HOWEVER, that after giving effect thereto, the aggregate
principal amount of all Committed Rate Loans made on the same
Borrowing Date shall not be less than $25,000,000. Anything
contained in this subsection 2.6 to the contrary notwithstanding,
partial prepayments of a Cancelled Bank's Loans in connection
with the termination under subsection 2.13(a), (b) or (c),
2.16(c) or 2.17(b) of such Cancelled Bank's Commitment (in whole
or in part) shall be in an amount equal to the principal amount
of the Loans of such Bank being prepaid, notwithstanding the
amount thereof, and shall be permitted notwithstanding the
provisions of the foregoing proviso. Either Borrower may prepay
Negotiated Rate Loans or Bid Loans on such terms as shall be
mutually agreed upon between the relevant Borrower and the
relevant Bank.
2.7 MINIMUM AMOUNT OF CERTAIN LOANS. All borrowings,
payments and, except as set forth in the penultimate sentence of
subsection 2.6 hereof, prepayments in respect of Committed Rate
Loans shall be in such amounts and be made pursuant to such
elections that, after giving effect thereto, (a) the aggregate
principal amount of Committed Rate Loans made on any Borrowing
Date shall not be less than $25,000,000 or a whole multiple of
$5,000,000 in excess thereof and (b) the aggregate principal
amount of Committed Rate Loans of any Type with the same Interest
Period made on any Borrowing Date shall not be less than
$10,000,000 or a whole multiple of $1,000,000 in excess thereof.
2.8 COMMITTED RATE LOAN INTEREST RATE AND PAYMENT
DATES. (a) The Eurodollar Loans shall bear interest for the
period from the date thereof until the stated maturity thereof on
the unpaid principal amount thereof at a rate per annum equal to
the Eurodollar Rate determined for the Interest Period therefor
plus the Applicable Margin.
(b) The ABR Loans shall bear interest for each day
during the period from the date thereof until the payment in full
thereof on the unpaid principal amount thereof at a fluctuating
rate per annum equal to the ABR for such day plus the Applicable
Margin.
(c) The C/D Rate Loans shall bear interest for the
period from the date thereof until the stated maturity thereof on
the unpaid principal amount thereof at a rate per annum equal to
<PAGE>
25
the C/D Rate determined for the Interest Period therefor plus the
Applicable Margin.
(d) If all or a portion of the principal amount of any
of the Committed Rate Loans shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise) such
overdue principal amount of such Committed Rate Loan (i) shall
bear interest at a rate per annum which is 1% above the rate
which would otherwise be applicable pursuant to subsection
2.8(a), (b) or (c), as the case may be, from the date when such
principal amount is due until the date on which such amount is
paid in full and (ii) shall, if such Committed Rate Loan is a
Eurodollar Loan or C/D Rate Loan, be converted to an ABR Loan at
the end of the Interest Period applicable thereto.
(e) Interest shall be payable in arrears on each
Interest Payment Date.
2.9 CONVERSION AND CONTINUATION OPTIONS. (a) The
relevant Borrower may elect from time to time to convert
Committed Rate Loans of one Type into Committed Rate Loans of
another Type by giving to the Administrative Agent irrevocable
notice of such conversion by the earliest time that they would
have been required to give notice under subsection 2.1(c) if they
had been borrowing Committed Rate Loans of each such Type on the
conversion date specified in such notice, PROVIDED that any such
conversion of Eurodollar Loans or C/D Rate Loans may only be made
on the last day of an Interest Period with respect thereto. Any
such notice of conversion to Eurodollar Loans or C/D Rate 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 Bank thereof. If
the last day of the then current Interest Period with respect to
C/D Rate Loans that are to be converted to Eurodollar Loans is
not a Working Day, such conversion shall be made on the next
succeeding Working Day, and during the period from such last day
to such succeeding Working Day such Loans shall bear interest as
if they were ABR Loans. All or any part of outstanding
Eurodollar Loans, ABR Loans and C/D Rate Loans may be converted
as provided herein, PROVIDED that no Loan may be converted into a
Eurodollar Loan or a C/D Rate Loan after the date that is one
month or 30 days, respectively, prior to (i) in the case of a
Loan made by an Objecting Bank, the second anniversary of such
Objecting Bank's Commitment Expiration Date, and (ii) in the case
of all other Loans, the second anniversary of the Termination
Date.
(b) Any Eurodollar Loans or C/D Rate Loans may be
continued as such upon the expiration of the then current
Interest Period with respect thereto by the relevant Borrower
giving notice to the Administrative Agent, such notice to be
given by the time it would have been required to give notice
under subsection 2.1(c) if it had been borrowing Eurodollar Loans
or C/D Rate Loans, as the case may be, on the last day of the
<PAGE>
26
then expiring Interest Period therefor, of the length of the next
Interest Period to be applicable to such Loans, PROVIDED that no
Eurodollar Loan or C/D Rate Loan may be continued as such after
the date that is one month or 30 days, respectively, prior to (i)
in the case of a Loan made by an Objecting Bank, the second
anniversary of such Objecting Bank's Commitment Expiration Date,
and (ii) in the case of all other Loans, the second anniversary
of the Termination Date.
2.10 COMPUTATION OF INTEREST AND FEES. (a) Facility
fees and interest in respect of ABR Loans based upon clause (a)
of the definition of ABR shall be calculated on the basis of a
365 (or 366 as the case may be) day year for the actual days
elapsed (including the first day and excluding the last day).
Interest in respect of Eurodollar Loans, C/D Rate Loans, Bid
Loans and ABR Loans based upon clause (b) of the definition of
ABR shall be calculated on the basis of a 360 day year for the
actual days elapsed (including the first day and excluding the
last day). The Administrative Agent shall promptly notify the
Borrowers and the Banks of each determination of a Eurodollar
Rate and of a C/D Rate. Any change in the interest rate on a
Committed Rate Loan resulting from a change in the ABR shall
become effective as of the opening of business on the day on
which such change in the ABR shall become effective. The
Administrative Agent shall promptly notify the Borrowers and the
Banks of the effective date and the amount of each such change.
(b) 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 Banks in
the absence of manifest error. The Administrative Agent shall,
at the request of a Borrower, deliver to such Borrower a
statement showing the quotations given by the Reference Banks and
the computations used by the Administrative Agent in determining
any interest rate.
(c) If any Reference Bank's Commitment shall terminate
(otherwise than on termination of all the Commitments) or, as the
case may be, its Loans are assigned, prepaid or repaid for any
reason whatsoever, such Reference Bank shall thereupon cease to
be a Reference Bank, and the Administrative Agent (after
consultation with the Banks and with the consent of the
Borrowers) shall, by notice to the Borrowers and the Banks,
designate a sufficient number of other Banks as Reference Banks
so that there shall at all times be at least three Reference
Banks.
(d) Each Reference Bank shall use its best efforts to
furnish quotations of rates to the Administrative Agent as
contemplated hereby. If any of the Reference Banks shall be
unable or otherwise fails to supply such rates to the
Administrative Agent upon its request, the rate of interest shall
be determined on the basis of the quotations of the remaining
Reference Banks or Reference Bank.
<PAGE>
27
2.11 INABILITY TO DETERMINE INTEREST RATE. (a) In
the event that the Administrative Agent shall have determined
(which determination shall be conclusive and binding upon the
Borrowers) that by reason of circumstances affecting the
interbank eurodollar market generally, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for any
requested Interest Period with respect to Committed Rate Loans
that a Borrower has requested be made as, continued as or
converted into Eurodollar Loans, the Administrative Agent shall
promptly give notice of such determination to such Borrower and
the Banks prior to the first day of the requested Interest Period
for such Eurodollar Loans. If such notice is given, such
Borrower may (i) in accordance with the provisions of subsections
2.1 or 2.9, as the case may be, (including any requirements for
notification) request that the affected Loans be made as,
continued as or converted into, as the case may be, C/D Rate
Loans or ABR Loans, or (ii) in the case of Loans requested to be
made on the first day of such Interest Period, withdraw the
notice given under subsections 2.1 or 2.9, as the case may be, by
giving telephonic notice to the Administrative Agent, no later
than 10:00 A.M. (New York City time) on the applicable Borrowing
Date, confirmed in writing no later than one Business Day after
such telephonic notice is given; PROVIDED that, if the
Administrative Agent does not receive any notice permitted from
the relevant Borrower hereunder, such Borrower shall be deemed to
have requested that the affected Loans be made as, continued as
or converted into, as the case may be, ABR Loans. Until the
notice given pursuant to the first sentence of this paragraph has
been withdrawn by the Administrative Agent, no further Loans
shall be made as, continued as or converted into, as the case may
be, Eurodollar Loans.
(b) In the event that the Administrative Agent shall
have determined (which determination shall be conclusive and
binding upon the Borrowers) that by reason of circumstances
affecting the domestic certificate of deposit market generally,
adequate and reasonable means do not exist for ascertaining the
C/D Rate for any requested Interest Period with respect to
Committed Rate Loans that a Borrower has requested be made as,
continued as or converted into, C/D Rate Loans, the
Administrative Agent shall promptly give notice of such
determination to such Borrower and the Banks on or prior to the
first day of the requested Interest Period for such C/D Rate
Loans. If such notice is given, such Borrower may (i) in
accordance with the provisions of subsections 2.1 or 2.9, as the
case may be, (including any requirements for notification)
request that the affected Loans be made as, continued as or
converted into, as the case may be, ABR Loans, or (ii) in the
case of Loans requested to be made on the first day of such
Interest Period, withdraw the notice given under subsections 2.1
or 2.9, as the case may be, by giving telephonic notice to the
Administrative Agent, no later than the later of 10:00 A.M. (New
York City time) on the applicable Borrowing Date and one hour
after receipt by such Borrower of the notice referred to in the
<PAGE>
28
preceding sentence, confirmed in writing no later than one
Business Day after such telephonic notice is given; PROVIDED
that, if the Administrative Agent does not receive any notice
permitted from the relevant Borrower hereunder, such Borrower
shall be deemed to have requested that the affected Loans be made
as, continued as or converted into, as the case may be, ABR
Loans. Until the notice given pursuant to the first sentence of
this paragraph has been withdrawn by the Administrative Agent, no
further Loans shall be made as, continued as or converted into,
as the case may be, C/D Rate Loans.
(c) In the event that the Auction Agent shall have
determined (which determination shall be conclusive and binding
upon the Borrowers) that by reason of circumstances affecting the
interbank eurodollar market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for any Interest
Period with respect to a proposed Bid Loan to be made pursuant to
an Index Rate Bid Loan Request, the Auction Agent shall forthwith
give notice of such determination to the relevant Borrower and
the Bid Loan Banks at least two Business Days prior to the
proposed Borrowing Date, and such Bid Loans shall not be made on
such Borrowing Date. Until any such notice has been withdrawn by
the Auction Agent, no further Index Rate Bid Loan Requests shall
be submitted by either Borrower.
2.12 PRO RATA TREATMENT AND PAYMENTS. (a) All
payments (including prepayments), to be made by the Borrowers on
account of principal, interest and fees shall be made without
defense, set-off or counterclaim and shall be made, in the case
of fees and principal of, and interest on, Loans (other than
Negotiated Rate Loans) at the Administrative Agent's office
specified in subsection 10.2, in each case in lawful money of the
United States of America and in immediately available funds not
later than 11:00 A.M. (New York City time) on the date due. The
Administrative Agent shall distribute such payments to the Banks
entitled thereto on the day of receipt in like funds as received,
PROVIDED that the Administrative Agent shall have received such
payments not later than 11:00 A.M. (New York City time). If the
Administrative Agent shall distribute such payments to the Banks
entitled thereto on a date after the date on which such payments
were received prior to 11:00 A.M. (New York City time), the
Administrative Agent shall pay to each such Bank on demand an
amount equal to the product of (i) the daily average Federal
funds rate during such period as quoted by the Administrative
Agent, TIMES (ii) the amount of such Bank's PRO RATA share of
such payment, TIMES (iii) a fraction the numerator of which is
the number of days that elapse from and including such date of
receipt of payment by the Administrative Agent to but excluding
the date on which such Bank's PRO RATA share of such payment
shall have become immediately available to such Bank and the
denominator of which is 360. All payments (including
prepayments) to be made by the Borrowers on account of principal,
interest and fees relating to Negotiated Rate Loans shall be made
to the Bank with respect thereto on such terms, at such address
<PAGE>
29
and at such time as shall be mutually agreed upon between the
relevant Borrower and the relevant Bank in lawful money of the
United States of America on the date due.
(b) Each borrowing by the Borrowers of Committed Rate
Loans shall be made PRO RATA among the Banks according to their
respective Available Commitments, PROVIDED, HOWEVER, that for the
purposes hereof, each Bank's Available Commitment shall be
increased by the amount that such Bank has agreed to make
Committed Rate Loans in excess of its Available Commitment
pursuant to the terms of subsection 2.1(a), and, except as
provided in subsections 2.13, 2.16 and 2.17, each reduction of
the Commitments shall be made PRO RATA among the Banks according
to the respective Commitment Percentages. Each payment by the
Borrowers under this Agreement or of any Loan (other than
Negotiated Rate Loans) shall be applied, FIRST, to any fees then
due and owing pursuant to subsection 2.4, SECOND, to interest
then due and owing in respect of the Loans (other than Negotiated
Rate Loans) and THIRD, to principal then due and owing hereunder
(other than principal due and owing under Negotiated Rate Loans)
and under the Loans (other than Negotiated Rate Loans). Each
payment made by the Borrowers under this Agreement relating to a
Negotiated Rate Loan to the Bank with respect thereto shall be
applied, FIRST, to interest then due and owing in respect of such
Negotiated Rate Loan and SECOND, to principal then due and owing
hereunder with respect to such Negotiated Rate Loan and under
such Negotiated Rate Loan. Each payment (other than prepayments)
by either Borrower on account of principal of and interest on the
Loans shall be made for the account of each Bank PRO RATA
according to the respective amounts due and owing to such Bank.
Each prepayment by a Borrower on account of principal of the
Loans (other than Negotiated Rate Loans) shall be applied, FIRST,
to such of its Committed Rate Loan borrowings as such Borrower
may designate (to be applied PRO RATA among the Banks in
accordance with each Bank's share of such borrowing), PROVIDED,
HOWEVER, that any such prepayment made after the Commitment
Expiration Date for an Objecting Bank the Committed Rate Loans of
which have not been paid in full shall be applied PRO RATA among
the Banks in accordance with the principal amount of the
Committed Rate Loans of the Banks at the time of such prepayment,
and, SECOND, after all Committed Rate Loans shall have been paid
in full, to all of its Absolute Rate Bid Loans or Index Rate Bid
Loans made on the same Borrowing Date with the same Interest
Period as such Borrower may designate, PRO RATA according to the
respective amounts outstanding; PROVIDED, HOWEVER, that
prepayments made pursuant to subsection 2.13(a), (b) or (c),
2.16(c) or 2.17(b) shall be applied in accordance with such
subsection.
(c) If any payment hereunder (other than payments on
the Eurodollar Loans and Index Rate Bid Loans) becomes due and
payable on a day other than a Business Day, such payment shall be
extended to the next succeeding Business Day. If any payment on
a Eurodollar Loan or Index Rate Bid Loan becomes due and payable
<PAGE>
30
on a day other than a Working Day, the maturity thereof shall be
extended to the next succeeding Working Day 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 Working Day. With respect to any extension
of the payment of principal pursuant to this subsection 2.12(c),
interest thereon shall be payable at the then applicable rate
during such extension.
(d) Unless the Administrative Agent shall have been
notified in writing by any Bank prior to the date of the
Committed Rate Loan, Committed Rate Loans, Bid Loan or Bid Loans
to be made by such Bank (which notice shall be effective upon
receipt) that such Bank will not make its PRO RATA share of the
amount of the requested borrowing on such date available to the
Administrative Agent, the Administrative Agent may assume that
such Bank has made such amount available to it on such date and
the Administrative Agent may, in reliance upon such assumption,
make available to the relevant Borrower a corresponding amount.
If a Bank shall make such amount available to the Administrative
Agent on a date after such Borrowing Date, such Bank shall pay to
the Administrative Agent on demand an amount equal to the product
of (i) the daily average Federal funds rate during such period as
quoted by the Administrative Agent, TIMES (ii) the amount of such
Bank's PRO RATA share of such borrowing, TIMES (iii) a fraction
the numerator of which is the number of days that elapse from and
including such Borrowing Date to but excluding the date on which
such Bank's PRO RATA share of such borrowing shall have become
immediately available to the Administrative Agent and the
denominator of which is 360. A certificate of the Administrative
Agent submitted to any Bank with respect to any amounts owing
under this subsection 2.12(d) shall be conclusive, absent
manifest error. If such Bank's PRO RATA share is not in fact
made available to the Administrative Agent by such Bank within
three Business Days of such Borrowing Date, the Administrative
Agent shall be entitled to recover such amount, on demand, from
the relevant Borrower with interest thereon at the rate equal to
the product of (i) during the period from and including such
Borrowing Date to the Business Day next following the date of
such demand, the daily average Federal funds rate quoted by the
Administrative Agent, TIMES a fraction the numerator of which is
the number of days that elapse from and including such Borrowing
Date to but excluding the Business Day next following the date of
such demand and the denominator of which is 360 and (ii)
thereafter, the interest rate or rates applicable to the Loan or
Loans funded by the Administrative Agent on behalf of such Bank
on the Borrowing Date, TIMES a fraction the numerator of which is
the number of days which elapse from and including the Business
Day next following the date of such demand to but excluding the
date such amount is recovered by the Administrative Agent from
such Borrower and the denominator of which is 360. In the event
any Bank's PRO RATA share of a borrowing is not made available to
the Administrative Agent in accordance with this paragraph within
three Business Days of the applicable Borrowing Date (i) such
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31
Bank shall, during the period from such Borrowing Date to the
date such Bank makes its PRO RATA share of the applicable
borrowing available, not accrue and shall not be entitled to
receive any facility fee under subsection 2.4 and (ii) either
Borrower may exercise or pursue any other rights, remedies,
powers and privileges against such Bank as are provided by law or
by contract.
2.13 REQUIREMENTS OF LAW. (a) If any Bank shall
determine that by reason of (i) the introduction after the date
hereof of any applicable law, regulation or guideline or any
change after the date hereof in any applicable law, regulation or
guideline (including the phasing-in of a provision of any
applicable law, regulation or guideline) or in the interpretation
thereof by any governmental or other regulatory authority charged
with the administration thereof or court of competent
jurisdiction and/or (ii) compliance by such Bank with any
requirement adopted after the date hereof of or directive adopted
after the date hereof from any central bank or other fiscal,
monetary or other regulatory authority (whether or not having the
force of law), there shall be any increase in the cost of such
Bank of maintaining or giving effect to its obligations with
respect to Committed Rate Loans under this Agreement or
maintaining its Commitment with respect to Committed Rate Loans
or making or maintaining any C/D Rate Loans or Eurodollar Loans
or any reduction in any amount receivable by such Bank in respect
of C/D Rate Loans or Eurodollar Loans under this Agreement,
notwithstanding the reasonable efforts (such reasonable efforts
not to result in the incurrence of additional costs or expenses)
of such Bank to mitigate such increase or reduction, then the
relevant Borrower shall from time to time on receipt (whenever
occurring) of a certificate from such Bank (which shall be
executed by an officer thereof and a copy of which shall be
delivered to the Administrative Agent) pay to such Bank such
amounts as are stated therein to be required to indemnify such
Bank against such increased costs or reduction; PROVIDED,
HOWEVER, that if such Borrower becomes obligated to pay any Bank
any additional amount pursuant to this subsection 2.13(a), such
Borrower shall have the right, so long as no Event of Default has
occurred and is then continuing, upon giving notice to the
Administrative Agent and such Bank in accordance with subsection
2.6, to prepay in full the Loans of any such Bank, together with
accrued interest thereon, any amounts payable to such Bank
pursuant to subsections 2.13, 2.14, 2.15 and 2.17 and any accrued
and unpaid facility fee or other amount payable to such Bank
hereunder and/or, upon giving not less than three Business Days'
notice to any such Bank and the Administrative Agent, to cancel
the whole or part of the Commitment of any such Bank; PROVIDED,
FURTHER, that such Borrower shall not be obligated to pay any
Bank any additional amount pursuant to this subsection 2.13(a)(A)
which constitutes a present or future income, stamp or other tax,
levy, impost, duty, charge, fee, deduction or withholding
referred to in subsection 2.17(a) or (B) as a result of any law,
rule, guideline, regulation, request or directive regarding
<PAGE>
32
capital adequacy referred to in subsection 2.13(b). The
certificate of such Bank as to the amount of such increased costs
or reduction shall set forth in reasonable detail the computation
of such increased costs or reduction, and shall be binding and
conclusive in the absence of manifest error. Amounts payable
pursuant to this subsection 2.13(a) shall not include amounts
which the relevant Borrower is obligated to pay pursuant to the
definition of "C/D Rate" or subsection 2.13(c). A Bank which
demands indemnification hereunder as a result of an increased
cost or reduction referred to herein shall deliver the
certificate referred to above to the relevant Borrower demanding
indemnification no later than the later of (y) the thirtieth day
immediately following each payment or realization by such Bank of
such increased cost or reduction (and such certificate shall
certify that the amounts set forth therein were paid or realized
within such thirty-day period) and (z) the thirtieth day
immediately following such Bank's knowledge of the incurrence or
realization by such Bank of such increased cost or reduction (and
such certificate shall so certify).
(b) In the event that any Bank shall have determined
that the adoption after the date hereof of any law, rule,
guideline or regulation regarding capital adequacy, or any change
after the date hereof in any existing or future law, rule,
guideline or regulation regarding capital adequacy (excluding,
however, the phasing-in of any existing law, rule, regulation or
guideline regarding capital adequacy) or in the interpretation or
application thereof or compliance by such Bank or any corporation
controlling such Bank with any request or directive made or
adopted after the date hereof regarding capital adequacy (whether
or not having the force of law) from any central bank or
Governmental Authority, does or shall have the effect of reducing
the rate of return on such Bank's or such corporation's capital
as a consequence of its obligations hereunder to a level below
that which such Bank or such corporation could have achieved but
for such adoption, change or compliance (taking into
consideration such Bank's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Bank to
be material, then from time to time, within 30 days after receipt
(whenever occurring) of a certificate from such Bank (which shall
be executed by an officer thereof and a copy of which shall be
delivered to the Administrative Agent), the Borrowers jointly and
severally agree to pay to such Bank such additional amounts as
are stated therein to be required to compensate it for such
reduction; PROVIDED, HOWEVER, that if such Borrower becomes
obligated to pay any Bank any additional amount pursuant to this
subsection 2.13(b), such Borrower shall have the right, so long
as no Event of Default has occurred and is then continuing, upon
giving notice to the Administrative Agent and such Bank in
accordance with subsection 2.6, to prepay in full the Loans of
any such Bank, together with accrued interest thereon, any
amounts payable pursuant to subsections 2.13, 2.14, 2.15 and 2.17
and any accrued and unpaid facility fee or other amounts payable
to it hereunder and/or, upon giving not less than three Business
<PAGE>
33
Days' notice to any such Bank and the Administrative Agent, to
cancel the whole or part of the Commitment of any such Bank. The
certificate of such Bank as to the amount of such reduction shall
set forth in reasonable detail the computation of such reduction,
and shall be binding and conclusive in the absence of manifest
error. A Bank which demands indemnification hereunder as a
result of a reduction referred to herein shall deliver the
certificate referred to above to the relevant Borrower demanding
indemnification no later than the later of (i) the thirtieth day
immediately following each realization by such Bank of such
reduction (and such certificate shall certify that the amounts
set forth therein were realized within such thirty-day period)
and (ii) the thirtieth day immediately following such Bank's
knowledge of the realization by such Bank of such reduction (and
such certificate shall so certify).
(c) Each Borrower shall pay to each Bank that delivers
a certificate to such Borrower in accordance with the second and
third following sentences such amounts as shall be necessary to
reimburse such Bank for the costs (determined in accordance with
the immediately following sentence), if any, incurred by such
Bank, as a result of the application to such Bank during any
period on which there are outstanding Eurodollar Loans advanced
by such Bank to such Borrower of basic, supplemental, marginal
and emergency reserves under any regulations of the Board of
Governors of the Federal Reserve System or other Governmental
Authority having jurisdiction with respect thereto dealing with
reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency liabilities" in
Regulation D of such Board) maintained by a member bank of such
System (any such reserves dealing with reserve requirements
prescribed for eurocurrency funding being referred to as
"RESERVES"), such amount to be set forth in a certificate of such
Bank delivered to the relevant Borrower; PROVIDED, HOWEVER, that
if a Bank gives to a Borrower the written notice contemplated by
the proviso set forth in the second following sentence, such
Borrower shall have the right, so long as no Event of Default has
occurred and is then continuing, upon giving notice to the
Administrative Agent and such Bank in accordance with subsection
2.6, to prepay in full the Loans of such Bank, together with
accrued interest thereon, any amounts payable pursuant to
subsections 2.13, 2.14, 2.15 and 2.17 and any accrued and unpaid
facility fee or other amounts payable to it hereunder and/or upon
giving not less than three Working Days' notice to any such Bank
and the Administrative Agent, to cancel the whole or part of the
Commitment of any such Bank. Amounts certified by a Bank
hereunder for any period shall represent such Bank's calculation
or, if an accurate calculation is impracticable, reasonable
estimate (using such reasonable means of allocation as such Bank
shall determine) of the actual costs, if any, theretofore
incurred by such Bank as a result of the application of Reserves
to Eurocurrency liabilities (as referred to in Regulation D
referred to above) of such Bank in an amount equal to such Bank's
Eurodollar Loans during such period and in any event shall not
<PAGE>
34
exceed the amount obtainable utilizing the maximum Reserves
prescribed by the Board of Governors of the Federal Reserve
System or other Governmental Authority having jurisdiction with
respect thereto for such period. Such payment shall be made
within fifteen days after receipt by the relevant Borrower of a
certificate, signed by an officer of the Bank delivering such
certificate, specifying the period (prior to the date of such
certificate) during which the cost set forth therein was incurred
by such Bank and stating (i) that such amount represents the
actual cost, or, if an accurate calculation of such cost is
impracticable stating that such amount represents such Bank's
reasonable estimate of the actual cost, incurred by such Bank
during such period as a result of the application of Reserves to
Eurocurrency liabilities of such Bank in an amount equal to such
Bank's Eurodollar Loans during such period and specified in such
certificate and (ii) that the amount set forth therein does not
in any event exceed the amount obtainable utilizing the maximum
Reserves prescribed for such period by the Board of Governors of
the Federal Reserve System or such other Governmental Authority
having jurisdiction with respect thereto; PROVIDED that the
obligation of the Borrowers to pay any amounts pursuant to this
subsection 2.13(c) shall apply only in the case of those Banks
that give to the relevant Borrower and the Administrative Agent,
no later than 3:00 P.M. (New York City time) on the day that is
two Working Days prior to the applicable Borrowing Date therefor,
a written notice stating that such Bank intends to demand
reimbursement pursuant hereto. A Bank which demands
reimbursement of Reserve costs hereunder on account of a
Eurodollar Loan made by such Bank shall deliver the certificate
referred to in the preceding sentence to the relevant Borrower
setting forth the items specified in clauses (i) and (ii) of the
preceding sentence no later than the thirtieth day immediately
following the last day of the Interest Period applicable to such
Eurodollar Loan.
(d) The obligations of the parties under this
subsection 2.13 shall survive termination of this Agreement and
payment of the Loans.
2.14 INDEMNITY. Each Borrower agrees to indemnify
each Bank and to hold such Bank harmless from any loss or expense
which such Bank may sustain or incur as a consequence of (a)
default by such Borrower in payment of the principal amount of or
interest on any Loan by such Bank, including, but not limited to,
any such loss or expense arising from interest or fees payable by
such Bank to lenders of funds obtained by it in order to maintain
its Loans hereunder, (b) default by such Borrower in making a
borrowing after such Borrower has given a notice in accordance
with subsection 2.1 or 2.2, (c) default by such Borrower in
making any prepayment after such Borrower has given a notice in
accordance with subsection 2.5 or 2.6 or (d) the making by such
Borrower of a prepayment of a Committed Rate Loan other than an
ABR Loan, a Bid Loan or, to the extent agreed to by the relevant
Borrower and the relevant Bank with respect to a Negotiated Rate
<PAGE>
35
Loan, a Negotiated Rate Loan on a day which is not the last day
of an Interest Period with respect thereto (with respect to
Committed Rate Loans) or the maturity date therefor (with respect
to Bid Loans) or any agreed date (with respect to Negotiated Rate
Loans), including, but not limited to, any such loss or expense
arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Loans hereunder.
This covenant shall survive termination of this Agreement and
payment of the outstanding Loans. A certificate as to any amount
payable pursuant to the foregoing shall be submitted by such Bank
(and executed by an officer thereof) to the relevant Borrower,
setting forth the computation of such amounts in reasonable
detail, and shall be conclusive in the absence of manifest error.
2.15 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.
With respect to all Loans except Negotiated Rate Loans, unless
the Administrative Agent shall have been notified by the relevant
Borrower prior to the date on which any payment is due from it
hereunder (which notice shall be effective upon receipt) that
such Borrower does not intend to make such payment, the
Administrative Agent may assume that such Borrower has made such
payment when due, and the Administrative Agent may in reliance
upon such assumption (but shall not be required to) make
available to each Bank on such payment date an amount equal to
the portion of such assumed payment to which such Bank is
entitled hereunder, and if such Borrower has not in fact made
such payment to the Administrative Agent, such Bank shall, on
demand, repay to the Administrative Agent the amount made
available to such Bank together with interest thereon in respect
of each day during the period commencing on the date such amount
was made available to such Bank and ending on (but excluding) the
date such Bank repays such amount to the Administrative Agent, at
a rate per annum equal to the Administrative Agent's cost of
obtaining overnight funds in the federal funds market in New York
on each such day. A certificate of the Administrative Agent
submitted to the relevant Bank with respect to any amount owing
under this subsection 2.15 shall be conclusive absent manifest
error.
2.16 EXTENSION OF TERMINATION DATE. (a) Not less than
60 days and not more than 90 days prior to the Termination Date
then in effect, provided that no Event of Default shall have
occurred and be continuing, the Borrowers may request an
extension of such Termination Date by submitting to the
Administrative Agent an Extension Request containing the
information in respect of such extension specified in Exhibit I,
which the Administrative Agent shall promptly furnish to each
Bank. Each Bank shall, not less than 30 days and not more than
60 days prior to the Termination Date then in effect, notify the
Borrowers and the Administrative Agent of its election to extend
or not extend the Termination Date as requested in such Extension
Request. Notwithstanding any provision of this Agreement to the
contrary, any notice by any Bank of its willingness to extend the
Termination Date shall be revocable by such Bank in its sole and
<PAGE>
36
absolute discretion at any time prior to the date which is 30
days prior to the Termination Date then in effect. If the
Required Banks shall approve in writing the extension of the
Termination Date requested in such Extension Request, the
Termination Date shall automatically and without any further
action by any Person be extended for the period specified in such
Extension Request; PROVIDED that (i) each extension pursuant to
this subsection 2.16 shall be for a maximum of 364 days and (ii)
the Commitment of any Bank which does not consent in writing to
such extension within 30 days of its receipt of such Extension
Request (an "OBJECTING BANK") shall, unless earlier terminated in
accordance with this Agreement, expire on the Termination Date in
effect on the date of such Extension Request (such Termination
Date, if any, referred to as the "COMMITMENT EXPIRATION DATE"
with respect to such Objecting Bank). If, within 30 days of
their receipt of an Extension Request, the Required Banks shall
not approve in writing the extension of the Termination Date
requested in such Extension Request, the Termination Date shall
not be extended pursuant to such Extension Request. The
Administrative Agent shall promptly notify (y) the Banks and the
Borrowers of any extension of the Termination Date pursuant to
this subsection 2.16 and (z) the Borrowers and any other Bank of
any Bank which becomes an Objecting Bank.
(b) Committed Rate Loans owing to any Objecting Bank
on the Commitment Expiration Date with respect to such Bank shall
be repaid in full on or before the date which is two years after
such Commitment Expiration Date.
(c) The Borrowers shall have the right, so long as no
Event of Default has occurred and is then continuing, upon giving
notice to the Administrative Agent and the Objecting Banks in
accordance with subsection 2.6, to prepay in full the Committed
Rate Loans of the Objecting Banks, together with accrued interest
thereon, any amounts payable pursuant to subsections 2.13, 2.14,
2.15 and 2.17 and any accrued and unpaid facility fee or other
amounts payable to it hereunder and/or, upon giving not less than
three Working Days' notice to the Objecting Banks and the
Administrative Agent, to cancel the whole or part of the
Commitments of the Objecting Banks.
2.17 FOREIGN TAXES. (a) All payments made under this
Agreement shall be made without set-off or counterclaim and free
and clear of, and without reduction for or on account of, any
present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions, withholdings or restrictions
or conditions of any nature whatsoever, now or hereafter imposed,
levied, collected, withheld or assessed by any country (or by any
political subdivision or taxing authority thereof or therein)
from or through which any amount is paid under this Agreement
excluding, in the case of each Bank, (i) income and franchise
taxes (including, without limitation, branch taxes imposed by the
United States or similar taxes imposed by a political subdivision
or taxing authority thereof or therein but excluding, in the case
<PAGE>
37
of any Bank not organized under the laws of the United States,
any taxes imposed by the United States by means of withholding at
the source), (ii) in the case of any Bank not organized under the
laws of the United States, any taxes imposed by the United States
by means of withholding at the source unless such Bank has
provided the Company, the Capital Corporation and the
Administrative Agent with the documents it is required to provide
to them under subsection 2.17(c) and (iii) taxes that would not
have been imposed on such Bank but for the existence of a
connection between such Bank and the jurisdiction imposing such
taxes (other than a connection arising principally by virtue of
this Agreement) (such non-excluded taxes being called "FOREIGN
TAXES"). If any Foreign Taxes are required to be withheld from
any amounts so payable to any Bank hereunder, the amounts so
payable to such Bank shall be increased to the extent necessary
to yield to such Bank (after payment of all Foreign Taxes)
interest or any such other amounts payable hereunder at the rates
or in the amounts specified in this Agreement. Whenever any
Foreign Taxes are payable by the Company or the Capital
Corporation, as the case may be, as promptly as possible
thereafter the Company or the Capital Corporation, as the case
may be, shall send to the Administrative Agent, for the account
of the affected Bank, a certified copy of the original official
receipt, if any, received by the Company or the Capital
Corporation, as the case may be, showing payment thereof. If the
Company or the Capital Corporation, as the case may be, fails to
pay any Foreign Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent, for the
account of the affected Banks, the required receipts or other
required documentary evidence, the Company or the Capital
Corporation, as the case may be, shall indemnify such Banks for
any incremental taxes, interest or penalties that may become
payable by such Banks as a result of any such failure.
(b) If a Borrower is required by this subsection 2.17
to make a payment to or in respect of any Bank, such Borrower
shall have the right, so long as no Event of Default has occurred
and is then continuing, upon giving notice to the Administrative
Agent and such Bank in accordance with subsection 2.6, to prepay
in full the Loans of such Bank, together with accrued interest
thereon, any amounts payable pursuant to subsections 2.13, 2.14,
2.15 and 2.17 and any accrued and unpaid facility fee or other
amounts payable to it hereunder and/or on giving not less than
three Business Days' notice to any such Bank and the
Administrative Agent, to cancel the whole or part of the
Commitment of such Bank.
(c) At least two Business Days prior to the first
Borrowing Date or, if such date does not occur within thirty days
after the Closing Date, by the end of such thirty-day period,
each Bank agrees that it will deliver to each Borrower and the
Administrative Agent (i) either (A) a statement that it is
incorporated under the laws of the United States or a state
thereof or (B) if it is not so incorporated, a letter in
<PAGE>
38
duplicate in the form of Exhibit J or Exhibit K, as appropriate,
and two duly completed copies of United States Internal Revenue
Service Form 4224 or 1001 or successor applicable form, as the
case may be, certifying in each case that such Bank is entitled
to receive payment under this Agreement without deduction or
withholding of any United States Federal income taxes, and (ii)
Internal Revenue Service Form W-8 or W-9, or successor applicable
form, as the case may be, to establish an exemption from United
States backup withholding tax. Each Bank agrees (for the benefit
of the Administrative Agent and the Borrowers) to provide the
Administrative Agent and the Borrowers a new letter and Form 4224
or 1001 and Form W-8 or W-9, or successor applicable form or
other manner of certification, on or before the date that any
such letter or form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent
letter or form previously delivered by it, certifying in the case
of a Form 1001 or 4224 that such Bank is entitled to receive
payments under this Agreement without deduction or withholding of
any United States Federal income tax, and in the case of a Form
W-8 or W-9 establishing exemption from United States backup
withholding tax. The Administrative Agent shall not be
responsible for obtaining such documentation from any Bank other
than Chemical.
(d) The Company and the Capital Corporation shall not
be required to make payments on account of United States
withholding taxes to any Bank under the second sentence of
subsection 2.17(a) to the extent that such taxes could have been
avoided had such Bank complied with a reasonable request by the
Company, the Capital Corporation or the Administrative Agent for
the forms or documents referred to in subsection 2.17(c).
(e) To the extent that, as determined by any Bank in
its sole discretion and without any obligation to disclose its
tax records, Foreign Taxes have been irrevocably utilized by such
Bank (either as credits or deductions) to reduce its tax
liabilities and such utilization is consistent with its overall
tax policies, such Bank shall pay to the Company or the Capital
Corporation, as the case may be, an amount equal to such
reduction obtained to the extent of such increased amounts paid
by the Company or the Capital Corporation to such Bank as
aforesaid.
(f) The obligations of the parties under this
subsection 2.17 shall survive termination of this Agreement and
payment of the Loans.
2.18 CONFIRMATIONS. The Administrative Agent shall,
within 15 days following the last day of each calendar quarter
(each such period being a "REPORT PERIOD"), furnish to the
Borrowers a written account with respect to all amounts
outstanding under the Loan Accounts as at the last day of such
Report Period, including an accounting setting forth, for such
Report Period the amounts of principal, interest and other sums
<PAGE>
39
paid and payable hereunder. The Borrowers shall, within 15 days
following receipt of such written account, notify the
Administrative Agent of any discrepancies between such written
account and the Borrowers' records or, if no such discrepancies
exist, furnish written confirmation to the Administrative Agent
of the accuracy of such written account. Upon any Bank's
request, the Administrative Agent shall furnish to each Bank a
copy of such written account together with the Borrowers'
response thereto.
2.19 REPLACEMENT OF CANCELLED BANKS. The Borrowers
may designate one or more financial institutions to act as a Bank
hereunder in place of any Cancelled Bank, and upon the Borrowers,
each such financial institution and the Administrative Agent
executing a writing substantially in the form of Exhibit L, such
financial institution shall become and be a Bank hereunder with
all the rights and obligations it would have had if it had been
named on the signature pages hereof, and having for all such
financial institutions an aggregate Commitment no greater than
the whole, or such cancelled part, of the Commitment of the
Cancelled Bank in place of which such financial institutions were
designated; PROVIDED, HOWEVER, that all rights and obligations of
such Cancelled Bank relating to the Loans made by such Cancelled
Bank that are outstanding on the date of such cancellation shall
be the rights and obligations of such Cancelled Bank and not of
any such financial institution. The Administrative Agent shall
execute any such writing presented to it and shall notify the
Banks of the execution thereof, the name of the financial
institution executing such writing and the amount of its
Commitment.
SECTION 3. REPRESENTATIONS AND WARRANTIES
Each Borrower hereby represents and warrants to the
Administrative Agent and to each Bank that:
3.1 FINANCIAL CONDITION. The consolidated balance
sheet of such Borrower and its consolidated Subsidiaries as at
October 31, 1992 and the related consolidated statements of
income and of cash flow for the fiscal year then ended (including
the related schedules and notes) reported on by Deloitte &
Touche, copies of which have heretofore been furnished to each
Bank, fairly present the consolidated financial condition of such
Borrower and its consolidated Subsidiaries as at such date, and
the consolidated results of their operations and changes in
financial position for the fiscal year then ended. The condensed
unaudited consolidated balance sheet of such Borrower and its
consolidated Subsidiaries as at July 31, 1993 and the related
unaudited consolidated statement of income for the nine-month
period ended on such date, certified by a Responsible Officer,
copies of which have heretofore been furnished to each Bank,
present fairly the consolidated financial condition of such
Borrower and its consolidated Subsidiaries as at such date, and
<PAGE>
40
the consolidated results of their operations for the nine-month
period then ended (subject to normal year-end audit adjustments).
All such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with
generally accepted accounting principles in the United States of
America applied consistently throughout the periods involved
(except as approved by such accountants or Responsible Officer,
as the case may be, and as disclosed therein).
3.2 CORPORATE EXISTENCE. Such Borrower is duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the corporate
power and authority to own its properties and to conduct the
business in which it is currently engaged.
3.3 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE
OBLIGATIONS. Such Borrower has the corporate power and authority
and the legal right to execute, deliver and perform this
Agreement and to borrow hereunder and has taken all necessary
corporate action to authorize its borrowings on the terms and
conditions of this Agreement and to authorize its execution,
delivery and performance of this Agreement. No consent or
authorization of, filing with, or other act by or in respect of
any Governmental Authority, is required in connection with the
borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement other
than any such consents, authorizations, filings or acts as have
been obtained, taken or made and are in full force and effect.
This Agreement has been duly executed and delivered on behalf of
such Borrower, and this Agreement constitutes a legal, valid and
binding obligation of such Borrower enforceable against such
Borrower in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equity
principles (whether enforcement is sought by proceedings in
equity or at law).
3.4 NO LEGAL BAR. The execution, delivery and
performance of this Agreement, the borrowings hereunder and the
use of the proceeds thereof, will not violate any Requirement of
Law or any Contractual Obligation of such Borrower, and will not
result in, or require, the creation or imposition of any lien on
any of its properties or revenues pursuant to any Requirement of
Law or Contractual Obligation.
3.5 NO MATERIAL LITIGATION. No litigation,
investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of such
Borrower, threatened by or against such Borrower or any of its
Subsidiaries or against any of its or their respective properties
or revenues except actions, suits or proceedings which will not
materially adversely affect the ability of such Borrower to
perform its obligations hereunder. All of the defaults, if any,
<PAGE>
41
of such Borrower or any of its Subsidiaries with respect to any
order of any Governmental Authority do not, and will not
collectively, have a material adverse effect on the business,
operations, property or financial or other condition of such
Borrower and its Subsidiaries taken as a whole.
3.6 TAXES. Each of such Borrower and its Subsidiaries
has filed or caused to be filed all tax returns which, to the
knowledge of such Borrower, are required to be filed (except
where the failure to file such tax returns would not have a
material adverse effect on the business, operations, property or
financial or other condition of such Borrower and its
Subsidiaries taken as a whole), and has paid all taxes shown to
be due and payable on said returns or on any assessments made
against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any
Governmental Authority (other than assessments, taxes, fees and
other charges the amount or validity of which is currently being
contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been
provided on the books of such Borrower or its Subsidiaries, as
the case may be).
3.7 MARGIN REGULATIONS. No part of the proceeds of
any Loan hereunder will be used for any purpose which violates
the provisions of Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in
effect.
3.8 PARI PASSU RANKING. The indebtedness of such
Borrower under its Loans and all other amounts due hereunder
ranks at least pari passu with all present and future unsecured
senior indebtedness of such Borrower (other than indebtedness
preferred by law).
3.9 NO DEFAULTS. No "Event of Default" or similar
event, or event which, with the lapse of time or the giving of
notice, or both, would constitute such an Event or event, has
occurred and is continuing hereunder or under any material bond,
debenture, note or other evidence of indebtedness, or in any
material mortgage, deed of trust, indenture or loan agreement, of
such Borrower.
3.10 USE OF PROCEEDS. The proceeds of the Loans will
be used by such Borrower for its general corporate purposes,
which shall include, but shall not be limited to, any purchase or
other acquisition of all or a portion of the debt or stock or
other evidences of ownership of such Borrower or the assets or
stock or other evidences of ownership of any other Person or
Persons.
<PAGE>
42
SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO INITIAL LOAN. The obligation of
each Bank to make its initial Loan hereunder is subject to the
satisfaction of the following conditions precedent:
(a) COUNTERPARTS. The Administrative Agent shall have
received counterparts hereof, executed by all of the parties
hereto.
(b) RESOLUTIONS. The Administrative Agent shall have
received, with a counterpart for each Bank, resolutions,
certified by the Secretary or an Assistant Secretary of each
Borrower, in form and substance satisfactory to the
Administrative Agent, adopted by the Board of Directors of
such Borrower authorizing the execution of this Agreement
and the performance of its obligations hereunder and any
borrowings hereunder from time to time.
(c) LEGAL OPINIONS. The Administrative Agent shall
have received, with a counterpart for each Bank, an opinion
of Frank S. Cottrell, Esq., or his successor, as general
counsel, or an associate general counsel, for each of the
Borrowers, dated the Closing Date and addressed to the
Agents and the Banks, substantially in the form of Exhibit
G, and an opinion of Shearman & Sterling, special counsel to
the Borrowers, dated the Closing Date and addressed to the
Agents and the Banks, substantially in the form of Exhibit
H. Such opinions shall also cover such other matters
incident to the transactions contemplated by this Agreement
as the Administrative Agent shall reasonably require.
(d) INCUMBENCY CERTIFICATE. The Administrative Agent
shall have received, with a counterpart for each Bank, a
certificate of the Secretary or an Assistant Secretary of
each Borrower certifying the names and true signatures of
the officers of such Borrower authorized to sign this
Agreement, together with evidence of the incumbency of such
Secretary or Assistant Secretary.
(e) EXISTING AGREEMENT. The commitment of each
financial institution to make loans to the Borrowers
pursuant to (i) the Credit Agreement, dated as of November
30, 1989, among the Company, the Capital Corporation, the
financial institution parties thereto and Chemical Bank (as
successor by merger to Manufacturers Hanover Trust Company),
as agent, and (ii) the Multi-Country Multi-Option Financing
Facility, dated December 15, 1989, among the Company, the
Capital Corporation, certain other Subsidiaries of the
Company, the financial institution parties thereto and
Deutsche Bank Luxembourg S.A., as agent, shall have been
terminated in full and the outstanding principal amount of
the indebtedness thereunder and all other amounts owing to
<PAGE>
43
any bank thereunder shall have been repaid or paid by the
Borrowers.
(f) FEES. The Administrative Agent shall have
received, for the accounts of the Banks and the
Administrative Agent, and the Auction Agent shall have
received, for the account of the Auction Agent, all accrued
fees and expenses owing hereunder or in connection herewith
to the Banks and the Agents to be received on the Closing
Date.
(g) ADDITIONAL MATTERS. All other documents which the
Administrative Agent may reasonably request in connection
with the transactions contemplated by this Agreement shall
be reasonably satisfactory in form and substance to the
Administrative Agent and its counsel.
4.2 CONDITIONS TO ALL LOANS. The obligation of each
Bank to make any Loan (which shall include the initial Loan to be
made by it hereunder) to be made by it hereunder is subject to
the satisfaction of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by the Borrowers herein
or which are contained in any certificate, document or
financial or other statement furnished by either Borrower at
any time hereunder or in connection herewith (other than any
representations and warranties which by the terms of such
certificate, document or financial or other statement do not
survive the execution of this Agreement) shall be correct on
and as of the date of such Loan as if made on and as of such
date except as such representations and warranties expressly
relate to an earlier date.
(b) NO DEFAULT OR EVENT OF DEFAULT. No Default or
Event of Default shall have occurred and be continuing on
such date or after giving effect to the Loans to be made on
such date and the application of the proceeds thereof.
(c) ADDITIONAL CONDITIONS TO BID LOANS. If such Loan
is made pursuant to subsection 2.2, all conditions set forth
in subsection 2.2(f) shall have been satisfied.
Each acceptance by either Borrower of a Loan shall
constitute a representation and warranty by the relevant Borrower
as of the date of such Loan that the applicable conditions in
clauses (a), (b) and (c) of this subsection 4.2 have been
satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
Each of the Borrowers (except as otherwise specified)
hereby agrees that, so long as there is any obligation by any
<PAGE>
44
Bank to make Loans hereunder, any Loan of such Borrower remains
outstanding and unpaid or any other amount is owing by such
Borrower to any Bank or the Administrative Agent hereunder
(unless the Required Banks shall otherwise consent in writing):
5.1 FINANCIAL STATEMENTS. Such Borrower shall furnish
to each Bank:
(a) as soon as available, but in any event within 120
days after the end of each fiscal year of such Borrower, a
copy of the consolidated balance sheet of such Borrower and
its consolidated Subsidiaries as at the end of such year and
the related consolidated statements of income and of cash
flow for such year, reported on by Deloitte & Touche or
other independent certified public accountants of nationally
recognized standing; and
(b) as soon as available, but in any event not later
than 60 days after the end of each of the first three
quarterly periods of each fiscal year of such Borrower, the
condensed unaudited consolidated balance sheet of such
Borrower and its consolidated Subsidiaries as at the end of
each such quarter and the related unaudited consolidated
statement of income of such Borrower and its consolidated
Subsidiaries for such quarterly period and the portion of
the fiscal year through such date, certified by a
Responsible Officer (subject to normal year-end audit
adjustments);
all such financial statements to present fairly the consolidated
financial condition of such Borrower and to be prepared in
accordance with generally accepted accounting principles in the
United States of America applied consistently throughout the
periods reflected therein (except as approved by such accountants
or officer, as the case may be, and disclosed therein).
5.2 CERTIFICATES; OTHER INFORMATION. Such Borrower
shall furnish to each Bank:
(a) concurrently with the delivery of the financial
statements referred to in subsections 5.1(a) and (b) above,
a certificate of a Responsible Officer stating that (i) he
has no knowledge of the occurrence and continuance of any
Default or Event of Default except as specified in such
certificate, in which case such certificate shall contain a
description thereof and a statement of the steps, if any,
which such Borrower is taking, or proposes to take, to cure
the same and (ii) the financial statements delivered
pursuant to subsection 5.1 would not be different if
prepared in accordance with GAAP except as specified in such
certificate; and
<PAGE>
45
(b) promptly, such additional financial and other
information as any Bank may from time to time reasonably
request.
5.3 COMPANY INDENTURE DOCUMENTS. The Company shall,
contemporaneously with the delivery thereof to the Trustee,
furnish to each Bank a copy of any information, document or
report required to be filed with the Trustee pursuant to Section
7.03 of the Indenture.
5.4 CAPITAL CORPORATION INDENTURE DOCUMENTS. The
Capital Corporation shall, contemporaneously with the delivery
thereof to the Trustee, furnish to each Bank a copy of any
information, document or report required to be filed with the
Trustee pursuant to Section 7.03 of the Indenture dated February
1, 1991, between the Capital Corporation and The Bank of New
York, as Trustee.
5.5 NOTICE OF DEFAULT. Such Borrower shall promptly
give notice to the Administrative Agent of the occurrence of any
Default or Event of Default, which notice shall be given in
writing as soon as possible, and in any event within 10 days
after a Responsible Officer obtains knowledge of such occurrence,
with a description of the steps being taken to remedy the same
(provided that such Borrower shall not be obligated to give
notice of any Default or Event of Default which is remedied prior
to or within 10 days after a Responsible Officer of such Borrower
first acquires such knowledge).
5.6 OWNERSHIP OF CAPITAL CORPORATION STOCK. The
Company shall continue to own, directly or through one or more
wholly-owned Subsidiaries, free and clear of any lien or other
encumbrance, 51% of the voting stock of the Capital Corporation;
PROVIDED, HOWEVER, that the Capital Corporation may merge or
consolidate with, or sell or convey substantially all of its
assets to, the Company as provided in subsection 7.4.
5.7 EMPLOYEE BENEFIT PLANS. The Company shall
maintain, and cause each of its Subsidiaries to maintain, each
Plan as to which it may have liability, in compliance with all
applicable requirements of law and regulations.
SECTION 6. NEGATIVE COVENANTS OF THE COMPANY
The Company hereby agrees that, so long as there is any
obligation by any Bank to make Loans hereunder, any Loan remains
outstanding and unpaid or any other amount is owing to either
Agent or any Bank hereunder, it shall not, nor in the case of
subsections 6.2 and 6.3 shall it permit any Restricted Subsidiary
to (unless the Required Banks shall otherwise consent in
writing):
<PAGE>
46
6.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS. Consolidate with or merge with or into any other
corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(a) either the Company shall be the continuing
corporation, or the corporation (if other than the Company)
formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance or
transfer the properties and assets of the Company
substantially as an entirety shall expressly assume, by an
assumption agreement, executed and delivered to the
Administrative Agent, in form satisfactory to the Required
Banks, the due and punctual payment of the principal of and
interest on the Loans to the Company and the performance of
every covenant of this Agreement on the part of the Company
to be performed or observed;
(b) immediately after giving effect to such
transaction, no Default or Event of Default, shall have
happened and be continuing;
(c) if as a result thereof any property or assets of
the Company or a Restricted Subsidiary would become subject
to any Mortgage not permitted by (i) through (xii) of
subsection 6.2(a) or subsection 6.2(b), compliance shall be
effected with the first clause of subsection 6.2(a); and
(d) the Company and the successor Person have
delivered to the Administrative Agent an officers'
certificate signed by two Responsible Officers stating that
such consolidation, merger, conveyance or transfer and such
assumption agreement comply with this subsection 6.1 and
that all conditions precedent herein provided for relating
to such transaction have been complied with.
6.2 LIMITATION ON LIENS. (a) Issue, incur, assume or
guarantee any debt (hereinafter in this subsection referred to as
"DEBT") secured by any mortgage, security interest, pledge, lien
or other encumbrance (hereinafter called "MORTGAGE" or
"MORTGAGES") upon any Important Property of the Company or of a
Restricted Subsidiary, or upon any shares of stock or
indebtedness issued or incurred by any Restricted Subsidiary
(whether such Important Property, shares of stock or indebtedness
is now owned or hereafter acquired) without in any such case
effectively providing, concurrently with the issuance,
incurrence, assumption or guaranty of any such Debt, that the
Loans and all other amounts hereunder (together with, if the
Company shall so determine, any other indebtedness of or guaranty
by the Company or such Restricted Subsidiary ranking equally with
the Loans then existing or thereafter created) shall be secured
equally and ratably with or prior to such Debt; PROVIDED,
HOWEVER, that the foregoing restrictions shall not apply to:
<PAGE>
47
(i) Mortgages on any property acquired, constructed or
improved by the Company or any Restricted Subsidiary after
the date of this Agreement which are created or assumed
contemporaneously with, or within 120 days after, such
acquisition, construction or improvement to secure or
provide for the payment of all or any part of the purchase
price of such property or the cost of such construction or
improvement incurred after the date of this Agreement, or
(in addition to Mortgages contemplated by clauses (ii),
(iii) and (iv) below) Mortgages on any property existing at
the time of acquisition thereof; PROVIDED that such
Mortgages shall not apply to any Important Property
theretofore owned by the Company or any Restricted
Subsidiary other than, in the case of any such construction
or improvement, any theretofore unimproved real property on
which the property so constructed, or the improvement, is
located;
(ii) Mortgages on any property, shares of stock, or
indebtedness existing at the time of acquisition thereof
from a corporation which is consolidated with or merged
into, or substantially all of the assets of which are
acquired by, the Company or a Restricted Subsidiary;
(iii) Mortgages on property of a corporation existing
at the time such corporation becomes a Restricted
Subsidiary;
(iv) Mortgages to secure Debt of a Restricted
Subsidiary to the Company or to another Restricted
Subsidiary;
(v) Mortgages in favor of the United States of
America or any State thereof, or any department, agency or
instrumentality or political subdivision of the United
States of America or any State thereof, to secure partial,
progress, advance or other payments pursuant to any contract
or statute or to secure any indebtedness incurred for the
purpose of financing all or any part of the purchase price
or the cost of constructing or improving the property
subject to such Mortgages and Mortgages given to secure
indebtedness incurred in connection with the financing of
construction of pollution control facilities, the interest
on which indebtedness is exempt from income taxes under the
Code;
(vi) any deposit or pledge of assets (1) with any
surety company or clerk of any court, or in escrow, as
collateral in connection with, or in lieu of, any bond on
appeal from any judgment or decree against the Company or a
Restricted Subsidiary, or in connection with other
proceedings or actions at law or in equity by or against the
Company or a Restricted Subsidiary, or (2) as security for
the performance of any contract or undertaking not directly
<PAGE>
48
related to the borrowing of money or the securing of
indebtedness, if made in the ordinary course of business, or
(3) with any governmental agency, which deposit or pledge is
required or permitted to qualify the Company or a Restricted
Subsidiary to conduct business, to maintain self-insurance,
or to obtain the benefits of any law pertaining to worker's
compensation, unemployment insurance, old age pensions,
social security, or similar matters, or (4) made in the
ordinary course of business to obtain the release of
mechanics', workmen's, repairmen's, warehousemen's or
similar liens, or the release of property in the possession
of a common carrier;
(vii) Mortgages existing on property acquired by the
Company or a Restricted Subsidiary through the exercise of
rights arising out of defaults on receivables acquired in
the ordinary course of business;
(viii) judgment liens, so long as the finality of such
judgment is being contested in good faith and execution
thereon is stayed;
(ix) Mortgages for the sole purpose of extending,
renewing or replacing in whole or in part Debt secured by
any Mortgage referred to in the foregoing clauses (i) to
(viii), inclusive, or in this clause (ix), PROVIDED,
HOWEVER, that the principal amount of Debt secured thereby
shall not exceed the principal amount of Debt so secured at
the time of such extension, renewal or replacement, and that
such extension, renewal or replacement shall be limited to
all or a part of the property which secured the Mortgage so
extended, renewed or replaced (plus improvements on such
property);
(x) liens for taxes or assessments or governmental
charges or levies not yet due or delinquent, or which can
thereafter be paid without penalty, or which are being
contested in good faith by appropriate proceedings;
landlord's liens on property held under lease; and any other
liens of a nature similar to those hereinabove described in
this clause (x) which do not, in the opinion of the Company,
materially impair the use of such property in the operation
of the business of the Company or a Restricted Subsidiary or
the value of such property for the purposes of such
business;
(xi) Mortgages on Margin Stock owned by the Company
and its Restricted Subsidiaries to the extent such Margin
Stock so Mortgaged exceeds 25% of the fair market value of
the sum of the Important Property of the Company and the
Restricted Subsidiaries plus the shares of stock (including
Margin Stock) and indebtedness issued or incurred by the
Restricted Subsidiaries; and
<PAGE>
49
(xii) Mortgages on any Important Property of, or any
shares of stock or indebtedness issued or incurred by, any
Restricted Subsidiary organized under the laws of Canada.
(b) (i) The provisions of subsection 6.2(a) shall not
apply to the issuance, incurrence, assumption or guarantee by the
Company or any Restricted Subsidiary of Debt secured by a
Mortgage which would otherwise be subject to the foregoing
restrictions up to an aggregate amount which, together with the
sum of (A) all other Debt issued or incurred by the Company and
its Restricted Subsidiaries secured by Mortgages (other than
Mortgages permitted by subsection 6.2(a)) which would otherwise
be subject to the foregoing restrictions and (B) the Attributable
Debt in respect of Sale and Lease-back Transactions in existence
at such time (other than Sale and Lease-back Transactions which,
if the Attributable Debt in respect of such Sale and Lease-back
had been a Mortgage, would have been permitted by clause (i) of
subsection 6.2(a) and other than Sale and Lease-back Transactions
the proceeds of which have been applied in accordance with
subsection 6.3(b)) does not at the time exceed 5% of Consolidated
Net Worth, as shown on the audited consolidated balance sheet
contained in the latest annual report to stockholders of the
Company.
(ii) For purposes of subsection 6.2(b)(i) above, the
term "CONSOLIDATED NET WORTH" shall mean the aggregate of capital
and surplus of the Company and its consolidated Subsidiaries,
less minority interests in Subsidiaries, determined in accordance
with GAAP; and the term "ATTRIBUTABLE DEBT" shall mean, as of any
particular time, the present value, discounted at a rate per
annum equal to the interest rate set forth in the form of
Debenture set forth in the Indenture, compounded semi-annually,
of the obligation of a lessee for rental payments during the
remaining term of any lease (including any period for which such
lease has been extended or may, at the option of the lessor, be
extended); the net amount of rent required to be paid for any
such period shall be the total amount of the rent payable by the
lessee with respect to such period, but may exclude amounts
required to be paid on account of maintenance and repairs,
insurance, taxes, assessments, water rates and similar charges;
and, in the case of any lease which is terminable by the lessee
upon the payment of a penalty, such net amount shall also include
the amount of such penalty, but no rent shall be considered as
required to be paid under such lease subsequent to the first date
upon which it may be so terminated.
(c) If, upon any consolidation or merger of any
Restricted Subsidiary with or into any other corporation, or upon
any consolidation or merger of any other corporation with or into
the Company or any Restricted Subsidiary or upon any sale or
conveyance of the property of any Restricted Subsidiary as an
entirety or substantially as an entirety to any other Person, or
upon any acquisition by the Company or any Restricted Subsidiary
by purchase or otherwise of all or any part of the property of
<PAGE>
50
any other Person, any Important Property theretofore owned by the
Company or such Restricted Subsidiary would thereupon become
subject to any Mortgage not permitted by the terms of subsection
(a) or (b) of this subsection 6.2, the Company, prior to such
consolidation, merger, sale or conveyance, or acquisition, will,
or will cause such Restricted Subsidiary to, secure payment of
the principal of and interest on the Loans (equally and ratably
with or prior to any other indebtedness of the Company or such
Subsidiary then entitled thereto) by a direct lien on all such
property prior to all liens other than any liens theretofore
existing thereon by an assumption agreement or otherwise.
(d) If at any time the Company or any Restricted
Subsidiary shall issue, incur, assume or guarantee any Debt
secured by any Mortgage not permitted by this subsection 6.2, to
which the covenant in subsection 6.2(a) is applicable, the
Company will promptly deliver to the Administrative Agent (with
counterparts for each Bank):
(i) an officers' certificate signed by two Responsible
Officers stating that the covenant of the Company contained
in subsections (a) or (c) of this subsection 6.2 has been
complied with; and
(ii) An opinion of counsel satisfactory to the
Administrative Agent to the effect that such covenant has
been complied with, and that any instruments executed by the
Company in the performance of such covenant comply with the
requirements of such covenant.
6.3 LIMITATIONS ON SALE AND LEASE-BACK TRANSACTIONS.
Enter into any arrangement with any Person providing for the
leasing to the Company or any Restricted Subsidiary of any
Important Property owned or hereafter acquired by the Company or
such Restricted Subsidiary (except for temporary leases for a
term, including any renewal thereof, of not more than three years
and except for leases between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries), which Important
Property has been or is to be sold or transferred by the Company
or such Restricted Subsidiary to such Person (herein referred to
as a "SALE AND LEASE-BACK TRANSACTION") unless the net proceeds
of such sale are at least equal to the fair value (as determined
by the Board of Directors) of such property and either (a) the
Company or such Restricted Subsidiary would be entitled, pursuant
to the provisions of (1) subsection 6.2(a)(i) or (2) subsection
6.2(b), to incur Debt secured by a Mortgage on the Important
Property to be leased without equally and ratably securing the
Loans, or (b) the Company shall, and in any such case the Company
covenants that it will, within 120 days of the effective date of
any such arrangement, apply an amount equal to the fair value (as
so determined) of such property to the reduction of the
Commitments (to be accompanied by prepayment of the Loans in
accordance with subsection 2.6 to the extent that the principal
amount thereof outstanding prior to such prepayment would exceed
<PAGE>
51
the Commitments as so reduced) or to the payment or other
retirement of funded debt for money borrowed, incurred or assumed
by the Company which ranks senior to or PARI PASSU with the Loans
or of funded debt for money borrowed, incurred or assumed by any
Restricted Subsidiary (other than, in either case, funded debt
owned by the Company or any Restricted Subsidiary). For this
purpose, funded debt means any Debt which by its terms matures at
or is extendable or renewable at the sole option of the obligor
without requiring the consent of the obligee to a date more than
twelve months after the date of the creation of such Debt.
6.4 CONSOLIDATED TANGIBLE NET WORTH. Permit
Consolidated Tangible Net Worth as at the end of any fiscal
quarter of the Company and its consolidated Subsidiaries
(including the last quarter of any fiscal year of the Company and
its consolidated Subsidiaries) to be less than $1,600,000,000.
SECTION 7. NEGATIVE COVENANTS OF THE CAPITAL
CORPORATION
The Capital Corporation hereby agrees that, so long as
there is any obligation by any Bank to make Loans to the Capital
Corporation hereunder, any Loan of the Capital Corporation
remains outstanding and unpaid or any other amount is owing by
the Capital Corporation to any Bank or either Agent hereunder,
the Capital Corporation shall not, nor in the case of the
agreements set forth in subsection 7.3 shall it permit any of its
Subsidiaries to, directly or indirectly (unless the Required
Banks shall otherwise consent in writing):
7.1 FIXED CHARGES RATIO. Permit the ratio of Net
Earnings Available for Fixed Charges to Fixed Charges for any
fiscal quarter of the Capital Corporation and its consolidated
Subsidiaries (including the last quarter of any fiscal year of
the Capital Corporation and its consolidated Subsidiaries) to be
less than 1.05 to 1.
7.2 CONSOLIDATED SENIOR DEBT TO CONSOLIDATED CAPITAL
BASE. Permit the ratio of Consolidated Senior Debt to
Consolidated Capital Base as at the end of any fiscal quarter of
the Capital Corporation and its consolidated Subsidiaries
(including the end of any fiscal year of the Capital Corporation
and its consolidated Subsidiaries) to be more than 8 to 1.
7.3 LIMITATION ON LIENS. Issue, incur, assume or
guarantee any Debt secured by any Mortgage upon any of its
property or assets, or any of the property or assets of any of
its Subsidiaries (whether any such property or assets is now
owned or hereafter acquired) without in any such case effectively
providing, concurrently with the issuance, incurrence, assumption
or guaranty of any such Debt, that the Loans and all other
amounts hereunder (together with, if the Capital Corporation
shall so determine, any other indebtedness of or guaranty by such
<PAGE>
52
Borrower or such Subsidiary ranking equally with the Loans then
existing or thereafter created) shall be secured equally and
ratably with or prior to such Debt; PROVIDED, HOWEVER, that the
foregoing restrictions shall not apply to:
(a) Mortgages on fixed assets or other physical
properties hereafter acquired to secure all or part of the
purchase price thereof or the acquiring hereafter of such assets
or properties subject to any existing lien or charge securing
indebtedness (whether or not assumed);
(b) easements, liens, franchises or other minor
encumbrances on or over any real property which do not materially
detract from the value of such property or its use in the
business of the Capital Corporation or a Subsidiary of the
Capital Corporation;
(c) any deposit or pledge of assets (i) with any
surety company or clerk of any court, or in escrow, as collateral
in connection with or in lieu of, any bond on appeal from any
judgment or decree against the Capital Corporation or a
Subsidiary of the Capital Corporation, or in connection with
other proceedings or actions at law or in equity by or against
the Capital Corporation or a Subsidiary of the Capital
Corporation or (ii) as security for the performance of any
contract or undertaking not directly or indirectly related to the
borrowing of money or the securing of indebtedness, if made in
the ordinary course of business, or (iii) with any governmental
agency, which deposit or pledge is required or permitted to
qualify the Capital Corporation or a Subsidiary of the Capital
Corporation to conduct business, to maintain self-insurance, or
to obtain the benefits of any law pertaining to workmen's
compensation, unemployment insurance, old age pensions, social
security, or similar matters, or (iv) made in the ordinary course
of business to obtain the release of mechanics', workmen's,
repairmen's, warehousemen's or similar liens, or the release of
property in the possession of a common carrier;
(d) Mortgages by a Subsidiary as security for
indebtedness owed to the Capital Corporation;
(e) liens for taxes and governmental charges not yet
due or contested by appropriate proceedings in good faith;
(f) Mortgages existing on property acquired by the
Capital Corporation or a Subsidiary of the Capital Corporation
through the exercise of rights arising out of defaults on
receivables acquired in the ordinary course of business;
(g) judgment liens, so long as the finality of such
judgment is being contested in good faith and execution thereon
is stayed;
<PAGE>
53
(h) any Mortgage (other than directly or indirectly to
secure borrowed money) if, after giving effect thereto, the
aggregate principal sums secured by pledges or liens otherwise
within the restrictions in clauses (a) through (h) of this
subsection 7.3 do not exceed $500,000;
(i) any transaction characterized as a sale of
receivables (retail or wholesale) but reflected as secured
indebtedness on a balance sheet in conformity with generally
accepted accounting principles in the United States of America;
and
(j) Mortgages on Margin Stock owned by the Capital
Corporation and its Subsidiaries to the extent such Margin Stock
exceeds 25% of the fair market value of property and assets of
the Capital Corporation and its Subsidiaries (including Margin
Stock).
7.4 CONSOLIDATION; MERGER. Merge or consolidate with,
or sell or convey (other than a conveyance by way of lease) all
or substantially all of its assets to, any other corporation,
unless (a) the Capital Corporation shall be the surviving
corporation in the case of a merger or the surviving, resulting
or transferee corporation (the "SUCCESSOR CORPORATION") shall be
a corporation organized under the laws of the United States or
any State thereof or the District of Columbia and shall expressly
assume the due and punctual performance of all of the agreements,
covenants and obligations of the Capital Corporation under this
Agreement by supplemental agreement satisfactory to the
Administrative Agent and executed and delivered to the
Administrative Agent by the successor corporation and (b) the
Capital Corporation or such successor corporation, as the case
may be, shall not, immediately after such merger, consolidation,
sale or conveyance, be in default in the performance of any such
agreements, covenants or obligations; PROVIDED, HOWEVER, that the
Capital Corporation may merge or consolidate with, or sell or
convey substantially all of its assets to, the Company, if (i)
the Company is the successor corporation (as defined above) and
(ii) subclause (b) above is complied with. Upon any such merger,
consolidation, sale or conveyance, the successor corporation
shall succeed to and be substituted for, and may exercise every
right and power of and shall be subject to all the obligations
of, the Capital Corporation under this Agreement, with the same
effect as if the successor corporation had been named as the
Capital Corporation herein and therein.
SECTION 8. EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any
of the following events:
(a) Either Borrower shall fail to pay any principal of
any Loan when due in accordance with the terms hereof or to
<PAGE>
54
pay any interest on any Loan, in each case within two
Business Days after any such amount becomes due in
accordance with the terms hereof or shall fail to pay any
other amount payable hereunder within five Business Days
after any such other amount becomes due in accordance with
the terms thereof or hereof; or
(b) Any representation or warranty made or pursuant to
subsection 4.2 deemed made by either Borrower herein or
which is contained in any material certificate, material
document or material financial statement or other material
statement furnished at any time under or in connection with
this Agreement shall prove to have been incorrect in any
material respect on or as of the date made or deemed made;
or
(c) The Company shall default in the observance or
performance of any agreement contained in subsections 5.6,
6.1 or 6.4, or the Capital Corporation shall default in the
observance or performance of any agreement contained in
subsections 7.1, 7.2 or 7.4; or
(d) Either Borrower shall default in the observance or
performance of any agreement contained in this Agreement
(other than those agreements referred to above in this
Section 8), and such default shall continue unremedied for a
period of 30 days after written notice thereof shall have
been given to such Borrower by the Administrative Agent or
any of the Banks through the Administrative Agent; or
(e) (i) Either Borrower or any of its Significant
Subsidiaries shall default in any payment of principal of or
interest on any indebtedness for borrowed money (other than
the Loans) in a principal amount in excess of $15,000,000 in
the aggregate, or any interest or premium thereon, when due
(whether at scheduled maturity or by required prepayment,
acceleration, demand or otherwise) and such failure shall
continue beyond the period of grace, if any, provided in the
instrument or agreement under which such indebtedness was
created; or (ii) any other default (other than any default
arising solely out of either Borrower's, or any of its
Significant Subsidiaries', violation of any arrangement with
any Bank, or any affiliate of any Bank, in any way
restricting such Borrower's, or such Significant
Subsidiary's, right or ability to sell, pledge or otherwise
dispose of Margin Stock other than Restricted Margin Stock),
or any other event that with notice or the lapse of time, or
both, would constitute such a default, under any agreement
or instrument relating to any such indebtedness for borrowed
money (other than the Loans), shall occur and shall continue
after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such default or
event is to accelerate the maturity of such indebtedness; or
(iii) any such indebtedness shall, by reason of default, be
<PAGE>
55
declared to be due and payable, or required to be prepaid,
prior to the stated maturity thereof (unless such
indebtedness is declared due and payable, or required to be
prepaid, solely by reason of either Borrower's, or any of
its Significant Subsidiaries', violation of any arrangement
with any Bank, or any affiliate of any Bank, in any way
restricting such Borrower's, or such Significant
Subsidiary's, right or ability to sell, pledge or otherwise
dispose of Margin Stock other than Restricted Margin Stock);
or
(f) (i) Either Borrower or any of its Significant
Subsidiaries shall commence any case, proceeding or other
action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for
it or for all or any substantial part of its assets, or such
Borrower or any of its Significant Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii)
there shall be commenced against either Borrower or any of
its Significant Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 90 days; or
(g) Any action is undertaken to terminate any Plan as
to which either Borrower, or any Subsidiary of either
Borrower, may have liability, or any such Plan is terminated
or such Borrower or Subsidiary withdraws from such Plan, or
any Reportable Event as to any such Plan shall occur, and
there shall exist a deficiency in the assets available to
satisfy the benefits guaranteeable under ERISA with respect
to such Plan, in the aggregate for all such Plans with
respect to which any of the foregoing shall have occurred in
the immediately preceding 12 consecutive months, of more
than 25% of the Consolidated Tangible Net Worth of such
Borrower; or
(h) Any Person shall own beneficially, directly or
indirectly, 30% or more of the common stock of the Company;
or any Person shall have the power, direct or indirect, to
vote securities having 30% or more of the ordinary voting
power for the election of directors of the Company or shall
own beneficially, directly or indirectly, securities having
such power, PROVIDED that there shall not be included among
the securities as to which any such Person has such power to
vote or which such Person so owns securities owned by such
<PAGE>
56
Person as nominee for the direct or indirect beneficial
owner thereof or securities as to which such power to vote
arises by virtue of proxies solicited by the management of
the Company;
then, and in any such event, (a) if such event is an Event of
Default specified in paragraph (f) above, automatically the
Commitments shall immediately terminate and the Loans hereunder
(with accrued interest thereon) and all other amounts owing under
this Agreement and the Loans shall immediately become due and
payable, and (b) if such event is any Event of Default specified
in paragraphs (a) or (e), then with the consent of the Majority
Banks, the Administrative Agent may, or upon the request of the
Majority Banks, the Administrative Agent shall, or if such Event
is an Event of Default specified in paragraphs (b), (c), (d), (g)
or (h), then with the consent of the Required Banks, the
Administrative Agent may, or upon the request of the Required
Banks, the Administrative Agent shall, take either or both of the
following actions: (i) by notice to the Borrowers, declare the
Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) by notice of default to the
Borrowers, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement to be
due and payable forthwith, whereupon the same shall immediately
become due and payable. Except as expressly provided above in
this Section, presentment, demand, protest and all other notices
of any kind are hereby expressly waived with respect to this
Agreement.
SECTION 9. THE AGENTS
9.1 APPOINTMENT. (a) Each Bank hereby irrevocably
designates and appoints Chemical as the Administrative Agent of
such Bank under this Agreement, and each Bank hereby irrevocably
authorizes Chemical, as the Administrative Agent for such Bank,
to take such action on its behalf under the provisions of this
Agreement and to exercise such powers and perform such duties as
are expressly delegated to the Administrative Agent by the terms
of this Agreement, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement, the Administrative
Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with
any Bank, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
(b) Each Bank hereby irrevocably designates and
appoints Deutsche Bank AG as the Auction Agent of such Bank under
this Agreement, and each Bank hereby irrevocably authorizes
Deutsche Bank AG, as the Auction Agent for such Bank, to take
such action on its behalf under the provisions of this Agreement
and to exercise such powers and perform such duties as are
<PAGE>
57
expressly delegated to the Auction Agent by the terms of this
Agreement, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Auction Agent shall not
have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or
otherwise exist against the Auction Agent.
(c) Notwithstanding anything to the contrary contained
in this Agreement, the parties hereto hereby agree that no
Managing Agent or Co-Agent shall have any rights, duties or
responsibilities in its capacity as a Managing Agent or a Co-
Agent, as the case may be, and that no Managing Agent or Co-Agent
shall have the authority to take any action hereunder in its
capacity as such.
9.2 DELEGATION OF DUTIES. Each Agent may execute any
of its duties under this Agreement by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Each Agent
shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
9.3 EXCULPATORY PROVISIONS. Neither Agent nor any of
their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable to any Bank
for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with this Agreement (except
for its or such Person's own gross negligence or wilful
misconduct), or (ii) responsible in any manner to any of the
Banks for any recitals, statements, representations or warranties
made by the Borrowers or any officer thereof contained in this
Agreement or in any certificate, report, statement or other
document referred to or provided for in, or received by any Agent
under or in connection with, this Agreement or for the value,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or for any failure of the Borrowers
to perform their obligations hereunder. Neither Agent shall be
under any obligation to any Bank to ascertain or to inquire as to
the observance or performance of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrowers.
9.4 RELIANCE BY AGENTS. Each Agent shall be entitled
to rely, and shall be fully protected in relying, upon any Loan,
writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, facsimile, telex or teletype
message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation,
counsel to the Borrowers), independent accountants and other
<PAGE>
58
experts selected by such Agent. Each Agent may deem and treat
the payee of any Loan as the owner thereof for all purposes
except as provided in subsections 10.5(c) and 10.5(d). Each
Agent shall be fully justified in failing or refusing to take any
discretionary action under this Agreement unless it shall first
receive such advice or concurrence of the Required Banks as it
deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action. Each Agent shall in all
cases be fully protected in acting, or in refraining from acting,
under this Agreement in accordance with a request of the Required
Banks, or all of the Banks (if the consent of all of the Banks is
required), and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Banks.
9.5 NOTICE OF DEFAULT. The Administrative Agent shall
not be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Bank or either
Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives
such a notice, the Administrative Agent shall give notice thereof
to the Banks. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be
reasonably directed by the Majority Banks or the Required Banks,
as applicable; PROVIDED that, unless and until the Administrative
Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests
of the Banks.
9.6 NON-RELIANCE ON AGENTS AND OTHER BANKS. Each Bank
expressly acknowledges that neither Agent nor any of its
respective officers, directors, employees, agents, attorneys-in-
fact or affiliates has made any representations or warranties to
it and that no act by such Agent hereinafter taken, including any
review of the affairs of the Borrowers, shall be deemed to
constitute any representation or warranty by such Agent to any
Bank. Each Bank represents to each Agent that it has,
independently and without reliance upon such Agent or any other
Bank, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation
into the business, operations, property, financial and other
condition and creditworthiness of each Borrower and made its own
decision to make its Loans hereunder and enter into this
Agreement. Each Bank also represents that it will, independently
and without reliance upon each Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this
Agreement, and to make such investigation as it deems necessary
<PAGE>
59
to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the
Borrowers. Except for notices, reports and other documents
expressly required to be furnished to the Banks by either Agent
hereunder, such Agent shall not have any duty or responsibility
to provide any Bank with any credit or other information
concerning the business, operations, property, financial and
other condition or creditworthiness of either Borrower which may
come into the possession of such Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
9.7 INDEMNIFICATION. The Banks agree to indemnify
each Agent in its capacity as such (to the extent not reimbursed
by the Borrowers and without limiting the obligation of the
Borrowers to do so), ratably (as reasonably determined by the
Administrative Agent), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever
which may at any time (including without limitation at any time
following the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out
of this Agreement, or any documents contemplated by or referred
to herein or the transactions contemplated hereby or any action
taken or omitted by such Agent under or in connection with any of
the foregoing; PROVIDED that no Bank shall be liable for the
payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from such Agent's gross negligence
or wilful misconduct. The agreements in this subsection 9.7
shall survive the payment of the Loans and all other amounts
payable hereunder.
9.8 AGENTS IN THEIR INDIVIDUAL CAPACITIES. Each Agent
and its respective affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the
Borrowers as though such Agent were not an Agent hereunder. With
respect to its Loans made by it, each Agent shall have the same
rights and powers under this Agreement as any Bank and may
exercise the same as though it were not an Agent, and the terms
"Bank" and "Banks" shall include the Administrative Agent and the
Auction Agent in their respective individual capacity.
9.9 SUCCESSOR AGENTS. Each Agent may resign as Agent
upon 30 days' notice thereof to the Borrowers and the Banks. If
any Agent shall resign as Agent under this Agreement, then the
Required Banks shall appoint from among the Banks a successor
agent for the Banks which successor agent shall be approved by
the Borrowers, whereupon such successor agent shall succeed to
the rights, powers and duties of the Administrative Agent or the
Auction Agent, as the case may be, and the term "Administrative
Agent" or "Auction Agent", as the case may be, shall mean such
successor agent effective upon its appointment, and the former
Agent's rights, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such
<PAGE>
60
former Agent or any of the parties to this Agreement. After any
retiring Agent's resignation hereunder as Agent, the provisions
of this Section 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this
Agreement.
SECTION 10. MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. With the written consent
of the Required Banks, the Administrative Agent and the Borrowers
may, from time to time, enter into written amendments,
supplements or modifications hereto for the purpose of adding any
provisions to this Agreement or changing in any manner the rights
of the Banks or of the Borrowers hereunder, and with the consent
of the Required Banks the Administrative Agent on behalf of the
Banks may execute and deliver to the Borrowers a written
instrument waiving, on such terms and conditions as the
Administrative Agent may specify in such instrument, any of the
requirements of this Agreement or any Default or Event of Default
and its consequences; PROVIDED, HOWEVER, that no such waiver,
amendment, supplement or modification shall (a) extend the
maturity of any Loan, or reduce the rate or extend the time of
payment of interest thereon, or reduce the principal amount
thereof, or reduce the rate of any fee payable hereunder or
extend the time of payment thereof, in each case, without the
written consent of (i) with respect to any such change to any
Committed Rate Loan, each Bank and (ii) with respect to any such
change to any Bid Loan, the Bank which made such Bid Loan, or (b)
change the amount of any Bank's Commitment or the terms of its
obligation to make Loans hereunder or amend, modify or waive any
provision of this subsection 10.1 or reduce the percentage
specified in the definition of Majority Banks or Required Banks,
or consent to the assignment or transfer by either Borrower of
any of its rights and obligations under this Agreement, in each
case without the written consent of each Bank, or (c) amend,
modify or waive any provision of Section 9 without the written
consent of the then Administrative Agent and Auction Agent, or
(d) extend the Termination Date with respect to any Bank without
the written consent of such Bank. Any such waiver and any such
amendment, supplement or modification shall apply equally to each
of the Banks and shall be binding upon the Borrowers, the Banks
and the Agents. In the case of any waiver, the Borrowers, the
Banks and the Agents shall be restored to their former position
and rights hereunder, and any Default or Event of Default waived
shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event
of Default, or impair any right consequent thereon. Anything
contained in the foregoing to the contrary notwithstanding, the
relevant Borrower and the relevant Bank with respect to a
Negotiated Rate Loan may, from time to time, enter into
amendments, supplements or modifications for the purpose of
adding any provisions to such Negotiated Rate Loans or changing
in any manner the rights of such Bank and such Borrower
<PAGE>
61
thereunder and such Bank may waive any of the requirements of
such Negotiated Rate Loan; PROVIDED, HOWEVER, that such Borrower
and such Bank shall notify the Administrative Agent in writing of
any extension of the maturity of such Negotiated Rate Loan or
reduction of the principal amount thereof; PROVIDED, FURTHER,
that such Borrower and such Bank shall not extend the maturity of
such Negotiated Rate Loan beyond the last day of the Commitment
Period.
10.2 NOTICES. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in
writing, by facsimile transmission, by telephone confirmed in
writing or by telegraph and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when
delivered by hand, or when deposited in the mail, air postage
prepaid, or, in the case of facsimile transmission, when
received, or, in the case of telegraphic notice, when delivered
to the telegraph company or department, addressed as follows in
the case of the Borrowers, the Administrative Agent and the
Auction Agent, and as set forth on Schedule III in the case of
the other parties hereto, or to such address or other address as
may be hereafter notified by the respective parties hereto:
The Borrowers:
The Company: Deere & Company
John Deere Road
Moline, Illinois 61265
Attention: Treasurer
Telephone: 309-765-4423
Facsimile: 309-765-5021
The Capital
Corporation: John Deere Capital Corporation
First National Bank Building
1 East First Street
Reno, Nevada 89501
Attention: Manager
Telephone: 702-786-5527
Facsimile: 702-786-4145
with a copy to: Deere & Company
John Deere Road
Moline, Illinois 61265
Attention: Treasurer
Facsimile: 309-765-5021
The Administrative
Agent: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: John J. Huber, III
Telephone: 212-270-1402
Facsimile: 212-270-2625
<PAGE>
62
The Auction Agent: Deutsche Bank AG Chicago Branch
c/o Deutsche Bank AG New York Branch
31 West 52nd Street
New York, New York 10019
Attention: Loan Syndications
Telephone: 212-474-7041
Facsimile: 212-474-7048
provided that any notice, request or demand to or upon the
Administrative Agent, the Auction Agent or the Banks pursuant to
subsections 2.1, 2.2, 2.5, 2.6, 2.9, 2.11 and 9.9 shall not be
effective until received (including receipt by telephone if
permitted hereby).
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of either
Borrower, the Administrative Agent, the Auction Agent or any
Bank, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative
and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 PAYMENT OF EXPENSES AND TAXES. (a) The Company
agrees (i) to pay or reimburse the Administrative Agent for all
its out-of-pocket costs and expenses incurred in connection with
the preparation and execution of, and any amendment, supplement
or modification to, this Agreement and any other documents
prepared in connection herewith, and the consummation of the
transactions contemplated hereby and thereby in such manner and
in such amounts as shall be agreed to in writing by the Company
and the Administrative Agent, (ii) to pay or reimburse the
Administrative Agent for the reasonable fees and disbursements of
counsel to the Administrative Agent incurred in connection with
the preparation and execution of, and any amendment, supplement,
modification to, this Agreement and other documents prepared in
connection herewith, and the consummation of the transaction
contemplated hereby and thereby, and (iii) to pay or reimburse
each Bank, the Administrative Agent and the Auction Agent for all
its out-of-pocket costs and expenses incurred in connection with
the enforcement or preservation of any rights under this
Agreement and any such other documents, including, without
limitation, fees and disbursements of counsel to the
Administrative Agent and the Auction Agent and one counsel
representing the Banks.
(b) The Borrowers agree jointly and severally to
indemnify and hold harmless the Administrative Agent, the Auction
Agent and each Bank against any and all losses, claims, damages
and liabilities (other than in connection with actions, suits and
proceedings by any of the Banks against any of the other Banks),
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63
joint or several, to which they or any of them may become subject
insofar as such losses, claims, damages and liabilities arise out
of, relate to or are based on this Agreement (including the
responsibilities, duties and obligations of the Banks hereunder
and their agreement to make Loans hereunder) in connection with
any acquisition or proposed acquisition of any securities or
assets by a Borrower or any of its Subsidiaries, and shall
reimburse each such indemnified party for any legal or other
expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage or
liability, subject to the following paragraph. This indemnity
agreement shall be in addition to any liability which either
Borrower may otherwise have.
(c) Promptly after receipt by an indemnified party under
subsection 10.4(b) of written notice of any loss, claim, damage
or liability in respect of which indemnity may be sought by it
hereunder, such indemnified party will, if a claim is to be made
against the Borrowers, notify the Borrowers thereof in writing;
but the omission so to notify the Borrowers will not relieve the
Borrowers from any liability (otherwise than under this
subsection 10.4) which they may have to any indemnified party
except as may be required or provided otherwise than under this
subsection 10.4. Thereafter, the indemnified party and the
Borrowers shall consult, to the extent appropriate, with a view
to minimizing the cost to the Borrowers of their obligations
hereunder. In case any indemnified party receives written notice
of any loss, claim, damage or liability in respect of which
indemnity may be sought hereunder by it and it notifies the
Borrowers thereof, the Borrowers will be entitled to participate
therein and, to the extent that they may elect by written notice
delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel reasonably satisfactory at all
times to such indemnified party; PROVIDED, HOWEVER, that (i) if
the parties against whom any loss, claim, damage or liability
arises include both the indemnified party and a Borrower or any
Subsidiary of a Borrower and the indemnified party shall have
reasonably concluded that there may be legal defenses available
to it or other indemnified parties which are different from or
additional to those available to a Borrower or any Subsidiary of
a Borrower and may conflict therewith, the indemnified party or
parties shall have the right to select one separate counsel for
such indemnified party or parties to assume such legal defenses
and to otherwise participate in the defense of such loss, claim,
damage or liability on behalf of such indemnified party or
parties and (ii) if any loss, claim, damage or liability arises
out of actions brought by or for the benefit of a Borrower or any
Subsidiary of a Borrower, the indemnified party or parties shall
have the right to select their counsel and to assume and direct
the defense thereof and neither Borrower shall be entitled to
participate therein or assume the defense thereof. Upon receipt
of notice from the Borrowers to such indemnified party of their
election so to assume the defense of such loss, claim, damage or
<PAGE>
64
liability and approval by the indemnified party of counsel, the
Borrowers shall not be liable to such indemnified party under
this subsection 10.4 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such
counsel in connection with the assumption of legal defenses in
accordance with the proviso to the next preceding sentence, (ii)
the Borrowers shall not have employed and continued to employ
counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of
commencement of the action or (iii) the Borrowers shall have
authorized the employment of counsel for the indemnified party at
the expense of the Borrowers.
(d) Notwithstanding any other provision contained in
this subsection 10.4, (i) the Borrowers shall not be liable for
any settlement, compromise or consent to the entry of any order
adjudicating or otherwise disposing of any loss, claim, damage or
liability effected without their consent and (ii) after the
Borrowers have assumed the defense of any loss, claim, damage or
liability under the preceding paragraph with respect to any Bank,
they will not settle, compromise or consent to entry of any order
adjudicating or otherwise disposing thereof (1) if such
settlement, compromise or order involves the payment of money
damages, except if the Borrowers agree with such Bank to pay such
money damages, and, if not simultaneously paid, to furnish such
Bank with satisfactory evidence of their ability to pay such
money damages, and (2) if such settlement, compromise or order
involves any relief against such Bank, other than the payment of
money damages, except with the prior written consent of such
Bank.
(e) The agreements in this subsection 10.4 shall survive
repayment of the Loans and all other amounts payable hereunder.
10.5 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING
BANKS. (a) This Agreement shall be binding upon and inure to
the benefit of the Borrowers, the Banks, the Administrative
Agent, the Auction Agent and their respective successors and
assigns, EXCEPT THAT the Borrowers may not assign or transfer any
of their rights or obligations under this Agreement without the
prior written consent of each Bank.
(b) Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable
law, at any time sell to one or more banks or other financial
institutions ("PARTICIPANTS") participating interests in the
Loans, Commitments and other interest of such Bank hereunder. In
the event of any such sale by a Bank of participating interests
to a Participant, such Bank's obligations under this Agreement to
the other parties to this Agreement shall remain unchanged, such
Bank shall remain solely responsible for the performance thereof,
such Bank shall remain the holder of any such Loan for all
purposes under this Agreement, and the Borrowers, the
<PAGE>
65
Administrative Agent and the Auction Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's
rights and obligations under this Agreement.
(c) Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable
law, at any time assign to one or more banks or other financial
institutions ("LOAN ASSIGNEES") any Bid Loan or Negotiated Rate
Loan or portion thereof owing to such Bank, pursuant to a Loan
Assignment executed by the assignor Bank and the Loan Assignee.
Upon such execution, from and after the Transfer Effective Date
specified in such Loan Assignment, the Loan Assignee shall, to
the extent of the assignment provided for in such Loan Assignment
and to the extent permitted by applicable law, be deemed to have
the same rights and benefits with respect to such Bid Loans and
Negotiated Rate Loans and the same obligation to share pursuant
to subsection 10.6 as it would have had if it were a Bank
hereunder; PROVIDED, that unless such Loan Assignment shall
otherwise specify and a copy of such Loan Assignment shall have
been delivered to the Administrative Agent for its acceptance and
recording in the Register in accordance with subsection 10.5(f),
the assignor Bank shall act as collection agent for the Loan
Assignee, and in the case of Bid Loans, the Administrative Agent
shall pay all amounts received from the relevant Borrower which
are allocable to the assigned Bid Loan directly to the assignor
Bank without any further liability to the relevant Loan Assignee,
and, in the case of Negotiated Rate Loans, the relevant Borrower
shall pay all amounts due under the assigned Negotiated Rate Loan
directly to the assignor Bank without any further liability to
the Loan Assignee. At the request of any Loan Assignee, on or
promptly after the Transfer Effective Date specified in such Loan
Assignment, the relevant Borrower, at its own expense, shall
execute and deliver to the Loan Assignee a promissory note with
respect to the Bid Loans or Negotiated Rate Loans to the order of
such Loan Assignee in an amount equal to the Bid Loan or
Negotiated Rate Loan assigned. Such note shall be dated the
Borrowing Date in respect of such Bid Loan or Negotiated Rate
Loan and shall otherwise be in the form of Exhibit M hereto;
PROVIDED, HOWEVER, that such Borrower shall not be required to
execute and deliver more than an aggregate of two notes with
respect to the Bid Loans of any Bank with the same Interest
Period at any time outstanding. The Loan Assignee shall not, by
virtue of such Loan Assignment, become a party to this Agreement
or have any rights to consent to or refrain from consenting to
any amendment, waiver or other modification of any provision of
this Agreement or any related document; PROVIDED, that (i) the
assignor Bank and the Loan Assignee may, in their discretion,
agree between themselves upon the manner in which the assignor
Bank will exercise its rights under this Agreement and any
related document, and (ii) if a copy of such Loan Assignment
shall have been delivered to the Administrative Agent for its
acceptance and recording in the Register in accordance with
subsection 10.5(f), neither the principal amount of, the interest
rate on, nor the maturity date of any Bid Loan or Negotiated Rate
<PAGE>
66
Loan assigned to a Loan Assignee will be modified without written
consent of such Loan Assignee.
(d) Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable
law, with the consent of the Borrowers, sell to any Bank or any
affiliate thereof and to one or more additional banks or other
financial institutions ("PURCHASING BANKS"), portions (subject to
the last sentence of this subsection 10.5(d)) of its rights and
obligations under this Agreement, pursuant to a Commitment
Transfer Supplement, executed by such Purchasing Bank and such
transferor Bank (and, in the case of a Purchasing Bank that is
not then a Bank or an affiliate thereof, by the Borrowers and the
Administrative Agent), and delivered to the Administrative Agent
for its acceptance and recording in the Register. Upon such
execution, delivery, acceptance and recording, from and after the
Transfer Effective Date specified in such Commitment Transfer
Supplement, (i) the Purchasing Bank thereunder shall be a party
hereto and, to the extent provided in such Commitment Transfer
Supplement, have the rights and obligations of a Bank hereunder
with a Commitment as set forth therein, and (ii) the transferor
Bank thereunder shall cease to have rights and obligations under
this Agreement to which the Purchasing Bank has succeeded (and,
in the case of a Commitment Transfer Supplement covering all or
the remaining portion of a transferor Bank's rights and
obligations under this Agreement, such transferor Bank shall
cease to be a party hereto). Such Commitment Transfer Supplement
shall be deemed to amend this Agreement to the extent, and only
to the extent, necessary to reflect the addition of such
Purchasing Bank and the resulting adjustment of Commitment
Percentages arising from the purchase by such Purchasing Bank of
a portion of the rights and obligations of such transferor Bank
under this Agreement. On or promptly after the Transfer
Effective Date specified in such Commitment Transfer Supplement,
the Purchasing Bank and the Administrative Agent, on behalf of
such Purchasing Bank, shall open and maintain in the name of each
Borrower a Loan Account with respect to such Purchasing Bank's
Committed Rate Loans and Bid Loans to such Borrower. Anything
contained in this Agreement to the contrary notwithstanding, no
Bank may sell any portion of its rights and obligations under
this subsection 10.5(d) to any bank or financial institution if
after giving effect to such sale the Commitment of either of the
selling and purchasing institutions would be less than
$5,000,000.
(e) The Administrative Agent shall maintain at its
address referred to in subsection 10.2 a copy of each Loan
Assignment and each Commitment Transfer Supplement delivered to
it and a register (the "REGISTER") for the recordation of (i) the
names and addresses of the Banks and the Commitment of, and
principal amount of the Loans (other than Negotiated Rate Loans)
owing to, each Bank from time to time, and (ii) with respect to
each Loan Assignment delivered to the Administrative Agent, the
name and address of the Loan Assignee and the principal amount of
<PAGE>
67
each Bid Loan owing to such Loan Assignee. The entries in the
Register shall constitute PRIMA FACIE evidence of the accuracy of
the information so recorded, and the Borrowers, the
Administrative Agent and the Banks may treat each Person whose
name is recorded in the Register as the owner of the Loan
recorded therein for all purposes of this Agreement. The
Register shall be available for inspection by the Company or any
Bank or Loan Assignee at any reasonable time and from time to
time upon reasonable prior notice.
(f) Upon its receipt of a Loan Assignment executed by an
assignor Bank and a Loan Assignee, together with payment to the
Administrative Agent (by the assignor Bank or the Loan Assignee,
as agreed between them) of a registration and processing fee of
$2,500, the Administrative Agent shall (i) accept such Loan
Assignment, (ii) record the information contained therein in the
Register and (iii) give prompt notice of such acceptance and
recordation to the assignor Bank, the Loan Assignee and the
Borrowers. Upon its receipt of a Commitment Transfer Supplement
executed by a transferor Bank and a Purchasing Bank (and, in the
case of a Purchasing Bank that is not then a Bank or an affiliate
thereof, by the Borrowers and the Administrative Agent) together
with payment to the Administrative Agent (by the transferor Bank
or the Purchasing Bank, as agreed between them) of a registration
and processing fee of $2,500 for each Purchasing Bank listed in
such Commitment Transfer Supplement, the Administrative Agent
shall (A) accept such Commitment Transfer Supplement, (B) record
the information contained therein in the Register and (C) give
prompt notice of such acceptance and recordation to the Banks and
the Borrowers.
(g) The Company authorizes each Bank to disclose to any
Participant, Loan Assignee or Purchasing Bank (each, a
"TRANSFEREE") and any prospective Transferee any and all
financial information in such Bank's possession concerning the
Borrowers and their Subsidiaries which has been delivered to such
Bank by or on behalf of the Borrowers pursuant to this Agreement
or in connection with such Bank's credit evaluation of the
Borrowers and their Subsidiaries prior to becoming a party to
this Agreement, PROVIDED that with respect to confidential data
or information described in subsection 10.7, such confidential
data may be disclosed only to (i) a Purchasing Bank and/or (ii)
any other Transferee or prospective Transferee with the
Borrowers' prior written consent, which consent shall not be
unreasonably withheld with respect to prospective Participants,
Participants, prospective Loan Assignees and Loan Assignees;
PROVIDED, HOWEVER, that such Bank shall not disclose any such
confidential data or information pursuant to this subsection
10.5(g) unless (i) it has notified the Purchasing Bank or other
Transferee or potential Transferee that such data or information
are confidential, such notification to be in writing if such data
or information are disclosed in writing and orally if such data
or information are disclosed orally, and (ii) such Purchasing
<PAGE>
68
Bank, Transferee or potential Transferee has agreed in writing to
be bound by the provisions of subsection 10.7.
(h) If, pursuant to this subsection, any loan
participation or series of loan participations is sold or any
interest in this Agreement is transferred to any Transferee, the
transferor Bank shall cause such Transferee, concurrently with
the effectiveness of such transfer or the first transfer to occur
in a series of transfers between such transferor Bank and such
Transferee, (i) to represent to the transferor Bank (for the
benefit of the transferor Bank, the Administrative Agent and the
Borrowers) either (A) that it is incorporated under the laws of
the United States or a state thereof or (B) that under applicable
law and treaties no taxes will be required to be withheld by the
Administrative Agent, the Borrowers or the transferor Bank with
respect to any payments to be made to such Transferee in respect
of the Loans, (ii) to furnish to the transferor Bank, the
Administrative Agent and the Borrowers (A) either (I) a statement
that it is incorporated under the laws of the United States or a
state thereof or (II) if it is not so incorporated, a letter in
duplicate in the form of Exhibit J or Exhibit K, as appropriate,
and two duly completed copies of United States Internal Revenue
Service Form 4224 or 1001 or successor applicable form, as the
case may be, certifying in each case that such Transferee is
entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income
taxes, and (B) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be, to establish an
exemption from United States backup withholding tax, and (iii) to
agree (for the benefit of the transferor Bank, the Administrative
Agent and the Borrowers) to provide the transferor Bank, the
Administrative Agent and the Borrowers a new Form 4224 or 1001
and Form W-8 or W-9, or successor applicable form or other manner
of certification, on or before the date that any such letter or
form expires or becomes obsolete or after the occurrence of any
event requiring a change in the most recent letter and form
previously delivered by it, certifying in the case of a Form 1001
or 4224 that such Transferee is entitled to receive payments
under this Agreement without deduction or withholding of any
United States federal income tax, and in the case of a Form W-8
or W-9 establishing exemption from United States backup
withholding tax. The Administrative Agent shall not be
responsible for obtaining such documentation except from its own
Transferees.
(i) Nothing in this subsection 10.5 shall prohibit any
Bank from pledging or assigning its Loans to any Federal Reserve
Bank in accordance with applicable law.
10.6 ADJUSTMENTS. If any Bank other than a Cancelled
Bank (a "BENEFITTED BANK") shall at any time receive any payment
of all or part of its Committed Rate Loans, or interest thereon
or facility fee in respect thereof, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-
<PAGE>
69
off, pursuant to events or proceedings of the nature referred to
in clause (e) of Section 8, or otherwise) in a greater proportion
than any such payment to and collateral received by any other
Bank, if any, in respect of such other Bank's Committed Rate
Loans, or interest thereon, such benefitted Bank shall purchase
for cash from the other Banks such portion of each such other
Bank's Committed Rate Loans, or shall provide such other Banks
with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefitted Bank to
share the excess payment or benefits of such collateral or
proceeds ratably with each of the Banks; PROVIDED, HOWEVER, that
if all or any portion of such excess payment or benefits is
thereafter recovered from such benefitted Bank, such purchase
shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. The
Borrowers agree that each Bank so purchasing a portion of another
Bank's Committed Rate Loans may exercise all rights of payment
(including, without limitation, rights of set-off) with respect
to such portion as fully as if such Bank were the direct holder
of such portion.
10.7 CONFIDENTIALITY. (a) Each of the Administrative
Agent, the Auction Agent and the Banks shall, subject as
hereinafter provided, keep confidential from any third party any
data or information received by them from the Borrowers pursuant
to this Agreement which, if provided in writing, is designated in
writing as such, and if provided orally, is designated orally as
such by the Borrowers except:
(i) any such data or information as is or becomes
publicly available or generally known otherwise than as a
result of any breach of the provisions of this subsection
10.7;
(ii) as required by law, rule, regulation or official
direction;
(iii) as may be necessary to protect as against the
Borrowers or either of them the interests of the Banks or
any of them under this Agreement;
(iv) to the extent permitted under subsection 10.5; and
(v) to the attorneys, accountants and regulators of
such Banks, and to each other Bank.
(b) Each of the Administrative Agent, the Auction Agent
and the Banks shall use their reasonable efforts to ensure that
any confidential data or information received by them from the
Borrowers pursuant to this Agreement which is disclosed to
employees of the Administrative Agent, the Auction Agent and the
Banks (as the case may be) is so disclosed only to the extent
necessary for purpose of the administration of this Agreement
<PAGE>
70
and, in all cases, on the condition that such information and
data shall be kept confidential except for such purpose.
(c) The provisions of this subsection 10.7 shall survive
the payment in full of all amounts payable hereunder and the
termination of this Agreement.
10.8 COUNTERPARTS. This Agreement may be executed by
one or more of the parties to this Agreement on any number of
separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall
be lodged with the Borrowers and the Administrative Agent.
10.9 GOVERNING LAW. This Agreement and the rights and
obligations of the parties under this Agreement shall be governed
by, and construed and interpreted in accordance with, the law of
the State of New York.
<PAGE>
71
10.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
All judicial proceedings brought against the Borrowers with
respect to this Agreement may be brought in any state or federal
court of competent jurisdiction in the State of New York, and, by
execution and delivery of this Agreement, the Borrowers accept,
for themselves and in connection with their properties, generally
and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts and irrevocably agree to be bound by any final
judgment rendered thereby in connection with this Agreement from
which no appeal has been taken or is available. The Borrowers
irrevocably agree that all process in any such proceedings in any
such court may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form
of mail), postage prepaid, to them at their addresses set forth
in subsection 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto,
such service being hereby acknowledged by the Borrowers to be
effective and binding service in every respect. Each of the
Borrowers, the Administrative Agent, the Auction Agent and the
Banks irrevocably waives any objection, including without
limitation, any objection to the laying of venue or based on the
grounds of forum non conveniens which it may now or hereafter
have to the bringing of any such action or proceeding in any such
jurisdiction. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the
right of the Administrative Agent, the Auction Agent or any Bank
to bring proceedings against the Borrowers in the courts of any
other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
DEERE & COMPANY
Attested by:
/s/ Michael A. Harring By: /s/ Nathan J. Jones
- --------------------------- --------------------------------
Title: Assistant Secretary Title: Assistant Treasurer
JOHN DEERE CAPITAL CORPORATION
Attested by:
/s/ Michael A. Harring By: /s/ Nathan J. Jones
- --------------------------- --------------------------------
Title: Assistant Secretary Title: Assistant Treasurer
<PAGE>
72
CHEMICAL BANK, as Administrative
Agent, as a Managing Agent and as
a Bank
By: /s/ Jeffrey A. Marcks
--------------------------------
Title: Managing Director
DEUTSCHE BANK AG CHICAGO BRANCH, as
Auction Agent and as a Managing
Agent
By: /s/ Dirk A. Quayle
--------------------------------
Title: Corp. Fin. Director
By: /s/ Thomas L. Newberry
--------------------------------
Title: Vice President
DEUTSCHE BANK AG CHICAGO AND/OR
CAYMAN ISLAND BRANCHES, as a
Managing Agent and as a Bank
By: /s/ Dirk A. Quayle
-------------------------------
Title: Corp. Fin. Director
By: /s/ Thomas L. Newberry
-------------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a
Co-Agent and as a Bank
By: /s/ Patricia DelGrande
-------------------------------
Title: Vice President
<PAGE>
73
THE BANK OF NEW YORK, as a Co-Agent
and as a Bank
By: /s/ Charlotte Sohn
--------------------------------
Title: Assistant Vice President
BANQUE NATIONALE DE PARIS CHICAGO
BRANCH, as a Co-Agent and as a
Bank
By: /s/ Alain Benard
--------------------------------
Title: Executive Vice President
THE CHASE MANHATTAN BANK N.A., as a
Co-Agent and as a Bank
By: /s/ Robert P. Jankowitz
--------------------------------
Title: Managing Director
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as a Co-Agent and as a
Bank
By: /s/ William J. Stevenson
--------------------------------
Title: Vice President
SOCIETE GENERALE, as a Co-Agent and
as a Bank
By: /s/ Eric E.O. Siebert, Jr.
--------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. Ashby
--------------------------------
Title: Senior Manager Loan
Operations
<PAGE>
74
CIBC INC.
By: /s/ Stephanie E. Johnson
--------------------------------
Title: Vice President
COMMERZBANK AKTIENGESELLSCHAFT,
GRAND CAYMAN BRANCH
By: /s/ Paul F. Karlin
--------------------------------
Title: Assistant Cashier
CREDIT SUISSE
By: /s/ Charles R. Shaw
--------------------------------
Title: Member of Senior
Management
By: /s/ Kristinn R. Kristinsson
--------------------------------
Title: Associate
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Michael W. McCorkle
--------------------------------
Title: Vice President
THE FUJI BANK, LIMITED
By: /s/ Peter L. Chinnici
--------------------------------
Title: Joint General Manager
<PAGE>
75
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD. CHICAGO BRANCH
By: /s/ Richard E. Stahl
--------------------------------
Title: Senior Vice President
MELLON BANK, N.A.
By: /s/ Jeffrey M. Anderson
--------------------------------
Title: Vice President
NBD BANK, N.A.
By: /s/ Timothy M. Monahan
--------------------------------
Title: Second Vice President
NATIONSBANK OF TEXAS, N.A.
By: /s/ Ellis E. Moseley
--------------------------------
Title: Senior Vice President
ROYAL BANK OF CANADA
By: /s/ G. David Cole
--------------------------------
Title: Senior Manager
TORONTO DOMINION (TEXAS), INC.
By: /s/ James J. McCarthy
--------------------------------
Title: Director
<PAGE>
76
UNION BANK OF SWITZERLAND, CHICAGO
BRANCH
By: /s/ Robert H. Riley III
--------------------------------
Title: Vice President
By: /s/ Martin Frey
--------------------------------
Title: Assistant Treasurer
WACHOVIA BANK OF GEORGIA, N.A.
By: /s/ Edward D. Ridenhour
--------------------------------
Title: Senior Vice President
<PAGE>
SCHEDULE I
TERMS OF SUBORDINATION
"SENIOR INDEBTEDNESS" means the principal of (and
premium, if any) and unpaid interest on (a) indebtedness of John
Deere Capital Corporation (the "Capital Corporation") (including
indebtedness of others guaranteed by the Capital Corporation),
other than the indebtedness evidenced by the Securities [such
term to be defined as the debt to be issued under the indenture
or agreement to which this Schedule relates], the 9.35%
Subordinated Debentures due 2003, the 8-5/8% Subordinated
Debentures due 2019 and the 9-5/8% Subordinated Notes due 1998 of
the Capital Corporation, whether outstanding on the date hereof
or hereafter created, incurred, assumed or guaranteed, for money
borrowed, unless in the instrument creating or evidencing the
same or pursuant to which the same is outstanding it is provided
that such indebtedness is not senior or prior in right of payment
to the Securities, and (b) renewals, extensions, modifications
and refundings of any such indebtedness.
SUBORDINATION
Section 1. AGREEMENT TO SUBORDINATE.
The Capital Corporation, for itself, its successors and
assigns, covenants and agrees, and each holder of Securities, by
such holder's acceptance thereof, likewise covenants and agrees,
that the payment of the principal of (and premium, if any) and
interest on each and all of the Securities is hereby expressly
subordinated, to the extent and in the manner hereinafter set
forth, in right of payment to the prior payment in full of all
Senior Indebtedness.
Section 2. DISTRIBUTION ON DISSOLUTION, LIQUIDATION AND
REORGANIZATION; SUBROGATION OF SECURITIES.
Upon any distribution of assets of the Capital
Corporation upon any dissolution, winding up, liquidation or
reorganization of the Capital Corporation, whether in bankruptcy,
insolvency, reorganization or receivership proceedings or upon an
assignment for the benefit of creditors or any other marshalling
of the assets and liabilities of the Capital Corporation or
otherwise (subject to the power of a court of competent
jurisdiction to make other equitable provisions reflecting the
rights conferred in this Agreement upon the Senior Indebtedness
and the holders thereof with respect to the Securities by a
lawful plan of reorganization under applicable bankruptcy law),
<PAGE>
2
(a) the holders of Senior Indebtedness shall be entitled
to receive payment in full of the principal thereof (and
premium if any) and the interest due on the Senior
Indebtedness before the holders of the Securities are entitled
to receive any payment upon the principal of (or premium, if
any) or interest on indebtedness evidenced by the Securities;
and
(b) any payment or distribution of assets of the Capital
Corporation of any kind or character, whether in cash,
property or securities, to which the holders of the Securities
or any trustee therefor would be entitled except for the
provisions of this Article shall be paid by the liquidating
trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the holders of
Senior Indebtedness or their representative or representatives
or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may
have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the principal of (and premium,
if any) and interest on the Senior Indebtedness held or
represented by each holder of Senior Indebtedness, to the
extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such
Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing,
any payment or distribution of assets of the Capital
Corporation of any kind or character, whether in cash,
property or securities, shall be received by any trustee for
the holders of the Securities or the holders of the Securities
before all Senior Indebtedness is paid in full, such payment
or distribution shall be paid over, upon written notice to any
trustee for the holders of the Securities, to the holders of
Senior Indebtedness or their representative or representatives
or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may
have been issued, ratably as aforesaid, for application to the
payment of all Senior Indebtedness remaining unpaid until all
such Senior Indebtedness shall have been paid in full, after
giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the
holders of the Securities shall be subrogated to the rights of
the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Capital
Corporation applicable to Senior Indebtedness until the principal
of (and premium, if any) and interest on the Securities shall be
paid in full and no such payments or distributions to the holders
of the Securities of cash, property or securities otherwise
distributable to the holders of Senior Indebtedness shall, as
<PAGE>
3
between the Capital Corporation, its creditors other than the
holders of Senior Indebtedness, and the holders of the
Securities, be deemed to be a payment by the Capital Corporation
to or on account of the Securities. It is understood that the
provisions of this Article are, and are intended, solely for the
purpose of defining the relative rights of the holders of the
Securities, on the one hand, and the holders of Senior
Indebtedness, on the other hand. Nothing contained in this
Article or elsewhere in this Agreement or in the Securities is
intended to or shall impair, as between the Capital Corporation,
its creditors other than the holders of Senior Indebtedness, and
the holders of the Securities, the obligation of the Capital
Corporation, which is unconditional and absolute, to pay to the
holders of the Securities the principal of (and premium, if any)
and interest on the Securities as and when the same shall become
due and payable in accordance with their terms, or to affect the
relative rights of the holders of the Securities and creditors of
the Capital Corporation other than the holders of Senior
Indebtedness, nor shall anything herein or in the instruments or
other evidence of the Securities prevent any trustee for the
holders of the Securities or the holder of any Securities from
exercising all remedies otherwise permitted by applicable law
upon default under this Agreement or such instrument or other
evidence, subject to the rights, if any, under this Article of
the holders of Senior Indebtedness in respect of cash, property
or securities of the Capital Corporation received upon the
exercise of any such remedy.
Section 3. NO PAYMENT ON SECURITIES IN EVENT OF NON-
PAYMENT WHEN DUE OF SENIOR INDEBTEDNESS.
No payment by the Capital Corporation on account of
principal (or premium, if any), sinking funds, or interest on the
Securities shall be made unless full payment of amounts then due
for principal, premium, if any, sinking funds and interest on
Senior Indebtedness has been made or duly provided for in money
or money's worth.
<PAGE>
SCHEDULE II
COMMITMENTS
<TABLE>
<CAPTION>
Bank Commitment
- ---- ----------
<S> <C>
Chemical Bank $66,000,000
Deutsche Bank AG Chicago and/or
Cayman Island Branches 66,000,000
Bank of America National Trust and
Savings Association 46,200,000
The Bank of New York 46,200,000
Banque Nationale de Paris Chicago Branch 46,200,000
The Chase Manhattan Bank N.A. 46,200,000
Morgan Guaranty Trust Company of New York 46,200,000
Societe Generale 46,200,000
The Bank of Nova Scotia 29,700,000
CIBC Inc. 29,700,000
Commerzbank Aktiengesellschaft,
Grand Cayman Branch 29,700,000
Credit Suisse 29,700,000
The First National Bank of Chicago 29,700,000
The Fuji Bank, Limited 29,700,000
The Long-Term Credit Bank of Japan, Ltd.,
Chicago Branch 29,700,000
Mellon Bank, N.A. 29,700,000
NBD Bank, N.A. 29,700,000
NationsBank of Texas, N.A. 29,700,000
Royal Bank of Canada 29,700,000
Toronto Dominion (Texas), Inc. 29,700,000
Union Bank of Switzerland, Chicago Branch 29,700,000
Wachovia Bank of Georgia, N.A. 29,700,000
----------
Total $825,000,000
------------
------------
</TABLE>
<PAGE>
SCHEDULE III
ADDRESSES FOR NOTICES
CHEMICAL BANK
270 Park Avenue
New York, New York 10017
Attention: John J. Huber, III
Telephone: (212) 270-1402
Facsimile: (212) 270-2625
DEUTSCHE BANK AG
Suite 4350
227 West Monroe Street
Chicago, Illinois 60606
Attention: Dirk A. Quayle
Telephone: (312) 578-4108
Facsimile: (312) 578-4111
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
4th Floor
1850 Gateway Boulevard
Concord, California 94520
Attention: Sandy Schwartzkopf
Telephone: (510) 675-7762
Facsimile: (510) 675-7531
THE BANK OF NEW YORK
Central Division - 19th Floor
One Wall Street
New York, New York 10286
Attention: Charlotte Sohn
Telephone: (212) 635-1147
Facsimile: (212) 635-1208/09
BANQUE NATIONALE DE PARIS
CHICAGO BRANCH
5th Floor
209 South LaSalle Street
Chicago, Illinois 60604
Attention: Chris Howatt
Telephone: (312) 977-1383
Facsimile: (312) 977-1380
<PAGE>
2
THE CHASE MANHATTAN BANK N.A.
One Chase Manhattan Plaza
New York, New York 10081
Attention: Barbara Hail
Don Stewart
Telephone: (212) 552-5407 (Barbara)
(212) 552-2662 (Don)
Facsimile: (212) 552-6731
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
60 Wall Street
New York, New York 10260
Attention: Kit C. Wong
Telephone: (212) 648-7340
Facsimile: (212) 648-5336
SOCIETE GENERALE
Suite 3400
181 West Madison Street
Chicago, Illinois 60602
Attention: Eric E.O. Siebert
Donna L. Benson
Telephone: (312) 578-5003 (Eric)
(312) 578-5112 (Donna)
Facsimile: (312) 578-5099
THE BANK OF NOVA SCOTIA
Suite 2700
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Attention: Claude Ashby
Telephone: (404) 877-1500
Facsimile: (404) 888-8998
CIBC INC.
Suite 2300
200 West Madison Street
Chicago, Illinois 60606
Attention: Stephanie Johnson
Telephone: (312) 750-8725
Facsimile: (312) 726-8884
with a copy to:
<PAGE>
3
CIBC INC.
Two Paces West
Suite 1200
2727 Paces Ferry road
Atlanta, Georgia 30339
Attention: Carrie Modica
Telephone: (404) 319-4816
Facsimile: (404) 319-4950
COMMERZBANK
AKTIENGESELLSCHAFT, GRAND
CAYMAN BRANCH
c/o Chicago Branch
Suite 5800
311 South Wacker Drive
Chicago, Illinois 60606
Attention: Anthony Giraldi
Telephone: (312) 435-1000
Facsimile: (312) 435-1486
CREDIT SUISSE
41st Floor
12 East 49th Street
New York, New York 10017
Attention: Hazel Leslie
Telephone: (212) 238-5218
Facsimile: (212) 238-5246
THE FIRST NATIONAL BANK OF
CHICAGO
Suite 0324
One First National Plaza
Chicago, Illinois 60670
Attention: Michael McCorkle
Telephone: (312) 732-3568
Facsimile: (312) 732-5296
THE FUJI BANK, LIMITED
c/o Chicago Branch
Suite 2000
225 West Wacker Drive
Chicago, Illinois 60606
Attention: Richard J. Dunning
Telephone: (312) 621-9485
Facsimile: (312) 621-0539
<PAGE>
4
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD. CHICAGO BRANCH
Suite 800
190 South LaSalle Street
Chicago, Illinois 60603
Attention: Richard E. Stahl
Telephone: (312) 704-5453
Facsimile: (312) 704-8505
MELLON BANK, N.A.
Suite 2600
55 West Monroe Street
Chicago, Illinois 60603
Attention: Jeffrey Anderson
Telephone: (312) 357-3405
Facsimile: (312) 357-3414
NBD BANK, N.A.
611 Woodward Avenue
Detroit, Michigan 48224
Attention: Timothy Monahan
Telephone: (313) 225-2762
Facsimile: (313) 225-167117
NATIONSBANK OF TEXAS, N.A.
67th Floor
901 Main Street
Dallas, Texas 75202-3707
Attention: Ellis Mosely
Telephone: (214) 508-0913
Facsimile: (214) 508-0980
ROYAL BANK OF CANADA
NEW YORK BRANCH
c/o New York Operations Center
Pierrepont Plaza
300 Cadman Plaza West
Brooklyn, New York 11201-2701
Attention: Manager, Loans Administration
Telephone: (212) 858-7168
Facsimile: (718) 522-6292/3
with a copy to:
<PAGE>
5
ROYAL BANK OF CANADA
Suite 2300
33 North Dearborn
Chicago, Illinois 60602
Attention: G. David Cole
Telephone: (312) 372-4404
Facsimile: (312) 782-3429
TORONTO DOMINION
(TEXAS),INC.
c/o The Toronto-Dominion
Bank
Suite 5430
70 West Madison Street
Chicago, Illinois 60602
Attention: David Lewing
Telephone: (312) 977-2105
Facsimile: (312) 782-6337
UNION BANK OF SWITZERLAND,
CHICAGO BRANCH
30 South Wacker Drive
Chicago, Illinois 60606
Attention: Martin A. Frey
Telephone: (312) 993-5476
Facsimile: (312) 993-5530
WACHOVIA BANK OF GEORGIA, N.A.
INC.
c/o Wachovia Corporate Services,
Inc.
Suite 1740
55 West Monroe Street
Chicago, Illinois 60603
Attention: Scott D. Bjelde
Telephone: (312) 853-0191
Facsimile: (312) 853-0693
<PAGE>
EXHIBIT A
[FORM OF BORROWING NOTICE]
,
----------- ----
Chemical Bank
as Administrative Agent under the
Credit Agreement referred to below
270 Park Avenue
New York, New York 10017
Gentlemen:
Pursuant to subsection 2.1(c) of the $825,000,000 Credit
Agreement, dated as of December 15, 1993, among DEERE & COMPANY,
JOHN DEERE CAPITAL CORPORATION, the Banks parties thereto,
CHEMICAL BANK, as Administrative Agent, DEUTSCHE BANK AG CHICAGO
BRANCH, as Auction Agent, the Managing Agents named therein and
the Co-Agents named therein (as the same may be amended,
supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), the undersigned hereby requests that the following
Committed Rate Loans be made on __________, ____ as follows:
(1). Total Amount of Committed Rate
Loans.......................... $
----------
(2). Amount of (1) to be allocated to
Eurodollar Loans............... $
----------
(3). Amount of (1) to be allocated to
C/D Rate Loans................. $
----------
(4). Amount of (1) to be allocated to
ABR Loans..................... $
----------
(5A). Interest Periods and amounts to be
allocated thereto in respect of
Eurodollar Loans (amounts must total (2)):
(i) one month................ $
----------
(ii) two months............... $
----------
(iii) three months............. $
----------
(iv) six months............... $
----------
Total Eurodollar Loans.......... $
----------
<PAGE>
A-2
(5B). Interest Periods and amounts to
be allocated thereto in respect
of C/D Rate Loans (amounts must
total (3)):
(i) 30 days.................. $
----------
(ii) 60 days.................. $
----------
(iii) 90 days.................. $
----------
(iv) 180 days................. $
----------
Total C/D Rate Loans........... $
----------
NOTE: THE AMOUNT APPEARING IN LINE (1) ABOVE
MUST BE AT LEAST EQUAL TO $25,000,000 AND
IN A WHOLE MULTIPLE OF $5,000,000 AND THE
AMOUNTS APPEARING IN EACH OTHER LINE ABOVE
MUST BE AT LEAST EQUAL TO $10,000,000 AND IN
A WHOLE MULTIPLE OF $1,000,000.
Terms defined in the Credit Agreement shall have the same
meanings when used herein.
Very truly yours,
[DEERE & COMPANY]
[JOHN DEERE CAPITAL CORPORATION]
By:
----------------------------
Title:
<PAGE>
EXHIBIT B
[FORM OF BID LOAN REQUEST]
,
--------- ----
Deutsche Bank AG Chicago Branch,
as Auction Agent
under the Credit Agreement
referred to below
c/o Deutsche Bank AG New York Branch
31 West 52nd Street
New York, New York 10019
Dear Sirs:
Reference is made to the $825,000,000 Credit Agreement,
dated as of December 15, 1993, among DEERE & COMPANY, JOHN DEERE
CAPITAL CORPORATION, the Banks parties thereto, CHEMICAL BANK, as
Administrative Agent, DEUTSCHE BANK AG CHICAGO BRANCH, as Auction
Agent, the Managing Agents named therein and the Co-Agents named
therein (as the same may be amended, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"). Terms
defined in the Credit Agreement are used herein as therein
defined.
This is an [Index Rate] [Absolute Rate] Bid Loan Request
pursuant to subsection 2.2 of the Credit Agreement requesting
quotes for the following Bid Loans:
Aggregate Principal Amount $ $ $
------- ------- -------
Borrowing Date
------- ------- -------
Interest Period
------- ------- -------
Maturity Date
------- ------- -------
Interest Payment Dates
------- ------- -------
Interest Rate Basis 360 day year
<PAGE>
B-2
NOTE: THE AGGREGATE PRINCIPAL AMOUNTS APPEARING ABOVE
MUST BE IN THE AGGREGATE AT LEAST EQUAL TO
$25,000,000 AND IN A WHOLE MULTIPLE OF
$5,000,000.
Very truly yours,
[DEERE & COMPANY]
[JOHN DEERE CAPITAL CORPORATION]
By:
----------------------------
Title:
- --------------------
Note: Pursuant to the Credit Agreement, a Bid Loan Request may
be transmitted by facsimile transmission, or by
telephone, immediately confirmed by facsimile
transmission. In any case, a Bid Loan Request shall
contain the information specified in the second paragraph
of this form.
<PAGE>
EXHIBIT C
[FORM OF BID LOAN OFFER]
,
--------- ----
Deutsche Bank AG Chicago Branch,
as Auction Agent under
the Credit Agreement
referred to below
c/o Deutsche Bank AG New York Branch
31 West 52nd Street
New York, New York 10019
Dear Sirs:
Reference is made to the $825,000,000 Credit Agreement,
dated as of December 15, 1993, among DEERE & COMPANY, JOHN DEERE
CAPITAL CORPORATION, the Banks parties thereto, CHEMICAL BANK, as
Administrative Agent, DEUTSCHE BANK AG CHICAGO BRANCH, as Auction
Agent, the Managing Agents named therein and the Co-Agents named
therein (as the same may be amended, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"). Terms
defined in the Credit Agreement are used herein as therein
defined.
In accordance with subsection 2.2 of the Credit Agreement,
the undersigned Bid Loan Bank offers to make Bid Loans thereunder
in the following amounts with the following maturity dates:
Borrowing Date: , 19
------- --
Aggregate Maximum Amount: $
-------
<TABLE>
<CAPTION>
Maturity Date 1: : Maturity Date 2: : Maturity Date 3: :
--------------- --- --------------- --- --------------- ---
<S> <C> <C> <C> <C> <C>
Maximum Amount $ Maximum Amount $ Maximum Amount $
--- --- ---
Rate* Amount $ Rate* Amount $ Rate* Amount $
-- --- -- --- -- ---
Rate* Amount $ Rate* Amount $ Rate* Amount $
-- --- -- --- -- ---
</TABLE>
Very truly yours,
[NAME OF BID LOAN BANK]
By:
--------------------------
Name:
Title:
Telephone:
Facsimile:
* If Index Rate Bid Loan, insert percentage above or below
Eurodollar Rate.
<PAGE>
EXHIBIT D
[FORM OF BID LOAN CONFIRMATION]
,
--------- ----
Deutsche Bank AG Chicago Branch,
as Auction Agent under the
Credit Agreement referred
to below
c/o Deutsche Bank AG New York Branch
31 West 52nd Street
New York, New York 10019
Dear Sirs:
Reference is made to the $825,000,000 Credit
Agreement, dated as of December 15, 1993, among DEERE &
COMPANY, JOHN DEERE CAPITAL CORPORATION, the Banks parties
thereto, CHEMICAL BANK, as Administrative Agent, DEUTSCHE
BANK AG CHICAGO BRANCH, as Auction Agent, the Managing Agents
named therein and the Co-Agents named therein (as the same
may be amended, supplemented or otherwise modified from time
to time, the "CREDIT AGREEMENT"). Terms defined in the
Credit Agreement are used herein as therein defined.
In accordance with subsection 2.2 of the Credit
Agreement, the undersigned accepts and confirms the offers by
Bid Loan Bank(s) to make Bid Loans to the undersigned on
________ , ____ [Borrowing Date] under said subsection 2.2 in
the (respective) amount(s) set forth on the attached list of
Bid Loans offered.
Very truly yours,
[DEERE & COMPANY]
[JOHN DEERE CAPITAL CORPORATION]
By:
-----------------------------
Title:
[Borrower to attach Bid Loan Offer list prepared by Auction
Agent with accepted amount entered by the Borrower to right
of each Bid Loan Offer].
<PAGE>
EXHIBIT E
[FORM OF LOAN ASSIGNMENT]
LOAN ASSIGNMENT
LOAN ASSIGNMENT, dated as of the date set forth in
Item 1 of Schedule I hereto, among the Assignor Bank set
forth in Item 2 of Schedule I hereto (the "ASSIGNOR BANK"),
the Loan Assignee set forth in Item 3 of Schedule I hereto
(the "LOAN ASSIGNEE"), and CHEMICAL BANK, as administrative
agent for the Banks under the Credit Agreement described
below (in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H :
WHEREAS, this Loan Assignment is being executed and
delivered in accordance with subsection 10.5(c) of the
$825,000,000 Credit Agreement, dated as of December 15, 1993
among DEERE & COMPANY (the "COMPANY"), JOHN DEERE CAPITAL
CORPORATION (the "CAPITAL CORPORATION"), the Assignor Bank
and the other Banks party thereto, the Administrative Agent,
DEUTSCHE BANK AG CHICAGO BRANCH, as Auction Agent, the
Managing Agents named therein and the Co-Agents named therein
(as from time to time amended, supplemented or otherwise
modified in accordance with the terms thereof, the "CREDIT
AGREEMENT"; terms defined therein being used herein as
therein defined); and
WHEREAS, the Assignor Bank has advanced to [the
Company] [the Capital Corporation] the Bid Loan or Negotiated
Rate Loan or portion thereof described in Item 5 of Schedule
I hereto (the "LOAN"), and the Assignor Bank is assigning the
Loan to the Loan Assignee pursuant to this Loan Assignment;
NOW, THEREFORE, the parties hereto hereby agree as
follows:
1. The Assignor Bank acknowledges receipt from the
Loan Assignee of an amount equal to the purchase price, as
agreed between the Assignor Bank and the Loan Assignee, of
the outstanding principal amount of, and accrued interest on,
the Loan. The Assignor Bank hereby irrevocably sells,
assigns and transfers to the Loan Assignee without recourse,
representation or warranty, and the Loan Assignee hereby
irrevocably purchases, takes and acquires from the Assignor
<PAGE>
E-2
Bank, the Loan, together with all instruments, documents and
collateral security pertaining thereto.
2. (a) From and after the date set forth in Item
4 of Schedule I hereto (the "TRANSFER EFFECTIVE DATE"),
principal and interest that would otherwise be payable to or
for the account of the Assignor Bank pursuant to the Loan
shall, instead, be payable to or for the account of the Loan
Assignee, whether such amounts have accrued prior to the
Transfer Effective Date or accrue subsequent to the Transfer
Effective Date.
(b) If Item 6 of Schedule I hereto contains
payment instructions for the Loan Assignee and if the Loan
Assignee delivers a copy of this Loan Assignment to the
Administrative Agent in accordance with subsection 10.5(f) of
the Credit Agreement at least 5 Business Days prior to the
due date of any payment to the Loan Assignee, the Loan
Assignee hereby instructs the Administrative Agent to pay all
such amounts payable to it pursuant to the provision of
subparagraph (a) of this paragraph 2, in accordance with such
payment instructions. If Item 6 of Schedule I hereto does
not contain payment instructions for the Loan Assignee (or a
copy hereof is not delivered to the Administrative Agent as
aforesaid), the Assignor Bank and the Loan Assignee agree
that, notwithstanding the provisions of subparagraph (a) of
this paragraph 2, the Assignor Bank is hereby appointed by
the Loan Assignee as its collection agent to receive from the
Administrative Agent, for and on behalf of and for the
account of the Loan Assignee, all amounts payable to or for
the account of the Loan Assignee under the Loan; the Assignor
Bank will immediately pay over to the Loan Assignee any such
amounts received by it, in like funds as received.
3. Each of the parties to this Loan Assignment
agrees that at any time and from time to time upon the
written request of any other party, it will execute and
deliver such further documents and do such further acts and
things as such other party may reasonably request in order to
effect the purposes of this Loan Assignment.
4. By executing and delivering this Loan
Assignment, the Assignor Bank and the Loan Assignee confirm
to and agree with each other and the Administrative Agent and
the Banks as follows: (i) other than the representation and
warranty that it is the legal and beneficial owner of the
interest being assigned hereby free and clear of any adverse
claim, the Assignor Bank makes no representation or warranty
and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with
the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the
Credit Agreement or any other instrument or document
furnished pursuant thereto; (ii) the Assignor Bank makes no
<PAGE>
E-3
representation or warranty and assumes no responsibility with
respect to the financial condition of the Company or the
Capital Corporation or the performance or observance by the
Company or the Capital Corporation of any of its obligations
under the Credit Agreement or any other instrument or
document furnished pursuant hereto; (iii) the Loan Assignee
confirms that it has received a copy of the Credit Agreement,
together with copies of the financial statements referred to
in subsection 3.1 (unless financial statements referred to in
subsection 5.1(a) have become available), the financial
statements delivered pursuant to subsection 5.1, if any, and
such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to
enter into this Loan Assignment; (iv) the Loan Assignee will,
independently and without reliance upon the Administrative
Agent, the Assignor Bank or any other Bank and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in respect of
the Credit Agreement; and (v) the Loan Assignee appoints and
authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to the Administrative Agent
by the terms thereof, together with such powers as are
reasonably incidental thereto, all in accordance with Section
9 of the Credit Agreement.
5. The Loan Assignee represents that it is
organized under the laws of _____________ . If the Loan
Assignee is organized under the laws of any jurisdiction
other than the United States or any State thereof, the Loan
Assignee (i) represents to the Assignor Bank (for the benefit
of the Assignor Bank, the Administrative Agent and [the
Company] [the Capital Corporation]) that under applicable law
and treaties no taxes will be required to be withheld by the
Administrative Agent, [the Company] [the Capital Corporation]
or the Assignor Bank with respect to any payments to be made
to the Loan Assignee in respect of the Loan, (ii) will
furnish to the Assignor Bank, the Administrative Agent and
[the Company] [the Capital Corporation], on or prior to the
Transfer Effective Date, a letter in duplicate in the form of
Exhibit J or Exhibit K, as appropriate, to the Credit
Agreement and two duly completed copies of either U.S.
Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein the Loan Assignee claims
entitlement to complete exemption from U.S. federal
withholding tax on all interest payments under the Loan),
(iii) will furnish to the Assignor Bank, the Administrative
Agent and [the Company] [the Capital Corporation], on or
prior to the Transfer Effective Date either U.S. Internal
Revenue Service Form W-8 or U.S. Internal Revenue Service
Form W-9 (wherein the Loan Assignee claims entitlement to
complete exemption from U.S. federal backup withholding tax
on all interest payments under the Loan) and (iv) agrees (for
the benefit of the Assignor Bank, the Administrative Agent
<PAGE>
E-4
and [the Company] [the Capital Corporation]) to provide the
Assignor Bank, the Administrative Agent and [the Company]
[the Capital Corporation] a new Form 4224 or Form 1001 and
Form W-8 or W-9 or successor applicable form or other manner
of certification on or before the expiration or obsolescence
of, or after the occurrence of any event requiring a change
in, any previously delivered letter or form and comparable
statements in accordance with applicable U.S. laws and
regulations and amendments duly executed and completed by the
Loan Assignee, and comply from time to time with all
applicable U.S. laws and regulations with regard to such
withholding tax exemption and such backup withholding tax
exemption.
6. The Loan Assignee agrees to be bound by
subsection 10.7 of the Credit Agreement relating to
confidentiality.
7. This Loan Assignment shall be governed by, and
construed and interpreted in accordance with, the law of the
State of New York.
IN WITNESS WHEREOF, the parties hereto have caused
this Loan Assignment to be executed by their respective duly
authorized officers on Schedule I hereto as of the date set
forth in Item 1 of Schedule I hereto.
<PAGE>
SCHEDULE I
TO LOAN
ASSIGNMENT
Item 1 (Date of Loan
Assignment): [Insert date of Loan
Assignment]
Item 2 (Assignor Bank): [Insert name of Assignor
Bank]
Item 3 (Loan Assignee): [Insert name, address,
telephone and telex
numbers and name of
contact party of Loan
Assignee]
Item 4 (Transfer Effective
Date): [Insert Transfer Effective
Date] [To be a date not
less than five business
days after date of Loan
Assignment]
Item 5 (Description of Loan):
a. Borrowing Date and Maturity Date of Bid
Loan or Negotiated Rate Loan:
b. Principal Amount of Loan:
Item 6 (Payment Instructions): [Complete only if
payments are to be
made by
Administrative Agent
to Loan Assignee
rather than to
Assignor Bank as
collection agent for
Loan Assignee; leave
blank if Assignor
Bank is to act as
such collection
agent]
Item 7 (Signatures):
, as
--------------------
Assignor Bank
By:
----------------------
Title:
<PAGE>
2
, as
-------------------
Loan Assignee
By:
-----------------------
Title:
ACCEPTED FOR RECORDATION
IN REGISTER:
CHEMICAL BANK, as Administrative
Agent
By:
-----------------------
Title:
<PAGE>
EXHIBIT F
[FORM OF COMMITMENT TRANSFER SUPPLEMENT]
COMMITMENT TRANSFER SUPPLEMENT
COMMITMENT TRANSFER SUPPLEMENT, dated as of the
date set forth in Item 1 of Schedule I hereto, among the
Transferor Bank set forth in Item 2 of Schedule I hereto (the
"TRANSFEROR BANK"), each Purchasing Bank set forth in Item 3
of Schedule I hereto (each, a "PURCHASING BANK"), DEERE &
COMPANY, a Delaware corporation (the "COMPANY"), JOHN DEERE
CAPITAL CORPORATION, a Delaware corporation (the "CAPITAL
CORPORATION"), and CHEMICAL BANK, as administrative agent for
the Banks under the Credit Agreement described below (in such
capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H :
WHEREAS, this Commitment Transfer Supplement is
being executed and delivered in accordance with subsection
10.5(d) of the $825,000,000 Credit Agreement, dated as of
December 15, 1993, among the Company, the Capital
Corporation, the Transferor Bank and the other Banks party
thereto, the Administrative Agent, Deutsche Bank AG Chicago
Branch, as Auction Agent the Managing Agents named therein
and the Co-Agents named therein (as from time to time
amended, supplemented or otherwise modified in accordance
with the terms thereof, the "CREDIT AGREEMENT"; terms defined
therein being used herein as therein defined);
WHEREAS, each Purchasing Bank (if it is not already
a Bank party to the Credit Agreement) wishes to become a Bank
party to the Credit Agreement; and
WHEREAS, the Transferor Bank is selling and
assigning to each Purchasing Bank, rights, obligations and
commitments under the Credit Agreement;
NOW, THEREFORE, the parties hereto hereby agree as
follows:
1. From and after the Transfer Effective Date set
forth in Item 4 of Schedule I hereto (the "TRANSFER EFFECTIVE
DATE"), each Purchasing Bank shall be a Bank party to the
Credit Agreement for all purposes thereof.
<PAGE>
F-2
2. The Transferor Bank acknowledges receipt from
each Purchasing Bank of an amount equal to the purchase
price, as agreed between the Transferor Bank and such
Purchasing Bank (the "PURCHASE PRICE"), of the portion being
purchased by such Purchasing Bank (such Purchasing Bank's
"PURCHASED PERCENTAGE") of the outstanding Committed Rate
Loans and other amounts owing to the Transferor Bank under
the Credit Agreement (other than any Bid Loans and Negotiated
Rate Loans owing to the Transferor Bank). The Transferor
Bank hereby irrevocably sells, assigns and transfers to each
Purchasing Bank, without recourse, representation or
warranty, and each Purchasing Bank hereby irrevocably
purchases, takes and assumes from the Transferor Bank, such
Purchasing Bank's Purchased Percentage of the Commitments and
the presently outstanding Committed Rate Loans and other
amounts owing to the Transferor Bank under the Credit
Agreement (other than any Bid Loans and Negotiated Rate Loans
owing to the Transferor Bank) together with all instruments,
documents and collateral security pertaining thereto.
3. The Transferor Bank has made arrangements with
each Purchasing Bank with respect to (i) the portion, if any,
to be paid, and the date or dates for payment, by the
Transferor Bank to such Purchasing Bank of any fees
heretofore received by the Transferor Bank pursuant to the
Credit Agreement prior to the Transfer Effective Date and
(ii) the portion, if any, to be paid, and the date or dates
for payment, by such Purchasing Bank to the Transferor Bank
of fees or interest received by such Purchasing Bank pursuant
to the Credit Agreement from and after the Transfer Effective
Date.
4. (a) From and after the Transfer Effective
Date, principal, interest, fees and other amounts that would
otherwise be payable to or for the account of the Transferor
Bank pursuant to the Credit Agreement and the Committed Rate
Loans (other than any Bid Loans and Negotiated Rate Loans
owing to the Transferor Bank) shall, instead, be payable to
or for the account of the Transferor Bank and the Purchasing
Banks, as the case may be, in accordance with their
respective interests as reflected in this Commitment Transfer
Supplement, whether such amounts have accrued prior to the
Transfer Effective Date or accrue subsequent to the Transfer
Effective Date.
(b) The Transferor Bank and each Purchasing Bank
hereby agree and instruct the Administrative Agent that,
notwithstanding the provisions of subparagraph (a) of this
paragraph 4, on each date hereafter on which interest or fees
are payable under the Credit Agreement and the Committed Rate
Loans in respect of any period (an "ACCRUAL PERIOD") ending
on or prior to the Transfer Effective Date, any such interest
or fees payable to the Purchasing Bank on account of such
Accrual Period in respect of its interests as reflected in
<PAGE>
F-3
this Commitment Transfer Supplement shall be paid over to the
Transferor Bank (and, if such interest or fees are not paid
in full when due, the payment over to the Transferor Bank
shall be ratable), and the Transferor Bank and such
Purchasing Bank will make appropriate arrangements for the
payment to such Purchasing Bank of the portion thereof owing
to it to reflect the amount, if any, included in the Purchase
Price for interest and fees in respect of any Accrual Period.
5. On or promptly after the Transfer Effective
Date specified in this Commitment Transfer Supplement, the
Purchasing Bank and the Administrative Agent, on behalf of
such Purchasing Bank, shall open and maintain in the name of
each Borrower a Loan Account with respect to such Purchasing
Bank's Committed Rate Loans and Bid Loans to such Borrower.
6. Concurrently with the execution and delivery
hereof, the Administrative Agent will, at the expense of the
Transferor Bank, provide to each Purchasing Bank (if it is
not already a Bank party to the Credit Agreement) conformed
copies of all documents delivered to the Administrative Agent
on the Closing Date in satisfaction of the conditions
precedent set forth in the Credit Agreement.
7. Each of the parties to this Commitment Transfer
Supplement agrees that at any time and from time to time upon
the written request of any other party, it will execute and
deliver such further documents and do such further acts and
things as such other party may reasonably request in order to
effect the purposes of this Commitment Transfer Supplement.
8. By executing and delivering this Commitment
Transfer Supplement, the Transferor Bank and each Purchasing
Bank confirm to and agree with each other and the
Administrative Agent and the Banks as follows: (i) other
than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned hereby free
and clear of any adverse claim, the Transferor Bank makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made
in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, the Committed
Rate Loans or any other instrument or document furnished
pursuant thereto; (ii) the Transferor Bank makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of the Company or the
Capital Corporation or the performance or observance by the
Company or the Capital Corporation of any of its obligations
under the Credit Agreement or any other instrument or
document furnished pursuant hereto; (iii) each Purchasing
Bank confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements
referred to in subsection 3.1, the financial statements
<PAGE>
F-4
delivered pursuant to subsection 5.1, if any, and such other
documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this
Commitment Transfer Supplement; (iv) each Purchasing Bank
will, independently and without reliance upon the
Administrative Agent, the Transferor Bank or any other Bank
and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit
Agreement; (v) each Purchasing Bank appoints and authorizes
the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under the Credit Agreement
as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably
incidental thereto, all in accordance with Section 9 of the
Credit Agreement; and (vi) each Purchasing Bank agrees that
it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are
required to be performed by it as a Bank.
9. The Purchasing Bank represents that it is
organized under the laws of ____________ . If the Purchasing
Bank is organized under the laws of any jurisdiction other
than the United States or any State thereof, the Purchasing
Bank (i) represents to the Transferor Bank (for the benefit
of the Transferor Bank, the Administrative Agent and the
Borrowers) that under applicable law and treaties no taxes
will be required to be withheld by the Administrative Agent,
the Borrowers or the Transferor Bank with respect to any
payments to be made to the Purchasing Bank in respect of the
Loans, (ii) will furnish to the Transferor Bank, the
Administrative Agent and the Borrowers, on or prior to the
Transfer Effective Date, a letter in duplicate in the form of
Exhibit J or Exhibit K, as appropriate, to the Credit
Agreement and two duly completed copies of either U.S.
Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein the Purchasing Bank claims
entitlement to complete exemption from U.S. federal
withholding tax on all interest payments under the Loan),
(iii) will furnish to the Transferor Bank, the Administrative
Agent and the Borrowers, on or prior to the Transfer
Effective Date either U.S. Internal Revenue Service Form W-8
or U.S. Internal Revenue Service Form W-9 (wherein the
Purchasing Bank claims entitlement to complete exemption from
U.S. federal backup withholding tax on all interest payments
under the Loan) and (iv) agrees (for the benefit of the
Transferor Bank, the Administrative Agent and the Borrowers),
to provide the Transferor Bank, the Administrative Agent and
the Borrowers a new Form 4224 or Form 1001 and Form W-8 or W-
9 or successor applicable form or other manner of
certification on or before the expiration or obsolescence of,
or after the occurrence of any event requiring a change in,
any previously delivered letter or form and comparable
statements in accordance with applicable U.S. laws and
<PAGE>
F-5
regulations and amendments duly executed and completed by the
Purchasing Bank, and comply from time to time with all
applicable U.S. laws and regulations with regard to such
withholding tax exemption and such backup withholding tax
exemption.
10. The Purchasing Bank agrees to be bound by
subsection 10.7 of the Credit Agreement relating to
confidentiality.
11. Schedule II hereto sets forth the revised
Commitments and Commitment Percentages of the Transferor Bank
and each Purchasing Bank as well as administrative
information with respect to each Purchasing Bank.
12. This Commitment Transfer Supplement shall be
governed by, and construed and interpreted in accordance
with, the law of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused
this Commitment Transfer Supplement to be executed by their
respective duly authorized officers on Schedule I hereto as
of the date set forth in Item 1 of Schedule I hereto.
<PAGE>
SCHEDULE I
TO
COMMITMENT
TRANSFER
SUPPLEMENT
COMPLETION OF INFORMATION AND
SIGNATURES FOR COMMITMENT
TRANSFER SUPPLEMENT
Item 1 (Date of Commitment [Insert date of Commitment
Transfer Supplement): Transfer Supplement]
Item 2 (Transferor Bank): [Insert name of Transferor
Bank]
Item 3 (Purchasing Bank[s]): [Insert name[s] of
Purchasing Bank[s]]
Item 4 (Transfer Effective [Insert Transfer Effective
Date): Date] [To be a date not
less than five business
days after date of
Commitment Transfer
Supplement]
Item 5 (Signatures of Parties
to Commitment Transfer
Supplement):
,
--------------------
as Transferor Bank
By:
-----------------------
Title:
,
--------------------
as a Purchasing Bank
By:
-----------------------
Title:
,
--------------------
as a Purchasing Bank
By:
-----------------------
Title:
<PAGE>
2
CONSENTED TO AND ACKNOWLEDGED:
DEERE & COMPANY
By:
----------------------
JOHN DEERE CAPITAL CORPORATION
By:
----------------------
Title:
ACCEPTED FOR RECORDATION
IN REGISTER:
CHEMICAL BANK, as Administrative
Agent
By:
----------------------
Title:
<PAGE>
SCHEDULE II
TO COMMITMENT
TRANSFER
SUPPLEMENT
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
[Name of Transferor Bank] REVISED COMMITMENT AMOUNTS: $
-----------
REVISED COMMITMENT PERCENTAGE:
-----------
[Name of Purchasing Bank] NEW COMMITMENT AMOUNTS: $
-----------
ADDRESS FOR NOTICES:
NEW COMMITMENT PERCENTAGE:
-----------
- -------------------
- -------------------
- -------------------
Attn:
------------
Telephone:
-----------------
Facsimile:
-----------------
[Name of Purchasing Bank] NEW COMMITMENT AMOUNTS: $
-----------
ADDRESS FOR NOTICES:
NEW COMMITMENT PERCENTAGE:
-----------
- -------------------
- -------------------
Attn:
------------
Telephone:
-------------------
Facsimile:
-------------------
<PAGE>
EXHIBIT G
[FORM OF OPINION OF GENERAL COUNSEL
TO THE BORROWERS]
To each of the Banks parties to
the Credit Agreement referred
to below, to Chemical Bank,
as Administrative Agent, and
Deutsche Bank AG Chicago Branch,
as Auction Agent
DEERE & COMPANY AND
JOHN DEERE CAPITAL CORPORATION
Gentlemen:
This opinion is furnished to you pursuant to
subsection 4.1(c) of the $825,000,000 Credit Agreement, dated
as of December 15, 1993 (the "Credit Agreement"), among Deere
& Company (the "Company"), John Deere Capital Corporation
(the "Capital Corporation", the Company and the Capital
Corporation being referred to herein individually as a
"Borrower" and collectively as the "Borrowers"), the Banks
parties thereto, Chemical Bank, as Administrative Agent,
Deutsche Bank AG Chicago Branch, as Auction Agent, the
Managing Agents named therein and the Co-Agents named
therein. Terms defined in the Credit Agreement are used
herein as therein defined.
As General Counsel to the Borrowers, I am familiar
with the corporate history and organization of each Borrower
and of its Subsidiaries and the proceedings relating to the
authorization, execution and delivery by each Borrower of the
Credit Agreement. In that connection I have examined:
1. The Credit Agreement;
2. The documents furnished by each of the
Borrowers pursuant to Section 4 of the Credit
Agreement;
3. The Certificates of Incorporation of the
Borrowers and all amendments thereto (the
"Charters");
4. The bylaws of the Borrowers and all amendments
thereto (the "Bylaws"); and
<PAGE>
G-2
5. Certificates of the Secretary of State of
Delaware, each dated a recent date, attesting
to the continued corporate existence and good
standing of the Borrowers in that State.
In addition, I have reviewed such of the corporate
proceedings of the Borrowers, and have examined such
documents, corporate records, and other instruments relating
to the organization of the Borrowers and their respective
Subsidiaries and such other agreements and instruments to
which the Borrowers and their respective Subsidiaries are
parties, as I have deemed necessary for the purpose of this
opinion. I have assumed the due execution and delivery,
pursuant to due authorization, of the Credit Agreement by the
Banks, the Administrative Agent, the Auction Agent and the
Managing Agents, and the authenticity of all documents
submitted to me as originals and the conformity to the
original documents of all documents submitted to me as
certified, conformed or photostatic copies.
I am qualified to practice law in the State of
Illinois and do not purport to be an expert on, and do not
express any opinion herein concerning, any laws other than
the laws of the State of Illinois, the General Corporation
Law of the State of Delaware and the Federal laws of the
United States.
Based upon the foregoing and upon such
investigation as I have deemed necessary, I am of the
following opinion:
1. Each Borrower is a corporation duly organized,
validly existing and in good standing under
the laws of the State of Delaware and has the
corporate power and authority to carry on its
business as now being conducted and to own its
properties.
2. The execution, delivery and performance by
each Borrower of the Credit Agreement are
within such Borrower's corporate powers, have
been duly authorized by all necessary
corporate action, and (i) do not contravene,
or constitute a default under the Charter or
the Bylaws of such Borrower, any judgment,
law, rule or regulation applicable to such
Borrower, or any Contractual Obligation by
which such Borrower is bound or (ii) result in
the creation of any lien, charge or
encumbrance upon any of its property or
assets. The Credit Agreement has been duly
executed and delivered on behalf of each
Borrower.
<PAGE>
G-3
3. No authorization, approval, or other action
by, and no notice to or filing with, any
governmental authority or regulatory body is
required for the due execution, delivery and
performance by each Borrower of the Credit
Agreement.
4. There is no pending or, to the best of my
knowledge, threatened action or proceeding
against either Borrower or any of its
Subsidiaries before any court, governmental
agency or arbitrator which is likely to have a
materially adverse effect upon the financial
condition or operations of such Borrower and
its Subsidiaries taken as a whole.
I am aware that Shearman & Sterling will rely upon
the opinions set forth in paragraphs 1, 2, and 3 of this
opinion in rendering their opinion furnished pursuant to
Section 4.1(c) of the Credit Agreement and consent thereto.
Very truly yours,
Frank S. Cottrell
<PAGE>
EXHIBIT H
[FORM OF OPINION OF SPECIAL NEW YORK COUNSEL
TO THE BORROWERS]
To each of the Banks parties to the
Credit Agreement referred to below,
to Chemical Bank, as Administrative
Agent, and Deutsche Bank AG Chicago
Branch, as Auction Agent
DEERE & COMPANY
JOHN DEERE CAPITAL CORPORATION
Ladies and Gentlemen:
This opinion is furnished to you pursuant to
subsection 4.1(c) of the $825,000,000 Credit Agreement, dated
as of December 15, 1993 (the "Credit Agreement"), among Deere
& Company (the "Company"), John Deere Capital Corporation
(the "Capital Corporation", the Company and the Capital
Corporation being referred to herein individually as a
"Borrower" and collectively as the "Borrowers"), the Banks
parties thereto, Chemical Bank, as Administrative Agent,
Deutsche Bank AG Chicago Branch, as Auction Agent, the
Managing Agents named therein and the Co-Agents named
therein. Terms defined in the Credit Agreement are used
herein as therein defined.
We have acted as special New York counsel for the
Borrowers in connection with the preparation, execution and
delivery of the Credit Agreement.
In that connection we have examined:
(1) the Credit Agreement; and
(2) the documents furnished by each of the
Borrowers pursuant to Section 4 of the Credit Agreement.
We have assumed the due execution and delivery,
pursuant to due authorization, of the Credit Agreement by the
Banks, the Administrative Agent, the Auction Agent and the
Managing Agents, the authenticity of all documents submitted
to us as originals and the conformity to the original
documents of all documents submitted to us as certified,
<PAGE>
H-2
conformed or photostatic copies. We have also assumed that
the Banks, the Administrative Agent and the Auction Agent
will perform the Credit Agreement reasonably and in good
faith and will act reasonably and in good faith in taking
action, exercising discretion and making determinations
thereunder. We have also assumed that no Bid Loan or
Negotiated Rate Loan made in an amount of less than
$2,500,000 will bear interest at a rate greater than 25% per
annum.
We are qualified to practice law in the State of
New York. We do not express any opinion herein concerning
any laws other than the laws of the State of New York and the
Federal laws of the United States. To the extent our
opinions expressed below involve conclusions as to matters
set forth in paragraph 1, 2 or 3 of the opinion of Frank S.
Cottrell, General Counsel to the Borrowers, a copy of which
is attached hereto, we have, with your permission, relied on
such opinion.
Based upon the foregoing and upon such
investigation as we have deemed necessary, we are of the
opinion that the Credit Agreement constitutes the legal,
valid and binding obligation of each Borrower enforceable
against such Borrower in accordance with its terms, except as
such enforceability may be subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium
or similar law affecting creditors' rights generally and to
the effect of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law).
Very truly yours,
<PAGE>
EXHIBIT I
[FORM OF EXTENSION REQUEST]
_______________, ____
Chemical Bank, as Administrative Agent
270 Park Avenue
New York, New York 10017
Attention:
------------------
Dear Sirs:
Reference is made to the $825,000,000 Credit
Agreement, dated as of December 15, 1993 among Deere &
Company, John Deere Capital Corporation, the Banks parties
thereto, Chemical Bank, as Administrative Agent, Deutsche
Bank AG Chicago Branch, as Auction Agent, the Managing Agents
named therein and the Co-Agents named therein (as the same
may be amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"). Terms defined in the
Credit Agreement are used herein as therein defined.
This is an Extension Request pursuant to subsection
2.16 of the Credit Agreement requesting an extension of the
<PAGE>
I-2
Termination Date to [requested Termination Date]. Please
transmit a copy of this Extension Request to each of the
Banks.
Very truly yours,
DEERE & COMPANY
By:_____________________
Title:
JOHN DEERE CAPITAL CORPORATION
By:_____________________
Title:
<PAGE>
EXHIBIT J
[FORM OF TAX LETTER]
[To be sent in DUPLICATE and accompanied
by TWO executed copies of Form 1001 of
the Internal Revenue Service]
[Bank's Letterhead]
,
------------- -----
Deere & Company
John Deere Road
Moline, Illinois 61265
Attention: Treasurer
John Deere Capital Corporation
First National Bank Building
1 East First Street
Reno, Nevada 89501
Attention: Manager
Re: $825,000,000 Credit Agreement dated
as of December 15, 1993 with Deere &
Company and John Deere Capital Corporation
------------------------------------------
Dear Sirs:
In connection with the $825,000,000 Credit
Agreement, dated as of December 15, 1993, among Deere &
Company, John Deere Capital Corporation, the Banks parties
thereto, Chemical Bank, as Administrative Agent, Deutsche
Bank AG Chicago Branch, as Auction Agent, the Managing Agents
named therein and the Co-Agents named therein, we hereby
represent and warrant that [name of Bank, address] is a [name
of Country] corporation and is currently exempt from any U.S.
federal withholding tax on payments to it from U.S. sources
by virtue of compliance with the provisions of the Income Tax
Convention between the United States and [name of Country]
signed [date], [as amended]. Our fiscal year is the twelve
months ending [_______________].
<PAGE>
J-2
The undersigned (a) is a corporation organized
under the laws of [_______________] whose registered business
is managed or controlled in [_______________], (b) [does not
have a permanent establishment or fixed base in the United
States] [does have a permanent establishment or fixed base in
the United States but the above Agreement is not effectively
connected with such permanent establishment or fixed base],
(c) is not exempt from tax on the income in [_______________]
and (d) is the beneficial owner of the income.
We enclose herewith two copies of From 1001 of the
U.S. Internal Revenue Service.
Yours faithfully,
[NAME OF BANK]
By:
-------------------------
Title:
cc: Chemical Bank, as Administrative Agent
<PAGE>
EXHIBIT K
[FORM OF TAX LETTER]
[To be sent in DUPLICATE and accompanied
by TWO executed copies of Form 4224 of
the Internal Revenue Service]
[Bank's Letterhead]
____________, ____
Deere & Company
John Deere Road
Moline, Illinois 61265
Attention: Treasurer
John Deere Capital Corporation
First National Bank Building
Reno, Nevada 89501
Attention: Manager
Re: $825,000,000 Credit Agreement dated as
of December 15, 1993 with Deere & Company
and John Deere Capital Corporation
-----------------------------------------
Dear Sirs:
In connection with the above $825,000,000 Credit
Agreement, dated as of December 15, 1993, among Deere &
Company, John Deere Capital Corporation, the Banks parties
thereto, Chemical Bank, as Administrative Agent, Deutsche
Bank AG Chicago Branch, as Auction Agent, the Managing Agents
named therein and the Co-Agents named therein, we hereby
represent and warrant that [name of Bank, address] is a
corporation and is entitled to exemption from U.S. federal
withholding tax on payments to it under the Agreement by
virtue of Section 1441(c)(1) of the Internal Revenue Code of
the United States of America and Treasury Regulation Section
1.1441-4(a) thereunder.
<PAGE>
K-2
We enclose herewith two copies of Form 4224 of the
U.S. Internal Revenue Service.
Yours faithfully,
[NAME OF BANK]
By
------------------------
Title:
cc: Chemical Bank, as Administrative Agent
<PAGE>
EXHIBIT L
[FORM OF AGREEMENT]
THIS AGREEMENT, dated as of__________ , ____
("AGREEMENT"), among Deere & Company (the "COMPANY"), John
Deere Capital Corporation (the "CAPITAL CORPORATION"),
____________ ("NEW BANK") and Chemical Bank, as
Administrative Agent for the Existing Banks referred to
below.
W I T N E S S E T H :
WHEREAS, the Company, the Capital Corporation, the
several financial institutions parties thereto (the "EXISTING
BANKS") Chemical Bank, as Administrative Agent, Deutsche Bank
AG Chicago Branch, as Auction Agent, the Managing Agents
named therein and the Co-Agents named therein are parties to
a $825,000,000 Credit Agreement, dated as of December 15,
1993 (as the same may have been or may hereafter be amended,
supplemented or otherwise modified, the "CREDIT AGREEMENT";
terms defined therein being used herein as therein defined);
WHEREAS, subsection 2.19 of the Credit Agreement
provides that one or more financial institutions (which may
be Existing Banks) may be added as a "Bank" or "Banks" for
purposes of the Credit Agreement upon the cancellation of all
or a portion of the Commitments pursuant to subsection
2.13(a), (b) or (c), 2.16(c) or 2.17(b) of the Credit
Agreement or the expiration of all or a portion of the
Commitments pursuant to subsection 2.16(b) of the Credit
Agreement and the execution of an agreement in substantially
the form of this Agreement;
WHEREAS, the Borrowers have cancelled or there have
expired an aggregate principal amount of Commitments equal to
$___________ which have not heretofore been replaced (the
"CANCELLED COMMITMENTS"; the Banks that are maintaining or
have maintained the Cancelled Commitments being collectively
referred to as "CANCELLED BANKS"); such Cancelled Commitments
being on the date hereof, or on the date of notice of
cancellation hereof having been, utilized as follows:
<TABLE>
<CAPTION>
Last day of
Principal Amount Interest Period
--------------- ---------------
<S> <C> <C>
I UNUSED PORTION N/A
</TABLE>
<PAGE>
L-2
<TABLE>
<CAPTION>
Last day of
Pincipal Amount Interest Period
--------------- ---------------
<S> <C> <C>
II COMMITTED RATE LOANS
C/D Rate Loans
1
2
3
Eurodollar Loans
1
2
3
ABR Loans N/A
III BID LOANS
1
2
3
IV NEGOTIATED RATE LOANS
1
2
3
</TABLE>
WHEREAS, the cancellation of the Cancelled
Commitments is effective in accordance with the Credit
Agreement; and
WHEREAS, [the Borrowers desire the New Bank to
become, and the New Bank is agreeable, to becoming, a "Bank"
for purposes of the Credit Agreement] [the New Bank is an
Existing Bank and the Borrowers desire the New Bank to
<PAGE>
L-3
increase, and the New Bank is agreeable to increasing, its
Commitment]* on the terms contained herein.
NOW, THEREFORE, in consideration of the premises
and mutual covenants contained herein, the parties hereto
agree as follows:
1. BENEFITS OF AGREEMENT. The Borrowers, the
Administrative Agent and the New Bank hereby [agree that on
and as of the date hereof the New Bank shall be] [confirm
that the New Bank is] a "Bank" for all purposes and shall
[continue to] be bound by and entitled to the benefits of the
Credit Agreement [as if the New Bank had been named on the
signature pages thereof], PROVIDED that the New Bank shall
not assume and shall, except as herein provided, have no
obligations in respect of any Loans outstanding on the date
hereof and made by any [Existing Bank.] [Cancelled Bank.]*
2. COMMITMENT OF NEW BANK. The Borrowers, the
Administrative Agent and the New Bank hereby agree that on
and as of the dates set forth below the New Bank shall
replace, as specified herein, ____% (such percentage being
referred to as the New Bank's "Percentage") of each
utilization of the Cancelled Commitments [set forth in the
third recital hereof] [set forth under the caption "Committed
Rate Loans"] and that the aggregate Commitment of the New
Bank shall on and as of the date hereof be $_________ **. In
connection therewith, the Borrowers, the Administrative Agent
and the New Bank hereby agree as follows***:
(i) for purposes of determining such New Bank's
pro rata share of each Committed Rate Loan borrowing
advanced on or after the date hereof such Bank's
Commitment shall be equal to $[SAME AS ABOVE];
(ii) the unused and available portion of such New
Bank's Commitment shall be deemed utilized by its
Percentage of the Committed Rate Loans made by the
Cancelled Banks and listed in the third recital hereof.
In furtherance thereof, the unused and available portion
of such New Bank's Commitment shall, on the earlier of
- -----------------
* As appropriate for New or Existing Banks.
** Insert amount equal to sum of New Bank's existing
Commitment, if any, plus New Bank's Percentage of
Cancelled Commitments.
*** The following clauses (ii)-(iii) may be altered to
reflect the agreements among the Cancelled Bank, the New
Bank and the Borrowers provided such agreements do not
adversely affect any Existing Bank or the Administrative
Agent.
<PAGE>
L-4
(x) the last day of each Interest Period specified for
each outstanding Committed Rate Loan in the third
recital hereof (and the payment in full to the Cancelled
Banks of the principal thereof and accrued interest
thereon) and (y) the prepayment of the principal of such
Loans together with accrued interest thereon,
automatically and without any further action by any
party increase by an amount equal to the New Bank's
Percentage of such Loan; and
(iii) [(A)] [concurrently with the execution
hereof the New Bank shall disburse to each Borrower in
immediately available funds such amount as shall be
necessary so that the ratio which each Bank's
outstanding ABR Loans bears to all of the outstanding
ABR Loans equals the ratio which each Bank's Commitment
(determined, for the New Bank, in accordance with clause
(i) above) bears to all of the Commitments (determined,
for the New Bank, in accordance with the immediately
foregoing parenthetical);]
[(B)] [on the last day of each Interest Period for
each outstanding Eurodollar Loan and C/D Rate Loan,
automatically and without any further action by either
Borrower, the New Bank shall disburse to each Borrower in
immediately available funds such amounts as shall be
necessary so that the ratio which each Bank's outstanding
Eurodollar Loans and C/D Rate Loans, bears to all of the
outstanding Eurodollar Loans and C/D Rate Loans respectively,
equals the ratio which each Bank's Commitment (determined,
for the New Bank, in accordance with clause (i) hereof) bears
to all of the Commitments (determined, for the New Bank, in
accordance with the immediately foregoing parenthetical);]
[(C)] [Funding of outstanding Bid Loans of
Cancelled Banks]*
[(D)] [Funding of outstanding Negotiated Rate Loans
of Cancelled Banks].*
3. REPRESENTATION AND WARRANTY OF BORROWERS. The
Borrowers hereby represent and warrant that after giving
effect to the provisions of paragraph 2 hereof the aggregate
principal amount of the Commitments of all Banks (including,
without limitation, the Commitment of the New Bank but
excluding the cancelled or expired portion of the Commitments
of the Cancelled Banks) under the Credit Agreement do not
exceed the aggregate principal amount of the Commitments in
effect immediately prior to the cancellation referred to in
the third recital hereof.
- ---------------------
* To be completed upon agreement of Borrowers and New
Bank.
<PAGE>
L-5
4. CONFIDENTIALITY. The New Bank agrees to
[continue to] be bound by the provisions of subsection 10.7
of the Credit Agreement.
[5. TAXES. The New Bank (i) represents to the
Administrative Agent and the Borrowers that [it is
incorporated under the laws of the United States or a state
thereof][under applicable law and treaties no taxes will be
required to be withheld by the Administrative Agent or the
Borrowers with respect to any payments to be made to such New
Bank in respect of the Loans], (ii) represents that it has
furnished to the Administrative Agent and the Borrowers (A)
[a statement that it is incorporated under the laws of the
United States or a state thereof][a letter in duplicate in
the form of Exhibit [J][K] to the Credit Agreement and two
duly completed copies of United States Internal Revenue
Service Form [4224][1001][successor applicable form],
certifying that such New Bank is entitled to receive payments
under the Credit Agreement without deduction or withholding
of any United States federal income taxes], and (B) [an
Internal Revenue Service Form [W-8][W-9]] [successor
applicable form] to establish an exemption from United States
backup withholding tax, and (iii) agrees to provide the
Administrative Agent and the Borrowers a new Form
[4224][1001] and Form [W-8][W-9], or successor applicable
form or other manner of certification, on or before the date
that any such letter or form expires or becomes obsolete or
after the occurrence of any event requiring a change in the
most recent letter and form previously delivered by it,
certifying in the case of a Form [1001][4224] that it is
entitled to receive payments under the Credit Agreement
without deduction or withholding of any United States federal
income tax, and in the case of a Form [W-8][W-9] establishing
exemption from United States backup withholding tax.]*
[5][6]. MISCELLANEOUS. (a) This Agreement may be
executed by the parties hereto in separate counterparts and
all of the counterparts taken together shall constitute one
and the same instrument and shall be effective only upon
receipt by the Administrative Agent of all of the
counterparts.
(b) This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the
State of New York.
- ------------------
* Use for non-Existing Banks.
<PAGE>
L-6
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered as of the day and year
first above written.
DEERE & COMPANY
By:
---------------------
Title:
JOHN DEERE CAPITAL CORPORATION
By:
---------------------
Title:
[NAME OF NEW BANK]
By:
---------------------
Title:
[Address]
Telephone:
Facsimile:
CHEMICAL BANK, as
Administrative Agent
By:
---------------------
Title:
<PAGE>
EXHIBIT M
[FORM OF BID LOAN OR NEGOTIATED RATE LOAN NOTE]
PROMISSORY NOTE
$__________ New York, New York
___________ __, ____
FOR VALUE RECEIVED, the undersigned, [DEERE &
COMPANY] [JOHN DEERE CAPITAL CORPORATION], a Delaware
corporation (the "BORROWER"), hereby promises to pay on
[insert maturity date or dates] to the order of
________________ (the "BANK") at the office of [Chemical Bank
located at 270 Park Avenue, New York, New York 10017 -- for
Bid Loan Note] [Name and address of Bank -- for Negotiated
Rate Loan Note], in lawful money of the United States of
America and in immediately available funds, the principal sum
of ______________DOLLARS ($____________). The undersigned
further agrees to pay interest in like money at such office
on the unpaid principal amount hereof from time to time from
the date hereof [at the rate of ___% per annum -- for Bid
Loan Note] [specify rate for Negotiated Rate Loan Note]
(calculated on the basis of a year of 360 days and actual
days elapsed) until the due date hereof (whether at the
stated maturity, by acceleration, or otherwise) and
thereafter at the rates determined or agreed in accordance
with subsection 2.2(e) of the $825,000,000 Credit Agreement,
dated as of December 15, 1993 (the "CREDIT AGREEMENT"), among
the Borrower, [Deere & Company] [John Deere Capital
Corporation], the Bank, the other financial institutions
parties thereto, Chemical Bank, as Administrative Agent,
Deutsche Bank AG Chicago Branch, as Auction Agent, the
Managing Agents named therein and the Co-Agents named
therein. Interest shall be payable on _______________. This
Note may be prepaid pursuant to the provisions of subsection
2.6 of the Credit Agreement.
This Note is one of the [Bid] [Negotiated Rate
Loan] Notes referred to in, is subject to and is entitled to
the benefits of, the Credit Agreement, which Credit
Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the occurrence of
any one or more of the Events of Default specified in the
Credit Agreement.
<PAGE>
M-2
Terms defined in the Credit Agreement are used
herein with their defined meanings unless otherwise defined
herein. This Note shall be governed by, and construed and
interpreted in accordance with, the law of the State of
New York.
[DEERE & COMPANY]
[JOHN DEERE CAPITAL CORPORATION]
By:_________________________
Title:
<PAGE>
EXHIBIT 12
JOHN DEERE CAPITAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YEAR ENDED 31 OCTOBER
-----------------------------------------------------
1993 1992 1991 1990 1989
-------- --------- -------- ------- ---------
<S> <C> <C> <C> <C> <C>
EARNINGS:
INCOME BEFORE INCOME
TAXES AND CHANGES
IN ACCOUNTING $ 169,339 $ 142,920 $ 110,820 $ 99,366 $ 99,971
FIXED CHARGES 170,226 191,930 230,901 216,985 214,038
--------- --------- --------- -------- --------
TOTAL EARNINGS $ 339,565 $ 334,850 $ 341,721 $ 316,351 $ 314,009
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
FIXED CHARGES:
INTEREST EXPENSE $ 167,787 $ 189,288 $ 228,308 $ 214,707 $ 212,144
RENT EXPENSE 2,439 2,642 2,593 2,278 1,894
--------- --------- -------- --------- ---------
TOTAL FIXED CHARGES $ 170,226 $ 191,930 $ 230,901 $ 216,985 $ 214,038
--------- --------- -------- --------- ---------
--------- --------- -------- --------- ---------
RATIO OF EARNINGS TO
FIXED CHARGES * 1.99 1.74 1.48 1.46 1.47
-------- --------- -------- ------- --------
-------- --------- -------- ------- --------
<FN>
- ----------
"Earnings" consist of income before income taxes, changes in accounting and
fixed charges. "Fixed charges" consist of interest on indebtedness, amortization
of debt discount and expense, and estimated amount of rental expense under
capitalized leases which is deemed to be representative of the interest factor
and rental expense under operating leases.
* The Company has not issued preferred stock, therefore, the ratios of
earnings to combined fixed charges and preferred stock dividends are the
same as the ratios presented above.
</TABLE>
<PAGE>
EXHIBIT 23
[LOGO]
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statements No. 33-
48123, 33-66082, 33-46514, and 33-65088 of John Deere Capital Corporation on
Form S-3 of our report dated December 10, 1993, appearing in this Annual Report
on Form 10-K of John Deere Capital Corporation for the year ended October 31,
1993.
DELOITTE & TOUCHE
January 24, 1994
