Page 1
United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended March 31, 1994
--------------
Commission file number 1-1396
------
Eaton Corporation
- - -------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 34-0196300
- - -------------------------------------------------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
Eaton Center, Cleveland, Ohio 44114-2584
- - -------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(216) 523-5000
- - -------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
and (2) has been subject to such filing requirements for the
past 90 days. Yes X
---
There were 76.3 million Common Shares outstanding as of
March 31, 1994.
Page 2
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
Eaton Corporation
Condensed Consolidated Balance Sheets
March 31, December 31,
(Millions of dollars) 1994 1993
---- ----
ASSETS
Current assets
Cash $ 22 $ 32
Short-term investments 21 268
Accounts receivable 879 550
Inventories 656 434
Other current assets 207 182
------ ------
1,785 1,466
Property, plant and equipment 1,525 1,188
Excess of cost over net assets of
businesses acquired 849 265
Other assets 429 349
------ ------
$4,588 $3,268
====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term debt and current portion of
long-term debt $ 159 $ 124
Other liabilities and accruals 898 663
------ ------
1,057 787
Long-term debt 1,199 649
Postretirement benefits other than
pensions 567 509
Other long-term liabilities 325 218
Shareholders' equity 1,440 1,105
------ ------
$4,588 $3,268
====== ======
See accompanying notes.
<PAGE>
Page 3
Eaton Corporation
Statements of Consolidated Income
Three Months Ended
March 31
------------------
(Millions of dollars except for per share data) 1994 1993
---- ----
Net sales $1,371 $1,086
Costs and expenses
Cost of products sold 998 811
Selling and administrative expense 197 143
Research and development expense 50 37
------ ------
1,245 991
------ ------
Income from operations 126 95
Other income and (expense)
Interest expense (23) (22)
Interest income 2 2
Other income--net 2 5
------ ------
(19) (15)
------ ------
Income before income taxes 107 80
Income taxes 33 27
------ ------
Income before extraordinary item 74 53
Extraordinary item (3)
------ ------
Net income $ 74 $ 50
====== ======
Per Common Share
Income before extraordinary item $ 1.01 $ .76
Extraordinary item (.05)
------ ------
Net income $ 1.01 $ .71
====== ======
Cash dividends paid $ .30 $ .275
Average number of Common Shares outstanding
(in millions) 73.1 69.4
See accompanying notes.
<PAGE>
Page 4
Eaton Corporation
Condensed Statements of Consolidated Cash Flows
Three Months Ended
March 31
------------------
(Millions of dollars) 1994 1993
---- ----
Operating activities
Income before extraordinary item $ 74 $ 53
Adjustments to reconcile to net cash
provided by operating activities
Depreciation and amortization 62 48
Changes in operating assets and
liabilities (115) (16)
Other--net 38 4
------ ------
Net cash provided by operating activities 59 89
Investing activities
Acquisitions of businesses, net of cash acquired (1,096) (10)
Expenditures for property, plant and
equipment (39) (40)
Net change in short-term investments 246 (19)
Other--net 3
------ ------
Net cash used in investing activities (886) (69)
Financing activities
Long-term borrowings 555
Payments of long-term debt (98) (5)
Proceeds from sale of Common Shares 252
Proceeds from exercise of stock options
by employees 16 6
Cash dividends paid (22) (19)
Net change in short-term debt 114 (15)
------ ------
Net cash provided by (used in) financing activities 817 (33)
------ ------
Decrease in cash (10) (13)
Cash at beginning of year 32 30
------ ------
Cash at end of period $ 22 $ 17
====== ======
See accompanying notes.
<PAGE>
Page 5
The following notes are included in accordance with the requirements
of Regulation S-X and Form 10-Q:
Preparation of Financial Statements
- - -----------------------------------
The condensed consolidated financial statements of Eaton Corporation
(Eaton or the Company) are unaudited. However, in the opinion of
management, all adjustments have been made which are necessary for a
fair presentation of financial position, results of operations and
cash flows for the three months ended March 31, 1994 and 1993. These
financial statements should be read in conjunction with the
consolidated financial statements and related notes included in the
Company's 1993 Annual Report on Form 10-K.
Net Income per Common Share
- - ---------------------------
Net income per Common Share is computed by dividing net income by the
average month-end number of shares outstanding during each period.
The dilutive effect of common stock equivalents is not material.
Inventories
- - -----------
March 31, December 31,
(Millions of dollars) 1994 1993
---- ----
Raw materials $180 $144
Work in process and
finished goods 563 374
---- ----
Gross inventories at FIFO 743 518
Excess of current cost
over LIFO cost (87) (84)
---- ----
Net inventories at LIFO $656 $434
==== ====
Acquisition of DCBU
- - -------------------
On January 31, 1994, the Company acquired the Distribution and
Control Business Unit (DCBU) of Westinghouse Electric Corporation for
a purchase price of $1.1 billion, plus the assumption of certain
liabilities. The purchase price is subject to adjustment based upon
changes in DCBU's adjusted net assets. DCBU, a leading North
American manufacturer of electrical distribution equipment and
industrial controls with 1993 sales of $1.1 billion, was combined
with Eaton's Industrial Control and Power Distribution operations
(ICPDO), which market Cutler-Hammer products, to form a new
Cutler-Hammer business unit.
Page 6
The acquisition has been accounted for as a purchase and,
accordingly, the statement of consolidated income includes the
results of DCBU beginning February 1, 1994. The acquired assets and
liabilities were recorded at estimated fair values as determined by
Eaton's management based on information currently available and on
current assumptions as to future operations. The allocation of the
purchase price to the acquired assets and liabilities is subject to
revision as a result of the final determination of appraised and
other fair values. Currently, the excess of cost over net assets
acquired, including intangible assets, is being amortized over an
average period of 25 years.
The unaudited pro forma results of operations for the first quarters
of 1994 and 1993, as if Eaton and DCBU had been combined as of the
beginning of those years, follow. The pro forma results include
preliminary estimates and assumptions which Eaton's management
believes are reasonable. The pro forma results are not necessarily
indicative of the results which would have occurred if the business
combination had been in effect on the dates indicated, or which may
result in the future and do not include any cost savings or other
effects of the planned integration of DCBU and ICPDO.
Three Months Ended
March 31
------------------
(Millions of dollars) 1994 1993
---- ----
Net sales $1,456 $1,327
Income before
extraordinary item 68 49
Income before extraordinary
item per Common Share $.93 $.71
The purchase price of DCBU was initially financed through the
liquidation of $170 million of short-term investments and the sale of
$930 million of short-term commercial paper. Of the short-term
commercial paper, $555 million is classified as long-term debt on the
balance sheet because the Company intends, and has the ability under
a five-year $555 million revolving credit agreement entered into in
January 1994, to refinance this debt on a long-term basis.
In March 1994, the Company refinanced a portion of the short-term
commercial paper by selling to the public 3.8 million Common Shares
for net proceeds of $214 million. In April 1994, to further
refinance the short-term commercial paper, the Company sold $100
million of 6-3\8% notes due 1999 and $100 million of 7-5\8%
debentures due 2024. Coincident with the sale of the notes and
debentures, the Company terminated and settled for cash interest rate
swap agreements totaling $200 million entered into in September 1993
to hedge the sale of the notes and debentures. The gain on the
Page 7
termination of the interest rate swap agreements will be amortized to
interest expense over the life of the notes and debentures and
effectively reduces the annual cost of the notes to 4.79% and the
debentures to 7.07%.
In March and April 1994, as a result of the sale of 3.8 million
Common Shares and $200 million of notes and debentures as discussed
above, the Company canceled $505 million of the $555 million 364-day
revolving credit agreement entered into in January 1994 to partially
finance the acquisition of DCBU.
Sale of Common Shares
- - ---------------------
In January 1994, in a private placement, the Company sold 800,000
Common Shares for net proceeds of $38 million. In March, the Company
sold 3.8 million Common Shares to the public for net proceeds of $214
million, as discussed under "Acquisition of DCBU" in this report.
Extraordinary Item
- - ------------------
In March 1993, the Company called for redemption in April 1993, the
$74 million outstanding balance of its 9% debentures. The
extraordinary loss on this redemption, including the write-off of
debt issue costs, was $5 million before income tax credits ($3
million after income tax credits, or $.05 per Common Share).
Summary Financial Information for Eaton ETN Offshore Ltd.
- - ---------------------------------------------------------
Eaton ETN Offshore Ltd. (Eaton Offshore) was incorporated by Eaton
under the laws of Ontario, Canada, primarily for the purpose of
raising funds through the offering of debt securities in the United
States and making these funds available to Eaton and/or one or more
of Eaton's direct or indirect subsidiaries. All of the issued and
outstanding capital stock of Eaton Offshore is owned directly or
indirectly by Eaton. In addition, Eaton Offshore owns all of the
issued and outstanding capital stock of Eaton Yale Ltd. (Eaton Yale)
previously owned by Eaton. Eaton Yale is engaged principally in the
manufacture of fasteners, leaf spring assemblies and electrical and
electronic controls. Effective January 31, 1994, Eaton Yale Ltd.
acquired certain of the Canadian operations of DCBU. Summary
financial information for Eaton Offshore and its consolidated
subsidiaries is as follows:
Three Months Ended
March 31
-------------------
(Millions of dollars) 1994 1993
---- ----
Income statement data
Net sales $88 $80
Gross profit 14 12
Net income 2 4
Page 8
March 31, December 31,
(Millions of dollars) 1994 1993
---- ----
Balance sheet data
Current assets $179 $144
Net intercompany (payables)
receivables (13) 22
Noncurrent assets 85 81
Current liabilities 55 42
Noncurrent liabilities 110 109
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
- - ---------------------
Net sales for the first quarter of 1994 were $1.371 billion, up 26%
over the comparable period of 1993. This sales increase reflects the
acquisition on January 31, 1994 of the Distribution and Control
Business Unit (DCBU) of Westinghouse Electric Corporation, the
results of which are included in the statement of consolidated income
beginning February 1, 1994. The sales increase also reflects
substantially improved sales of the Truck Components product line due
to the strong pace of North American factory sales of heavy trucks.
Improved sales performance of the Off-Highway Vehicle and Specialty
Controls product lines and increased sales of industrial control and
power distribution equipment also contributed to the sales increase.
The prolonged European recession continued to affect sales and
earnings, but there are now signs of recovery in the U.K. and a
gradual improvement in business conditions is expected over the
remainder of the year.
Income from operations (sales less costs of products sold, selling
and administrative expense, and research and development expense)
increased to $126 million in the first quarter of 1994 from $95
million in the first quarter of 1993. This improvement reflects the
higher level of sales described above, including the DCBU
contribution, the results of ongoing cost containment measures and
efforts to maintain and improve efficiency and productivity in the
face of greatly increased demand, and recent restructurings.
Interest expense of $23 million in the first quarter of 1994 was
level compared to the first quarter of 1993; however, it was up $9
million from the fourth quarter of 1993, reflecting increased expense
due to the $930 million of short-term commercial paper issued on
January 31, 1994 to partially finance the acquisition of DCBU. Also,
interest expense capitalized as part of the purchase or construction
of major fixed assets was lower in the first quarter of 1994 compared
to the fourth quarter of 1993.
Net income increased 48% to $74 million in the first quarter of 1994
over the comparable period in 1993 largely due to increased sales and
other improvements in operating results discussed above. However,
Page 9
net income per Common Share increased by a smaller percentage (42%),
due to the sale of 5.8 million Common Shares in the fourth quarter of
1993 and the first quarter of 1994, the proceeds of which were used
primarily to refinance a portion of the short-term commercial paper
issued for the acquisition of DCBU.
Results of the Company's Vehicle Components segment are summarized as
follows:
Three Months Ended
March 31
------------------
(Millions of dollars) 1994 1993
---- ----
Net sales
Truck Components $430 $359
Passenger Car Components 148 143
Off-Highway Vehicle
Components 100 81
---- ----
$678 $583
==== ====
Operating profit $ 89 $ 70
==== ====
The Vehicle Components segment experienced significant growth in
sales, which rose 16% in the first quarter of 1994 compared to the
first quarter of 1993. This growth was largely due to substantially
higher sales of the Truck Components product line which rose 20% in
1994 over the comparable period in 1993. This increase was the
result of the continuing strong pace of North American factory sales
of heavy trucks which were running at an annualized rate of 200,000
units in the first quarter of 1994. Order backlogs for heavy trucks
have reached 128,000 units. Sales of Truck Components also increased
due to higher sales of components for sport utility vehicles and
light trucks, factory sales of which increased 27% in North America
in 1994. Total market sales of off-highway equipment rose 14% in the
first quarter of 1994, while Eaton's sales of the Off-Highway Vehicle
Components product line increased 23% over the first quarter of 1993.
Operating profit for the Vehicle Components segment was strong,
rising 27% for the first quarter of 1994 over the first quarter of
1993. The increased profits were attributable largely to improved
sales levels. The Company has market shares in heavy truck
transmissions, axles and brakes which enable it to reap significant
benefits from any trend which results in greater demand for heavy
trucks. Additionally, improved profits were also the result of
continuing stringent cost containment efforts as well as from the
economies achieved through restructurings of certain businesses which
have better positioned operations to benefit from further growth and
market opportunities in global vehicle markets.
Page 10
Results of the Company's Electrical and Electronic Controls segment
are as follows:
Three Months Ended
March 31
------------------
(Millions of dollars) 1994 1993
---- ----
Industrial and Commercial
Controls $364 $177
Automotive and Appliance
Controls 200 198
Specialty Controls 101 76
---- ----
$665 $451
==== ====
Operating profit $ 42 $ 29
==== ====
Sales for the Electrical and Electronic Controls segment showed
significant improvement, rising 47% primarily due to the acquisition
of DCBU. The sales increase was also the result of increased market
purchases of industrial control and power distribution equipment and
from robust sales of semiconductor equipment. Sales of automotive
and appliance controls were strong in North America but were offset
by continuing weakness in Europe. The home appliance market, which
Eaton serves with a variety of controls, experienced strong
replacement demand and benefited from the upswing in new home
construction.
Operating profit for the Electrical and Electronic Controls segment
was up 45% over the first quarter of 1993. This improvement resulted
from higher sales, including the DCBU contribution, as well as
improved results of the Specialty Controls product line, primarily
semiconductor equipment. The profits of this segment continue to
benefit from continuing stringent cost containment efforts as well as
from economies achieved through restructurings of certain businesses
to benefit from further growth and market opportunities in global
controls markets.
The combination of DCBU with the Company's existing Industrial
Control and Power Distribution operations (ICPDO) will strengthen the
Company's competitive position and provide the opportunity for
significant cost savings resulting from the complementary fit of the
two businesses. Management expects to achieve substantial
efficiencies by combining these two operations. The Company has a
comprehensive integration plan which is focused on the
rationalization of product lines and manufacturing operations, the
integration of sales and distribution functions and the reduction of
administrative expenses. Significant duplication of capacity exists
between DCBU and ICPDO. The combined operations have a total of 97
plants and warehouses. The Company's plan includes plant closures
over the next few years. In 1994, it is closing eight facilities and
relocating several product lines, affecting a total of approximately
1,200 employees. The cost of the consolidation program for ICPDO
locations was included in Eaton's $55 million pretax integration
Page 11
charge accrued in 1993. For DCBU locations, such cost will be
included in the allocation of the purchase price of DCBU.
Results of the Company's Defense Systems segment are as follows:
Three Months Ended
March 31
------------------
(Millions of dollars) 1994 1993
---- ----
Net sales $ 28 $ 52
Operating profit -0- 1
Changes in Financial Condition
- - ------------------------------
The Company's financial condition remained strong during the first
quarter of 1994. The current ratio was 1.7 at March 31, 1994
compared to 1.9 at December 31, 1993. Net working capital increased
to $728 million at March 31 from $679 million at the end of 1993.
Short-term investments were reduced by $247 million in the first
quarter of 1994, primarily the result of the liquidation of $170
million to partially fund the acquisition of DCBU and the redemption
in January of the $89 million outstanding balance of the 8.5%
debentures.
Accounts receivable increased by $329 million in the first quarter of
1994, largely due to the acquisition of DCBU and increased sales
levels. The acquisition of DCBU was also the principal cause of the
substantial increases in the first quarter in inventories, excess of
cost over net assets of businesses acquired, other noncurrent assets,
and other current and long-term liabilities.
Total debt, consisting of short-term, long-term and the current
portion of long-term debt, increased to $1.358 billion at March 31,
1994 from $773 million at the end of 1993, primarily due to debt
issued to finance the acquisition of DCBU as discussed under
"Acquisition of DCBU" in this report. The increase in total debt in
the first quarter was net of the redemption in January of the $89
million outstanding balance of 8.5% debentures.
Net cash provided by operating activities was $59 million for the
first quarter of 1994 compared to $89 million for the first quarter
of 1993. The improvement in cash flow resulting from increased net
income and other items was more than offset by cash requirements to
fund increased working capital, primarily the substantial increase in
accounts receivable caused by the higher level of sales reported in
the first quarter of 1994. Net cash provided by operating activities
in the first quarter of 1994, supplemented by the liquidation of $246
million of short-term investments, $669 million of short-term
commercial paper and other borrowings, and $268 million from the sale
of Common Shares were used to fund the $1.1 billion purchase price of
DCBU, capital expenditures, cash dividends and the repayment of the
8.5% debentures.
Page 12
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - See Exhibit Index attached.
(b) Reports on Form 8-K.
During the three months ended March 31, 1994, the following
reports on Form 8-K were filed by the Company:
Date of Report Items Reported Description
- - -------------- -------------- -----------
February 14, 1994 2, 7 Acquisition by the
Company of the
Distribution and Control
Business Unit (DCBU) of
Westinghouse Electric
Corporation.
February 18, 1994 7 Financial statements of
DCBU for the years ended
December 31, 1992 and
1991 and the nine month
periods ended September
30, 1993 and 1992.
March 30, 1994 5, 7 Closing of sale of $100
million of 6-3\8% notes
due 1999 and $100 million
of 7-5\8% debentures due
2024 and filing of
related ratio of earnings
to fixed charges and
pro forma ratio of
earnings to fixed
charges.
Page 13
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
Eaton Corporation
-----------------
Registrant
Date: May 11, 1994 S. R. Hardis
----------------------------
Vice Chairman and Chief
Financial and Administrative
Officer (Principal Financial
Officer)
Page 1
EATON CORPORATION
EXHIBIT INDEX
Regulation S-K,
Item 601 - Exhibit
Reference Number Exhibit
- - ---------------- -------
4 Pursuant to Regulation S-K
Item 601 (b)(4), the Company
agrees to furnish to the
Commission, upon request, a copy
of the instruments defining
the rights of holders of long-term
debt of the Company and its
subsidiaries.
10 Five-year $555 million revolving credit
agreement and 364-day $555 million
revolving credit agreement, both dated
as of January 25, 1994.
11 Computations of net income per
Common Share can be determined from
the Statements of Consolidated Income
on page 3 and the footnote "Net Income
per Common Share" on page 5.
CONFORMED COPY
$555,000,000
One Year
CREDIT AGREEMENT
dated as of
January 25, 1994
among
Eaton Corporation
The Banks Listed Herein
Bankers Trust Company
Credit Suisse
The First National Bank of Chicago
NationsBank of North Carolina, N.A.
and
Society National Bank,
as Co-Agents
Chemical Bank,
as Managing Agent
and
Morgan Guaranty Trust Company of New York,
as Agent
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . .
.
. . 1
SECTION 1.02. Accounting Terms and
Determinations. . . . . . . . . . . . . . . .
.
. 15
SECTION 1.03. Types of Borrowings . . . . . . . . . . . . .
.
. . 15
SECTION 1.04. Basis for Ratings . . . . . . . . . . . . . .
.
. . 15
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend . . . . . . . . . . . . .
.
. . 16
SECTION 2.02. Notice of Committed Borrowing . . . . . . . .
.
. . 16
SECTION 2.03. Money Market Borrowings . . . . . . . . . . .
.
. . 17
SECTION 2.04. Notice to Banks; Funding of Loans . . . . . .
.
. . 22
SECTION 2.05. Notes . . . . . . . . . . . . . . . . . . . .
.
. . 23
SECTION 2.06. Maturity of Loans . . . . . . . . . . . . . .
.
. . 24
SECTION 2.07. Interest Rates. . . . . . . . . . . . . . . .
.
. . 24
SECTION 2.08. Fees. . . . . . . . . . . . . . . . . . . . .
.
. . 27
SECTION 2.09. Optional Termination or Reduction
of Commitments. . . . . . . . . . . . . . . .
.
. 28
SECTION 2.10. Mandatory Termination or Reduction
of Commitments. . . . . . . . . . . . . . . .
.
. 28
SECTION 2.11. Optional Prepayments. . . . . . . . . . . . .
.
. . 28
SECTION 2.12. General Provisions as to Payments . . . . . .
.
. . 29
SECTION 2.13. Funding Losses. . . . . . . . . . . . . . . .
.
. . 30
SECTION 2.14. Computation of Interest and Fees. . . . . . .
.
. . 30
SECTION 2.15. Regulation D Compensation . . . . . . . . . .
.
. . 30
SECTION 2.16. Judgment Currency . . . . . . . . . . . . . .
.
. . 31
SECTION 2.17. Foreign Subsidiary Costs. . . . . . . . . . .
.
. . 31
SECTION 2.18. Eligible Subsidiaries . . . . . . . . . . . .
.
. . 32
ARTICLE III
CONDITIONS
SECTION 3.01. Closing . . . . . . . . . . . . . . . . . . .
.
. . 33
SECTION 3.02. Borrowings. . . . . . . . . . . . . . . . . .
.
. . 34
SECTION 3.03. First Borrowing by Each Eligible
Subsidiary. . . . . . . . . . . . . . . . . .
.
. 35
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
SECTION 4.01. Corporate Existence and Power . . . . . . . .
.
. . 35
SECTION 4.02. Corporate and Governmental
Authorization; No Contravention . . . . . . .
.
. 36
SECTION 4.03. Binding Effect. . . . . . . . . . . . . . . .
.
. . 36
SECTION 4.04. Financial Information . . . . . . . . . . . .
.
. . 36
SECTION 4.05. Litigation. . . . . . . . . . . . . . . . . .
.
. . 37
SECTION 4.06. Compliance with ERISA . . . . . . . . . . . .
.
. . 37
SECTION 4.07. Environmental Matters . . . . . . . . . . . .
.
. . 38
SECTION 4.08. Taxes . . . . . . . . . . . . . . . . . . . .
.
. . 38
SECTION 4.09. Subsidiaries. . . . . . . . . . . . . . . . .
.
. . 39
SECTION 4.10. Not an Investment Company . . . . . . . . . .
.
. . 39
SECTION 4.11. Full Disclosure . . . . . . . . . . . . . . .
.
. . 39
SECTION 4.12. Liens . . . . . . . . . . . . . . . . . . . .
.
. . 39
ARTICLE V
COVENANTS
SECTION 5.01. Information . . . . . . . . . . . . . . . . .
.
. . 40
SECTION 5.02. Payment of Obligations. . . . . . . . . . . .
.
. . 43
SECTION 5.03. Maintenance of Property; Insurance. . . . . .
.
. . 43
SECTION 5.04. Conduct of Business and Maintenance
of Existence. . . . . . . . . . . . . . . . .
.
. 43
SECTION 5.05. Compliance with Laws. . . . . . . . . . . . .
.
. . 44
SECTION 5.06. Inspection of Property, Books and
Records . . . . . . . . . . . . . . . . . . .
.
. 44
SECTION 5.07. Leverage Ratio. . . . . . . . . . . . . . . .
.
. . 45
SECTION 5.08. Negative Pledge . . . . . . . . . . . . . . .
.
. . 45
SECTION 5.09. Consolidations, Mergers and Sales
of Assets . . . . . . . . . . . . . . . . . .
.
. 46
SECTION 5.10. Use of Proceeds . . . . . . . . . . . . . . .
.
. . 47
SECTION 5.11. Subsidiary Guaranty.. . . . . . . . . . . . .
.
. . 47
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default . . . . . . . . . . . . . .
.
. . 48
SECTION 6.02. Notice of Default . . . . . . . . . . . . . .
.
. . 51
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization . . . . . . . .
.
. . 51
SECTION 7.02. Agent and Affiliates. . . . . . . . . . . . .
.
. . 51
SECTION 7.03. Action by Agent . . . . . . . . . . . . . . .
.
. . 51
SECTION 7.04. Consultation with Experts . . . . . . . . . .
.
. . 51
SECTION 7.05. Liability of Agent. . . . . . . . . . . . . .
.
. . 51
SECTION 7.06. Indemnification . . . . . . . . . . . . . . .
.
. . 52
SECTION 7.07. Credit Decision . . . . . . . . . . . . . . .
.
. . 52
SECTION 7.08. Successor Agent . . . . . . . . . . . . . . .
.
. . 52
SECTION 7.09. Agent's Fee . . . . . . . . . . . . . . . . .
.
. . 53
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. . . . . . . . . . . . .
.
. 53
SECTION 8.02. Illegality. . . . . . . . . . . . . . . . . .
.
. . 54
SECTION 8.03. Increased Cost and Reduced Return . . . . . .
.
. . 55
SECTION 8.04. Taxes . . . . . . . . . . . . . . . . . . . .
.
. . 56
SECTION 8.05. Base Rate Loans Substituted for
Affected Fixed Rate Loans . . . . . . . . . .
.
. 58
SECTION 8.06. Substitution of Bank. . . . . . . . . . . . .
.
. . 59
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
OF ELIGIBLE SUBSIDIARIES
SECTION 9.01. Corporate or Partnership Existence
and Power . . . . . . . . . . . . . . . . . .
.
. 60
SECTION 9.02. Corporate or Partnership and
Governmental Authorization; No
Contravention . . . . . . . . . . . . . . . .
.
. 60
SECTION 9.03. Binding Effect. . . . . . . . . . . . . . . .
.
. . 60
SECTION 9.04. Taxes . . . . . . . . . . . . . . . . . . . .
.
. . 60
ARTICLE X
GUARANTY
SECTION 10.01. The Guaranty . . . . . . . . . . . . . . . .
.
. . 61
SECTION 10.02. Guaranty Unconditional . . . . . . . . . . .
.
. . 61
SECTION 10.03. Discharge Only Upon Payment In
Full; Reinstatement In Certain
Circumstances . . . . . . . . . . . . . . . .
.
. 62
SECTION 10.04. Waiver by the Company. . . . . . . . . . . .
.
. . 62
SECTION 10.05. Subrogation. . . . . . . . . . . . . . . . .
.
. . 62
SECTION 10.06. Stay of Acceleration . . . . . . . . . . . .
.
. . 63
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices. . . . . . . . . . . . . . . . . . .
.
. . 63
SECTION 11.02. No Waivers . . . . . . . . . . . . . . . . .
.
. . 63
SECTION 11.03. Expenses; Indemnification. . . . . . . . . .
.
. . 64
SECTION 11.04. Sharing of Set-Offs. . . . . . . . . . . . .
.
. . 65
SECTION 11.05. Amendments and Waivers . . . . . . . . . . .
.
. . 65
SECTION 11.06. Successors and Assigns . . . . . . . . . . .
.
. . 66
SECTION 11.07. Collateral . . . . . . . . . . . . . . . . .
.
. . 68
SECTION 11.08. Governing Law; Submission to
Jurisdiction . . . . . . . . . . . . . . . . .
. . 68
SECTION 11.09. Counterparts; Integration;
Effectiveness . . .. . . . . . . . . . . .
.
. . 68<PAGE>
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of Counsel for the Company
Exhibit F - Opinion of Special Counsel for the Agent
Exhibit G - Form of Election to Participate
Exhibit H - Form of Election to Terminate
Exhibit I - Opinion of Counsel for the Borrower
(Borrowings by Eligible Subsidiaries)
Exhibit J - Subsidiary Guaranty
Exhibit K - Opinion of Counsel for the Subsidiary
Guarantor
Exhibit L - Definition of "Debt Downgrade" as set forth
in the Note and Guaranty Agreement dated
as of December 7, 1990 among Eaton
Corporation, as Guarantor, the Eaton
Corporation Share Purchase and Investment
Plan Trust, acting by and through
Ameritrust
Company National Association, as Trustee,
as
Issuer, and the lenders listed on the
signature pages thereof
Exhibit M - Assignment and Assumption Agreement
<PAGE>
CREDIT AGREEMENT
AGREEMENT dated as of January 25, 1994 among EATON
CORPORATION, an Ohio corporation, the BANKS and CO-AGENTS
listed on the signature pages hereof, CHEMICAL BANK, as
Managing Agent, and MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as Agent;
W I T N E S S E T H:
WHEREAS, the Company has agreed to purchase
certain assets and assume certain liabilities of the
Distribution and Control Business Unit of Westinghouse
Electric Corporation; and
WHEREAS, the Company desires to enter into the
revolving credit facility provided herein to finance a
portion of the purchase price of such acquisition and for
its general corporate purposes;
NOW, THEREFORE, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms,
as used herein, have the following meanings:
"Absolute Rate Auction" means a solicitation of
Money Market Quotes setting forth Money Market Absolute
Rates pursuant to Section 2.03.
"Adjusted CD Rate" has the meaning set forth in
Section 2.07(b).
"Adjusted Consolidated Net Worth" means at any
date the sum, without duplication, of (i) the consolidated
stockholders' equity of the Company and its Consolidated
Subsidiaries, (ii) their consolidated liability for
postretirement benefits other than pensions and (iii) the
aggregate carrying value of any outstanding Qualifying
Preferred Stock, all determined as of such date.
"Administrative Questionnaire" means, with respect
to each Bank, an administrative questionnaire in the form
prepared by the Agent and submitted to the Agent (with a
copy to the Company) duly completed by such Bank.
"Agent" means Morgan Guaranty Trust Company of New
York in its capacity as agent for the Banks hereunder, and
its successors in such capacity.
"Applicable Lending Office" means, with respect to
any Bank, (i) in the case of its Domestic Loans, its
Domestic Lending Office, (ii) in the case of its Euro-Dollar
Loans, its Euro-Dollar Lending Office and (iii) in the case
of its Money Market Loans, its Money Market Lending Office.
"Assessment Rate" has the meaning set forth in
Section 2.07(b).
"Assignee" has the meaning set forth in Section
11.06(c).
"Bank" means each bank listed on the signature
pages hereof, each Assignee which becomes a Bank pursuant to
Section 11.06(c), and their respective successors.
"Base Rate" means, for any day, a rate per annum
equal to the higher of (i) the Prime Rate for such day and
(ii) the sum of 1/2 of 1% plus the Federal Funds Rate for
such day.
"Base Rate Loan" means a Committed Loan to be made
by a Bank as a Base Rate Loan in accordance with the
applicable Notice of Committed Borrowing or pursuant to
Article VIII.
"Benefit Arrangement" means at any time an
employee benefit plan within the meaning of Section 3(3) of
ERISA which is not a Plan or a Multiemployer Plan and which
is maintained or otherwise contributed to by any member of
the ERISA Group.
"Borrower" means the Company or the relevant
Eligible Subsidiary, as the context may require, and their
respective successors, and "Borrowers" means all of the
foregoing.
"Borrowing" has the meaning set forth in Section
1.03.
"CD Base Rate" has the meaning set forth in
Section 2.07(b).
"CD Loan" means a Committed Loan to be made by a
Bank as a CD Loan in accordance with the applicable Notice
of Committed Borrowing.
"CD Margin" has the meaning set forth in Section
2.07(b).
"CD Reference Banks" means Chemical Bank, Society
National Bank and Morgan Guaranty Trust Company of New York.
"Closing Date" means the date on or after the
Effective Date on which the Agent shall have received the
documents specified in or pursuant to Section 3.01.
"Commitment" means, with respect to each Bank, the
amount set forth opposite the name of such Bank on the
signature pages hereof, as such amount may be reduced from
time to time pursuant to Section 2.09.
"Committed Loan" means a loan made by a Bank
pursuant to Section 2.01.
"Company" means Eaton Corporation, an Ohio
corporation, and its successors.
"Company's 1992 Form 10-K" means the Company's
annual report on Form 10-K for 1992, as filed with the
Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended.
"Confidentiality Agreement" means a
confidentiality agreement entered into by the Company and a
Bank, as such Confidentiality Agreement may be amended from
time to time.
"Consolidated Capitalization" means at any date an
amount equal to the sum of (i) Consolidated Debt at such
date plus (ii) Adjusted Consolidated Net Worth at such date.
"Consolidated Debt" means at any date the Debt of
the Company and its Consolidated Subsidiaries, determined on
a consolidated basis as of such date.
"Consolidated Subsidiary" means at any date any
Subsidiary or other entity the accounts of which would be
consolidated with those of the Company in its consolidated
financial statements if such statements were prepared as of
such date.
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred
purchase price of property which has been acquired prior to
such date or services which have been provided prior to such
date, except trade accounts payable and accounts for
services arising in the ordinary course of business and
deferred compensation and other accruals or reserves
(including postretirement benefits) relating to the services
of employees, (iv) all obligations of such Person as lessee
which are capitalized in accordance with generally accepted
accounting principles, (v) all obligations of others of the
types referred to in clauses (i) and (ii) of this definition
which are secured by a Lien on any asset of such Person,
whether or not such Person has assumed such obligations, and
(vi) all obligations of others of the types referred to in
clauses (i) and (ii) of this definition which are Guaranteed
by such Person; provided that the term "Debt" shall not
include money borrowed against the cash surrender value of
life insurance policies.
"Default" means any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
"Domestic Business Day" means any day except a
Saturday, Sunday or other day on which commercial banks in
New York City are authorized by law to close.
"Domestic Lending Office" means, as to each Bank,
its office located at its address set forth in its
Administrative Questionnaire (or identified in its Admini-
strative Questionnaire as its Domestic Lending Office) or
such other office as such Bank may hereafter designate as
its Domestic Lending Office by notice to the Company and the
Agent; provided that any Bank may so designate separate
Domestic Lending Offices for its Base Rate Loans, on the one
hand, and its CD Loans, on the other hand, in which case all
references herein to the Domestic Lending Office of such
Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans
or both.
"Domestic Reserve Percentage" has the meaning set
forth in Section 2.07(b).
"Effective Date" means the date this Agreement
becomes effective in accordance with Section 11.09.
"Election to Participate" means an Election to
Participate substantially in the form of Exhibit G hereto.
"Election to Terminate" means an Election to
Terminate substantially in the form of Exhibit H hereto.
"Eligible Subsidiary" means any Wholly-Owned
Consolidated Subsidiary as to which an Election to
Participate shall have been delivered to the Agent and as to
which an Election to Terminate shall not have been delivered
to the Agent.
"Environmental Laws" means any and all federal,
state, local and foreign statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees,
plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental
restrictions relating to the environment, the effect of the
environment on human health or to emissions, discharges or
releases of pollutants, contaminants, Hazardous Substances
or wastes into the environment, including, without
limitation, ambient air, surface water, ground water or
land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport
or handling of pollutants, contaminants, Hazardous
Substances or wastes or the clean-up or other remediation
thereof.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, or any successor statute.
"ERISA Group" means the Company, any Subsidiary
and all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under
common control which, together with the Company or any
Subsidiary, are treated as a single employer under Section
414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic
Business Day on which commercial banks are open for
international business (including dealings in dollar
deposits) in London.
"Euro-Dollar Lending Office" means, as to
each Bank, its office, branch or affiliate located at
its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or
affiliate of such Bank as it may hereafter designate as its
Euro-Dollar Lending Office by notice to the Company and the
Agent.
"Euro-Dollar Loan" means a Committed Loan to be
made by a Bank as a Euro-Dollar Loan in accordance with the
applicable Notice of Committed Borrowing.
"Euro-Dollar Margin" has the meaning set forth in
Section 2.07(c).
"Euro-Dollar Reference Banks" means the principal
London offices of Chemical Bank and Morgan Guaranty Trust
Company of New York and the Cayman Islands office of Society
National Bank.
"Euro-Dollar Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect
on such day, 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 five billion dollars in respect of "Eurocurrency
liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which
the interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which
includes loans by a non-United States office of any Bank to
United States residents).
"Event of Default" has the meaning set forth in
Section 6.01.
"Facility Fee Rate" has the meaning set forth in
Section 2.08(a).
"Federal Funds Rate" means, for any day, the rate
per annum (rounded upward, if necessary, to the nearest
1/100 of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New
York on the Domestic Business Day next succeeding such day,
provided that (i) if such day is not a Domestic Business
Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business
Day, and (ii) if no such rate is so published on such next
succeeding Domestic Business Day, the Federal Funds Rate for
such day shall be the average rate quoted to Morgan Guaranty
Trust Company of New York on such day on such transactions
as determined by the Agent.
"Five Year Credit Agreement" means the Five Year
Credit Agreement dated as of January 25, 1994 among the
Company, the Banks and Co-Agents listed therein, Chemical
Bank, as Managing Agent, and Morgan Guaranty Trust Company
of New York, as Agent, as such Five Year Credit Agreement
may be amended from time to time.
"Fixed Rate Loans" means CD Loans or Euro-Dollar
Loans or Money Market Loans (excluding Money Market LIBOR
Loans bearing interest at the Base Rate pursuant to Section
8.01(a)) or any combination of the foregoing.
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or
indirectly guaranteeing any Debt of any other Person and,
without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt (whether
arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) assuring in any other
manner the obligee of such Debt of the payment thereof or
protecting such obligee against loss in respect thereof (in
whole or in part), provided that the term Guarantee shall
not include (a) endorsements for collection or deposit in
the ordinary course of business or (b) any other obligation
described in the foregoing definition if the related Debt
does not exceed $1,000,000 in the case of any single
obligation excluded pursuant to this clause (b) or
$10,000,000 in the aggregate for all obligations excluded
pursuant to this clause (b). The term "Guarantee" used as a
verb has a corresponding meaning.
"Hazardous Substances" means any toxic,
radioactive, caustic or otherwise hazardous substance,
including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section
11.03(b).
"Information Documents" means (i) the Company's
1992 Form 10-K and (ii) the information memorandum dated
October 25, 1993 regarding the Company and the Westinghouse
DCBU Acquisition furnished by J.P. Morgan Securities Inc. to
the Banks (including the Appendices thereto).
"Insignificant Subsidiaries" means any one or more
Subsidiaries which, if considered in the aggregate as a
single Subsidiary, would not constitute a "significant
subsidiary" as defined in Rule 12b-2 promulgated by the
Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended.
"Interest Period" means: (1) with respect to each
Euro-Dollar Borrowing, the period commencing on the date of
such Borrowing and ending one, two, three or six months
thereafter, as the relevant Borrower may elect in the
applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall
be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day
in the calendar month at the end of such Interest
Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period that would otherwise end
after the Termination Date shall end on the Termination
Date;
(2) with respect to each CD Borrowing, the period
commencing on the date of such Borrowing and ending 30, 60,
90 or 180 days thereafter, as the relevant Borrower may
elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period (other than an Interest
Period determined pursuant to clause (b) below) which
would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period that would otherwise end
after the Termination Date shall end on the Termination
Date;
(3) with respect to each Base Rate Borrowing, the period
commencing on the date of such Borrowing and ending 30 days
thereafter; provided that:
(a) any Interest Period (other than an Interest
Period determined pursuant to clause (b) below) which
would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period that would otherwise end
after the Termination Date shall end on the Termination
Date;
(4) with respect to each Money Market LIBOR Borrowing, the
period commencing on the date of such Borrowing and ending
such whole number of months thereafter as the relevant
Borrower may elect in accordance with Section 2.03; provided
that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall
be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day
in the calendar month at the end of such Interest
Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period that would otherwise end
after the Termination Date shall end on the Termination
Date; and
(5) with respect to each Money Market Absolute Rate
Borrowing, the period commencing on the date of such
Borrowing and ending such number of days thereafter (but not
less than 7 days) as the relevant Borrower may elect in
accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall
be extended to the next succeeding Euro-Dollar Business
Day; and
(b) any Interest Period that would otherwise end
after the Termination Date shall end on the Termination
Date.
"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended, or any successor statute.
"Level I Status" exists on any date if, at such
date, the Company's outstanding senior unsecured long-term
debt securities are rated AA- or an equivalent rating or
higher by S&P and Aa3 or an equivalent rating or higher by
Moody's.
"Level II Status" exists on any date if, at such
date, (i) the Company's outstanding senior unsecured long-
term debt securities are rated A- or an equivalent rating or
higher by S&P and A3 or an equivalent rating or higher by
Moody's and (ii) Level I Status does not exist on such date.
"Level III Status" exists on any date if, at such
date, (i) the Company's outstanding senior unsecured long-
term debt securities are rated BBB or an equivalent rating
or higher by S&P and Baa2 or an equivalent rating or higher
by Moody's and (ii) neither Level I Status nor Level II
Status exists on such date.
"Level IV Status" exists on any date if none of
Level I Status, Level II Status or Level III Status exists
on such date.
"LIBOR Auction" means a solicitation of Money
Market Quotes setting forth Money Market Margins based on
the London Interbank Offered Rate pursuant to Section 2.03.
"Lien" means, with respect to any asset, any
mortgage, lien, pledge, charge or security interest of any
kind, or any other type of preferential arrangement that has
the practical effect of creating a security interest, in
respect of such asset; provided that the term "Lien" shall
not include (i) title defects, easements, encroachments,
encumbrances or rights-of-way or (ii) any mortgage, lien,
pledge, charge or security interest on or in any assets of a
Subsidiary securing only indebtedness owed by such
Subsidiary to the Company or to one or more Wholly-Owned
Consolidated Subsidiaries. For the purposes of this
Agreement, the Company or any Subsidiary shall be deemed to
own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Loan" means a Domestic Loan or a Euro-Dollar Loan
or a Money Market Loan and "Loans" means Domestic Loans or
Euro-Dollar Loans or Money Market Loans or any combination
of the foregoing.
"London Interbank Offered Rate" has the meaning
set forth in Section 2.07(c).
"Material" means material in relation to the
Company and its Consolidated Subsidiaries, taken as a whole.
"Material Adverse Effect" means any material
adverse effect upon the condition (financial or otherwise),
results of operations, assets, liabilities, business,
operations, prospects, capitalization or stockholders'
equity of the Company and its Consolidated Subsidiaries,
taken as a whole.
"Material Debt" means Debt (other than the Notes)
of the Company and/or one or more of its Subsidiaries,
arising in one or more related or unrelated transactions, in
an aggregate principal amount exceeding $50,000,000.
"Material Plan" means at any time a Plan or Plans
having aggregate Unfunded Liabilities in excess of
$50,000,000.
"Money Market Absolute Rate" has the meaning set
forth in Section 2.03(d).
"Money Market Absolute Rate Loan" means a loan to
be made by a Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each
Bank, its Domestic Lending Office or such other office,
branch or affiliate of such Bank as it may hereafter
designate as its Money Market Lending Office by notice to
the Company and the Agent; provided that any Bank may from
time to time by notice to the Company and the Agent
designate separate Money Market Lending Offices for its
Money Market LIBOR Loans, on the one hand, and its Money
Market Absolute Rate Loans, on the other hand, in which case
all references herein to the Money Market Lending Office of
such Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made
by a Bank pursuant to a LIBOR Auction (including such a loan
bearing interest at the Base Rate pursuant to Section
8.01(a)).
"Money Market Loan" means a Money Market LIBOR
Loan, a Money Market Absolute Rate Loan or a Money Market
Refunding Loan.
"Money Market Margin" has the meaning set forth in
Section 2.03(d).
"Money Market Quote" means an offer by a Bank to
make a Money Market Loan in accordance with Section 2.03.
"Money Market Refunding Loan" has the meaning set
forth in Section 2.03(h).
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means at any time an employee
pension benefit plan within the meaning of Section
4001(a)(3) of ERISA to which any member of the ERISA Group
is then making or accruing an obligation to make
contributions or has within the preceding five plan years
made contributions, including for these purposes any Person
which ceased to be a member of the ERISA Group during such
five year period.
"Notes" means promissory notes of a Borrower,
substantially in the form of Exhibit A hereto, evidencing
the obligation of such Borrower to repay the Loans made to
it, and "Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" means a Notice of Committed
Borrowing (as defined in Section 2.02) or a Notice of Money
Market Borrowing (as defined in Section 2.03(f)).
"Parent" means, with respect to any Bank, any
Person controlling such Bank.
"Participant" has the meaning set forth in Section
11.06(b).
"PBGC" means the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or
organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension
benefit plan (other than a Multiemployer Plan) which is
covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Internal Revenue
Code and either (i) is maintained, or contributed to, by any
member of the ERISA Group for employees of any member of the
ERISA Group or (ii) for purposes of the imposition of
liability under Section 4069 of ERISA, has at any time
within the preceding five years been maintained, or
contributed to, by any Person which was at such time a
member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Prime Rate" means the rate of interest publicly
announced by Morgan Guaranty Trust Company of New York in
New York City from time to time as its Prime Rate.
"Qualifying Preferred Stock" means any preferred
stock of the Company, if and to the extent that the terms of
such preferred stock do not provide for any redemption,
repurchase or other acquisition thereof (except a
redemption, repurchase or other acquisition thereof at the
option of the Company) prior to the date which is 30 days
after the Termination Date.
"Reference Banks" means the CD Reference Banks or
the Euro-Dollar Reference Banks, as the context may require,
and "Reference Bank" means any one of such Reference Banks.
"Refunding Borrowing" means (i) a Committed
Borrowing which, after application of the proceeds thereof,
results in no net increase in the outstanding principal
amount of Committed Loans made by any Bank to any Borrower
or (ii) the borrowing of a Money Market Refunding Loan.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from
time to time.
"Required Banks" means at any time Banks having at
least 66-2/3% of the aggregate amount of the Commitments or,
if the Commitments shall have been terminated, holding Notes
evidencing at least 66-2/3% of the aggregate unpaid
principal amount of the Loans.
"Revolving Credit Period" means the period from
and including the Effective Date to and including the
Termination Date.
"S&P" means Standard & Poor's Corporation.
"Subsidiary" means any corporation or other entity
of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are
at the time directly or indirectly owned by the Company (or,
if such term is used with reference to any other Person, by
such other Person).
"Subsidiary Guarantors" means one or more Wholly-
Owned Consolidated Subsidiaries to which the Company will
transfer, or cause to be transferred, the assets acquired in
the Westinghouse DCBU Acquisition and certain other assets
of the Company and/or its Subsidiaries relating to their
Industrial Control and Power Distribution business, and the
related marketing and sales operations.
"Subsidiary Guaranty" means a Subsidiary Guaranty
to be entered into by a Subsidiary Guarantor, substantially
in the form of Exhibit J hereto, as such Subsidiary Guaranty
may be amended from time to time.
"Substitute Bank" has the meaning set forth in
Section 8.06.
"Termination Date" means the date which is 364
days after the Effective Date, or, if such day is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar
Business Day.
"Unfunded Liabilities" means, with respect to any
Plan at any time, the amount (if any) by which (i) the value
of all benefit liabilities under such Plan, determined on a
plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii)
the fair market value of all Plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued
but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the
extent that such excess represents a potential liability of
a member of the ERISA Group to the PBGC or any other Person
under Title IV of ERISA.
"United States" means the United States of
America, including the States and the District of Columbia,
but excluding its territories and possessions.
"Westinghouse" means Westinghouse Electric
Corporation, a Pennsylvania corporation, and its successors.
"Westinghouse DCBU Acquisition" means the
Company's acquisition of certain assets and assumption of
certain liabilities of the Distribution and Control Business
Unit of Westinghouse, substantially as described in the
Information Documents.
"Wholly-Owned Consolidated Subsidiary" means any
Consolidated Subsidiary all of the shares of capital stock
or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly
owned by the Company.
SECTION 1.02. Accounting Terms and
Determinations. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder
shall be prepared in accordance with generally accepted
accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred
in by the Company's independent public accountants) with the
most recent audited consolidated financial statements of the
Company and its Consolidated Subsidiaries delivered to the
Banks; provided that, if the Company notifies the Agent that
the Company wishes to amend any covenant in Article V to
eliminate the effect of any change in generally accepted
accounting principles on the operation of such covenant (or
if the Agent notifies the Company that the Required Banks
wish to amend Article V for such purpose), then the
Company's compliance with such covenant shall be determined
on the basis of generally accepted accounting principles in
effect immediately before the relevant change in generally
accepted accounting principles became effective, until
either such notice is withdrawn or such covenant is amended
in a manner satisfactory to the Company and the Required
Banks.
SECTION 1.03. Types of Borrowings. The term
"Borrowing" denotes the aggregation of Loans of one or more
Banks to be made to a single Borrower pursuant to Article II
on a single date and for a single Interest Period.
Borrowings are classified for purposes of this Agreement
either by reference to the pricing of Loans comprising such
Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the
provisions of Article II under which participation therein
is determined (i.e., a "Committed Borrowing" is a Borrowing
under Section 2.01 in which all Banks participate in
proportion to their Commitments, while a "Money Market
Borrowing" is a Borrowing under Section 2.03 in which the
Bank participants are determined on the basis of their bids
in accordance therewith).
SECTION 1.04. Basis for Ratings. The credit
ratings to be utilized in the determination of a Status are
the ratings assigned to unsecured obligations of the Company
without third party credit support. Ratings assigned to any
obligation which is secured or which has the benefit of
third party credit support shall be disregarded.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. Each Bank
severally agrees, on the terms and conditions set forth in
this Agreement, to make loans to the Company or any Eligible
Subsidiary pursuant to this Section from time to time during
the Revolving Credit Period; provided that the aggregate
principal amount of Committed Loans by such Bank at any one
time outstanding to all Borrowers shall not exceed the
amount of its Commitment. Each Borrowing under this Section
2.01 shall be in an aggregate principal amount of
$10,000,000 or any larger multiple of $1,000,000 (except
that any such Borrowing may be in the aggregate amount
available in accordance with Section 3.02(c)) and shall be
made from the several Banks ratably in proportion to their
respective Commitments. Within the foregoing limits, the
Borrowers may borrow under this Section 2.01, repay, or to
the extent permitted by Section 2.11 prepay, Loans and
reborrow at any time during the Revolving Credit Period
under this Section 2.01. Notwithstanding the foregoing, no
more than ten Fixed Rate Committed Borrowings shall be
outstanding at any one time, and any Borrowing that would
exceed such limitation shall be made as a Base Rate
Borrowing.
SECTION 2.02. Notice of Committed Borrowing.
(a) The relevant Borrower shall give the Agent notice (a
"Notice of Committed Borrowing") before 10:00 A.M. (New York
City time) on (x) the date of each Base Rate Borrowing,
(y) the second Domestic Business Day before each CD
Borrowing and (z) the third Euro-Dollar Business Day before
each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Domestic
Borrowing or a Euro-Dollar Business Day in the case of
a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing
are to be CD Loans, Base Rate Loans or Euro-Dollar
Loans, and
(iv) in the case of a Fixed Rate Borrowing, the
duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest
Period.
(b) The provisions of subsection (a) above
notwithstanding, if a Borrower shall not have given a Notice
of Borrowing before 10:00 A.M. (New York City time) on the
last day of the Interest Period applicable to an outstanding
Committed Borrowing, then, unless such Borrower notifies the
Agent before such time that it elects not to borrow on such
date, the Agent shall be deemed to have received a Notice of
Committed Borrowing specifying (i) that the date of the
proposed Borrowing shall be the last day of the Interest
Period applicable to such outstanding Borrowing, (ii) that
the aggregate amount of the proposed Borrowing shall be the
amount of such outstanding Borrowing (reduced to the extent
necessary to reflect any reduction of the Commitments on or
prior to the date of the proposed Borrowing), and (iii) that
the Loans comprising the proposed Borrowing are to be Base
Rate Loans.
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to
Committed Borrowings pursuant to Section 2.01, any Borrower
may, as set forth in this Section, request the Banks during
the Revolving Credit Period to make offers to make Money
Market Loans to the Borrower. The Banks may, but shall have
no obligation to, make such offers and the Borrower may, but
shall have no obligation to, accept any such offers in the
manner set forth in this Section.
(b) Money Market Quote Request. When a Borrower
wishes to request offers to make Money Market Loans under
this Section, it shall transmit to the Agent by telex or
facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B hereto so as to be
received before 10:00 A.M. (New York City time) on (x) the
fifth Euro-Dollar Business Day prior to the date of
Borrowing proposed therein, in the case of a LIBOR Auction
or (y) the Domestic Business Day next preceding the date of
Borrowing proposed therein, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Company and the Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be
effective) specifying:
(i) the proposed date of Borrowing, which shall
be a Euro-Dollar Business Day in the case of a LIBOR
Auction or a Domestic Business Day in the case of an
Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which
shall be $10,000,000 or a larger multiple of
$1,000,000,
(iii) the duration of the Interest Period
applicable thereto, subject to the provisions of the
definition of Interest Period, and
(iv) whether the Money Market Quotes requested are
to set forth a Money Market Margin or a Money Market
Absolute Rate.
A Borrower may request offers to make Money Market Loans for
more than one Interest Period in a single Money Market Quote
Request. No Money Market Quote Request shall be given
within five Euro-Dollar Business Days (or such other number
of days as the Company and the Agent may agree) of any other
Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly
upon receipt of a Money Market Quote Request, the Agent
shall send to the Banks by telex or facsimile transmission
an Invitation for Money Market Quotes substantially in the
form of Exhibit C hereto, which shall constitute an
invitation by the relevant Borrower to each Bank to submit
Money Market Quotes offering to make the Money Market Loans
to which such Money Market Quote Request relates in
accordance with this Section.
(d) Submission and Contents of Money Market
Quotes. (i) Each Bank may submit a Money Market Quote
containing an offer or offers to make Money Market Loans in
response to any Invitation for Money Market Quotes. Each
Money Market Quote must comply with the requirements of this
subsection (d) and must be submitted to the Agent by telex
or facsimile transmission at its offices specified in or
pursuant to Section 11.01 not later than (x) 2:00 P.M. (New
York City time) on the fourth Euro-Dollar Business Day prior
to the proposed date of Borrowing, in the case of a LIBOR
Auction or (y) 9:15 A.M. (New York City time) on the
proposed date of Borrowing, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Company and the Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be
effective); provided that Money Market Quotes submitted by
the Agent (or any affiliate of the Agent) in the capacity of
a Bank may be submitted, and may only be submitted, if the
Agent or such affiliate notifies the Borrower of the terms
of the offer or offers contained therein not later than (x)
one hour prior to the deadline for the other Banks, in the
case of a LIBOR Auction or (y) 15 minutes prior to the
deadline for the other Banks, in the case of an Absolute
Rate Auction. Subject to Articles III and VI, any Money
Market Quote so made shall be irrevocable except with the
written consent of the Agent given on the instructions of
the relevant Borrower.
(ii) Each Money Market Quote shall be in
substantially the form of Exhibit D hereto and shall in any
case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan
for which each such offer is being made, which
principal amount (w) may be greater than or less than
the Commitment of the quoting Bank, (x) must be
$5,000,000 or a larger multiple of $1,000,000, (y) may
not exceed the principal amount of Money Market Loans
for which offers were requested and (z) may be subject
to an aggregate limitation as to the principal amount
of Money Market Loans for which offers being made by
such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin
above or below the applicable London Interbank Offered
Rate (the "Money Market Margin") offered for each such
Money Market Loan, expressed as a percentage (specified
to the nearest 1/10,000 of 1%) to be added to or
subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the
rate of interest per annum (specified to the nearest
1/10,000 of 1%) (the "Money Market Absolute Rate")
offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate
offers by the quoting Bank with respect to each Interest
Period specified in the related Invitation for Money Market
Quotes.
(iii) Any Money Market Quote shall be disregarded
if it:
(A) is not substantially in conformity with
Exhibit D hereto or does not specify all of the
information required by subsection (d)(ii);
(B) contains qualifying, conditional or similar
language;
(C) proposes terms other than or in addition to
those set forth in the applicable Invitation for Money
Market Quotes; or
(D) arrives after the time set forth in
subsection (d)(i).
(e) Notice to Borrower. The Agent shall promptly
notify the relevant Borrower of the terms (x) of any Money
Market Quote submitted by a Bank that is in accordance with
subsection (d) and (y) of any Money Market Quote that
amends, modifies or is otherwise inconsistent with a
previous Money Market Quote submitted by such Bank with
respect to the same Money Market Quote Request. Any such
subsequent Money Market Quote shall be disregarded by the
Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money
Market Quote. The Agent's notice to the relevant Borrower
shall specify (A) the aggregate principal amount of Money
Market Loans for which offers have been received for each
Interest Period specified in the related Money Market Quote
Request, (B) the respective principal amounts and Money
Market Margins or Money Market Absolute Rates, as the case
may be, so offered and (C) if applicable, limitations on the
aggregate principal amount of Money Market Loans for which
offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later
than 10:00 A.M. (New York City time) on (x) the third
Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) the
proposed date of Borrowing, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Company and the Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be
effective), the relevant Borrower shall notify the Agent of
its acceptance or non-acceptance of the offers so notified
to it pursuant to subsection (e). In the case of
acceptance, such notice (a "Notice of Money Market
Borrowing") shall specify the aggregate principal amount of
offers for each Interest Period that are accepted. The
relevant Borrower may accept any Money Market Quote in whole
or in part; provided that:
(i) the aggregate principal amount of each Money
Market Borrowing may not exceed the applicable amount
set forth in the related Money Market Quote Request,
(ii) the principal amount of each Money Market
Borrowing must be $10,000,000 or a larger multiple of
$1,000,000,
(iii) acceptance of offers may only be made on the
basis of ascending Money Market Margins or Money Market
Absolute Rates, as the case may be, and
(iv) a Borrower may not accept any offer that is
described in subsection (d)(iii) or that otherwise
fails to comply with the requirements of this
Agreement.
(g) Allocation by Agent. If offers are made by
two or more Banks with the same Money Market Margins or
Money Market Absolute Rates, as the case may be, for a
greater aggregate principal amount than the amount in
respect of which such offers are accepted for the related
Interest Period, the principal amount of Money Market Loans
in respect of which such offers are accepted shall be
allocated by the Agent among such Banks as nearly as
possible (in multiples of $1,000,000, as the Agent may deem
appropriate) in proportion to the aggregate principal
amounts of such offers. Determinations by the Agent of the
amounts of Money Market Loans shall be conclusive in the
absence of manifest error.
(h) Refunding of Money Market Loans. If, on the
date of the maturity of any Money Market Loan, the relevant
Borrower is able to meet all the conditions set forth in
Section 3.02 for a Refunding Borrowing, but is unable to
meet all the conditions set forth in Section 3.02 for any
other Borrowing, such Borrower may, upon three Euro-Dollar
Business Days' notice to the Agent and the Bank which made
such Money Market Loan, require such Bank to refund such
Money Market Loan by making another Money Market Loan (a
"Money Market Refunding Loan") to such Borrower on such
maturity date in an amount not to exceed the principal
amount of the Money Market Loan to be refunded. Such Money
Market Refunding Loan shall have an Interest Period of one
month (subject to the provisions of the definition of
Interest Period) and shall bear interest on the outstanding
principal amount thereof, for each day in such Interest
Period, at a rate per annum equal to the sum of the Euro-
Dollar Margin for such day plus the London Interbank Offered
Rate applicable to such Interest Period. Such interest
shall be payable on the last day of such Interest Period.
Any overdue principal of or interest on any Money Market
Refunding Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of
2% plus the Base Rate for such day. At the maturity of any
such Money Market Refunding Loan, such Borrower may require
such Bank to refund such Money Market Refunding Loan by
making another Money Market Refunding Loan subject to the
satisfaction of, and in accordance with, the terms and
conditions set forth in this subsection (h).
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the
Agent shall promptly notify each Bank of the contents
thereof and of such Bank's share (if any) of such Borrowing
and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City
time) on the date of each Borrowing, each Bank participating
therein shall (except as provided in subsection (c) of this
Section) make available its share of such Borrowing, in
Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section
11.01. Unless the Agent determines that any applicable
condition specified in Article III has not been satisfied,
the Agent will make the funds so received from the Banks
available to the relevant Borrower at the Agent's aforesaid
address in immediately available funds.
(c) If any Bank makes a new Loan to a Borrower
hereunder on a day on which such Borrower is to repay all or
any part of an outstanding Loan from such Bank, such Bank
shall apply the proceeds of its new Loan to make such
repayment and only an amount equal to the difference (if
any) between the amount being borrowed by such Borrower and
the amount being repaid by it shall be made available by
such Bank to the Agent as provided in subsection (b), or
remitted by such Borrower to the Agent as provided in
Section 2.12, as the case may be.
(d) Unless the Agent shall have received notice
from a Bank prior to the date of any Borrowing that such
Bank will not make available to the Agent such Bank's share
of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such
Borrowing in accordance with subsections (b) and (c) of this
Section 2.04 and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank
shall not have so made such share available to the Agent,
such Bank and the relevant Borrower severally agree to repay
to the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date
such amount is made available to such Borrower until the
date such amount is repaid to the Agent, at (i) in the case
of such Borrower, a rate per annum equal to the higher of
the Federal Funds Rate and the interest rate applicable
thereto pursuant to Section 2.07 and (ii) in the case of
such Bank, the Federal Funds Rate. If such Bank shall repay
to the Agent such corresponding amount, such amount so
repaid shall constitute such Bank's Loan included in such
Borrowing for purposes of this Agreement.
SECTION 2.05. Notes. (a) The Loans of each Bank
to each Borrower shall be evidenced by a single Note of such
Borrower payable to the order of such Bank for the account
of its Applicable Lending Office in an amount equal to the
aggregate unpaid principal amount of such Bank's Loans to
such Borrower.
(b) Each Bank may, by notice to a Borrower and
the Agent, request that its Loans of a particular type to
such Borrower be evidenced by a separate Note of such
Borrower in an amount equal to the aggregate unpaid
principal amount of such Loans. Each such Note shall be in
substantially the form of Exhibit A hereto with appropriate
modifications to reflect the fact that it evidences solely
Loans of the relevant type. Each reference in this
Agreement to the "Note" of such Bank shall be deemed to
refer to and include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Bank's Note pursuant to
Section 3.01(a) or Section 3.03(a), the Agent shall forward
such Note to such Bank. Each Bank shall record the date,
amount, type and maturity of each Loan made by it to each
Borrower and the date and amount of each payment of
principal made with respect thereto, and may, if such Bank
so elects in connection with any transfer or enforcement of
any of its Notes, endorse on the schedule forming a part
thereof appropriate notations to evidence the foregoing
information with respect to each such Loan to the relevant
Borrower then outstanding; provided that the failure of any
Bank to make any such recordation or endorsement shall not
affect the obligations of any Borrower hereunder or under
the Notes. Each Bank is hereby irrevocably authorized by
each Borrower so to endorse its Notes and to attach to and
make a part of any Note a continuation of any such schedule
as and when required.
SECTION 2.06. Maturity of Loans. Each Loan
included in any Borrowing shall mature, and the principal
amount thereof shall be due and payable, on the last day of
the Interest Period applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base
Rate Loan shall bear interest on the outstanding principal
amount thereof, for each day from the date such Loan is made
until it becomes due, at a rate per annum equal to the Base
Rate for such day. Such interest shall be payable for each
Interest Period on the last day thereof. Any overdue
principal of or interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the rate
otherwise applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the
outstanding principal amount thereof, for each day in the
Interest Period applicable thereto, at a rate per annum
equal to the sum of the CD Margin for such day plus the
Adjusted CD Rate applicable to such Interest Period;
provided that if any CD Loan or any portion thereof shall,
as a result of clause (2)(b) of the definition of Interest
Period, have an Interest Period of less than 30 days, such
portion shall bear interest during such Interest Period at
the rate applicable to Base Rate Loans during such period.
Such interest shall be payable for each Interest Period on
the last day thereof and, if such Interest Period is longer
than 90 days, at intervals of 90 days after the first day
thereof. Any overdue principal of or interest on any CD
Loan shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the sum of 2% plus
the higher of (i) the sum of the CD Margin for such day plus
the Adjusted CD Rate applicable to such Loan and (ii) the
rate applicable to Base Rate Loans for such day.
"CD Margin" means (i) 0.345% per annum for any day
on which Level I Status exists, (ii) 0.375% per annum for
any day on which Level II Status exists, (iii) 0.450% per
annum for any day on which Level III Status exists and
(iv) 0.525% per annum for any day on which Level IV Status
exists.
The "Adjusted CD Rate" applicable to any Interest
Period means a rate per annum determined pursuant to the
following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest
Period is the rate of interest determined by the Agent to be
the average (rounded upward, if necessary, to the next
higher 1/100 of 1%) of the prevailing 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 two
or more New York certificate of deposit dealers of
recognized standing for the purchase at face value from each
CD Reference Bank of its certificates of deposit in an
amount comparable to the principal amount of the CD Loan of
such CD Reference Bank to which such Interest Period applies
and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including without
limitation any basic, supplemental or emergency reserves)
for a member bank of the Federal Reserve System in New York
City with deposits exceeding five billion dollars in respect
of new non-personal time deposits in dollars in New York
City having a maturity comparable to the related Interest
Period and in an amount of $100,000 or more. The Adjusted
CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve
Percentage.
"Assessment Rate" means for any day the annual
assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund classified as adequately
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. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change
in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on
the outstanding principal amount thereof, for each day in
the Interest Period applicable thereto, at a rate per annum
equal to the sum of the Euro-Dollar Margin for such day plus
the London Interbank Offered Rate applicable to such
Interest Period. Such interest shall be payable for each
Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of
three months after the first day thereof.
"Euro-Dollar Margin" means (i) 0.220% per annum
for any day on which Level I Status exists, (ii) 0.250% per
annum for any day on which Level II Status exists,
(iii) 0.325% per annum for any day on which Level III Status
exists and (iv) 0.400% per annum for any day on which Level
IV Status exists.
The "London Interbank Offered Rate" applicable to
any Interest Period means the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective
rates per annum at which deposits in dollars are offered to
each of the Euro-Dollar Reference Banks in the London
interbank market at approximately 11:00 A.M. (London time)
two Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Euro-Dollar
Reference Bank to which such Interest Period is to apply and
for a period of time comparable to such Interest Period.
(d) Any overdue principal of or interest on any
Euro-Dollar Loan shall bear interest, payable on demand, for
each day from and including the date payment thereof was due
to but excluding the date of actual payment, at a rate per
annum equal to the sum of 2% plus the higher of (i) the sum
of the Euro-Dollar Margin for such day plus the London
Interbank Offered Rate applicable to such Loan and (ii) the
Euro-Dollar Margin for such day plus the average (rounded
upward, if necessary, to the next higher 1/16 of 1%) of the
respective rates per annum at which one day (or, if such
amount due remains unpaid more than three Euro-Dollar
Business Days, then for such other period of time not longer
than six months as the Agent may select) deposits in dollars
in an amount approximately equal to such overdue payment due
to each of the Euro-Dollar Reference Banks are offered to
such Euro-Dollar Reference Bank in the London interbank
market for the applicable period determined as provided
above (or, if the circumstances described in clause (a) or
(b) of Section 8.01 shall exist, at a rate per annum equal
to the sum of 2% plus the rate applicable to Base Rate Loans
for such day).
(e) Subject to Section 8.01(a), each Money Market
LIBOR Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto,
at a rate per annum equal to the sum of the London Interbank
Offered Rate for such Interest Period (determined in
accordance with Section 2.07(c) as if the related Money
Market LIBOR Borrowing were a Committed Euro-Dollar
Borrowing) plus (or minus) the Money Market Margin quoted by
the Bank making such Loan in accordance with Section 2.03.
Each Money Market Absolute Rate Loan shall bear interest on
the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the
Money Market Absolute Rate quoted by the Bank making such
Loan in accordance with Section 2.03. Such interest shall
be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, at
intervals of three months after the first day thereof. Any
overdue principal of or interest on any Money Market Loan
shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of 2% plus the
Base Rate for such day.
(f) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give
prompt notice to the relevant Borrower and the participating
Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of
manifest error.
(g) Each Reference Bank agrees to use its best
efforts to furnish quotations to the Agent as contemplated
by this Section. If any Reference Bank does not furnish a
timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations
furnished by the remaining Reference Bank or Banks or, if
none of such quotations is available on a timely basis, the
provisions of Section 8.01 shall apply.
SECTION 2.08. Fees.
(a) Facility Fee. The Company shall pay to the
Agent for the account of the Banks ratably a facility fee at
the Facility Fee Rate. Such facility fee shall accrue (i)
for each day from and including the Effective Date to but
excluding the Termination Date (or earlier date of
termination of the Commitments in their entirety), on the
aggregate amount of the Commitments (whether used or unused)
on such day and (ii) for each day from and including such
Termination Date or other date of termination to but
excluding the date the Loans shall be repaid in their
entirety, on the aggregate outstanding principal amount of
the Loans on such day.
"Facility Fee Rate" means (i) 0.08% per annum for
any day on which Level I Status exists, (ii) 0.10% per annum
for any day on which Level II Status exists, (iii) 0.15% per
annum for any day on which Level III Status exists and (iv)
0.20% per annum for any day on which Level IV Status exists.
(b) Payments. Accrued fees under this Section
shall be payable quarterly on each March 31, June 30,
September 30 and December 31 and upon the date of
termination of the Commitments in their entirety (and, if
later, the date the Loans shall be repaid in their
entirety).
SECTION 2.09. Optional Termination or Reduction
of Commitments. During the Revolving Credit Period, the
Company may, upon at least three Domestic Business Days'
notice to the Agent, (i) terminate the Commitments at any
time, if no Loans are outstanding at such time or
(ii) ratably reduce from time to time by an aggregate amount
of $25,000,000 or any larger multiple of $5,000,000, the
aggregate amount of the Commitments in excess of the
aggregate outstanding principal amount of the Loans.
SECTION 2.10. Mandatory Termination or Reduction
of Commitments. The Commitments shall terminate on the
Termination Date, and any Loans then outstanding (together
with accrued interest thereon) shall be due and payable on
such date.
SECTION 2.11. Optional Prepayments. (a) The
relevant Borrower may (i) upon at least one Domestic
Business Day's notice to the Agent, prepay any Base Rate
Borrowing (or any Money Market Borrowing bearing interest at
the Base Rate pursuant to Section 8.01(a)), (ii) upon at
least two Domestic Business Days' notice to the Agent,
prepay any CD Borrowing and (iii) upon at least three Euro-
Dollar Business Days' notice to the Agent, prepay any Euro-
Dollar Borrowing, in whole at any time, or from time to time
in part in amounts aggregating $10,000,000 or any larger
multiple of $1,000,000, by paying the principal amount to be
prepaid together with accrued interest thereon to the date
of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Banks
included in such Borrowing. In connection with any such
prepayment of a CD Borrowing or Euro-Dollar Borrowing, the
Company shall reimburse the Banks for funding losses as
provided in Section 2.13.
(b) Except as provided in Section 8.02, no
Borrower may prepay all or any portion of the principal
amount of any Money Market Loan (except a Money Market Loan
bearing interest at the Base Rate pursuant to Section
8.01(a)) prior to the maturity thereof .
(c) Upon receipt of a notice of prepayment
pursuant to this Section, the Agent shall promptly notify
each Bank of the contents thereof and of such Bank's ratable
share (if any) of such prepayment and such notice shall not
thereafter be revocable by the relevant Borrower.
SECTION 2.12. General Provisions as to Payments.
(a) The Borrowers shall make each payment of principal of,
and interest on, the Loans and of fees hereunder, not later
than 12:00 Noon (New York City time) on the date when due,
in Federal or other funds immediately available in New York
City, to the Agent at its address specified in or pursuant
to Section 11.01. The Agent will promptly distribute to
each Bank its ratable share of each such payment received by
the Agent for the account of the Banks. Whenever any
payment of principal of, or interest on, the Domestic Loans
or of fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended
to the next succeeding Domestic Business Day. Whenever any
payment of principal of, or interest on, the Euro-Dollar
Loans shall be due on a day which is not a Euro-Dollar
Business Day, the date for payment thereof shall be extended
to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day. Whenever any payment of
principal of, or interest on, the Money Market Loans shall
be due on a day which is not a Euro-Dollar Business Day, the
date for payment thereof shall be extended to the next
succeeding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such
extended time.
(b) Unless the Agent shall have received notice
from a Borrower prior to the date on which any payment is
due from such Borrower to the Banks hereunder that such
Borrower will not make such payment in full, the Agent may
assume that such Borrower has made such payment in full to
the Agent on such date and the Agent may, in reliance upon
such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such
Bank. If and to the extent that such Borrower shall not
have so made such payment, each Bank shall repay to the
Agent forthwith on demand such amount distributed to such
Bank together with interest thereon, for each day from the
date such amount is distributed to such Bank until the date
such Bank repays such amount to the Agent, at the Federal
Funds Rate.
SECTION 2.13. Funding Losses. If (i) a Borrower
makes any payment of principal with respect to any Fixed
Rate Loan (pursuant to Article VI or VIII or otherwise) on
any day other than the last day of the Interest Period
applicable thereto, or the last day of an applicable period
fixed pursuant to Section 2.07(d), (ii) a Borrower fails to
borrow any Fixed Rate Loan after notice has been given to
any Bank in accordance with Section 2.04(a) or (iii) the
Company requires a Bank to assign its rights with respect to
any CD Loan or Euro-Dollar Loan to a Substitute Bank
pursuant to Section 8.06 on any day other than the last day
of the Interest Period applicable thereto, the Company shall
reimburse each Bank within 15 days after demand for any
resulting loss or expense incurred by it (or by an existing
or prospective Participant in the related Loan), including
(without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but
excluding loss of margin for the period after any such
payment, failure to borrow or required assignment, provided
that such Bank shall have delivered to the Company a
certificate setting forth the amount of such loss or expense
and showing in reasonable detail how such amount was
calculated, which certificate shall be conclusive in the
absence of manifest error.
SECTION 2.14. Computation of Interest and Fees.
Interest based on the Prime Rate hereunder shall be computed
on the basis of a year of 365 days (or 366 days in a leap
year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All
other interest and fees shall be computed on the basis of a
year of 360 days and paid for the actual number of days
elapsed (including the first day but excluding the last
day).
SECTION 2.15. Regulation D Compensation. Each
Bank may require each Borrower to pay, contemporaneously
with each payment of interest on Euro-Dollar Loans made to
such Borrower, additional interest on the relevant Euro-
Dollar Loan of such Bank to such Borrower at a rate per
annum determined by such Bank up to but not exceeding the
excess of (i) (A) the applicable London Interbank Offered
Rate divided by (B) one minus the Euro-Dollar Reserve
Percentage over (ii) the applicable London Interbank Offered
Rate. Any Bank wishing to require payment of such
additional interest (x) shall so notify such Borrower and
the Agent, in which case such additional interest on the
Euro-Dollar Loans of such Bank to such Borrower shall be
payable to such Bank at the place indicated in such notice
with respect to each Interest Period commencing at least
three Euro-Dollar Business Days after the giving of such
notice and (y) shall notify such Borrower, at least five
Euro-Dollar Business Days prior to each date on which
interest is payable on Euro-Dollar Loans made to such
Borrower, of the amount then due to such Bank under this
Section. Each Bank confirms that, as of the date hereof,
the Euro-Dollar Reserve Percentage is zero.
SECTION 2.16. Judgment Currency. If for the
purpose of obtaining judgment in any court it is necessary
to convert a sum due from any Borrower hereunder or under
any of the Notes in United States dollars ("dollars") into
another currency, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with
normal banking procedures the Agent could purchase dollars
with such other currency at the Agent's New York office on
the Domestic Business Day preceding that on which final
judgment is given. The obligations of each Borrower in
respect of any sum due to any Bank or the Agent hereunder or
under any Note shall, notwithstanding any judgment in a
currency other than dollars, be discharged only to the
extent that, on the Domestic Business Day following receipt
by such Bank or the Agent (as the case may be) of any sum
adjudged to be so due in such other currency, such Bank or
the Agent (as the case may be) may in accordance with normal
banking procedures purchase dollars with such other
currency. If the amount of dollars so purchased is less
than the sum originally due to such Bank or the Agent, as
the case may be, in dollars, each Borrower agrees, to the
fullest extent that it may effectively do so, as a separate
obligation and notwithstanding any such judgment, to
indemnify such Bank or the Agent, as the case may be,
against such loss, and if the amount of dollars so purchased
exceeds the sum of (a) the amount originally due to such
Bank or the Agent, as the case may be, and (b) any amounts
shared with other Banks as a result of allocations of such
excess as a disproportionate payment to such Bank under
Section 11.04, such Bank or the Agent, as the case may be,
agrees to remit such excess to the appropriate Borrower.
SECTION 2.17. Foreign Subsidiary Costs. (a) If
the cost to any Bank of making or maintaining any Loan to an
Eligible Subsidiary is increased, or the amount of any sum
received or receivable by any Bank (or its Applicable
Lending Office) is reduced by an amount deemed by such Bank
to be material, by reason of the fact that such Eligible
Subsidiary is incorporated in or organized under the laws
of, or conducts business in, a jurisdiction outside the
United States, such Eligible Subsidiary shall indemnify such
Bank for such increased cost or reduction within 15 days
after demand by such Bank (with a copy to the Agent). A
certificate of such Bank, claiming compensation under this
subsection (a), setting forth the additional amount or
amounts to be paid to it hereunder and showing in reasonable
detail how such amount or amounts were calculated, shall be
conclusive in the absence of manifest error.
(b) Each Bank will promptly notify the Company
and the Agent of any event of which it has knowledge that
will entitle such Bank to additional interest or payments
pursuant to subsection (a) of this Section and will
designate a different Applicable Lending Office if, in the
judgment of such Bank, such designation will avoid the need
for, or reduce the amount of, such compensation and will not
be otherwise disadvantageous to such Bank.
SECTION 2.18. Eligible Subsidiaries. (a) The
Company may from time to time cause any Wholly-Owned
Consolidated Subsidiary to become eligible to borrow under
Sections 2.01 and 2.03 by delivering to the Agent an
Election to Participate with respect to such Subsidiary.
The eligibility of any such Subsidiary to borrow under said
Sections shall terminate when the Agent receives a Notice of
Termination with respect to such Subsidiary. Each Election
to Participate delivered to the Agent shall be duly executed
on behalf of the relevant Subsidiary and the Company, and
each Election to Terminate delivered to the Agent shall be
duly executed on behalf of the Company, in such number of
copies as the Agent may request. The delivery of an
Election to Terminate shall not affect any obligation of the
relevant Subsidiary theretofore incurred. The Agent shall
promptly give notice to the Banks of its receipt of any
Election to Participate or Election to Terminate.
(b) If (i) an Eligible Subsidiary at any time
ceases to be an Eligible Subsidiary (by reason of an
Election to Terminate being delivered to the Agent, by
reason of such Subsidiary no longer being a Wholly-Owned
Consolidated Subsidiary or otherwise) or (ii) an Event of
Default specified in Section 6.01(g) or 6.01(h) occurs with
respect to an Eligible Subsidiary (or an event occurs which
would have been such an Event of Default but for the fact
that such Eligible Subsidiary is an Insignificant
Subsidiary):
(A) the Banks will have no obligation to make any
further Loans to such Subsidiary, and
(B) the Company will inform each Bank of the
relevant event described in clause (i) or (ii) of this
subsection (b) within 3 Domestic Business Days after it
occurs and, within 30 days after being requested to do
so by any Bank, will purchase from such Bank its
outstanding Loans to the relevant Subsidiary at a price
equal to the unpaid principal amount of such Loans plus
interest accrued thereon to the date of such purchase
and, if such purchase does not occur on the last day of
an Interest Period, an amount sufficient to reimburse
such Bank for any funding losses, calculated as
provided in Section 2.13 as if such Loans had been
prepaid on the date of such purchase.
ARTICLE III
CONDITIONS
SECTION 3.01. Closing. The closing hereunder
shall occur upon receipt by the Agent of the following
documents, each dated the Closing Date unless otherwise
indicated:
(a) a duly executed Note of the Company for the
account of each Bank dated on or before the Closing
Date complying with the provisions of Section 2.05;
(b) an opinion of Gerald L. Gherlein, Executive
Vice President and General Counsel of the Company,
substantially in the form of Exhibit E hereto;
(c) an opinion of Davis Polk & Wardwell, special
counsel for the Agent, substantially in the form of
Exhibit F hereto; and
(d) all documents the Agent may reasonably
request relating to the existence of the Company, the
corporate authority for and the validity of this
Agreement and the Company's Notes, all in form and
substance satisfactory to the Agent.
The Agent shall promptly notify the Company and the Banks of
the Closing Date, and such notice shall be conclusive and
binding on all parties hereto.
SECTION 3.02. Borrowings. The obligation of any
Bank to make a Loan on the occasion of any Borrowing is
subject to the satisfaction of the following conditions:
(a) the fact that the Closing Date shall have
occurred on or prior to June 30, 1994;
(b) receipt (or deemed receipt) by the Agent of a
Notice of Borrowing as required by Section 2.02 or
2.03, as the case may be;
(c) the fact that, immediately after such
Borrowing, the aggregate outstanding principal amount
of the Loans will not exceed the aggregate amount of
the Commitments;
(d) if the aggregate outstanding principal amount
of the Loans immediately after such Borrowing will
exceed $100,000,000, the fact that the Westinghouse
DCBU Acquisition shall have been consummated prior to
or substantially concurrently with such Borrowing;
(e) the fact that, immediately before and after
such Borrowing, (i) in the case of a Refunding
Borrowing, no Event of Default shall have occurred and
be continuing and (ii) in the case of any other
Borrowing, no Default shall have occurred and be
continuing and no "Event of Default" (as defined in the
Five Year Credit Agreement) shall have occurred and be
continuing; and
(f) the fact that (i) the representations and
warranties of the Company contained in this Agreement
shall be true on and as of the date of such Borrowing,
(ii) if a Subsidiary Guaranty has theretofore been
executed and delivered in accordance with Section 5.11,
the representations and warranties of the relevant
Subsidiary Guarantor contained in such Subsidiary
Guaranty shall be true on and as of the date of such
Borrowing and (iii) if the Borrower is an Eligible
Subsidiary, the representations and warranties of such
Eligible Subsidiary contained in this Agreement shall
be true on and as of the date of such Borrowing, except
that this clause (f) shall not apply to (x) in the case
of a Refunding Borrowing, the representations and
warranties set forth in Sections 4.04(c), 4.05, 4.06,
4.07, 4.08 and 4.09 as to any matter which has
theretofore been disclosed in writing by the Company to
the Banks and (y) the representations and warranties
set forth in Sections 4.02(b) and 4.12.
Each Borrowing hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of
such Borrowing as to the facts specified in clauses (c), (d)
(if applicable), (e) and (f) of this Section.
SECTION 3.03. First Borrowing by Each Eligible
Subsidiary. The obligation of each Bank to make a Loan on
the occasion of the first Borrowing by each Eligible
Subsidiary is subject to the satisfaction of the following
further conditions:
(a) receipt by the Agent for the account of
each Bank of a duly executed Note of such Eligible
Subsidiary, dated on or before the date of such
Borrowing, complying with the provisions of
Section 2.05;
(b) receipt by the Agent of one or more
opinions of counsel for such Eligible Subsidiary
acceptable to the Agent, which taken together
cover the matters set forth in Exhibit I hereto;
and
(c) receipt by the Agent of all documents
which it may reasonably request relating to (i)
the existence of such Eligible Subsidiary, (ii)
the corporate or partnership authority for and the
validity of the Election to Participate of such
Eligible Subsidiary, this Agreement and the Notes
of such Eligible Subsidiary and (iii) the
corporate authorization by the board of directors
of the Company of the guaranty set forth in
Article X hereof with respect to such Eligible
Subsidiary, in each case in form and substance
satisfactory to the Agent.
Each opinion referred to in clause (b) above shall be dated
no more than five Euro-Dollar Business Days before the date
of the first Borrowing by such Eligible Subsidiary.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The
Company is a corporation duly incorporated, validly existing
and in good standing under the laws of Ohio, and has all
corporate powers and all Material governmental licenses,
authorizations, consents and approvals required to carry on
its business as now conducted.
SECTION 4.02. Corporate and Governmental
Authorization; No Contravention. (a) The execution,
delivery and performance by the Company of this Agreement
and its Notes are within the Company's corporate powers,
have been duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable
law or regulation or of the amended articles of
incorporation or amended regulations of the Company or of
any agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or any of its
Subsidiaries or result in the creation or imposition of any
Lien on any asset of the Company or any of its Subsidiaries.
(b) The consummation of the Westinghouse DCBU
Acquisition will not contravene, or constitute a default
under, any provision of applicable law or regulation or of
the amended articles of incorporation or amended regulations
of the Company or of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Company
or any of its Subsidiaries or, to the best of the Company's
knowledge, Westinghouse or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of the Company and
the Company's Notes, when executed and delivered in
accordance with this Agreement, will constitute valid and
binding obligations of the Company, in each case enforceable
in accordance with its terms, except as may be limited by
(i) bankruptcy, insolvency or other similar laws affecting
the rights and remedies of creditors generally and (ii)
general principles of equity.
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the Company
and its Consolidated Subsidiaries as of December 31, 1992
and the related consolidated statements of income,
shareholders' equity and cash flows for the fiscal year then
ended, reported on by Ernst & Young and set forth in the
Company's 1992 Form 10-K, a copy of which has been delivered
to each of the Banks, fairly present, in conformity with
generally accepted accounting principles, the consolidated
financial position of the Company and its Consolidated
Subsidiaries as of such date and their consolidated results
of operations and cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of
the Company and its Consolidated Subsidiaries as of
September 30, 1993 and the related unaudited consolidated
statements of income, shareholders' equity and cash flows
for the nine months then ended, set forth in the Company's
quarterly report for the fiscal quarter ended September 30,
1993 as filed with the Securities and Exchange Commission on
Form 10-Q, a copy of which has been delivered to each of the
Banks, fairly present, on a basis consistent with the
financial statements referred to in subsection (a) of this
Section (except that certain operations previously reported
as discontinued are now included in continuing operations),
the consolidated financial position of the Company and its
Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such
six month period (subject to normal year-end adjustments).
(c) Since September 30, 1993 there has been no
material adverse change in the business, financial position,
results of operations or prospects of the Company and its
Consolidated Subsidiaries, considered as a whole (a
"Material Adverse Change"). The parties hereto agree that
the changes reflected or to be reflected in the Company's
financial statements as of the date and as of a result of
the Westinghouse DCBU Acquisition, to the extent disclosed
to the Banks in the Information Documents, do not in
themselves constitute a Material Adverse Change and will not
be taken into account in determining whether any Material
Adverse Change has occurred.
SECTION 4.05. Litigation. There is no action,
suit or proceeding pending against, or to the knowledge of
the Company threatened against or affecting, the Company or
any of its Subsidiaries before any court or arbitrator or
any governmental body, agency or official in which there is
a reasonable possibility of an adverse decision which would
have a Material Adverse Effect or an adverse effect on the
rights or remedies of the Agent or the Banks under this
Agreement or the Notes or which in any manner draws into
question the validity of this Agreement or the Notes.
SECTION 4.06. Compliance with ERISA. Each member
of the ERISA Group has fulfilled its obligations under the
minimum funding standards of ERISA and the Internal Revenue
Code with respect to each Plan and is in compliance in all
respects with the presently applicable provisions of ERISA
and the Internal Revenue Code with respect to each Plan,
except to the extent that non-fulfillment or non-compliance
could not reasonably be expected to result in a Material
Adverse Effect. The members of the ERISA Group have not (i)
sought a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code in respect of any
Plan, except for waivers of amounts not exceeding
$25,000,000 in the aggregate, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or
in respect of any Benefit Arrangement, or made any amendment
to any Plan or Benefit Arrangement, which has resulted or
could result in the imposition of a Lien or the posting of a
bond or other security under ERISA or the Internal Revenue
Code to secure a liability in excess of $25,000,000 or (iii)
incurred any liability in excess of $25,000,000 under Title
IV of ERISA other than a liability to the PBGC for premiums
under Section 4007 of ERISA.
SECTION 4.07. Environmental Matters. The Company
regularly reviews those contingencies known to it with
respect to which there is a reasonable possibility that
Environmental Laws may have a foreseeable adverse effect on
the business, operations and properties of the Company and
its Subsidiaries. In the course of such reviews it
identifies and evaluates associated liabilities and costs
(including, without limitation, capital or operating
expenditures required for clean-up or closure of properties
presently or previously owned, capital or operating
expenditures required to achieve or maintain compliance with
environmental protection standards imposed by law or as a
condition of any license, permit or contract, related
constraints on operating activities, including the periodic
or permanent shutdown of a facility or reduction in the
level of or change in the nature of operations conducted
thereat, costs or liabilities in connection with off-site
disposal of wastes or Hazardous Substances, and actual or
potential liabilities to third parties, including employees,
and related costs and expenses). On the basis of such
reviews, the Company has reasonably concluded that such
associated liabilities and costs, including the costs of
compliance with Environmental Laws, are unlikely to have a
Material Adverse Effect.
SECTION 4.08. Taxes. United States Federal
income tax returns of the Company and its Subsidiaries have
been examined and closed through the fiscal year ended
December 31, 1987. The Company and its Subsidiaries have
filed all United States Federal income tax returns and all
other material tax returns which are required to be filed by
them and have paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Company or any
Subsidiary, except any such assessment that is being
contested by the Company or any Subsidiary in good faith by
appropriate proceedings. The charges, accruals and reserves
on the books of the Company and its Subsidiaries in respect
of taxes or other governmental charges are, in the opinion
of the Company, adequate.
SECTION 4.09. Subsidiaries. All of the Company's
Subsidiaries (except Insignificant Subsidiaries) are
corporations duly incorporated or partnerships duly
organized, validly existing and in good standing under the
laws of their respective jurisdictions of incorporation or
organization, and have all corporate or partnership powers
and all Material governmental licenses, authorizations,
consents and approvals required to carry on their respective
businesses as now conducted.
SECTION 4.10. Not an Investment Company. The
Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
SECTION 4.11. Full Disclosure. The information
set forth in the Information Documents was true and accurate
in all Material respects on the date as of which such
information was stated or certified, except that the Company
makes no representation whatsoever (express or implied) with
respect to (a) any statements, estimates or projections with
respect to the future performance of the Company and its
Subsidiaries or (b) any historical financial information
concerning Westinghouse Electric Corporation and its
Distribution and Control Business Unit except as it pertains
to 1992. All information hereafter furnished by the Company
at any meeting to which all the Banks are invited or
hereafter furnished in writing by the Company to the Agent
or any Bank pursuant to or in connection with this Agreement
will be true and accurate (in all respects that are material
in relation to any Bank's decision to take or refrain from
taking any action requested by the Company or to exercise or
refrain from exercising any remedy under Article VI hereof)
on the date as of which such information is stated or
certified, subject to the exception set forth in the
preceding sentence. The Company has disclosed to the Banks
in writing any and all facts which have a Material Adverse
Effect (or with respect to which, in the Company's good
faith opinion, a reasonable possibility exists that they may
have a Material Adverse Effect).
SECTION 4.12. Liens. On the date of this
Agreement, the aggregate principal amount of Debt
outstanding which is secured by Liens on assets of the
Company or any Subsidiary does not exceed $50,000,000.
ARTICLE V
COVENANTS
The Company agrees that, so long as any Bank has
any Commitment hereunder or any amount payable under any
Note remains unpaid:
SECTION 5.01. Information. The Company will
deliver to each of the Banks:
(a) as soon as available and in any event within
120 days after the end of each fiscal year of the
Company, a consolidated balance sheet of the Company
and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated statements of
income, shareholders' equity and cash flows for such
fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all
reported on in a manner acceptable to the Securities
and Exchange Commission by Ernst & Young or other
independent public accountants of nationally recognized
standing;
(b) as soon as available and in any event within
60 days after the end of each of the first three
quarters of each fiscal year of the Company, a
condensed consolidated balance sheet of the Company and
its Consolidated Subsidiaries as of the end of such
quarter, the related condensed consolidated statements
of income for such quarter and for the portion of the
Company's fiscal year ended at the end of such quarter
and the related condensed statement of cash flows for
such portion of the Company's fiscal year, setting
forth in the case of such statements of income and cash
flows in comparative form the figures for the
corresponding periods in the Company's previous fiscal
year, all certified by the chief financial officer or
the chief accounting officer of the Company (subject to
normal year-end adjustments) as to fairness of
presentation and consistency with the most recent
audited financial statements referred to in Section
4.04(a) or 5.01(a), except for changes in accounting
principles disclosed in such officer's certificate and
approved by the firm of independent public accountants
which reported on such audited financial statements;
(c) simultaneously with the delivery of each set
of financial statements referred to in clauses (a) and
(b) above, a certificate of the chief financial officer
or the chief accounting officer of the Company
(i) setting forth in reasonable detail the calculations
required to establish whether the Company was in
compliance with the requirements of Section 5.07 on the
date of such financial statements and (ii) stating
whether any Default exists on the date of such
certificate and, if any Default then exists, setting
forth the details thereof and the action which the
Company is taking or proposes to take with respect
thereto;
(d) within ten Domestic Business Days after any
financial officer of the Company obtains knowledge of
any Default, if such Default is then continuing, a
certificate of the chief financial officer or the chief
accounting officer of the Company setting forth the
details thereof and the action which the Company is
taking or proposes to take with respect thereto;
(e) promptly upon the mailing thereof to the
shareholders of the Company generally, copies of all
financial statements, reports and proxy statements so
mailed;
(f) promptly upon the filing thereof, copies of
all registration statements (other than the exhibits
thereto and any registration statements on Form S-8 or
its equivalent) and reports on Forms 10-K, 10-Q and 8-K
(or their equivalents) which the Company shall have
filed with the Securities and Exchange Commission;
(g) if and when any member of the ERISA Group
(i) gives or is required to give, with respect to any
Plan which has Unfunded Liabilities, notice to the PBGC
of any "reportable event" (as defined in Section 4043
of ERISA) which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or
knows that the plan administrator of any such Plan has
given or is required to give notice of any such
reportable event, a copy of the notice of such
reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice
that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title
IV of ERISA of an intent to terminate, impose liability
(other than for premiums under Section 4007 of ERISA)
in respect of, or appoint a trustee to administer any
Plan, a copy of such notice; (iv) applies for a waiver
of the minimum funding standard under Section 412 of
the Internal Revenue Code, a copy of such application;
(v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives
notice of any withdrawal from any Plan pursuant to
Section 4063 of ERISA, a copy of such notice; or (vii)
fails to make any payment or contribution to any Plan
or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or
Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or
other security to secure a liability, a certificate of
the chief financial officer or the chief accounting
officer of the Company setting forth details as to such
occurrence and the action, if any, which the Company or
applicable member of the ERISA Group is required or
proposes to take; provided that the copies referred to
in this subsection (g) shall be required to be
delivered as a result of any event specified in clauses
(i) through (vii) of this subsection (g) only if such
event, together with all other such events within the
previous twelve months, represents actual or potential
liabilities of one or more members of the ERISA Group
in an aggregate amount in excess of $10,000,000 and/or
relates to a Plan or Plans having aggregate Unfunded
Liabilities in excess of $10,000,000 (for which purpose
each event specified in clauses (ii), (vi) and (vii)
shall be deemed to represent an actual liability of a
member of the ERISA Group in the amount set forth in
the relevant notice);
(h) promptly upon the chief financial officer,
chief accounting officer or treasurer of the Company
obtaining knowledge thereof, notice of any change in
any rating by S&P or Moody's of any outstanding senior
unsecured long-term debt of the Company or any public
announcement by S&P or Moody's that such a rating is
under review for possible downgrade; and
(i) from time to time such additional information
regarding the financial position or business of the
Company and its Subsidiaries as the Agent, at the
request of any Bank, may reasonably request.
In addition, if any Bank requests financial statements of
the Eligible Subsidiaries and states that it is required to
obtain such financial statements by a law, rule or
regulation applicable to it, or an interpretation thereof by
a governmental authority, central bank or comparable agency
charged with the administration thereof, or a request or
directive (whether or not having the force of law) of any
such authority, central bank or comparable agency, then,
within 30 days after receiving such request or, if later,
within 120 days after the end of the relevant fiscal year of
the Company, the Company will deliver to such Bank financial
statements of each Eligible Subsidiary, including a balance
sheet and the related statements of income, shareholders'
equity (if such a statement exists) and cash flows for such
fiscal year, certified by a financial officer of the Company
to be the financial statements of such Eligible Subsidiary
used by the Company as working papers in preparing the
financial statements delivered pursuant to Section 5.01(a).
SECTION 5.02. Payment of Obligations. The
Company will pay and discharge, and will cause its
Subsidiaries to pay and discharge, at or before maturity,
all their respective obligations and liabilities, including,
without limitation, tax liabilities, except where the same
may be contested in good faith by appropriate proceedings or
where the failure to pay and discharge them would not have a
Material Adverse Effect. The Company and its Subsidiaries
will maintain, on a consolidated basis, in accordance with
generally accepted accounting principles, appropriate
reserves for the accrual of any of the same.
SECTION 5.03. Maintenance of Property; Insurance.
(a) The Company will, and will cause its Subsidiaries to,
keep all property useful and necessary in their respective
businesses in good working order and condition, ordinary
wear and tear excepted, except where the failure to do so
would not have a Material Adverse Effect.
(b) The Company and its Subsidiaries (except
Insignificant Subsidiaries) will maintain (either in the
name of the Company or in such Subsidiaries' own names),
with financially sound and responsible insurance companies
(which may include so-called captive insurance companies),
insurance on all their respective properties in at least
such amounts and against at least such risks (and with such
risk retention) as are usually insured against in the same
general area by companies of established repute engaged in
the same or a similar business; and will furnish to the
Banks, upon request from the Agent, information presented in
reasonable detail as to the insurance so carried.
SECTION 5.04. Conduct of Business and Maintenance
of Existence. The Company will continue, and will cause its
Subsidiaries (except Insignificant Subsidiaries) to
continue, to engage in the vehicle components and electrical
and electronics controls businesses, and will preserve,
renew and keep in full force and effect, and will cause its
Subsidiaries (except Insignificant Subsidiaries) to
preserve, renew and keep in full force and effect their
respective corporate or partnership existences and their
respective rights, privileges and franchises necessary or
desirable in the normal conduct of business; provided that
nothing in this Section 5.04 shall prohibit (i) the merger
of a Subsidiary into the Company or the merger or
consolidation of a Subsidiary with or into another Person if
the corporation surviving such consolidation or merger is a
Subsidiary and if, in each case, after giving effect
thereto, no Default shall have occurred and be continuing,
(ii) the termination of the corporate or partnership
existence of any Subsidiary if the Company in good faith
determines that such termination is in the best interest of
the Company and is not materially disadvantageous to the
Banks, (iii) any sale, lease or transfer of assets or any
sale of the stock of a Subsidiary which is otherwise
permitted by Section 5.09 or (iv) the Company or any
Subsidiary from entering into businesses in addition to
those of the general type now conducted by the Company and
its Subsidiaries.
SECTION 5.05. Compliance with Laws. The Company
will comply, and cause each Subsidiary to comply, in all
respects with all applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA
and the rules and regulations thereunder), except where the
necessity of compliance therewith is contested in good faith
by appropriate proceedings or where it is not probable that
the failure to comply therewith will result in a reduction
of more than 25% of the Company's Adjusted Consolidated Net
Worth, as shown in its most recent financial statements
furnished in accordance with Section 5.01(a) or 5.01(b).
SECTION 5.06. Inspection of Property, Books and
Records. The Company will keep, and will cause each
Subsidiary to keep, books of record and account in which
entries shall be made of dealings and transactions in
relation to its business and activities, all to the extent
required to permit its consolidated financial statements to
be audited and reported on without qualification in
accordance with generally accepted accounting principles and
practices. The Company will permit, and will cause each
Subsidiary to permit, representatives of any Bank at such
Bank's expense to visit any of their respective properties
(such representatives to be accompanied by an officer of the
Company or his designee) and to discuss their respective
affairs, finances and accounts with officers of the Company
or their designees, all at such reasonable times and as
often as may reasonably be desired. During any period in
which (i) Level III Status or Level IV Status exists or (ii)
a Default exists, the Company will permit, and will cause
each Subsidiary to permit, representatives of any Bank, at
such Bank's expense (except as provided in Section
11.03(a)(ii)), to inspect any of their respective
properties, to examine and make abstracts from any of their
respective books and records (except to the extent covered
by attorney-client or other privilege) and to discuss their
respective affairs, finances and accounts with their
respective officers and independent public accountants, all
at such reasonable times and as often as may reasonably be
desired; provided that, at the Company's request, an officer
of the Company or his designee may be present at any such
discussion with independent public accountants. Any
information so obtained by any Bank shall be kept
confidential in accordance with its Confidentiality
Agreement.
SECTION 5.07. Leverage Ratio. The ratio of
Consolidated Debt to Consolidated Capitalization shall not
exceed (i) 0.60:1 on any day prior to April 1, 1995 or (ii)
0.50:1 on April 1, 1995 or any day thereafter; provided that
the foregoing permitted ratio shall be reduced prior to
April 1, 1995 to (x) 0.55:1 if and when Adjusted
Consolidated Net Worth shall be increased, on a cumulative
basis after September 30, 1993, by more than $150,000,000 as
a result of the issuance or sale of equity by the Company
and (y) 0.50:1 if and when Adjusted Consolidated Net Worth
shall be increased, on a cumulative basis after September
30, 1993, by more than $300,000,000 as a result of the
issuance or sale of equity by the Company.
SECTION 5.08. Negative Pledge. After the date of
this Agreement, the Company will not, and will not permit
any Subsidiary to, create, assume or suffer to be created
any Lien on any asset now owned or hereafter acquired by it,
except:
(a) any Lien existing on any asset of any
corporation at the time such corporation becomes a
Subsidiary and not created in contemplation of such
event;
(b) any Lien on any asset securing Debt incurred
or assumed for the purpose of financing all or any part
of the cost of acquiring such asset, provided that such
Lien attaches to such asset concurrently with or within
90 days after the acquisition thereof;
(c) any Lien on any asset of any corporation
existing at the time such corporation is merged or
consolidated with or into the Company or a Subsidiary
and not created in contemplation of such event;
(d) any Lien existing on any asset prior to the
acquisition thereof by the Company or a Subsidiary and
not created in contemplation of such acquisition;
(e) any Lien arising out of the refinancing,
extension, renewal or refunding of any Debt secured by
any Lien permitted by any of the foregoing clauses of
this Section, provided that such Debt is not increased
and is not secured by any additional assets;
(f) Liens arising in the ordinary course of its
business which (i) do not secure Debt and (ii) do not
secure any single obligation (or any group of related
obligations) in an amount exceeding $100,000,000; and
(g) Liens not otherwise permitted by the
foregoing clauses of this Section securing Debt in an
aggregate principal amount at any time outstanding not
to exceed 10% of Adjusted Consolidated Net Worth.
SECTION 5.09. Consolidations, Mergers and Sales
of Assets. The Company will not (i) consolidate with or
merge into any other Person or (ii) sell, lease or otherwise
transfer or permit any of its Subsidiaries to sell, lease or
otherwise transfer, directly or indirectly, all or
substantially all of the assets of the Company and its
Subsidiaries, taken as a whole, to any other Person;
provided that nothing in this Section 5.09 shall prohibit
the Company from consolidating with or merging into another
Person if:
(i) immediately after such consolidation or
merger substantially all the shares of stock of the
surviving company are owned by the former stockholders
of the Company;
(ii) immediately after such consolidation or
merger the corporation into which the Company shall
have been consolidated or merged shall not be in
default in the performance or observance of any of the
terms, covenants and conditions of this Agreement to be
kept or performed by the Company;
(iii) the corporation into which the Company shall
have been consolidated or merged shall be a corporation
organized under the laws of the United States of
America or any State thereof;
(iv) the due and punctual payment of the
principal of (and premium, if any) and interest on all
of the Loans according to their tenor and the due and
punctual performance and observance of all the
covenants and conditions of this Agreement to be
performed or observed by the Company, shall be
expressly assumed, pursuant to documentation in form
and substance satisfactory to the Agent, and executed
and delivered by the corporation into which the Company
shall have been consolidated or merged;
(v) immediately after such consolidation or
merger the chief financial officer or chief accounting
officer of the Company shall deliver to the Agent a
certificate stating that as of the time immediately
after the effective date of such consolidation or
merger the covenants of the Company contained in this
Section 5.09 have been complied with and the successor
corporation is not in Default under the provisions of
this Agreement; and
(vi) immediately after such merger the Company
shall have delivered to the Agent an opinion of counsel
reasonably satisfactory to the Agent to the effect that
the conditions set forth in this Section 5.09 have been
met.
SECTION 5.10. Use of Proceeds. The proceeds of
the Loans made under this Agreement will be used by the
Borrowers for their general corporate or partnership
purposes and the financing of acquisitions. None of such
proceeds will be used in violation of any applicable law or
regulation.
SECTION 5.11. Subsidiary Guaranty. The Company
has advised the Banks that the assets acquired in the
Westinghouse DCBU Acquisition, certain other assets of the
Company and/or its Subsidiaries relating to their Industrial
Control and Power Distribution business and the related
marketing and sales operations will be transferred to the
Subsidiary Guarantors. Substantially concurrently with
transferring or causing such assets to be transferred to the
Subsidiary Guarantors, the Company will cause each
Subsidiary Guarantor to (i) in consideration of such
transfer of assets to it, execute a Subsidiary Guaranty and
deliver it to the Agent, (ii) execute a contribution
agreement among the Subsidiary Guarantors in form and
substance reasonably satisfactory to the Agent and (iii)
deliver to the Agent an opinion of counsel for such
Subsidiary Guarantor, substantially in the form of Exhibit K
hereto.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more
of the following events ("Events of Default") shall have
occurred and be continuing:
(a) any principal of any Loan shall not be paid
when due or any interest on any Loan, any fees or any
other amount payable hereunder shall not be paid within
five Domestic Business Days after the due date thereof;
(b) the Company shall fail (i) to observe or
perform any covenant contained in Section 5.07 or 5.08
for 30 days after a financial officer of the Company
shall become aware of such failure or (ii) to observe
or perform any covenant contained in Section 5.09, 5.10
or 5.11;
(c) any Borrower shall fail to observe or perform
any covenant or agreement contained in this Agreement
(other than those covered by clause (a) or (b) above)
for 30 days after written notice thereof has been given
to the Company by the Agent at the request of any Bank;
(d) any representation, warranty, certification
or statement made by any Borrower in this Agreement or
by a Subsidiary Guarantor in its Subsidiary Guaranty or
by any Borrower in any certificate, financial statement
or other document delivered pursuant to this Agreement
or by a Subsidiary Guarantor in any certificate or
other document delivered pursuant to its Subsidiary
Guaranty shall prove to have been incorrect (in any
respect that is material in relation to any Bank's
decision to take or refrain from taking any action
requested by the Company or to exercise or refrain from
exercising any remedy under this Article VI) when made
or deemed made;
(e) the Company or any Subsidiary shall fail to
make any payment in respect of any Material Debt when
due or within any applicable grace period;
(f) any event or condition shall occur which (i)
results in the acceleration of the maturity of any
Material Debt or (ii) any applicable grace period
having expired, permits the holder of such Debt or any
Person acting on such holder's behalf to accelerate the
maturity thereof; provided that this clause (f) shall
not apply to (x) any voluntary call or voluntary
prepayment of any Debt by the Company or the relevant
Subsidiary, (y) the right of the holders of the
Company's 8% Debentures due August 15, 2006 to request,
during the period from June 15, 1996 to July 15, 1996,
inclusive, repayment of such debentures, in accordance
with the terms of such debentures, or the exercise of
such right by any such holder or (z) the right of the
holders of notes issued by the Eaton Corporation Share
Purchase and Investment Plan Trust and guaranteed by
the Company to require the Company to purchase such
notes upon the occurrence of a "Debt Downgrade", as
defined in Exhibit L, or the exercise of such right by
any such holder;
(g) one or more of the Company and its
Subsidiaries (except Insignificant Subsidiaries) shall
commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar
official of it or any substantial part of its property,
or shall consent to any such relief or to the
appointment of or taking possession by any such
official in an involuntary case or other proceeding
commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the
foregoing;
(h) an involuntary case or other proceeding shall
be commenced against one or more of the Company and its
Subsidiaries (except Insignificant Subsidiaries)
seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar
official of it or any substantial part of its property,
and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60
days; or an order for relief shall be entered against
one or more of the Company and its Subsidiaries (except
Insignificant Subsidiaries) under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to
pay when due (after taking into account any approved
and granted payment date extensions) an amount or
amounts aggregating in excess of $50,000,000 which it
shall have become liable to pay under Title IV of
ERISA; or notice of intent to terminate a Material Plan
shall be filed under Section 4041(c) of ERISA by any
member of the ERISA Group, any plan administrator or
any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer any Material
Plan; or a condition shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating
that any Material Plan must be terminated; or there
shall occur a complete or partial withdrawal from, or a
default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans
which could cause one or more members of the ERISA
Group to incur a current payment obligation in excess
of $50,000,000;
(j) a judgment or order for the payment of money
in excess of $50,000,000 shall be rendered against the
Company or any Subsidiary and such judgment or order
shall continue unsatisfied and unstayed for a period of
30 days; or
(k) any person or group of persons (within the
meaning of Section 13 or 14 of the Securities Exchange
Act of 1934, as amended) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said
Act) of 35% or more of the outstanding shares of common
stock of the Company; or, during any period of 12
consecutive calendar months, individuals who were
directors of the Company on the first day of such
period shall cease to constitute a majority of the
board of directors of the Company;
then, and in every such event, the Agent shall (i) if
requested by Banks having more than 50% in aggregate amount
of the Commitments, by notice to the Borrowers terminate the
Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in
aggregate principal amount of the Loans, by notice to the
Borrowers declare the Notes (together with accrued interest
thereon) to be, and the Notes shall thereupon become,
immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby
waived by each Borrower; provided that in the case of any of
the Events of Default specified in clause (g) or (h) above
with respect to the Company, without any notice to any
Borrower or any other act by the Agent or the Banks, the
Commitments shall thereupon terminate and the Notes
(together with accrued interest thereon) shall become
immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby
waived by each Borrower.
SECTION 6.02. Notice of Default. The Agent shall
give notice to the Company under Section 6.01(c) promptly
upon being requested to do so by any Bank and shall
thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization.
Each Bank irrevocably appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such
powers under this Agreement and the Notes as are delegated
to the Agent by the terms hereof or thereof, together with
all such powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan
Guaranty Trust Company of New York shall have the same
rights and powers under this Agreement as any other Bank and
may exercise or refrain from exercising the same as though
it were not the Agent, and Morgan Guaranty Trust Company of
New York and its affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with
the Company or any Subsidiary or affiliate of the Company as
if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations
of the Agent hereunder are only those expressly set forth
herein. Without limiting the generality of the foregoing,
the Agent shall not be required to take any action with
respect to any Default, except as expressly provided in
Article VI.
SECTION 7.04. Consultation with Experts. The
Agent may consult with legal counsel (who may be counsel for
any Borrower), independent public accountants and other
experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or
experts.
SECTION 7.05. Liability of Agent. Neither the
Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be liable for
any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks
or (ii) in the absence of its own gross negligence or
willful misconduct. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers,
agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this
Agreement or any borrowing hereunder; (ii) the performance
or observance of any of the covenants or agreements of any
Borrower; (iii) the satisfaction of any condition specified
in Article III, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness
or genuineness of this Agreement (except with respect to the
Agent in its capacity as such), the Notes or any other
instrument or writing furnished in connection herewith. The
Agent shall not incur any liability by acting in reliance
upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile
transmission or similar writing) believed by it to be
genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall,
ratably in accordance with its Commitment, indemnify the
Agent, its affiliates and their respective directors,
officers, agents and employees (to the extent not reimbursed
by the Borrowers) against any cost, expense (including
reasonable counsel fees and disbursements), claim, demand,
action, loss or liability (except such as result from such
indemnitees' gross negligence or willful misconduct) that
such indemnitees may suffer or incur in connection with this
Agreement or any action taken or omitted by such indemnitees
hereunder.
SECTION 7.07. Credit Decision. Each Bank
acknowledges that it has, independently and without reliance
upon the Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the 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 decisions in taking or not taking any action
under this Agreement.
SECTION 7.08. Successor Agent. The Agent may
resign at any time by giving notice thereof to the Banks and
the Company. Upon any such resignation, the Required Banks
shall have the right, after consultation with the Company,
to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Required Banks, and shall have
accepted such appointment, within 30 days after the retiring
Agent gives notice of resignation, then the retiring Agent
may, on behalf of the Banks, appoint a successor Agent,
which shall be a commercial bank organized or licensed under
the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at
least $50,000,000. Upon the acceptance of its appointment
as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all
the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this
Article shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent.
SECTION 7.09. Agent's Fee. The Company shall pay
to the Agent for its own account fees in the amounts and at
the times previously agreed upon between the Company and the
Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of
any Interest Period for any Fixed Rate Borrowing:
(a) the Agent is advised by the Reference Banks
that deposits in dollars (in the applicable amounts)
are not being offered to the Reference Banks in the
relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks
having 50% or more of the aggregate amount of the
Commitments advise the Agent that the Adjusted CD Rate
or the London Interbank Offered Rate, as the case may
be, as determined by the Agent will not adequately and
fairly reflect the cost to such Banks of funding their
CD Loans or Euro-Dollar Loans, as the case may be, for
such Interest Period,
the Agent shall forthwith give notice thereof to the
Borrowers and the Banks, whereupon until the Agent notifies
the Borrowers that the circumstances giving rise to such
suspension no longer exist, the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be,
shall be suspended. Unless the relevant Borrower notifies
the Agent at least two Domestic Business Days before the
date of any Fixed Rate Borrowing for which a Notice of
Borrowing has previously been given that it elects not to
borrow on such date, (i) if such Fixed Rate Borrowing is a
Committed Borrowing, such Borrowing shall instead be made as
a Base Rate Borrowing and (ii) if such Fixed Rate Borrowing
is a Money Market LIBOR Borrowing, the Money Market LIBOR
Loans comprising such Borrowing shall bear interest for each
day from and including the first day to but excluding the
last day of the Interest Period applicable thereto at the
Base Rate for such day.
SECTION 8.02. Illegality. If, on or after the
date of this Agreement, the adoption of any applicable law,
rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by
any Bank (or its Euro-Dollar Lending Office) with any
request or directive (whether or not having the force of
law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for any Bank (or
its Euro-Dollar Lending Office) to make, maintain or fund
its Euro-Dollar Loans to any Borrower and such Bank shall so
notify the Agent, the Agent shall forthwith give notice
thereof to the other Banks and the relevant Borrower,
whereupon until such Bank notifies the relevant Borrower and
the Agent that the circumstances giving rise to such
suspension no longer exist, the obligation of the relevant
Bank to make Euro-Dollar Loans to such Borrower shall be
suspended. Before giving any notice to the Agent pursuant
to this Section, such Bank shall designate a different
Euro-Dollar Lending Office if such designation will avoid
the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such
Bank. If such Bank shall determine that it may not lawfully
continue to maintain and fund any of its outstanding
Euro-Dollar Loans to the relevant Borrower to maturity and
shall so specify in such notice, such Borrower shall
immediately prepay in full the then outstanding principal
amount of each such Euro-Dollar Loan, together with accrued
interest thereon. Concurrently with prepaying each such
Euro-Dollar Loan, such Borrower shall borrow a Base Rate
Loan in an equal principal amount from such Bank (on which
interest and principal shall be payable contemporaneously
with the related Euro-Dollar Loans of the other Banks), and
such Bank shall make such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return.
(a) If on or after (x) the date hereof, in the case of any
Committed Loan or any obligation to make Committed Loans or
(y) the date of the related Money Market Quote, in the case
of any Money Market Loan, the adoption of any applicable
law, rule or regulation, or any change in any applicable
law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by
any Bank (or its Applicable Lending Office) with any request
or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency shall
impose, modify or deem applicable any reserve (including,
without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but
excluding (i) with respect to any CD Loan, any such
requirement included in an applicable Domestic Reserve
Percentage and (ii) with respect to any Euro-Dollar Loan,
any such requirement with respect to which such Bank is
entitled to compensation during the relevant Interest Period
under Section 2.15), special deposit, insurance assessment
(excluding, with respect to any CD Loan, any such
requirement reflected in an applicable Assessment Rate) or
similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or
its Applicable Lending Office) or on the United States
market for certificates of deposit or the London interbank
market any other condition affecting its Fixed Rate Loans,
its Note or its obligation to make Fixed Rate Loans and the
result of any of the foregoing is to increase the cost to
such Bank (or its Applicable Lending Office) of making or
maintaining any Fixed Rate Loan to any Borrower, or to
reduce the amount of any sum received or receivable by such
Bank (or its Applicable Lending Office) under this Agreement
or under its Note with respect thereto, by an amount deemed
by such Bank to be material, then, within 15 days after
demand by such Bank (with a copy to the Agent), the Company
shall pay to such Bank such additional amount or amounts as
will compensate such Bank for such increased cost or
reduction.
(b) If any Bank shall have determined that, after
the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any
such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with
the interpretation or administration thereof, or any request
or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank
or comparable agency (including any determination by any
such authority, central bank or comparable agency that for
purposes of capital adequacy requirements, the Commitments
hereunder do not constitute commitments with an original
maturity of one year or less), has or would have the effect
of reducing the rate of return on capital of such Bank (or
its Parent) as a consequence of such Bank's obligations
hereunder to a level below that which such Bank (or its
Parent) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, within 15
days after demand by such Bank (with a copy to the Agent),
the Company shall pay to such Bank such additional amount or
amounts as will compensate such Bank (or its Parent) for
such reduction.
(c) Each Bank will promptly notify the Company
and the Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such
Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. A
certificate of any Bank claiming compensation under this
Section and setting forth the additional amount or amounts
to be paid to it hereunder shall be conclusive in the
absence of manifest error. In determining such amount, such
Bank may use any reasonable averaging and attribution
methods.
SECTION 8.04. Taxes. (a) Any and all payments
by any Borrower to or for the account of any Bank or the
Agent hereunder or under any Note shall be made free and
clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank and the Agent, taxes
imposed on its income, and franchise taxes imposed on it, by
the jurisdiction under the laws of which such Bank or the
Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Bank, taxes
imposed on its income, and franchise or similar taxes
imposed on it, by the jurisdiction of such Bank's Applicable
Lending Office or any political subdivision thereof (all
such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If any Borrower shall
be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or under any Note to any Bank or
the Agent, (i) the sum payable shall be increased as
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 8.04) such Bank or the Agent (as the case
may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such
Borrower shall make such deductions, (iii) such Borrower
shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable
law and (iv) such Borrower shall furnish to the Agent, at
its address specified in or pursuant to Section 11.01, the
original or a certified copy of a receipt evidencing payment
thereof.
(b) In addition, each Borrower agrees to pay any
present or future stamp or documentary taxes and any other
excise or property taxes, or charges or similar levies which
arise from any payment made by it hereunder or under any of
its Notes or, in the case of the Company, from the execution
or delivery of, or otherwise with respect to, this Agreement
or any Note (hereinafter referred to as "Other Taxes").
(c) The Company agrees to indemnify each Bank and
the Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable
under this Section 8.04) paid by such Bank or the Agent (as
the case may be) and any liability (including penalties,
interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 30 days
from the date such Bank or the Agent (as the case may be)
makes demand therefor, setting forth a complete explanation
and calculation thereof. If any such indemnification is
made, such Bank will, at the Company's reasonable request
and expense, contest such Taxes and Other Taxes in good
faith; provided that such Bank shall not be required to
continue any such contest if in the opinion of its counsel
there is both (i) a reasonable doubt that such contest will
be successful and (ii) a reasonable possibility that the
continuation thereof will adversely affect the resolution of
other tax issues affecting such Bank. If any such contest
is successful, such Bank will remit to the relevant Borrower
the amount recovered (but not more than the amount of the
indemnification paid by such Borrower).
(d) Each Bank organized under the laws of a
jurisdiction outside the United States, on or prior to the
date of its execution and delivery of this Agreement in the
case of each Bank listed on the signature pages hereof and
on or prior to the date on which it becomes a Bank in the
case of each other Bank, and from time to time thereafter if
requested in writing by any Borrower (but only so long as
such Bank remains lawfully able to do so), shall provide
such Borrower with Internal Revenue Service form 1001 or
4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Bank is
entitled to benefits under an income tax treaty to which the
United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that
the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or
business in the United States. For any period with respect
to which a Bank has failed to provide Borrower with the
appropriate form pursuant to this Section 8.04(d),
withholding tax will be considered excluded from "Taxes" as
defined in Section 8.04(a). If the form provided by a Bank
at the time such Bank first becomes a party to this
Agreement indicates a United States interest withholding tax
rate in excess of zero, withholding tax at such rate shall
be considered excluded from "Taxes" as defined in Section
8.04(a).
(e) For any period with respect to which a Bank
has failed to provide the Company or a requesting Borrower
with the appropriate form pursuant to Section 8.04(d)
(unless such failure is due to a change in treaty, law or
regulation occurring subsequent to the date on which a form
originally was required to be provided), such Bank shall not
be entitled to indemnification under Section 8.04(a) with
respect to Taxes imposed by the United States; provided,
however, that should a Bank, which is otherwise exempt from
or subject to a reduced rate of withholding tax, become
subject to Taxes because of its failure to deliver a form
required hereunder, the relevant Borrower shall take such
steps as such Bank shall reasonably request to assist such
Bank to recover such Taxes.
(f) If any Borrower is required to pay additional
amounts to or for the account of any Bank pursuant to this
Section 8.04, then such Bank will change the jurisdiction of
its Applicable Lending Office so as to eliminate or reduce
any such additional payment which may thereafter accrue if
such change, in the judgment of such Bank, is not otherwise
disadvantageous to such Bank.
SECTION 8.05. Base Rate Loans Substituted for
Affected Fixed Rate Loans. If (i) the obligation of any
Bank to make Euro-Dollar Loans to any Borrower has been
suspended pursuant to Section 8.02 or (ii) any Bank has
demanded compensation under Section 8.03 or 8.04 from any
Borrower with respect to its CD Loans or Euro-Dollar Loans
and such Borrower shall, by at least five Euro-Dollar
Business Days' prior notice to such Bank through the Agent,
have elected that the provisions of this Section shall apply
to such Bank, then, unless and until such Bank notifies such
Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer exist:
(a) all Loans of such Bank to such Borrower which
would otherwise be made by such Bank as CD Loans or
Euro-Dollar Loans, as the case may be, shall be made
instead as Base Rate Loans (on which interest and
principal shall be payable contemporaneously with the
related Fixed Rate Loans of the other Banks), and
(b) after each of its CD Loans or Euro-Dollar
Loans, as the case may be, to such Borrower has been
repaid, all payments of principal which would otherwise
be applied to repay such Fixed Rate Loans shall be
applied to repay its Base Rate Loans instead.
SECTION 8.06. Substitution of Bank. If (i) the
obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has
demanded compensation under Section 8.03 or 8.04, the
Company shall have the right, with the assistance of the
Agent, to seek a mutually satisfactory substitute bank or
banks ("Substitute Banks") (which may be one or more of the
Banks) to purchase the Committed Loans and assume the
Commitment of such Bank (the "Exiting Bank"). The Exiting
Bank shall, upon reasonable notice and payment to it of the
purchase price agreed between it and the Substitute Bank or
Banks (or, failing such agreement, a purchase price equal to
the outstanding principal amount of its Committed Loans and
interest accrued thereon to but excluding the date of
payment), assign all of its rights and obligations under
this Agreement and the Notes (including its Commitment but
excluding its Money Market Loans, if any, unless it
otherwise agrees) to the Substitute Bank or Banks, and the
Substitute Bank or Banks shall assume such rights and
obligations, in accordance with Section 11.06(c) hereof. In
connection with any such sale, the relevant Borrowers shall
compensate the Exiting Bank for any funding losses as
provided in Section 2.13 and the Company shall pay to the
Exiting Bank its facility fee accrued to but excluding the
date of such sale.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
OF ELIGIBLE SUBSIDIARIES
Each Eligible Subsidiary shall, by signing and
delivering its Election to Participate, represent and
warrant as of the date thereof that:
SECTION 9.01. Corporate or Partnership Existence
and Power. It is a corporation duly incorporated or a
partnership duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation
or organization and is, and at the time of each borrowing by
it hereunder will be, a Wholly-Owned Consolidated Subsidiary
of the Company.
SECTION 9.02. Corporate or Partnership and
Governmental Authorization; No Contravention. The execution
and delivery by it of its Election to Participate and its
Notes, and the performance by it of its obligations under
this Agreement and its Notes, are within its corporate or
partnership powers, have been duly authorized by all
necessary corporate or partnership action, require no action
by or in respect of, or filing with, any governmental body,
agency or official and do not contravene, or constitute a
default under, any provision of applicable law or regulation
or of its certificate of incorporation or partnership
agreement or by-laws, if any, or of any agreement, judgment,
injunction, order, decree or other instrument binding upon
the Company or such Eligible Subsidiary or result in the
creation or imposition of any Lien on any asset of the
Company or any of its Subsidiaries.
SECTION 9.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of such Eligible
Subsidiary and its Notes, when executed and delivered in
accordance with this Agreement, will constitute valid and
binding obligations of such Eligible Subsidiary, in each
case enforceable in accordance with its terms, except as may
be limited by (i) bankruptcy, insolvency or other similar
laws affecting the rights and remedies of creditors
generally and (ii) general principles of equity.
SECTION 9.04. Taxes. Except as disclosed in its
Election to Participate, there are no Taxes or Other Taxes
imposed by any country, or any taxing authority thereof or
therein, in the nature of withholding or otherwise, which
are imposed on any payment to be made by such Eligible
Subsidiary pursuant to this Agreement or its Notes, or are
imposed on or by virtue of the execution, delivery or
enforcement of its Election to Participate or its Notes.
ARTICLE X
GUARANTY
SECTION 10.01. The Guaranty. The Company hereby
unconditionally guarantees the full and punctual payment
(whether at stated maturity, upon acceleration or otherwise)
of the principal of and interest on each Note issued by any
Eligible Subsidiary pursuant to this Agreement, and the full
and punctual payment of all other amounts payable by any
Eligible Subsidiary under this Agreement. Upon failure by
any Eligible Subsidiary to pay punctually any such amount,
the Company shall forthwith on demand pay the amount not so
paid at the place and in the manner specified in this
Agreement.
SECTION 10.02. Guaranty Unconditional. The
obligations of the Company under this Article X shall be
unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement,
compromise, waiver or release in respect of any
obligation of any Eligible Subsidiary under this
Agreement or any Note, by operation of law or
otherwise;
(ii) any modification or amendment of or
supplement to this Agreement or any Note;
(iii) any release, impairment, non-perfection or
invalidity of any direct or indirect security for any
obligation of any Eligible Subsidiary under this
Agreement or any Note;
(iv) any change in the corporate or partnership
existence, structure or ownership of any Eligible
Subsidiary, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting
any Eligible Subsidiary or its assets or any resulting
release or discharge of any obligation of any Eligible
Subsidiary contained in this Agreement or any Note;
(v) the existence of any claim, set-off or other
rights which the Company may have at any time against
any Eligible Subsidiary, the Agent, any Bank or any
other Person, whether in connection herewith or any
unrelated transactions, provided that nothing herein
shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating
to or against any Eligible Subsidiary for any reason of
this Agreement or any Note, or any provision of
applicable law or regulation purporting to prohibit the
payment by any Eligible Subsidiary of the principal of
or interest on any Note or any other amount payable by
it under this Agreement; or
(vii) any other act or omission to act or delay of
any kind by any Eligible Subsidiary, the Agent, any
Bank or any other Person or any other circumstance
whatsoever which might, but for the provisions of this
clause (vii), constitute a legal or equitable discharge
of the Company's obligations hereunder.
SECTION 10.03. Discharge Only Upon Payment In
Full; Reinstatement In Certain Circumstances. The Company's
obligations under this Article X shall remain in full force
and effect until the Commitments shall have terminated and
the principal of and interest on the Notes of each Eligible
Subsidiary and all other amounts payable by each Eligible
Subsidiary under this Agreement shall have been paid in
full. If at any time any payment of the principal of or
interest on any Note of any Eligible Subsidiary or any other
amount payable by any Eligible Subsidiary under this
Agreement is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization
of such Eligible Subsidiary or otherwise, the Company's
obligations under this Article X with respect to such
payment shall be reinstated at such time as though such
payment had been due but not made at such time.
SECTION 10.04. Waiver by the Company. The
Company irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not provided for herein, as
well as any requirement that at any time any action be taken
by any Person against any Eligible Subsidiary or any other
Person.
SECTION 10.05. Subrogation. The Company
irrevocably waives any and all rights to which it may be
entitled, by operation of law or otherwise, upon making any
payment pursuant to this Article X, to be subrogated to the
rights of the payee against an Eligible Subsidiary with
respect to such payment or against any direct or indirect
security therefor, or otherwise to be reimbursed,
indemnified or exonerated by or for the account of an
Eligible Subsidiary in respect thereof.
SECTION 10.06. Stay of Acceleration. If
acceleration of the time for payment of any amount payable
by any Eligible Subsidiary under this Agreement or its Notes
is stayed upon the insolvency, bankruptcy or reorganization
of such Eligible Subsidiary, all such amounts otherwise
subject to acceleration under the terms of this Agreement
shall nonetheless be payable by the Company hereunder
forthwith on demand by the Agent made at the request of the
Required Banks.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices. All notices, requests
and other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission
or similar writing) and shall be given to such party:
(w) in the case of the Company or the Agent, at its address
or telex or facsimile transmission number set forth on the
signature pages hereof, (x) in the case of any Eligible
Subsidiary, at its address or telex or facsimile
transmission number set forth in its Election to
Participate, (y) in the case of any Bank, at its address or
telex or facsimile transmission number set forth in its
Administrative Questionnaire or (z) in the case of any
party, such other address or telex or facsimile transmission
number as such party may hereafter specify for the purpose
by notice to the Agent and the Company. Each such notice,
request or other communication shall be effective (i) if
given by telex, when such telex is transmitted to the telex
number specified in or pursuant to this Section and the
appropriate answerback is received, (ii) if given by mail,
72 hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid or
(iii) if given by any other means, when delivered at the
address specified in or pursuant to this Section; provided
that notices to the Agent under Article II or Article VIII
shall not be effective until received.
SECTION 11.02. No Waivers. No failure or delay
by the Agent or any Bank in exercising any right, power or
privilege hereunder or under any Note shall operate as a
waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.
SECTION 11.03. Expenses; Indemnification.
(a) The Company shall pay (i) all out-of-pocket expenses of
the Agent, including fees and disbursements of special
counsel for the Agent, in connection with the preparation
and administration of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged
Default hereunder and (ii) if an Event of Default occurs,
all out-of-pocket expenses incurred by the Agent and each
Bank, including fees and disbursements of counsel, in
connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.
(b) The Borrowers agree jointly and severally to
indemnify the Agent and each Bank, their respective
affiliates and the respective directors, officers, agents
and employees of the foregoing (each an "Indemnitee") and
hold each Indemnitee harmless from and against any and all
liabilities, losses, damages, costs and expenses of any
kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such
Indemnitee in connection with any investigative,
administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of this Agreement or
any actual or proposed use of proceeds of Loans hereunder;
provided that no Indemnitee shall have the right to be
indemnified hereunder for (i) such Indemnitee's own gross
negligence or willful misconduct as determined by a court of
competent jurisdiction, (ii) any breach by such Indemnitee
of a contract between such Indemnitee and a third party,
(iii) any misrepresentation by such Indemnitee to a third
party, except to the extent that such misrepresentation is
based on information supplied by the Company or any of its
Subsidiaries, (iv) any claim by any Bank against the Agent
or another Bank, or any claim by the Agent against any Bank,
except to the extent that such claim is based on actions
taken or not taken in reliance on information supplied or
actions taken by the Company or any of its Subsidiaries or
(v) any settlement of any investigative, administrative or
judicial proceeding entered into without the consent of the
Company, which consent will not be unreasonably withheld.
At its own expense, each Borrower shall have the right to
participate in (but not control) the defense of any action
with respect to which it may have an indemnity obligation
hereunder.
SECTION 11.04. Sharing of Set-Offs. Each Bank
agrees that if it shall, by exercising any right of set-off
or counterclaim or otherwise, receive payment of a
proportion of the aggregate amount of principal and interest
due with respect to any Note of any Borrower held by it
which is greater than the proportion received by any other
Bank in respect of the aggregate amount of principal and
interest due with respect to any Note of such Borrower held
by such other Bank, the Bank receiving such proportionately
greater payment shall purchase such participations in the
Notes of such Borrower held by the other Banks, and such
other adjustments shall be made, as may be required so that
all such payments of principal and interest with respect to
the Notes of such Borrower held by the Banks (including any
payments by Subsidiary Guarantors) shall be shared by the
Banks pro rata; provided that nothing in this Section shall
impair the right of any Bank to exercise any right of
set-off or counterclaim it may have and to apply the amount
subject to such exercise to the payment of indebtedness or
other obligations of the relevant Borrower or Subsidiary
Guarantor other than its indebtedness under the Notes or its
guaranty of such indebtedness. Each Borrower agrees, to the
fullest extent it may effectively do so under applicable
law, that any holder of a participation in a Note of such
Borrower, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim
and other rights with respect to such participation as fully
as if such holder of a participation were a direct creditor
of such Borrower in the amount of such participation.
SECTION 11.05. Amendments and Waivers. Any
provision of this Agreement, the Notes or any Subsidiary
Guaranty may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the
Company (or the relevant Subsidiary Guarantor, in the case
of a Subsidiary Guaranty) and by the Required Banks (and, if
the rights or duties of the Agent are affected thereby, by
the Agent); provided that no such amendment or waiver shall,
unless signed by all the Banks, (i) increase or decrease the
Commitment of any Bank (except for a ratable decrease in the
Commitments of all Banks) or subject any Bank to any
additional obligation, (ii) reduce the principal of or rate
of interest on any Loan or any fees hereunder, (iii)
postpone the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder or for the
termination of any Commitment, (iv) change the percentage of
the Commitments or of the aggregate unpaid principal amount
of the Notes, or the number of Banks, which shall be
required for the Banks or any of them to take any action
under this Section or any other provision of this Agreement,
(v) release the Company from any of its obligations as
guarantor under Section 10.01 or (vi) release any Subsidiary
Guarantor from any of its obligations as guarantor under
Section 2 of its Subsidiary Guaranty; and provided further
that no such amendment, waiver or modification shall, unless
signed by an Eligible Subsidiary, (w) subject such Eligible
Subsidiary to any additional obligation, (x) increase the
principal of or rate of interest on any outstanding Loan of
such Eligible Subsidiary, (y) accelerate the stated maturity
of any outstanding Loan of such Eligible Subsidiary or (z)
change this proviso.
SECTION 11.06. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns, except that (i) no Borrower may
assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all Banks,
and (ii) no Bank may assign or transfer any of its rights
under this Agreement except in accordance with the terms of
this Section.
(b) Any Bank may at any time grant to one or more
banks or other institutions (each a "Participant")
participating interests in its Commitment or any or all of
its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon
notice to the Borrowers and the Agent, such Bank shall
remain responsible for the performance of its obligations
hereunder, and the Borrowers and the Agent shall continue to
deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement.
Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the
obligations of the Borrowers hereunder including, without
limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that
such participation agreement may provide that such Bank will
not agree to any modification, amendment or waiver of this
Agreement described in clause (i), (ii) or (iii) of Section
11.05 without the consent of the Participant. The Borrowers
agree that each Participant shall, to the extent provided in
its participation agreement, be entitled to the benefits of
Section 2.15 and Article VIII with respect to its
participating interest. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall
be given effect for purposes of this Agreement only to the
extent of a participating interest granted in accordance
with this subsection (b).
(c) Any Bank may at any time assign to one or
more banks or other institutions (each an "Assignee") all,
or a proportionate part of all, of its rights and
obligations under this Agreement and the Notes, and each
such Assignee shall assume such rights and obligations (or a
proportionate part thereof), pursuant to an Assignment and
Assumption Agreement in substantially the form of Exhibit M
hereto executed by such Assignee and such transferor Bank,
with (and subject to) the subscribed consent of the Company
and the Agent (such consent by the Agent not to be
unreasonably withheld); provided that (i) the amount
assigned to each Assignee which was not theretofore a Bank
shall be at least $10,000,000, (ii) if an Assignee is an
affiliate of such transferor Bank having a rating of BBB+ or
higher, or Baa1 or higher, by any two of S&P, Moody's and
Duff and Phelps Credit Rating Company, no such consent shall
be required and (iii) any such assignment may, but need not,
include rights of the transferor Bank in respect of
outstanding Money Market Loans. Upon execution and delivery
of such instrument and payment by the Assignee to such
transferor Bank of the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a
Bank party to this Agreement and shall have all the rights
and obligations of a Bank with a Commitment as set forth in
such instrument of assumption, and the transferor Bank shall
be released from its obligations hereunder to a
corresponding extent, and no further consent or action by
any party shall be required. Upon the consummation of any
assignment pursuant to this subsection (c), the transferor
Bank, the Agent and the Borrowers shall make appropriate
arrangements so that, if required, new Notes are issued to
the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Agent an administrative fee
for processing such assignment in the amount of $2,500. If
the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall
deliver to the Company and the Agent certification as to
exemption from deduction or withholding of any United States
federal income taxes in accordance with Section 8.04.
(d) Any Bank may at any time assign all or any
portion of its rights under this Agreement and its Note to a
Federal Reserve Bank. No such assignment shall release the
transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee
of any Bank's rights shall be entitled to receive any
greater payment under Section 8.03 or 8.04 than such Bank
would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the
Company's prior written consent or by reason of the
provisions of Section 8.02, 8.03 or 8.04 requiring such Bank
to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances
giving rise to such greater payment did not exist.
SECTION 11.07. Collateral. Each of the Banks
represents to the Agent and each of the other Banks that it
in good faith is not relying upon any "margin stock" (as
defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 11.08. Governing Law; Submission to
Jurisdiction. This Agreement and each Note shall be
governed by and construed in accordance with the laws of the
State of New York. Each Borrower hereby submits to the
nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New
York State court sitting in New York City for purposes of
all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. Each
Borrower irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to
the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought
in such a court has been brought in an inconvenient forum.
SECTION 11.09. Counterparts; Integration;
Effectiveness. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement and the
Confidentiality Agreements constitute the entire agreement
and understanding among the parties hereto and supersede any
and all other prior agreements and understandings, oral or
written, relating to the subject matter hereof. This
Agreement shall become effective upon receipt by the Agent
of counterparts hereof signed by each of the parties hereto
(or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the
Agent in form satisfactory to it of telegraphic, telex or
other written confirmation from such party of execution of a
counterpart hereof by such party).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the day and year first above
written.
EATON CORPORATION
By /s/ J. M. Carmont
Title: Vice President and
Treasurer
And by /s/ S. R. Hardis
Title: Vice Chairman and
Chief Financial and
Administrative Officer
Eaton Center
Cleveland, Ohio 44114-2584
Telex number: 687-3223
Facsimile transmission
number: 216-523-4787
<PAGE>
$37,500,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Timothy S. Broadbent
Title: Vice President
$37,500,000 J.P. MORGAN DELAWARE
By /s/ David J. Morris
Title: Vice President
$65,000,000 CHEMICAL BANK
By /s/ Rosemary Bradley
Title: Vice President
<PAGE>
Co-Agents
$55,000,000 BANKERS TRUST COMPANY,
as Bank and Co-Agent
By /s/ Edward G. Benedict
Title: Vice President
$55,000,000 CREDIT SUISSE,
as Bank and Co-Agent
By /s/ Christopher J. Eldin
Title: Member of Senior
Management
By /s/ William R. Ziglar
Title: Associate
$55,000,000 THE FIRST NATIONAL BANK OF
CHICAGO, as Bank and Co-Agent
By /s/ Marguerite C. Canestraro
Title: Vice President
<PAGE>
Co-Agents
$55,000,000 NATIONSBANK OF NORTH
CAROLINA, N.A.,
as Bank and Co-Agent
By /s/ Jay Johnston
Title: Vice President
$55,000,000 SOCIETY NATIONAL BANK,
as Bank and Co-Agent
By /s/ Helen W. France
Title: Vice President
<PAGE>
$35,000,000 DEUTSCHE BANK AG NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES
By /s/ Jeffrey N. Wieser
Title: Director
By /s/ Gregory M. Hill
Title: Vice President
$35,000,000 NATIONAL CITY BANK
By /s/ Robert C. Rowe
Title: Account Officer
$35,000,000 TRUST COMPANY BANK
By /s/ Ruth E. Whitner
Title: Banking Officer
By /s/ Deborah S. Armstrong
Title: Group Vice President
$35,000,000 WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK AND
CAYMAN ISLANDS BRANCHES
By /s/ Stephen W. Frey
Title: Vice President
By /s/ Karen E. Hoplock
Title: Associate
_________________
Total Commitments
$555,000,000
=================<PAGE>
AGENTS
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Timothy S. Broadbent
Title: Vice President
60 Wall Street
New York, New York 10260-0060
Attention: Timothy S. Broadbent
Telex number: 177615
Facsimile transmission
number: 212-648-5336
CHEMICAL BANK,
as Managing Agent
By /s/ Rosemary Bradley
Title: Vice President
270 Park Avenue
New York, New York 10017
Attention: Rosemary Bradley
Facsimile transmission
number: 212-972-9854
<PAGE>
EXHIBIT A
THE TRANSFER OR ASSIGNMENT OF THIS NOTE IS SUBJECT
TO THE RESTRICTIONS CONTAINED IN THE CREDIT
AGREEMENT REFERRED TO BELOW, INCLUDING (WITH
CERTAIN EXCEPTIONS) THE PRIOR CONSENT OF EATON
CORPORATION.
NOTE
New York, New York
, 199
For value received, [name of Borrower], a
[jurisdiction of incorporation or organization]
[corporation] [partnership] (the "Borrower"), promises to
pay to the order of
(the "Bank"), for the account of its Applicable Lending
Office, the unpaid principal amount of each Loan made by the
Bank to the Borrower pursuant to the Credit Agreement
referred to below on the last day of the Interest Period
relating to such Loan. The Borrower promises to pay
interest on the unpaid principal amount of each such Loan on
the dates and at the rate or rates provided for in the
Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States
in Federal or other immediately available funds at the
office of Morgan Guaranty Trust Company of New York, 60 Wall
Street, New York, New York.
All Loans made to the Borrower by the Bank, the
respective types and maturities thereof and all repayments
of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the
foregoing information with respect to each such Loan then
outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule
attached to and made a part hereof; provided that the
failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the
One Year Credit Agreement dated as of January 25, 1994 among
Eaton Corporation, the banks and Co-Agents listed on the
signature pages thereof, Chemical Bank, as Managing Agent,
and Morgan Guaranty Trust Company of New York, as Agent (as
the same may be amended from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used
herein with the same meanings. Reference is made to the
Credit Agreement for provisions for the prepayment hereof
and the acceleration of the maturity hereof.
The payment in full of the principal of and
interest on this note [(i) has been unconditionally
guaranteed by Eaton Corporation, pursuant to the provisions
of the Credit Agreement, and (ii)] has been or is to be
unconditionally guaranteed by one or more Subsidiaries of
Eaton Corporation.
[NAME OF BORROWER]
By________________________
Title:
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
_________________________________________________________________
_
Amount of
Amount of Type of Principal Maturity
Notation
Date Loan Loan Repaid Date Made
By
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
<PAGE>
EXHIBIT B
Form of Money Market Quote Request
[Date]
To: Morgan Guaranty Trust Company of New York
(the "Agent")
From: [Name of Borrower]
Re: One Year Credit Agreement (the "Credit
Agreement") dated as of January 25, 1994
among Eaton Corporation, the Banks and Co-
Agents listed on the signature pages thereof,
Chemical Bank, as Managing Agent, and the
Agent
We hereby give notice pursuant to Section 2.03 of
the Credit Agreement that we request Money Market Quotes for
the following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money
Market [Margin] [Absolute Rate]. [The applicable base rate
is the London Interbank Offered Rate.]
Terms used herein have the meanings assigned to
them in the Credit Agreement.
[NAME OF BORROWER]
By________________________
Title:
<PAGE>
EXHIBIT C
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes to [Name
of Borrower] (the "Borrower")
Pursuant to Section 2.03 of the One Year Credit
Agreement dated as of January 25, 1994 (the "Credit
Agreement") among Eaton Corporation, the Banks and Co-Agents
parties thereto, Chemical Bank, as Managing Agent, and the
undersigned, as Agent, we are pleased on behalf of the
Borrower to invite you to submit Money Market Quotes to the
Borrower for the following proposed Money Market
Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money
Market [Margin] [Absolute Rate]. [The applicable base rate
is the London Interbank Offered Rate.]
Any Bank making a Money Market Loan may be
required to refund such Loan under certain circumstances, as
provided in Section 2.03(h) of the Credit Agreement.
Please respond to this invitation by no later than
[2:00 P.M.] [9:15 A.M.] (New York City time) on [date].
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By______________________
Authorized Officer
<PAGE>
EXHIBIT D
Form of Money Market Quote
To: Morgan Guaranty Trust Company of New York,
as Agent
Re: Money Market Quote to [Name of Borrower]
(the "Borrower")
In response to your invitation on behalf of the
Borrower dated _____________, 19__, we hereby make the
following Money Market Quote on the following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the
following principal amounts, for the following Interest
Periods and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
$
$
[Provided, that the aggregate principal amount of Money
Market Loans for which the above offers may be accepted
shall not exceed $____________.]**
__________
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not
exceed principal amount requested. Specify aggregate
limitation if the sum of the individual offers exceeds the
amount the Bank is willing to lend. Bids must be made for
$5,000,000 or a larger multiple of $1,000,000.
(notes continued on following page)
We understand and agree that the offer(s) set
forth above, subject to the satisfaction of the applicable
conditions set forth in the One Year Credit Agreement dated
as of January 25, 1994 among Eaton Corporation, the Banks
and Co-Agents listed on the signature pages thereof,
Chemical Bank, as Managing Agent, and yourselves, as Agent,
irrevocably obligates us to make the Money Market Loan(s)
for which any offer(s) are accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
__________
*** Not less than one month or not less than 7 days, as
specified in the related Invitation. No more than five bids
are permitted for each Interest Period.
**** Margin over or under the London Interbank Offered Rate
determined for the applicable Interest Period. Specify
percentage (to the nearest 1/10,000 of 1%) and specify
whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest
1/10,000 of 1%).
EXHIBIT E
OPINION OF
COUNSEL FOR THE COMPANY
To the Banks, the Co-Agents,
the Managing Agent and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
I am the Executive Vice President and General
Counsel of Eaton Corporation (the "Company") and have acted
as such in connection with the One Year Credit Agreement
(the "Credit Agreement") dated as of January 25, 1994 among
the Company, the banks and Co-Agents listed on the signature
pages thereof, Chemical Bank, as Managing Agent, and Morgan
Guaranty Trust Company of New York, as Agent. Terms defined
in the Credit Agreement are used herein as therein defined.
This opinion is being rendered to you pursuant to Section
3.01(b) of the Credit Agreement.
I have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and
other instruments and have conducted such other
investigations of fact and law as I have deemed necessary or
advisable for purposes of this opinion.
Upon the basis of the foregoing, I am of the
opinion that:
1. The Company is a corporation duly
incorporated, validly existing and in good standing under
the laws of Ohio, and has all corporate powers and all
Material governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted.
2. The execution, delivery and performance by the
Company of the Credit Agreement and its Notes are within the
Company's corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of
the amended articles of incorporation or amended regulations
of the Company or of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Company
or any of its Subsidiaries or result in the creation or
imposition of any Lien on any asset of the Company or any of
its Subsidiaries.
3. The Credit Agreement constitutes a valid and
binding agreement of the Company and its Notes constitute
valid and binding obligations of the Company, in each case
enforceable in accordance with its terms, except as may be
limited by (i) bankruptcy, insolvency or other similar laws
affecting the rights and remedies of creditors generally and
(ii) general principles of equity.
4. There is no action, suit or proceeding pending
against, or to the best of my knowledge threatened against
or affecting, the Company or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or
official, in which there is a reasonable possibility of an
adverse decision which would have a Material Adverse Effect
or an adverse effect on the rights or remedies of the Agent
or the Banks under this Agreement or the Notes or which in
any manner draws into question the validity of the Credit
Agreement or the Notes.
Very truly yours,
<PAGE>
EXHIBIT F
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
To the Banks, the Co-Agents,
the Managing Agent and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the One
Year Credit Agreement dated as of January 25, 1994 (the
"Credit Agreement") among Eaton Corporation, an Ohio
corporation (the "Company"), the banks and Co-Agents listed
on the signature pages thereof, Chemical Bank, as Managing
Agent, and Morgan Guaranty Trust Company of New York, as
Agent (the "Agent"), and have acted as special counsel for
the Agent for the purpose of rendering this opinion pursuant
to Section 3.01(c) of the Credit Agreement. Terms defined
in the Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and
other instruments and have conducted such other
investigations of fact and law as we have deemed necessary
or advisable for purposes of this opinion.
Upon the basis of the foregoing, we are of the
opinion that the Credit Agreement constitutes a valid and
binding agreement of the Company and the Notes constitute
valid and binding obligations of the Company, in each case
enforceable in accordance with its terms, except as may be
limited by (i) bankruptcy, insolvency or other similar laws
affecting the rights and remedies of creditors generally and
(ii) general principles of equity.
We are members of the Bar of the State of New York
and the foregoing opinion is limited to the laws of the
State of New York and the federal laws of the United States
of America. Insofar as the foregoing opinion involves
matters governed by the laws of Ohio, we have relied,
without independent investigation, upon the opinion of
Gerald L. Gherlein, Executive Vice President and General
Counsel of the Company, a copy of which has been delivered
to you. In giving the foregoing opinion, we express no
opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any
Bank is located which limits the rate of interest that such
Bank may charge or collect.
This opinion is rendered solely to you in
connection with the above matter. This opinion may not be
relied upon by you for any other purpose or relied upon by
any other person without our prior written consent.
Very truly yours,
EXHIBIT G
FORM OF ELECTION TO PARTICIPATE
__________,
19__
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
for the Banks under the One Year Credit
Agreement dated as of January 25, 1994 (as
amended from time to time, the "Credit
Agreement") among Eaton Corporation, such
Banks, the Co-Agents listed on the signature
pages thereof, Chemical Bank, as Managing
Agent, and such Agent
Dear Sirs:
Reference is made to the Credit Agreement
described above. Terms not defined herein which are defined
in the Credit Agreement have for the purposes hereof the
meaning provided therein.
The undersigned, [name of Eligible Subsidiary], a
[corporation][partnership] organized under the laws of
[jurisdiction of incorporation or organization], elects to
be an Eligible Subsidiary for purposes of the Credit
Agreement, effective from the date hereof until an Election
to Terminate shall have been delivered to the Agent on
behalf of the undersigned in accordance with the Credit
Agreement.
The undersigned confirms that the representations
and warranties set forth in Articles IV and IX of the Credit
Agreement are true and correct as to the undersigned as of
the date hereof. The undersigned agrees to perform all the
obligations of an Eligible Subsidiary under, and to be bound
in all respects by the terms of, the Credit Agreement,
including without limitation Sections 11.03(b) and 11.08
thereof, as if the undersigned were a signatory party
thereto.
[Tax disclosure pursuant to Section 9.04]
<PAGE>
The address to which all notices to the
undersigned under the Credit Agreement should be directed
is: . This instrument shall be construed in
accordance with and governed by the laws of the State of New
York.
Very truly yours,
[NAME OF ELIGIBLE SUBSIDIARY]
By____________________________
Title:
The undersigned confirms that [name of Eligible
Subsidiary] is an Eligible Subsidiary for purposes of the
Credit Agreement described above.
EATON CORPORATION
By____________________________
Title:
Receipt of the above Election to Participate is
acknowledged on and as of the date set forth above.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By____________________________
Title:
<PAGE>
EXHIBIT H
FORM OF ELECTION TO TERMINATE
__________,
19__
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
for the Banks under the One Year Credit
Agreement dated as of January 25, 1994 (as
amended from time to time, the "Credit
Agreement") among Eaton Corporation, such
Banks, the Co-Agents listed on the signature
pages thereof, Chemical Bank, as Managing
Agent, and such Agent
Dear Sirs:
Reference is made to the Credit Agreement
described above. Terms not defined herein which are defined
in the Credit Agreement have for the purposes hereof the
meaning provided therein.
The undersigned, Eaton Corporation, an Ohio
corporation, elects to terminate the status of [name of
Eligible Subsidiary], a [corporation][partnership] organized
under the laws of [jurisdiction of incorporation or
organization] (the "Designated Subsidiary"), as an Eligible
Subsidiary for purposes of the Credit Agreement, effective
as of the date hereof. The undersigned represents and
warrants that all principal and interest on all Notes of the
Designated Subsidiary and all other amounts payable by such
Designated Subsidiary pursuant to the Credit Agreement have
been paid in full on or prior to the date hereof.
Notwithstanding the foregoing, this Election to Terminate
shall not affect any obligation of the Designated Subsidiary
under the Credit Agreement or under any of its Notes
heretofore incurred.
This instrument shall be construed in accordance
with and governed by the laws of the State of New York.
Very truly yours,
EATON CORPORATION
By__________________________
Title:
Receipt of the above Election to Terminate is
hereby acknowledged on and as of the date set forth above.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By__________________________
Title:
<PAGE>
EXHIBIT I
OPINION OF COUNSEL FOR THE BORROWER
(BORROWINGS BY ELIGIBLE SUBSIDIARIES)
[Dated as provided in
Section 3.03 of the
Credit Agreement]
To the Banks, the Co-Agents,
the Managing Agent and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
I am counsel to [name of Eligible Subsidiary], a
[corporation] [partnership] organized under the laws of
[jurisdiction of incorporation or organization] (the
"Borrower"), and give this opinion pursuant to Section
3.03(b) of the One Year Credit Agreement dated as of January
25, 1994 (the "Credit Agreement") among Eaton Corporation
(the "Company"), the banks and Co-Agents listed on the
signature pages thereof, Chemical Bank, as Managing Agent,
and Morgan Guaranty Trust Company of New York, as Agent.
Terms defined in the Credit Agreement are used herein as
therein defined.
I have examined originals or copies, certified or
otherwise identified to my satisfaction, of such documents,
corporate [and partnership] records, certificates of public
officials and other instruments and have conducted such
other investigations of fact and law as I have deemed
necessary or advisable for purposes of this opinion.
Upon the basis of the foregoing, I am of the
opinion that:
1. The Borrower is a [corporation duly
incorporated] [partnership duly organized], validly existing
and in good standing under the laws of [jurisdiction of
incorporation or organization], and is a Wholly-Owned
Consolidated Subsidiary of the Company.
2. The execution and delivery by the Borrower of
its Election to Participate and its Notes and the
performance by the Borrower of its obligations under the
Credit Agreement and its Notes are within the Borrower's
[corporate] [partnership] powers, have been duly authorized
by all necessary [corporate] [partnership] action, require
no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable
law or regulation or of the [certificate of incorporation]
[partnership agreement] [or by-laws] of the Borrower or of
any agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or the Borrower or
result in the creation or imposition of any Lien on any
asset of the Company or any of its Subsidiaries.
3. The Credit Agreement constitutes a valid and
binding agreement of the Borrower and its Notes constitute
valid and binding obligations of the Borrower, in each case
enforceable in accordance with its terms, except as may be
limited by (i) bankruptcy, insolvency or other similar laws
affecting the rights and remedies of creditors generally and
(ii) general principles of equity.
4. Except as disclosed in the Borrower's Election
to Participate, there are no Taxes or Other Taxes imposed by
[jurisdiction of incorporation or organization and, if
different, principal place of business], or any taxing
authority thereof or therein, in the nature of withholding
or otherwise, which are imposed on any payment to be made by
the Borrower pursuant to the Credit Agreement or its Notes,
or are imposed on or by virtue of the execution, delivery or
enforcement of its Election to Participate or its Notes.
Very truly yours,
EXHIBIT J
SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY dated as of , 19
made by [SUBSIDIARY GUARANTOR], a [jurisdiction of
incorporation/organization] [corporation/[limited] [general]
partnership] (with its successors, the "Subsidiary
Guarantor"), to MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Agent (with its successors in such capacity, the
"Agent").
W I T N E S S E T H:
WHEREAS, this Subsidiary Guaranty relates to the
One Year Credit Agreement dated as of January 25, 1994 among
EATON CORPORATION (the "Company"), the Banks party thereto
(the "Banks"), the Co-Agents party thereto, CHEMICAL BANK,
as Managing Agent, and the Agent (the "Credit Agreement"),
which provides, subject to the terms and conditions thereof,
for loans to the Company and to its Eligible Subsidiaries by
the Banks in the aggregate principal amount of up to
$555,000,000;
WHEREAS, in order to induce the Banks, the Co-
Agents, the Managing Agent and the Agent to enter into the
Credit Agreement, the Company agreed that, substantially
concurrently with transferring, or causing to be
transferred, to the Subsidiary Guarantor and/or to one or
more other Wholly-Owned Consolidated Subsidiaries the assets
expected to be acquired in the Westinghouse DCBU Acquisition
and certain other assets of the Company and/or its
Subsidiaries relating to their Industrial Control and Power
Distribution business, and the related marketing and sales
operations (collectively, the "Asset Transfer"), it would
cause the Subsidiary Guarantor, in consideration of such
transfer of assets to it, to enter into this guaranty; and
WHEREAS, the Asset Transfer is being consummated
substantially concurrently with the execution and delivery
of this Subsidiary Guaranty;
NOW, THEREFORE, in consideration of the foregoing
and the mutual agreements contained herein, the parties
hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not
otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.
SECTION 2. The Guaranty. The Subsidiary
Guarantor hereby unconditionally guarantees the full and
punctual payment (whether at stated maturity, upon
acceleration or otherwise) of the principal of and interest
on each Note issued by any Borrower pursuant to the Credit
Agreement, and the full and punctual payment of all other
amounts payable by any Borrower under the Credit Agreement.
Upon failure by any Borrower to pay punctually any such
amount, the Subsidiary Guarantor shall forthwith on demand
pay the amount not so paid at the place and in the manner
specified in the Credit Agreement.
SECTION 3. Guaranty Unconditional. The
obligations of the Subsidiary Guarantor hereunder shall be
unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement,
compromise, waiver or release in respect of any
obligation of any Borrower under the Credit Agreement
or any Note, by operation of law or otherwise;
(ii) any modification or amendment of or
supplement to the Credit Agreement or any Note;
(iii) any release, impairment, non-perfection or
invalidity of any direct or indirect security for any
obligation of any Borrower under the Credit Agreement
or any Note;
(iv) any change in the corporate or partnership
existence, structure or ownership of any Borrower, or
any insolvency, bankruptcy, reorganization or other
similar proceeding affecting any Borrower or its assets
or any resulting release or discharge of any obligation
of any Borrower contained in the Credit Agreement or
any Note;
(v) the existence of any claim, set-off or other
rights which the Subsidiary Guarantor may have at any
time against any Borrower, the Agent, any Bank or any
other Person, whether in connection herewith or any
unrelated transactions, provided that nothing herein
shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating
to or against any Borrower for any reason of the Credit
Agreement or any Note, or any provision of applicable
law or regulation purporting to prohibit the payment by
any Borrower of the principal of or interest on any
Note or any other amount payable by any Borrower under
the Credit Agreement; or
(vii) any other act or omission to act or delay of
any kind by any Borrower, the Agent, any Bank or any
other Person or any other circumstance whatsoever which
might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the
Subsidiary Guarantor's obligations hereunder.
SECTION 4. Discharge Only Upon Payment In Full;
Reinstatement In Certain Circumstances. The Subsidiary
Guarantor's obligations hereunder shall remain in full force
and effect until the Commitments shall have terminated and
the principal of and interest on the Notes of each Borrower
and all other amounts payable by each Borrower under the
Credit Agreement shall have been paid in full. If at any
time any payment of the principal of or interest on any Note
of any Borrower or any other amount payable by any Borrower
under the Credit Agreement is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or
reorganization of such Borrower or otherwise, the Subsidiary
Guarantor's obligations hereunder with respect to such
payment shall be reinstated at such time as though such
payment had been due but not made at such time.
SECTION 5. Waiver by the Subsidiary Guarantor.
The Subsidiary Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not
provided for herein, as well as any requirement that at any
time any action be taken by any Person against any Borrower
or any other Person.
SECTION 6. Subrogation. The Subsidiary Guarantor
irrevocably waives any and all rights to which it may be
entitled, by operation of law or otherwise, upon making any
payment hereunder to be subrogated to the rights of the
payee against a Borrower with respect to such payment or
against any direct or indirect security therefor, or
otherwise to be reimbursed, indemnified or exonerated by or
for the account of a Borrower in respect thereof.
SECTION 7. Limit of Liability. The obligations
of the Subsidiary Guarantor hereunder shall be limited to an
aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance under
Section 548 of the United States Bankruptcy Code or any
comparable provisions of any applicable state law. To the
extent permitted by applicable law, said largest amount
shall be calculated after taking into account any
contribution rights that the Subsidiary Guarantor may have
against other guarantors of the same obligations.
SECTION 8. Stay of Acceleration. If acceleration
of the time for payment of any amount payable by any
Borrower under the Credit Agreement or its Notes is stayed
upon the insolvency, bankruptcy or reorganization of such
Borrower, all such amounts otherwise subject to acceleration
under the terms of the Credit Agreement shall nonetheless be
payable by the Subsidiary Guarantor hereunder forthwith on
demand by the Agent made at the request of the Required
Banks.
SECTION 9. Rights of Set-Off. The Subsidiary
Guarantor agrees, to the fullest extent it may effectively
do so under applicable law, that any holder of a
participation in any Note, whether or not acquired pursuant
to the arrangements set forth in Section 11.04 of the Credit
Agreement, may exercise rights of set-off or counterclaim
and other rights with respect to such participation as fully
as if such holder of a participation were a direct creditor
of the Subsidiary Guarantor in the amount of such
participation.
SECTION 10. Representations and Warranties.
The Subsidiary Guarantor represents and warrants that:
(a) [Corporate] [Partnership] Existence and
Power. The Subsidiary Guarantor is a [corporation duly
incorporated] [partnership duly organized], validly existing
and in good standing under the laws of its jurisdiction of
[incorporation] [organization] and is a Wholly-Owned
Consolidated Subsidiary of the Company.
(b) [Corporate] [Partnership] and Governmental
Authorization; No Contravention. The execution and delivery
by the Subsidiary Guarantor of this Subsidiary Guaranty, and
the performance by it of its obligations under this
Subsidiary Guaranty, are within its [corporate]
[partnership] powers, have been duly authorized by all
necessary [corporate] [partnership] action, require no
action by or in respect of, or filing with, any governmental
body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law
or regulation or of its [certificate of incorporation]
[partnership agreement] [or by-laws], or of any agreement,
judgment, injunction, order, decree or other instrument
binding upon the Company or Subsidiary Guarantor or result
in the creation or imposition of any Lien on any asset of
the Company or any of its Subsidiaries.
(c) Binding Effect. This Subsidiary Guaranty
constitutes a valid and binding agreement of the Subsidiary
Guarantor, enforceable in accordance with its terms, except
as may be limited by (i) bankruptcy, insolvency or other
similar laws affecting the rights and remedies of creditors
generally and (ii) general principles of equity.
SECTION 11. Amendments and Waivers. Any
provision of this Subsidiary Guaranty may be amended or
waived as provided, but only as provided, in Section 11.05
of the Credit Agreement.
SECTION 12. Notices. All notices, requests and
other communications to any party hereunder shall be given
in accordance with Section 11.01 of the Credit Agreement,
and in the case of the Subsidiary Guarantor, shall be given
to it at its address or telex or facsimile transmission
number set forth on the signature page hereof.
SECTION 13. No Waivers. No failure or delay by
the Agent or any Bank in exercising any right, power or
privilege hereunder or under any Note shall operate as a
waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.
SECTION 14. Governing Law. This Subsidiary
Guaranty shall be governed by and construed in accordance
with the laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the Subsidiary Guarantor has
caused this Subsidiary Guaranty to be executed and delivered
by its duly authorized officers as of the date first above
written.
[Subsidiary Guarantor]
By_________________________
Title:
And by
Title:
[Address]
[Address]
Telex number:
Facsimile transmission
number:
<PAGE>
EXHIBIT K
OPINION OF COUNSEL FOR THE SUBSIDIARY GUARANTOR
[Date]
To the Banks, the Co-Agents,
the Managing Agent and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
I am counsel to [name of Subsidiary Guarantor], a
[corporation incorporated] [partnership organized] under the
laws of [jurisdiction of incorporation or organization] (the
"Subsidiary Guarantor"), and give this opinion pursuant to
Section 5.11 of the One Year Credit Agreement dated as of
January 25, 1994 (the "Credit Agreement") among Eaton
Corporation (the "Company"), the banks and Co-Agents listed
on the signature pages thereof, Chemical Bank, as Managing
Agent, and Morgan Guaranty Trust Company of New York, as
Agent. Terms defined in the Credit Agreement are used
herein as therein defined.
I have examined executed copies of the Subsidiary
Guaranty dated as of , 199 signed by the
Subsidiary Guarantor (the "Subsidiary Guaranty") and the
contribution agreement referred to in Section 5.11 of the
Credit Agreement (the "Contribution Agreement") and
originals or copies, certified or otherwise identified to my
satisfaction, of such documents, corporate [and partnership]
records, certificates of public officials and other
instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, I am of the
opinion that:
1. The Subsidiary Guarantor is a [corporation
duly incorporated] [partnership duly organized], validly
existing and in good standing under the laws of
[jurisdiction of incorporation or organization], and is a
Wholly-Owned Consolidated Subsidiary of the Company.
2. The execution and delivery by the Subsidiary
Guarantor of the Subsidiary Guaranty and the Contribution
Agreement and the performance by the Subsidiary Guarantor of
its obligations under the Subsidiary Guaranty and the
Contribution Agreement are within the Subsidiary Guarantor's
[corporate] [partnership] powers, have been duly authorized
by all necessary [corporate] [partnership] action, require
no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable
law or regulation or of the [certificate of incorporation]
[partnership agreement] [or by-laws] of the Subsidiary
Guarantor or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Company or the
Subsidiary Guarantor or result in the creation or imposition
of any Lien on any asset of the Company or any of its
Subsidiaries.
3. Each of the Subsidiary Guaranty and the
Contribution Agreement constitutes a valid and binding
agreement of the Subsidiary Guarantor, enforceable in
accordance with its terms, except as may be limited by (i)
bankruptcy, insolvency or other similar laws affecting the
rights and remedies of creditors generally and (ii) general
principles of equity.
Very truly yours,
<PAGE>
Exhibit L
Definition of "Debt Downgrade" as set forth in the Note and
Guaranty Agreement dated as of December 7, 1990
among Eaton Corporation, as Guarantor, the Eaton Corporation
Share Purchase and Investment Plan Trust, acting by and
through Ameritrust Company National Association, as Trustee,
as Issuer, and the lenders listed on the signature pages hereof
"Debt Downgrade" means
(i) the rating of the Guarantor's senior
unsecured funded debt securities by both S&P and
Moody's in a rating category below Investment Grade, or
if such debt securities are not rated by both S&P and
Moody's, but only by one of them, such rating in a
rating category below Investment Grade by either S&P or
Moody's and by any other nationally recognized
statistical rating organization selected by Principal
Mutual Life Insurance Company or Credit Suisse and
consented to in writing by the holders of more than 50%
in unpaid principal amount of the Notes at the time
outstanding (which holders shall include Credit Suisse
and Principal Mutual Life Insurance Company),
(ii) if such debt securities are not at the time
rated by (a) either S&P or Moody's and (b) any other
nationally recognized statistical rating organization
as aforesaid, the rating of such debt securities by any
nationally recognized statistical rating organization
selected by Principal Mutual Life Insurance Company or
Credit Suisse and consented to in writing by the
holders of more than 50% in unpaid principal amount of
the Notes at the time outstanding (which holders shall
include Credit Suisse and Principal Mutual Life
Insurance Company), in a rating category below
Investment Grade, pursuant to a request for a private
rating made by the Guarantor or the holder or holders
of at least 5% of the unpaid principal amount of the
Notes at the time outstanding,
(iii) if no such debt securities of the Guarantor
are rated, the rating of the Notes by S&P, Moody's or
such other nationally recognized rating agency selected
by Principal Mutual Life Insurance Company or Credit
Suisse and consented to in writing by the holders of
more than 50% in unpaid principal amount of the Notes
at the time outstanding (which holders shall include
Credit Suisse and Principal Mutual Life Insurance
Company), in a rating category below Investment Grade
pursuant to a request for a private rating made by the
Guarantor or the holder or holders of at least 5% of
the unpaid principal amount of the Notes at the time
outstanding, or
(iv) if a rating agency for a private rating is
selected and consented to as specified in clause (ii)
or (iii) above and the Guarantor has not delivered to
each holder of a Note a copy of a private rating from
such rating agency rating such debt securities or the
Notes, as the case may be, in a rating category of
Investment Grade or higher within 60 days of such
consent.
For purposes of this definition, "S&P" means Standard &
Poor's Corporation or any successor thereto; "Moody's" means
Moody's Investor Service, Inc. or any successor thereto; and
"Investment Grade" means a rating category of or higher than
"BBB-" with respect to S&P, a rating category of or higher
than "Baa3" with respect to Moody's and a comparable rating
category with respect to any other rating organization
selected as specified above.
<PAGE>
EXHIBIT M
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among
[ASSIGNOR] (the "Assignor"), [ASSIGNEE] (the "Assignee"),
EATON CORPORATION (the "Company") and MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement
(the "Agreement") relates to the One Year Credit Agreement
dated as of January 25, 1994 among the Company, the Assignor
and the other Banks party thereto, as Banks, the Co-Agents
party thereto, Chemical Bank, as Managing Agent, and the
Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement,
the Assignor has a Commitment to make Loans to the Company
and its Eligible Subsidiaries in an aggregate principal
amount at any time outstanding not to exceed $__________;
WHEREAS, Committed Loans made to the Company and
its Eligible Subsidiaries by the Assignor under the Credit
Agreement in the aggregate principal amount of $__________
are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the
Assignee all of the rights of the Assignor under the Credit
Agreement in respect of a portion of its Commitment
thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of each of
its outstanding Committed Loans, and the Assignee proposes
to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing
and the mutual agreements contained herein, the parties
hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not
otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby
assigns and sells to the Assignee all of the rights of the
Assignor under the Credit Agreement to the extent of the
Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the
obligations of the Assignor under the Credit Agreement to
the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the
principal amount of the Committed Loans made by the Assignor
outstanding at the date hereof. Upon the execution and
delivery hereof by the Assignor, the Assignee, the Company
and the Agent and the payment of the amounts specified in
Section 3 required to be paid on the date hereof (i) the
Assignee shall, as of the date hereof, succeed to the rights
and be obligated to perform the obligations of a Bank under
the Credit Agreement with a Commitment in an amount equal to
the Assigned Amount, and (ii) the Commitment of the Assignor
shall, as of the date hereof, be reduced by a like amount
and the Assignor released from its obligations under the
Credit Agreement to the extent such obligations have been
assumed by the Assignee. The assignment provided for herein
shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the
assignment and sale contemplated in Section 2 hereof, the
Assignee shall pay to the Assignor on the date hereof in
Federal funds the amount heretofore agreed between them. It
is understood that facility fees accrued to the date hereof
are for the account of the Assignor and such fees accruing
from and including the date hereof are for the account of
the Assignee. Each of the Assignor and the Assignee hereby
agrees that if it receives any amount under the Credit
Agreement which is for the account of the other party
hereto, it shall receive the same for the account of such
other party to the extent of such other party's interest
therein and shall promptly pay the same to such other party.
SECTION 4. Consent of the Company and the Agent.
This Agreement is conditioned upon the consent of the
Company and the Agent pursuant to Section 11.06(c) of the
Credit Agreement. The execution of this Agreement by the
Company and the Agent is evidence of this consent. Pursuant
to Section 11.06(c) the Company agrees to execute and
deliver a Note [and to cause each Eligible Subsidiary to
execute and deliver a Note] payable to the order of the
Assignee to evidence the assignment and assumption provided
for herein.
SECTION 5. Non-Reliance on Assignor. The
Assignor makes no representation or warranty in connection
with, and shall have no responsibility with respect to, the
solvency, financial condition, or statements of any
Borrower, or the validity and enforceability of the
obligations of any Borrower in respect of the Credit
Agreement or any Note. The Assignee acknowledges that it
has, independently and without reliance on the Assignor, and
based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to
enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the
business, affairs and financial condition of the Borrowers.
SECTION 6. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of
the State of New York.
SECTION 7. Counterparts. This Agreement may be
signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their duly
authorized officers as of the date first above written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
EATON CORPORATION
By__________________________
Title:
And by
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By__________________________
Title:
CONFORMED COPY
$555,000,000
Five Year
CREDIT AGREEMENT
dated as of
January 25, 1994
among
Eaton Corporation
The Banks Listed Herein
Bankers Trust Company
Credit Suisse
The First National Bank of Chicago
NationsBank of North Carolina, N.A.
and
Society National Bank,
as Co-Agents
Chemical Bank,
as Managing Agent
and
Morgan Guaranty Trust Company of New York,
as Agent
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . .
. . . 1
SECTION 1.02. Accounting Terms and
Determinations. . . . . . . . . . . . . . . . . . . . .
. . . 15
SECTION 1.03. Types of Borrowings . . . . . . . . . . . . .
. . . 15
SECTION 1.04. Basis for Ratings . . . . . . . . . . . . . .
. . . 15
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend . . . . . . . . . . . . .
. . . 16
SECTION 2.02. Notice of Committed Borrowing . . . . . . . .
. . . 16
SECTION 2.03. Money Market Borrowings . . . . . . . . . . .
. . . 17
SECTION 2.04. Notice to Banks; Funding of Loans . . . . . .
. . . 22
SECTION 2.05. Notes . . . . . . . . . . . . . . . . . . . .
. . . 23
SECTION 2.06. Maturity of Loans . . . . . . . . . . . . . .
. . . 24
SECTION 2.07. Interest Rates. . . . . . . . . . . . . . . .
. . . 24
SECTION 2.08. Fees. . . . . . . . . . . . . . . . . . . . .
. . . 27
SECTION 2.09. Optional Termination or Reduction
of Commitments. . . . . . . . . . . . . . . . . . . . .
. . 28
SECTION 2.10. Mandatory Termination or Reduction
of Commitments. . . . . . . . . . . . . . . . . . . . .
. . 28
SECTION 2.11. Optional Prepayments. . . . . . . . . . . . .
. . . 28
SECTION 2.12. General Provisions as to Payments . . . . . .
. . . 29
SECTION 2.13. Funding Losses. . . . . . . . . . . . . . . .
. . . 30
SECTION 2.14. Computation of Interest and Fees. . . . . . .
. . . 30
SECTION 2.15. Regulation D Compensation . . . . . . . . . .
. . . 31
SECTION 2.16. Judgment Currency . . . . . . . . . . . . . .
. . . 31
SECTION 2.17. Foreign Subsidiary Costs. . . . . . . . . . .
. . . 32
SECTION 2.18. Eligible Subsidiaries . . . . . . . . . . . .
. . . 32
ARTICLE III
CONDITIONS
SECTION 3.01. Closing . . . . . . . . . . . . . . . . . . .
. . . 33
SECTION 3.02. Borrowings. . . . . . . . . . . . . . . . . .
. . . 34
SECTION 3.03. First Borrowing by Each Eligible
Subsidiary. . . . . . . . . . . . . . . . . . . . . . .
. . 35
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
SECTION 4.01. Corporate Existence and Power . . . . . . . .
. . . 36
SECTION 4.02. Corporate and Governmental
Authorization; No Contravention . . . . . . . . . . . .
. . 36
SECTION 4.03. Binding Effect. . . . . . . . . . . . . . . .
. . . 36
SECTION 4.04. Financial Information . . . . . . . . . . . .
. . . 37
SECTION 4.05. Litigation. . . . . . . . . . . . . . . . . .
. . . 37
SECTION 4.06. Compliance with ERISA . . . . . . . . . . . .
. . . 38
SECTION 4.07. Environmental Matters . . . . . . . . . . . .
. . . 38
SECTION 4.08. Taxes . . . . . . . . . . . . . . . . . . . .
. . . 39
SECTION 4.09. Subsidiaries. . . . . . . . . . . . . . . . .
. . . 39
SECTION 4.10. Not an Investment Company . . . . . . . . . .
. . . 39
SECTION 4.11. Full Disclosure . . . . . . . . . . . . . . .
. . . 39
SECTION 4.12. Liens . . . . . . . . . . . . . . . . . . . .
. . . 40
ARTICLE V
COVENANTS
SECTION 5.01. Information . . . . . . . . . . . . . . . . .
. . . 40
SECTION 5.02. Payment of Obligations. . . . . . . . . . . .
. . . 43
SECTION 5.03. Maintenance of Property; Insurance. . . . . .
. . . 43
SECTION 5.04. Conduct of Business and Maintenance
of Existence. . . . . . . . . . . . . . . . . . . . . .
. . 44
SECTION 5.05. Compliance with Laws. . . . . . . . . . . . .
. . . 44
SECTION 5.06. Inspection of Property, Books and
Records . . . . . . . . . . . . . . . . . . . . . . . .
. . 44
SECTION 5.07. Leverage Ratio. . . . . . . . . . . . . . . .
. . . 45
SECTION 5.08. Negative Pledge . . . . . . . . . . . . . . .
. . . 45
SECTION 5.09. Consolidations, Mergers and Sales
of Assets . . . . . . . . . . . . . . . . . . . . . . .
. . 46
SECTION 5.10. Use of Proceeds . . . . . . . . . . . . . . .
. . . 47
SECTION 5.11. Subsidiary Guaranty . . . . . . . . . . . . .
. . . 47
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default . . . . . . . . . . . . . .
. . . 48
SECTION 6.02. Notice of Default . . . . . . . . . . . . . .
. . . 51
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization . . . . . . . .
. . . 51
SECTION 7.02. Agent and Affiliates. . . . . . . . . . . . .
. . . 51
SECTION 7.03. Action by Agent . . . . . . . . . . . . . . .
. . . 51
SECTION 7.04. Consultation with Experts . . . . . . . . . .
. . . 52
SECTION 7.05. Liability of Agent. . . . . . . . . . . . . .
. . . 52
SECTION 7.06. Indemnification . . . . . . . . . . . . . . .
. . . 52
SECTION 7.07. Credit Decision . . . . . . . . . . . . . . .
. . . 52
SECTION 7.08. Successor Agent . . . . . . . . . . . . . . .
. . . 53
SECTION 7.09. Agent's Fee . . . . . . . . . . . . . . . . .
. . . 53
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. . . . . . . . . . . . . . . . . .
. . 53
SECTION 8.02. Illegality. . . . . . . . . . . . . . . . . .
. . . 54
SECTION 8.03. Increased Cost and Reduced Return . . . . . .
. . . 55
SECTION 8.04. Taxes . . . . . . . . . . . . . . . . . . . .
. . . 56
SECTION 8.05. Base Rate Loans Substituted for
Affected Fixed Rate Loans . . . . . . . . . . . . . . .
. . 59
SECTION 8.06. Substitution of Bank. . . . . . . . . . . . .
. . . 59
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
OF ELIGIBLE SUBSIDIARIES
SECTION 9.01. Corporate or Partnership Existence
and Power . . . . . . . . . . . . . . . . . . . . . . .
. . 60
SECTION 9.02. Corporate or Partnership and
Governmental Authorization; No
Contravention . . . . . . . . . . . . . . . . . . . . .
. . 60
SECTION 9.03. Binding Effect. . . . . . . . . . . . . . . .
. . . 60
SECTION 9.04. Taxes . . . . . . . . . . . . . . . . . . . .
. . . 60
ARTICLE X
GUARANTY
SECTION 10.01. The Guaranty . . . . . . . . . . . . . . . .
. . . 61
SECTION 10.02. Guaranty Unconditional . . . . . . . . . . .
. . . 61
SECTION 10.03. Discharge Only Upon Payment In
Full; Reinstatement In Certain
Circumstances . . . . . . . . . . . . . . . . . . . . .
. . 62
SECTION 10.04. Waiver by the Company. . . . . . . . . . . .
. . . 62
SECTION 10.05. Subrogation. . . . . . . . . . . . . . . . .
. . . 62
SECTION 10.06. Stay of Acceleration . . . . . . . . . . . .
. . . 63
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices. . . . . . . . . . . . . . . . . . .
. . . 63
SECTION 11.02. No Waivers . . . . . . . . . . . . . . . . .
. . . 63
SECTION 11.03. Expenses; Indemnification. . . . . . . . . .
. . . 64
SECTION 11.04. Sharing of Set-Offs. . . . . . . . . . . . .
. . . 65
SECTION 11.05. Amendments and Waivers . . . . . . . . . . .
. . . 65
SECTION 11.06. Successors and Assigns . . . . . . . . . . .
. . . 66
SECTION 11.07. Collateral . . . . . . . . . . . . . . . . .
. . . 68
SECTION 11.08. Governing Law; Submission to
Jurisdiction. . . . . . . . . . . . . . . . . . . . . .
. . 68
SECTION 11.09. Counterparts; Integration;
Effectiveness . . . . . . . . . . . . . . . . . . . . .
. . 68
<PAGE>
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of Counsel for the Company
Exhibit F - Opinion of Special Counsel for the Agent
Exhibit G - Form of Election to Participate
Exhibit H - Form of Election to Terminate
Exhibit I -Opinion of Counsel for the Borrower
(Borrowings by Eligible Subsidiaries)
Exhibit J - Subsidiary Guaranty
Exhibit K - Opinion of Counsel for the Subsidiary
Guarantor
Exhibit L - Definition of "Debt Downgrade" as set forth
in the Note and Guaranty Agreement dated
as of December 7, 1990 among Eaton
Corporation, as Guarantor, the Eaton
Corporation Share Purchase and Investment
Plan Trust, acting by and through Ameritrust
Company National Association, as Trustee, as
Issuer, and the lenders listed on the
signature pages thereof
Exhibit M - Assignment and Assumption Agreement
<PAGE>
CREDIT AGREEMENT
AGREEMENT dated as of January 25, 1994 among EATON
CORPORATION, an Ohio corporation, the BANKS and CO-AGENTS
listed on the signature pages hereof, CHEMICAL BANK, as
Managing Agent, and MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as Agent;
W I T N E S S E T H:
WHEREAS, the Company has agreed to purchase
certain assets and assume certain liabilities of the
Distribution and Control Business Unit of Westinghouse
Electric Corporation; and
WHEREAS, the Company desires to enter into the
revolving credit facility provided herein to finance a
portion of the purchase price of such acquisition and for
its general corporate purposes;
NOW, THEREFORE, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms,
as used herein, have the following meanings:
"Absolute Rate Auction" means a solicitation of
Money Market Quotes setting forth Money Market Absolute
Rates pursuant to Section 2.03.
"Adjusted CD Rate" has the meaning set forth in
Section 2.07(b).
"Adjusted Consolidated Net Worth" means at any
date the sum, without duplication, of (i) the consolidated
stockholders' equity of the Company and its Consolidated
Subsidiaries, (ii) their consolidated liability for
postretirement benefits other than pensions and (iii) the
aggregate carrying value of any outstanding Qualifying
Preferred Stock, all determined as of such date.
"Administrative Questionnaire" means, with respect
to each Bank, an administrative questionnaire in the form
prepared by the Agent and submitted to the Agent (with a
copy to the Company) duly completed by such Bank.
"Agent" means Morgan Guaranty Trust Company of New
York in its capacity as agent for the Banks hereunder, and
its successors in such capacity.
"Applicable Lending Office" means, with respect to
any Bank, (i) in the case of its Domestic Loans, its
Domestic Lending Office, (ii) in the case of its Euro-Dollar
Loans, its Euro-Dollar Lending Office and (iii) in the case
of its Money Market Loans, its Money Market Lending Office.
"Assessment Rate" has the meaning set forth in
Section 2.07(b).
"Assignee" has the meaning set forth in Section
11.06(c).
"Bank" means each bank listed on the signature
pages hereof, each Assignee which becomes a Bank pursuant to
Section 11.06(c), and their respective successors.
"Base Rate" means, for any day, a rate per annum
equal to the higher of (i) the Prime Rate for such day and
(ii) the sum of 1/2 of 1% plus the Federal Funds Rate for
such day.
"Base Rate Loan" means a Committed Loan to be made
by a Bank as a Base Rate Loan in accordance with the
applicable Notice of Committed Borrowing or pursuant to
Article VIII.
"Benefit Arrangement" means at any time an
employee benefit plan within the meaning of Section 3(3) of
ERISA which is not a Plan or a Multiemployer Plan and which
is maintained or otherwise contributed to by any member of
the ERISA Group.
"Borrower" means the Company or the relevant
Eligible Subsidiary, as the context may require, and their
respective successors, and "Borrowers" means all of the
foregoing.
"Borrowing" has the meaning set forth in Section
1.03.
"CD Base Rate" has the meaning set forth in
Section 2.07(b).
"CD Loan" means a Committed Loan to be made by a
Bank as a CD Loan in accordance with the applicable Notice
of Committed Borrowing.
"CD Margin" has the meaning set forth in Section
2.07(b).
"CD Reference Banks" means Chemical Bank, Society
National Bank and Morgan Guaranty Trust Company of New York.
"Closing Date" means the date on or after the
Effective Date on which the Agent shall have received the
documents specified in or pursuant to Section 3.01.
"Commitment" means, with respect to each Bank, the
amount set forth opposite the name of such Bank on the
signature pages hereof, as such amount may be reduced from
time to time pursuant to Section 2.09.
"Committed Loan" means a loan made by a Bank
pursuant to Section 2.01.
"Company" means Eaton Corporation, an Ohio
corporation, and its successors.
"Company's 1992 Form 10-K" means the Company's
annual report on Form 10-K for 1992, as filed with the
Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended.
"Confidentiality Agreement" means a
confidentiality agreement entered into by the Company and a
Bank, as such Confidentiality Agreement may be amended from
time to time.
"Consolidated Capitalization" means at any date an
amount equal to the sum of (i) Consolidated Debt at such
date plus (ii) Adjusted Consolidated Net Worth at such date.
"Consolidated Debt" means at any date the Debt of
the Company and its Consolidated Subsidiaries, determined on
a consolidated basis as of such date.
"Consolidated Subsidiary" means at any date any
Subsidiary or other entity the accounts of which would be
consolidated with those of the Company in its consolidated
financial statements if such statements were prepared as of
such date.
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred
purchase price of property which has been acquired prior to
such date or services which have been provided prior to such
date, except trade accounts payable and accounts for
services arising in the ordinary course of business and
deferred compensation and other accruals or reserves
(including postretirement benefits) relating to the services
of employees, (iv) all obligations of such Person as lessee
which are capitalized in accordance with generally accepted
accounting principles, (v) all obligations of others of the
types referred to in clauses (i) and (ii) of this definition
which are secured by a Lien on any asset of such Person,
whether or not such Person has assumed such obligations, and
(vi) all obligations of others of the types referred to in
clauses (i) and (ii) of this definition which are Guaranteed
by such Person; provided that the term "Debt" shall not
include money borrowed against the cash surrender value of
life insurance policies.
"Default" means any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
"Domestic Business Day" means any day except a
Saturday, Sunday or other day on which commercial banks in
New York City are authorized by law to close.
"Domestic Lending Office" means, as to each Bank,
its office located at its address set forth in its
Administrative Questionnaire (or identified in its Admini-
strative Questionnaire as its Domestic Lending Office) or
such other office as such Bank may hereafter designate as
its Domestic Lending Office by notice to the Company and the
Agent; provided that any Bank may so designate separate
Domestic Lending Offices for its Base Rate Loans, on the one
hand, and its CD Loans, on the other hand, in which case all
references herein to the Domestic Lending Office of such
Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans
or both.
"Domestic Reserve Percentage" has the meaning set
forth in Section 2.07(b).
"Effective Date" means the date this Agreement
becomes effective in accordance with Section 11.09.
"Election to Participate" means an Election to
Participate substantially in the form of Exhibit G hereto.
"Election to Terminate" means an Election to
Terminate substantially in the form of Exhibit H hereto.
"Eligible Subsidiary" means any Wholly-Owned
Consolidated Subsidiary as to which an Election to
Participate shall have been delivered to the Agent and as to
which an Election to Terminate shall not have been delivered
to the Agent.
"Environmental Laws" means any and all federal,
state, local and foreign statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees,
plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental
restrictions relating to the environment, the effect of the
environment on human health or to emissions, discharges or
releases of pollutants, contaminants, Hazardous Substances
or wastes into the environment, including, without
limitation, ambient air, surface water, ground water or
land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport
or handling of pollutants, contaminants, Hazardous
Substances or wastes or the clean-up or other remediation
thereof.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, or any successor statute.
"ERISA Group" means the Company, any Subsidiary
and all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under
common control which, together with the Company or any
Subsidiary, are treated as a single employer under Section
414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic
Business Day on which commercial banks are open for
international business (including dealings in dollar
deposits) in London.
"Euro-Dollar Lending Office" means, as to
each Bank, its office, branch or affiliate located at
its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or
affiliate of such Bank as it may hereafter designate as its
Euro-Dollar Lending Office by notice to the Company and the
Agent.
"Euro-Dollar Loan" means a Committed Loan to be
made by a Bank as a Euro-Dollar Loan in accordance with the
applicable Notice of Committed Borrowing.
"Euro-Dollar Margin" has the meaning set forth in
Section 2.07(c).
"Euro-Dollar Reference Banks" means the principal
London offices of Chemical Bank and Morgan Guaranty Trust
Company of New York and the Cayman Islands office of Society
National Bank.
"Euro-Dollar Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect
on such day, 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 five billion dollars in respect of "Eurocurrency
liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which
the interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which
includes loans by a non-United States office of any Bank to
United States residents).
"Event of Default" has the meaning set forth in
Section 6.01.
"Facility Fee Rate" has the meaning set forth in
Section 2.08(a).
"Federal Funds Rate" means, for any day, the rate
per annum (rounded upward, if necessary, to the nearest
1/100 of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New
York on the Domestic Business Day next succeeding such day,
provided that (i) if such day is not a Domestic Business
Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business
Day, and (ii) if no such rate is so published on such next
succeeding Domestic Business Day, the Federal Funds Rate for
such day shall be the average rate quoted to Morgan Guaranty
Trust Company of New York on such day on such transactions
as determined by the Agent.
"Fixed Rate Loans" means CD Loans or Euro-Dollar
Loans or Money Market Loans (excluding Money Market LIBOR
Loans bearing interest at the Base Rate pursuant to Section
8.01(a)) or any combination of the foregoing.
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or
indirectly guaranteeing any Debt of any other Person and,
without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt (whether
arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) assuring in any other
manner the obligee of such Debt of the payment thereof or
protecting such obligee against loss in respect thereof (in
whole or in part), provided that the term Guarantee shall
not include (a) endorsements for collection or deposit in
the ordinary course of business or (b) any other obligation
described in the foregoing definition if the related Debt
does not exceed $1,000,000 in the case of any single
obligation excluded pursuant to this clause (b) or
$10,000,000 in the aggregate for all obligations excluded
pursuant to this clause (b). The term "Guarantee" used as a
verb has a corresponding meaning.
"Hazardous Substances" means any toxic,
radioactive, caustic or otherwise hazardous substance,
including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section
11.03(b).
"Information Documents" means (i) the Company's
1992 Form 10-K and (ii) the information memorandum dated
October 25, 1993 regarding the Company and the Westinghouse
DCBU Acquisition furnished by J.P. Morgan Securities Inc. to
the Banks (including the Appendices thereto).
"Insignificant Subsidiaries" means any one or more
Subsidiaries which, if considered in the aggregate as a
single Subsidiary, would not constitute a "significant
subsidiary" as defined in Rule 12b-2 promulgated by the
Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended.
"Interest Period" means: (1) with respect to each
Euro-Dollar Borrowing, the period commencing on the date of
such Borrowing and ending one, two, three or six months
thereafter, as the relevant Borrower may elect in the
applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall
be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day
in the calendar month at the end of such Interest
Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period that would otherwise end
after the Termination Date shall end on the Termination
Date;
(2) with respect to each CD Borrowing, the period
commencing on the date of such Borrowing and ending 30, 60,
90 or 180 days thereafter, as the relevant Borrower may
elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period (other than an Interest
Period determined pursuant to clause (b) below) which
would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period that would otherwise end
after the Termination Date shall end on the Termination
Date;
(3) with respect to each Base Rate Borrowing, the period
commencing on the date of such Borrowing and ending 30 days
thereafter; provided that:
(a) any Interest Period (other than an Interest
Period determined pursuant to clause (b) below) which
would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period that would otherwise end
after the Termination Date shall end on the Termination
Date;
(4) with respect to each Money Market LIBOR Borrowing, the
period commencing on the date of such Borrowing and ending
such whole number of months thereafter as the relevant
Borrower may elect in accordance with Section 2.03; provided
that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall
be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day
in the calendar month at the end of such Interest
Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period that would otherwise end
after the Termination Date shall end on the Termination
Date; and
(5) with respect to each Money Market Absolute Rate
Borrowing, the period commencing on the date of such
Borrowing and ending such number of days thereafter (but not
less than 7 days) as the relevant Borrower may elect in
accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall
be extended to the next succeeding Euro-Dollar Business
Day; and
(b) any Interest Period that would otherwise end
after the Termination Date shall end on the Termination
Date.
"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended, or any successor statute.
"Level I Status" exists on any date if, at such
date, the Company's outstanding senior unsecured long-term
debt securities are rated AA- or an equivalent rating or
higher by S&P and Aa3 or an equivalent rating or higher by
Moody's.
"Level II Status" exists on any date if, at such
date, (i) the Company's outstanding senior unsecured long-
term debt securities are rated A- or an equivalent rating or
higher by S&P and A3 or an equivalent rating or higher by
Moody's and (ii) Level I Status does not exist on such date.
"Level III Status" exists on any date if, at such
date, (i) the Company's outstanding senior unsecured long-
term debt securities are rated BBB or an equivalent rating
or higher by S&P and Baa2 or an equivalent rating or higher
by Moody's and (ii) neither Level I Status nor Level II
Status exists on such date.
"Level IV Status" exists on any date if none of
Level I Status, Level II Status or Level III Status exists
on such date.
"LIBOR Auction" means a solicitation of Money
Market Quotes setting forth Money Market Margins based on
the London Interbank Offered Rate pursuant to Section 2.03.
"Lien" means, with respect to any asset, any
mortgage, lien, pledge, charge or security interest of any
kind, or any other type of preferential arrangement that has
the practical effect of creating a security interest, in
respect of such asset; provided that the term "Lien" shall
not include (i) title defects, easements, encroachments,
encumbrances or rights-of-way or (ii) any mortgage, lien,
pledge, charge or security interest on or in any assets of a
Subsidiary securing only indebtedness owed by such
Subsidiary to the Company or to one or more Wholly-Owned
Consolidated Subsidiaries. For the purposes of this
Agreement, the Company or any Subsidiary shall be deemed to
own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Loan" means a Domestic Loan or a Euro-Dollar Loan
or a Money Market Loan and "Loans" means Domestic Loans or
Euro-Dollar Loans or Money Market Loans or any combination
of the foregoing.
"London Interbank Offered Rate" has the meaning
set forth in Section 2.07(c).
"Material" means material in relation to the
Company and its Consolidated Subsidiaries, taken as a whole.
"Material Adverse Effect" means any material
adverse effect upon the condition (financial or otherwise),
results of operations, assets, liabilities, business,
operations, prospects, capitalization or stockholders'
equity of the Company and its Consolidated Subsidiaries,
taken as a whole.
"Material Debt" means Debt (other than the Notes)
of the Company and/or one or more of its Subsidiaries,
arising in one or more related or unrelated transactions, in
an aggregate principal amount exceeding $50,000,000.
"Material Plan" means at any time a Plan or Plans
having aggregate Unfunded Liabilities in excess of
$50,000,000.
"Money Market Absolute Rate" has the meaning set
forth in Section 2.03(d).
"Money Market Absolute Rate Loan" means a loan to
be made by a Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each
Bank, its Domestic Lending Office or such other office,
branch or affiliate of such Bank as it may hereafter
designate as its Money Market Lending Office by notice to
the Company and the Agent; provided that any Bank may from
time to time by notice to the Company and the Agent
designate separate Money Market Lending Offices for its
Money Market LIBOR Loans, on the one hand, and its Money
Market Absolute Rate Loans, on the other hand, in which case
all references herein to the Money Market Lending Office of
such Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made
by a Bank pursuant to a LIBOR Auction (including such a loan
bearing interest at the Base Rate pursuant to Section
8.01(a)).
"Money Market Loan" means a Money Market LIBOR
Loan, a Money Market Absolute Rate Loan or a Money Market
Refunding Loan.
"Money Market Margin" has the meaning set forth in
Section 2.03(d).
"Money Market Quote" means an offer by a Bank to
make a Money Market Loan in accordance with Section 2.03.
"Money Market Refunding Loan" has the meaning set
forth in Section 2.03(h).
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means at any time an employee
pension benefit plan within the meaning of Section
4001(a)(3) of ERISA to which any member of the ERISA Group
is then making or accruing an obligation to make
contributions or has within the preceding five plan years
made contributions, including for these purposes any Person
which ceased to be a member of the ERISA Group during such
five year period.
"Notes" means promissory notes of a Borrower,
substantially in the form of Exhibit A hereto, evidencing
the obligation of such Borrower to repay the Loans made to
it, and "Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" means a Notice of Committed
Borrowing (as defined in Section 2.02) or a Notice of Money
Market Borrowing (as defined in Section 2.03(f)).
"One Year Credit Agreement" means the One Year
Credit Agreement dated as of January 25, 1994 among the
Company, the Banks and Co-Agents listed therein, Chemical
Bank, as Managing Agent, and Morgan Guaranty Trust Company,
as Agent, as such One Year Credit Agreement may be amended
from time to time.
"Parent" means, with respect to any Bank, any
Person controlling such Bank.
"Participant" has the meaning set forth in Section
11.06(b).
"PBGC" means the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or
organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension
benefit plan (other than a Multiemployer Plan) which is
covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Internal Revenue
Code and either (i) is maintained, or contributed to, by any
member of the ERISA Group for employees of any member of the
ERISA Group or (ii) for purposes of the imposition of
liability under Section 4069 of ERISA, has at any time
within the preceding five years been maintained, or
contributed to, by any Person which was at such time a
member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Prime Rate" means the rate of interest publicly
announced by Morgan Guaranty Trust Company of New York in
New York City from time to time as its Prime Rate.
"Qualifying Preferred Stock" means any preferred
stock of the Company, if and to the extent that the terms of
such preferred stock do not provide for any redemption,
repurchase or other acquisition thereof (except a
redemption, repurchase or other acquisition thereof at the
option of the Company) prior to the date which is 30 days
after the Termination Date.
"Reference Banks" means the CD Reference Banks or
the Euro-Dollar Reference Banks, as the context may require,
and "Reference Bank" means any one of such Reference Banks.
"Refunding Borrowing" means (i) a Committed
Borrowing which, after application of the proceeds thereof,
results in no net increase in the outstanding principal
amount of Committed Loans made by any Bank to any Borrower
or (ii) the borrowing of a Money Market Refunding Loan.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from
time to time.
"Required Banks" means at any time Banks having at
least 66-2/3% of the aggregate amount of the Commitments or,
if the Commitments shall have been terminated, holding Notes
evidencing at least 66-2/3% of the aggregate unpaid
principal amount of the Loans.
"Revolving Credit Period" means the period from
and including the Effective Date to and including the
Termination Date.
"S&P" means Standard & Poor's Corporation.
"Subsidiary" means any corporation or other entity
of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are
at the time directly or indirectly owned by the Company (or,
if such term is used with reference to any other Person, by
such other Person).
"Subsidiary Guarantors" means one or more Wholly-
Owned Consolidated Subsidiaries to which the Company will
transfer, or cause to be transferred, the assets acquired in
the Westinghouse DCBU Acquisition and certain other assets
of the Company and/or its Subsidiaries relating to their
Industrial Control and Power Distribution business, and the
related marketing and sales operations.
"Subsidiary Guaranty" means a Subsidiary Guaranty
to be entered into by a Subsidiary Guarantor, substantially
in the form of Exhibit J hereto, as such Subsidiary Guaranty
may be amended from time to time.
"Substitute Bank" has the meaning set forth in
Section 8.06.
"Termination Date" means the date which is five
years after the Effective Date, or, if such day is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar
Business Day.
"Unfunded Liabilities" means, with respect to any
Plan at any time, the amount (if any) by which (i) the value
of all benefit liabilities under such Plan, determined on a
plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii)
the fair market value of all Plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued
but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the
extent that such excess represents a potential liability of
a member of the ERISA Group to the PBGC or any other Person
under Title IV of ERISA.
"United States" means the United States of
America, including the States and the District of Columbia,
but excluding its territories and possessions.
"Westinghouse" means Westinghouse Electric
Corporation, a Pennsylvania corporation, and its successors.
"Westinghouse DCBU Acquisition" means the
Company's acquisition of certain assets and assumption of
certain liabilities of the Distribution and Control Business
Unit of Westinghouse, substantially as described in the
Information Documents.
"Wholly-Owned Consolidated Subsidiary" means any
Consolidated Subsidiary all of the shares of capital stock
or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly
owned by the Company.
SECTION 1.02. Accounting Terms and
Determinations. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder
shall be prepared in accordance with generally accepted
accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred
in by the Company's independent public accountants) with the
most recent audited consolidated financial statements of the
Company and its Consolidated Subsidiaries delivered to the
Banks; provided that, if the Company notifies the Agent that
the Company wishes to amend any covenant in Article V to
eliminate the effect of any change in generally accepted
accounting principles on the operation of such covenant (or
if the Agent notifies the Company that the Required Banks
wish to amend Article V for such purpose), then the
Company's compliance with such covenant shall be determined
on the basis of generally accepted accounting principles in
effect immediately before the relevant change in generally
accepted accounting principles became effective, until
either such notice is withdrawn or such covenant is amended
in a manner satisfactory to the Company and the Required
Banks.
SECTION 1.03. Types of Borrowings. The term
"Borrowing" denotes the aggregation of Loans of one or more
Banks to be made to a single Borrower pursuant to Article II
on a single date and for a single Interest Period.
Borrowings are classified for purposes of this Agreement
either by reference to the pricing of Loans comprising such
Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the
provisions of Article II under which participation therein
is determined (i.e., a "Committed Borrowing" is a Borrowing
under Section 2.01 in which all Banks participate in
proportion to their Commitments, while a "Money Market
Borrowing" is a Borrowing under Section 2.03 in which the
Bank participants are determined on the basis of their bids
in accordance therewith).
SECTION 1.04. Basis for Ratings. The credit
ratings to be utilized in the determination of a Status are
the ratings assigned to unsecured obligations of the Company
without third party credit support. Ratings assigned to any
obligation which is secured or which has the benefit of
third party credit support shall be disregarded.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. Each Bank
severally agrees, on the terms and conditions set forth in
this Agreement, to make loans to the Company or any Eligible
Subsidiary pursuant to this Section from time to time during
the Revolving Credit Period; provided that the aggregate
principal amount of Committed Loans by such Bank at any one
time outstanding to all Borrowers shall not exceed the
amount of its Commitment. Each Borrowing under this Section
2.01 shall be in an aggregate principal amount of
$10,000,000 or any larger multiple of $1,000,000 (except
that any such Borrowing may be in the aggregate amount
available in accordance with Section 3.02(c)) and shall be
made from the several Banks ratably in proportion to their
respective Commitments. Within the foregoing limits, the
Borrowers may borrow under this Section 2.01, repay, or to
the extent permitted by Section 2.11 prepay, Loans and
reborrow at any time during the Revolving Credit Period
under this Section 2.01. Notwithstanding the foregoing, no
more than ten Fixed Rate Committed Borrowings shall be
outstanding at any one time, and any Borrowing that would
exceed such limitation shall be made as a Base Rate
Borrowing.
SECTION 2.02. Notice of Committed Borrowing.
(a) The relevant Borrower shall give the Agent notice (a
"Notice of Committed Borrowing") before 10:00 A.M. (New York
City time) on (x) the date of each Base Rate Borrowing,
(y) the second Domestic Business Day before each CD
Borrowing and (z) the third Euro-Dollar Business Day before
each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Domestic
Borrowing or a Euro-Dollar Business Day in the case of
a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing
are to be CD Loans, Base Rate Loans or Euro-Dollar
Loans, and
(iv) in the case of a Fixed Rate Borrowing, the
duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest
Period.
(b) The provisions of subsection (a) above
notwithstanding, if a Borrower shall not have given a Notice
of Borrowing before 10:00 A.M. (New York City time) on the
last day of the Interest Period applicable to an outstanding
Committed Borrowing, then, unless such Borrower notifies the
Agent before such time that it elects not to borrow on such
date, the Agent shall be deemed to have received a Notice of
Committed Borrowing specifying (i) that the date of the
proposed Borrowing shall be the last day of the Interest
Period applicable to such outstanding Borrowing, (ii) that
the aggregate amount of the proposed Borrowing shall be the
amount of such outstanding Borrowing (reduced to the extent
necessary to reflect any reduction of the Commitments on or
prior to the date of the proposed Borrowing), and (iii) that
the Loans comprising the proposed Borrowing are to be Base
Rate Loans.
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to
Committed Borrowings pursuant to Section 2.01, any Borrower
may, as set forth in this Section, request the Banks during
the Revolving Credit Period to make offers to make Money
Market Loans to the Borrower. The Banks may, but shall have
no obligation to, make such offers and the Borrower may, but
shall have no obligation to, accept any such offers in the
manner set forth in this Section.
(b) Money Market Quote Request. When a Borrower
wishes to request offers to make Money Market Loans under
this Section, it shall transmit to the Agent by telex or
facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B hereto so as to be
received before 10:00 A.M. (New York City time) on (x) the
fifth Euro-Dollar Business Day prior to the date of
Borrowing proposed therein, in the case of a LIBOR Auction
or (y) the Domestic Business Day next preceding the date of
Borrowing proposed therein, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Company and the Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be
effective) specifying:
(i) the proposed date of Borrowing, which shall
be a Euro-Dollar Business Day in the case of a LIBOR
Auction or a Domestic Business Day in the case of an
Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which
shall be $10,000,000 or a larger multiple of
$1,000,000,
(iii) the duration of the Interest Period
applicable thereto, subject to the provisions of the
definition of Interest Period, and
(iv) whether the Money Market Quotes requested are
to set forth a Money Market Margin or a Money Market
Absolute Rate.
A Borrower may request offers to make Money Market Loans for
more than one Interest Period in a single Money Market Quote
Request. No Money Market Quote Request shall be given
within five Euro-Dollar Business Days (or such other number
of days as the Company and the Agent may agree) of any other
Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly
upon receipt of a Money Market Quote Request, the Agent
shall send to the Banks by telex or facsimile transmission
an Invitation for Money Market Quotes substantially in the
form of Exhibit C hereto, which shall constitute an
invitation by the relevant Borrower to each Bank to submit
Money Market Quotes offering to make the Money Market Loans
to which such Money Market Quote Request relates in
accordance with this Section.
(d) Submission and Contents of Money Market
Quotes. (i) Each Bank may submit a Money Market Quote
containing an offer or offers to make Money Market Loans in
response to any Invitation for Money Market Quotes. Each
Money Market Quote must comply with the requirements of this
subsection (d) and must be submitted to the Agent by telex
or facsimile transmission at its offices specified in or
pursuant to Section 11.01 not later than (x) 2:00 P.M. (New
York City time) on the fourth Euro-Dollar Business Day prior
to the proposed date of Borrowing, in the case of a LIBOR
Auction or (y) 9:15 A.M. (New York City time) on the
proposed date of Borrowing, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Company and the Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be
effective); provided that Money Market Quotes submitted by
the Agent (or any affiliate of the Agent) in the capacity of
a Bank may be submitted, and may only be submitted, if the
Agent or such affiliate notifies the Borrower of the terms
of the offer or offers contained therein not later than (x)
one hour prior to the deadline for the other Banks, in the
case of a LIBOR Auction or (y) 15 minutes prior to the
deadline for the other Banks, in the case of an Absolute
Rate Auction. Subject to Articles III and VI, any Money
Market Quote so made shall be irrevocable except with the
written consent of the Agent given on the instructions of
the relevant Borrower.
(ii) Each Money Market Quote shall be in
substantially the form of Exhibit D hereto and shall in any
case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan
for which each such offer is being made, which
principal amount (w) may be greater than or less than
the Commitment of the quoting Bank, (x) must be
$5,000,000 or a larger multiple of $1,000,000, (y) may
not exceed the principal amount of Money Market Loans
for which offers were requested and (z) may be subject
to an aggregate limitation as to the principal amount
of Money Market Loans for which offers being made by
such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin
above or below the applicable London Interbank Offered
Rate (the "Money Market Margin") offered for each such
Money Market Loan, expressed as a percentage (specified
to the nearest 1/10,000 of 1%) to be added to or
subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the
rate of interest per annum (specified to the nearest
1/10,000 of 1%) (the "Money Market Absolute Rate")
offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate
offers by the quoting Bank with respect to each Interest
Period specified in the related Invitation for Money Market
Quotes.
(iii) Any Money Market Quote shall be disregarded
if it:
(A) is not substantially in conformity with
Exhibit D hereto or does not specify all of the
information required by subsection (d)(ii);
(B) contains qualifying, conditional or similar
language;
(C) proposes terms other than or in addition to
those set forth in the applicable Invitation for Money
Market Quotes; or
(D) arrives after the time set forth in
subsection (d)(i).
(e) Notice to Borrower. The Agent shall promptly
notify the relevant Borrower of the terms (x) of any Money
Market Quote submitted by a Bank that is in accordance with
subsection (d) and (y) of any Money Market Quote that
amends, modifies or is otherwise inconsistent with a
previous Money Market Quote submitted by such Bank with
respect to the same Money Market Quote Request. Any such
subsequent Money Market Quote shall be disregarded by the
Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money
Market Quote. The Agent's notice to the relevant Borrower
shall specify (A) the aggregate principal amount of Money
Market Loans for which offers have been received for each
Interest Period specified in the related Money Market Quote
Request, (B) the respective principal amounts and Money
Market Margins or Money Market Absolute Rates, as the case
may be, so offered and (C) if applicable, limitations on the
aggregate principal amount of Money Market Loans for which
offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later
than 10:00 A.M. (New York City time) on (x) the third
Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) the
proposed date of Borrowing, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Company and the Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be
effective), the relevant Borrower shall notify the Agent of
its acceptance or non-acceptance of the offers so notified
to it pursuant to subsection (e). In the case of
acceptance, such notice (a "Notice of Money Market
Borrowing") shall specify the aggregate principal amount of
offers for each Interest Period that are accepted. The
relevant Borrower may accept any Money Market Quote in whole
or in part; provided that:
(i) the aggregate principal amount of each Money
Market Borrowing may not exceed the applicable amount
set forth in the related Money Market Quote Request,
(ii) the principal amount of each Money Market
Borrowing must be $10,000,000 or a larger multiple of
$1,000,000,
(iii) acceptance of offers may only be made on the
basis of ascending Money Market Margins or Money Market
Absolute Rates, as the case may be, and
(iv) a Borrower may not accept any offer that is
described in subsection (d)(iii) or that otherwise
fails to comply with the requirements of this
Agreement.
(g) Allocation by Agent. If offers are made by
two or more Banks with the same Money Market Margins or
Money Market Absolute Rates, as the case may be, for a
greater aggregate principal amount than the amount in
respect of which such offers are accepted for the related
Interest Period, the principal amount of Money Market Loans
in respect of which such offers are accepted shall be
allocated by the Agent among such Banks as nearly as
possible (in multiples of $1,000,000, as the Agent may deem
appropriate) in proportion to the aggregate principal
amounts of such offers. Determinations by the Agent of the
amounts of Money Market Loans shall be conclusive in the
absence of manifest error.
(h) Refunding of Money Market Loans. If, on the
date of the maturity of any Money Market Loan, the relevant
Borrower is able to meet all the conditions set forth in
Section 3.02 for a Refunding Borrowing, but is unable to
meet all the conditions set forth in Section 3.02 for any
other Borrowing, such Borrower may, upon three Euro-Dollar
Business Days' notice to the Agent and the Bank which made
such Money Market Loan, require such Bank to refund such
Money Market Loan by making another Money Market Loan (a
"Money Market Refunding Loan") to such Borrower on such
maturity date in an amount not to exceed the principal
amount of the Money Market Loan to be refunded. Such Money
Market Refunding Loan shall have an Interest Period of one
month (subject to the provisions of the definition of
Interest Period) and shall bear interest on the outstanding
principal amount thereof, for each day in such Interest
Period, at a rate per annum equal to the sum of the Euro-
Dollar Margin for such day plus the London Interbank Offered
Rate applicable to such Interest Period. Such interest
shall be payable on the last day of such Interest Period.
Any overdue principal of or interest on any Money Market
Refunding Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of
2% plus the Base Rate for such day. At the maturity of any
such Money Market Refunding Loan, such Borrower may require
such Bank to refund such Money Market Refunding Loan by
making another Money Market Refunding Loan subject to the
satisfaction of, and in accordance with, the terms and
conditions set forth in this subsection (h).
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the
Agent shall promptly notify each Bank of the contents
thereof and of such Bank's share (if any) of such Borrowing
and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City
time) on the date of each Borrowing, each Bank participating
therein shall (except as provided in subsection (c) of this
Section) make available its share of such Borrowing, in
Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section
11.01. Unless the Agent determines that any applicable
condition specified in Article III has not been satisfied,
the Agent will make the funds so received from the Banks
available to the relevant Borrower at the Agent's aforesaid
address in immediately available funds.
(c) If any Bank makes a new Loan to a Borrower
hereunder on a day on which such Borrower is to repay all or
any part of an outstanding Loan from such Bank, such Bank
shall apply the proceeds of its new Loan to make such
repayment and only an amount equal to the difference (if
any) between the amount being borrowed by such Borrower and
the amount being repaid by it shall be made available by
such Bank to the Agent as provided in subsection (b), or
remitted by such Borrower to the Agent as provided in
Section 2.12, as the case may be.
(d) Unless the Agent shall have received notice
from a Bank prior to the date of any Borrowing that such
Bank will not make available to the Agent such Bank's share
of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such
Borrowing in accordance with subsections (b) and (c) of this
Section 2.04 and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank
shall not have so made such share available to the Agent,
such Bank and the relevant Borrower severally agree to repay
to the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date
such amount is made available to such Borrower until the
date such amount is repaid to the Agent, at (i) in the case
of such Borrower, a rate per annum equal to the higher of
the Federal Funds Rate and the interest rate applicable
thereto pursuant to Section 2.07 and (ii) in the case of
such Bank, the Federal Funds Rate. If such Bank shall repay
to the Agent such corresponding amount, such amount so
repaid shall constitute such Bank's Loan included in such
Borrowing for purposes of this Agreement.
SECTION 2.05. Notes. (a) The Loans of each Bank
to each Borrower shall be evidenced by a single Note of such
Borrower payable to the order of such Bank for the account
of its Applicable Lending Office in an amount equal to the
aggregate unpaid principal amount of such Bank's Loans to
such Borrower.
(b) Each Bank may, by notice to a Borrower and
the Agent, request that its Loans of a particular type to
such Borrower be evidenced by a separate Note of such
Borrower in an amount equal to the aggregate unpaid
principal amount of such Loans. Each such Note shall be in
substantially the form of Exhibit A hereto with appropriate
modifications to reflect the fact that it evidences solely
Loans of the relevant type. Each reference in this
Agreement to the "Note" of such Bank shall be deemed to
refer to and include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Bank's Note pursuant to
Section 3.01(a) or Section 3.03(a), the Agent shall forward
such Note to such Bank. Each Bank shall record the date,
amount, type and maturity of each Loan made by it to each
Borrower and the date and amount of each payment of
principal made with respect thereto, and may, if such Bank
so elects in connection with any transfer or enforcement of
any of its Notes, endorse on the schedule forming a part
thereof appropriate notations to evidence the foregoing
information with respect to each such Loan to the relevant
Borrower then outstanding; provided that the failure of any
Bank to make any such recordation or endorsement shall not
affect the obligations of any Borrower hereunder or under
the Notes. Each Bank is hereby irrevocably authorized by
each Borrower so to endorse its Notes and to attach to and
make a part of any Note a continuation of any such schedule
as and when required.
SECTION 2.06. Maturity of Loans. Each Loan
included in any Borrowing shall mature, and the principal
amount thereof shall be due and payable, on the last day of
the Interest Period applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base
Rate Loan shall bear interest on the outstanding principal
amount thereof, for each day from the date such Loan is made
until it becomes due, at a rate per annum equal to the Base
Rate for such day. Such interest shall be payable for each
Interest Period on the last day thereof. Any overdue
principal of or interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the rate
otherwise applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the
outstanding principal amount thereof, for each day in the
Interest Period applicable thereto, at a rate per annum
equal to the sum of the CD Margin for such day plus the
Adjusted CD Rate applicable to such Interest Period;
provided that if any CD Loan or any portion thereof shall,
as a result of clause (2)(b) of the definition of Interest
Period, have an Interest Period of less than 30 days, such
portion shall bear interest during such Interest Period at
the rate applicable to Base Rate Loans during such period.
Such interest shall be payable for each Interest Period on
the last day thereof and, if such Interest Period is longer
than 90 days, at intervals of 90 days after the first day
thereof. Any overdue principal of or interest on any CD
Loan shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the sum of 2% plus
the higher of (i) the sum of the CD Margin for such day plus
the Adjusted CD Rate applicable to such Loan and (ii) the
rate applicable to Base Rate Loans for such day.
"CD Margin" means (i) 0.3375% per annum for any
day on which Level I Status exists, (ii) 0.3750% per annum
for any day on which Level II Status exists, (iii) 0.4375%
per annum for any day on which Level III Status exists and
(iv) 0.5000% per annum for any day on which Level IV Status
exists.
The "Adjusted CD Rate" applicable to any Interest
Period means a rate per annum determined pursuant to the
following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest
Period is the rate of interest determined by the Agent to be
the average (rounded upward, if necessary, to the next
higher 1/100 of 1%) of the prevailing 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 two
or more New York certificate of deposit dealers of
recognized standing for the purchase at face value from each
CD Reference Bank of its certificates of deposit in an
amount comparable to the principal amount of the CD Loan of
such CD Reference Bank to which such Interest Period applies
and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including without
limitation any basic, supplemental or emergency reserves)
for a member bank of the Federal Reserve System in New York
City with deposits exceeding five billion dollars in respect
of new non-personal time deposits in dollars in New York
City having a maturity comparable to the related Interest
Period and in an amount of $100,000 or more. The Adjusted
CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve
Percentage.
"Assessment Rate" means for any day the annual
assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund classified as adequately
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. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change
in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on
the outstanding principal amount thereof, for each day in
the Interest Period applicable thereto, at a rate per annum
equal to the sum of the Euro-Dollar Margin for such day plus
the London Interbank Offered Rate applicable to such
Interest Period. Such interest shall be payable for each
Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of
three months after the first day thereof.
"Euro-Dollar Margin" means (i) 0.2125% per annum
for any day on which Level I Status exists, (ii) 0.2500% per
annum for any day on which Level II Status exists,
(iii) 0.3125% per annum for any day on which Level III
Status exists and (iv) 0.3750% per annum for any day on
which Level IV Status exists.
The "London Interbank Offered Rate" applicable to
any Interest Period means the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective
rates per annum at which deposits in dollars are offered to
each of the Euro-Dollar Reference Banks in the London
interbank market at approximately 11:00 A.M. (London time)
two Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Euro-Dollar
Reference Bank to which such Interest Period is to apply and
for a period of time comparable to such Interest Period.
(d) Any overdue principal of or interest on any
Euro-Dollar Loan shall bear interest, payable on demand, for
each day from and including the date payment thereof was due
to but excluding the date of actual payment, at a rate per
annum equal to the sum of 2% plus the higher of (i) the sum
of the Euro-Dollar Margin for such day plus the London
Interbank Offered Rate applicable to such Loan and (ii) the
Euro-Dollar Margin for such day plus the average (rounded
upward, if necessary, to the next higher 1/16 of 1%) of the
respective rates per annum at which one day (or, if such
amount due remains unpaid more than three Euro-Dollar
Business Days, then for such other period of time not longer
than six months as the Agent may select) deposits in dollars
in an amount approximately equal to such overdue payment due
to each of the Euro-Dollar Reference Banks are offered to
such Euro-Dollar Reference Bank in the London interbank
market for the applicable period determined as provided
above (or, if the circumstances described in clause (a) or
(b) of Section 8.01 shall exist, at a rate per annum equal
to the sum of 2% plus the rate applicable to Base Rate Loans
for such day).
(e) Subject to Section 8.01(a), each Money Market
LIBOR Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto,
at a rate per annum equal to the sum of the London Interbank
Offered Rate for such Interest Period (determined in
accordance with Section 2.07(c) as if the related Money
Market LIBOR Borrowing were a Committed Euro-Dollar
Borrowing) plus (or minus) the Money Market Margin quoted by
the Bank making such Loan in accordance with Section 2.03.
Each Money Market Absolute Rate Loan shall bear interest on
the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the
Money Market Absolute Rate quoted by the Bank making such
Loan in accordance with Section 2.03. Such interest shall
be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, at
intervals of three months after the first day thereof. Any
overdue principal of or interest on any Money Market Loan
shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of 2% plus the
Base Rate for such day.
(f) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give
prompt notice to the relevant Borrower and the participating
Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of
manifest error.
(g) Each Reference Bank agrees to use its best
efforts to furnish quotations to the Agent as contemplated
by this Section. If any Reference Bank does not furnish a
timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations
furnished by the remaining Reference Bank or Banks or, if
none of such quotations is available on a timely basis, the
provisions of Section 8.01 shall apply.
SECTION 2.08. Fees.
(a) Facility Fee. The Company shall pay to the
Agent for the account of the Banks ratably a facility fee at
the Facility Fee Rate. Such facility fee shall accrue (i)
for each day from and including the Effective Date to but
excluding the Termination Date (or earlier date of
termination of the Commitments in their entirety), on the
aggregate amount of the Commitments (whether used or unused)
on such day and (ii) for each day from and including such
Termination Date or other date of termination to but
excluding the date the Loans shall be repaid in their
entirety, on the aggregate outstanding principal amount of
the Loans on such day.
"Facility Fee Rate" means (i) 0.1000% per annum
for any day on which Level I Status exists, (ii) 0.1250% per
annum for any day on which Level II Status exists, (iii)
0.1875% per annum for any day on which Level III Status
exists and (iv) 0.2500% per annum for any day on which Level
IV Status exists.
(b) Payments. Accrued fees under this Section
shall be payable quarterly on each March 31, June 30,
September 30 and December 31 and upon the date of
termination of the Commitments in their entirety (and, if
later, the date the Loans shall be repaid in their
entirety).
SECTION 2.09. Optional Termination or Reduction
of Commitments. During the Revolving Credit Period, the
Company may, upon at least three Domestic Business Days'
notice to the Agent, (i) terminate the Commitments at any
time, if no Loans are outstanding at such time or
(ii) ratably reduce from time to time by an aggregate amount
of $25,000,000 or any larger multiple of $5,000,000, the
aggregate amount of the Commitments in excess of the
aggregate outstanding principal amount of the Loans.
SECTION 2.10. Mandatory Termination or Reduction
of Commitments. The Commitments shall terminate on the
Termination Date, and any Loans then outstanding (together
with accrued interest thereon) shall be due and payable on
such date.
SECTION 2.11. Optional Prepayments. (a) The
relevant Borrower may (i) upon at least one Domestic
Business Day's notice to the Agent, prepay any Base Rate
Borrowing (or any Money Market Borrowing bearing interest at
the Base Rate pursuant to Section 8.01(a)), (ii) upon at
least two Domestic Business Days' notice to the Agent,
prepay any CD Borrowing and (iii) upon at least three Euro-
Dollar Business Days' notice to the Agent, prepay any Euro-
Dollar Borrowing, in whole at any time, or from time to time
in part in amounts aggregating $10,000,000 or any larger
multiple of $1,000,000, by paying the principal amount to be
prepaid together with accrued interest thereon to the date
of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Banks
included in such Borrowing. In connection with any such
prepayment of a CD Borrowing or Euro-Dollar Borrowing, the
Company shall reimburse the Banks for funding losses as
provided in Section 2.13.
(b) Except as provided in Section 8.02, no
Borrower may prepay all or any portion of the principal
amount of any Money Market Loan (except a Money Market Loan
bearing interest at the Base Rate pursuant to Section
8.01(a)) prior to the maturity thereof .
(c) Upon receipt of a notice of prepayment
pursuant to this Section, the Agent shall promptly notify
each Bank of the contents thereof and of such Bank's ratable
share (if any) of such prepayment and such notice shall not
thereafter be revocable by the relevant Borrower.
SECTION 2.12. General Provisions as to Payments.
(a) The Borrowers shall make each payment of principal of,
and interest on, the Loans and of fees hereunder, not later
than 12:00 Noon (New York City time) on the date when due,
in Federal or other funds immediately available in New York
City, to the Agent at its address specified in or pursuant
to Section 11.01. The Agent will promptly distribute to
each Bank its ratable share of each such payment received by
the Agent for the account of the Banks. Whenever any
payment of principal of, or interest on, the Domestic Loans
or of fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended
to the next succeeding Domestic Business Day. Whenever any
payment of principal of, or interest on, the Euro-Dollar
Loans shall be due on a day which is not a Euro-Dollar
Business Day, the date for payment thereof shall be extended
to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day. Whenever any payment of
principal of, or interest on, the Money Market Loans shall
be due on a day which is not a Euro-Dollar Business Day, the
date for payment thereof shall be extended to the next
succeeding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such
extended time.
(b) Unless the Agent shall have received notice
from a Borrower prior to the date on which any payment is
due from such Borrower to the Banks hereunder that such
Borrower will not make such payment in full, the Agent may
assume that such Borrower has made such payment in full to
the Agent on such date and the Agent may, in reliance upon
such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such
Bank. If and to the extent that such Borrower shall not
have so made such payment, each Bank shall repay to the
Agent forthwith on demand such amount distributed to such
Bank together with interest thereon, for each day from the
date such amount is distributed to such Bank until the date
such Bank repays such amount to the Agent, at the Federal
Funds Rate.
SECTION 2.13. Funding Losses. If (i) a Borrower
makes any payment of principal with respect to any Fixed
Rate Loan (pursuant to Article VI or VIII or otherwise) on
any day other than the last day of the Interest Period
applicable thereto, or the last day of an applicable period
fixed pursuant to Section 2.07(d), (ii) a Borrower fails to
borrow any Fixed Rate Loan after notice has been given to
any Bank in accordance with Section 2.04(a) or (iii) the
Company requires a Bank to assign its rights with respect to
any CD Loan or Euro-Dollar Loan to a Substitute Bank
pursuant to Section 8.06 on any day other than the last day
of the Interest Period applicable thereto, the Company shall
reimburse each Bank within 15 days after demand for any
resulting loss or expense incurred by it (or by an existing
or prospective Participant in the related Loan), including
(without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but
excluding loss of margin for the period after any such
payment, failure to borrow or required assignment, provided
that such Bank shall have delivered to the Company a
certificate setting forth the amount of such loss or expense
and showing in reasonable detail how such amount was
calculated, which certificate shall be conclusive in the
absence of manifest error.
SECTION 2.14. Computation of Interest and Fees.
Interest based on the Prime Rate hereunder shall be computed
on the basis of a year of 365 days (or 366 days in a leap
year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All
other interest and fees shall be computed on the basis of a
year of 360 days and paid for the actual number of days
elapsed (including the first day but excluding the last
day).
SECTION 2.15. Regulation D Compensation. Each
Bank may require each Borrower to pay, contemporaneously
with each payment of interest on Euro-Dollar Loans made to
such Borrower, additional interest on the relevant Euro-
Dollar Loan of such Bank to such Borrower at a rate per
annum determined by such Bank up to but not exceeding the
excess of (i) (A) the applicable London Interbank Offered
Rate divided by (B) one minus the Euro-Dollar Reserve
Percentage over (ii) the applicable London Interbank Offered
Rate. Any Bank wishing to require payment of such
additional interest (x) shall so notify such Borrower and
the Agent, in which case such additional interest on the
Euro-Dollar Loans of such Bank to such Borrower shall be
payable to such Bank at the place indicated in such notice
with respect to each Interest Period commencing at least
three Euro-Dollar Business Days after the giving of such
notice and (y) shall notify such Borrower, at least five
Euro-Dollar Business Days prior to each date on which
interest is payable on Euro-Dollar Loans made to such
Borrower, of the amount then due to such Bank under this
Section. Each Bank confirms that, as of the date hereof,
the Euro-Dollar Reserve Percentage is zero.
SECTION 2.16. Judgment Currency. If for the
purpose of obtaining judgment in any court it is necessary
to convert a sum due from any Borrower hereunder or under
any of the Notes in United States dollars ("dollars") into
another currency, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with
normal banking procedures the Agent could purchase dollars
with such other currency at the Agent's New York office on
the Domestic Business Day preceding that on which final
judgment is given. The obligations of each Borrower in
respect of any sum due to any Bank or the Agent hereunder or
under any Note shall, notwithstanding any judgment in a
currency other than dollars, be discharged only to the
extent that, on the Domestic Business Day following receipt
by such Bank or the Agent (as the case may be) of any sum
adjudged to be so due in such other currency, such Bank or
the Agent (as the case may be) may in accordance with normal
banking procedures purchase dollars with such other
currency. If the amount of dollars so purchased is less
than the sum originally due to such Bank or the Agent, as
the case may be, in dollars, each Borrower agrees, to the
fullest extent that it may effectively do so, as a separate
obligation and notwithstanding any such judgment, to
indemnify such Bank or the Agent, as the case may be,
against such loss, and if the amount of dollars so purchased
exceeds the sum of (a) the amount originally due to such
Bank or the Agent, as the case may be, and (b) any amounts
shared with other Banks as a result of allocations of such
excess as a disproportionate payment to such Bank under
Section 11.04, such Bank or the Agent, as the case may be,
agrees to remit such excess to the appropriate Borrower.
SECTION 2.17. Foreign Subsidiary Costs. (a) If
the cost to any Bank of making or maintaining any Loan to an
Eligible Subsidiary is increased, or the amount of any sum
received or receivable by any Bank (or its Applicable
Lending Office) is reduced by an amount deemed by such Bank
to be material, by reason of the fact that such Eligible
Subsidiary is incorporated in or organized under the laws
of, or conducts business in, a jurisdiction outside the
United States, such Eligible Subsidiary shall indemnify such
Bank for such increased cost or reduction within 15 days
after demand by such Bank (with a copy to the Agent). A
certificate of such Bank, claiming compensation under this
subsection (a), setting forth the additional amount or
amounts to be paid to it hereunder and showing in reasonable
detail how such amount or amounts were calculated, shall be
conclusive in the absence of manifest error.
(b) Each Bank will promptly notify the Company
and the Agent of any event of which it has knowledge that
will entitle such Bank to additional interest or payments
pursuant to subsection (a) of this Section and will
designate a different Applicable Lending Office if, in the
judgment of such Bank, such designation will avoid the need
for, or reduce the amount of, such compensation and will not
be otherwise disadvantageous to such Bank.
SECTION 2.18. Eligible Subsidiaries. (a) The
Company may from time to time cause any Wholly-Owned
Consolidated Subsidiary to become eligible to borrow under
Sections 2.01 and 2.03 by delivering to the Agent an
Election to Participate with respect to such Subsidiary.
The eligibility of any such Subsidiary to borrow under said
Sections shall terminate when the Agent receives a Notice of
Termination with respect to such Subsidiary. Each Election
to Participate delivered to the Agent shall be duly executed
on behalf of the relevant Subsidiary and the Company, and
each Election to Terminate delivered to the Agent shall be
duly executed on behalf of the Company, in such number of
copies as the Agent may request. The delivery of an
Election to Terminate shall not affect any obligation of the
relevant Subsidiary theretofore incurred. The Agent shall
promptly give notice to the Banks of its receipt of any
Election to Participate or Election to Terminate.
(b) If (i) an Eligible Subsidiary at any time
ceases to be an Eligible Subsidiary (by reason of an
Election to Terminate being delivered to the Agent, by
reason of such Subsidiary no longer being a Wholly-Owned
Consolidated Subsidiary or otherwise) or (ii) an Event of
Default specified in Section 6.01(g) or 6.01(h) occurs with
respect to an Eligible Subsidiary (or an event occurs which
would have been such an Event of Default but for the fact
that such Eligible Subsidiary is an Insignificant
Subsidiary):
(A) the Banks will have no obligation to make any
further Loans to such Subsidiary, and
(B) the Company will inform each Bank of the
relevant event described in clause (i) or (ii) of this
subsection (b) within 3 Domestic Business Days after it
occurs and, within 30 days after being requested to do
so by any Bank, will purchase from such Bank its
outstanding Loans to the relevant Subsidiary at a price
equal to the unpaid principal amount of such Loans plus
interest accrued thereon to the date of such purchase
and, if such purchase does not occur on the last day of
an Interest Period, an amount sufficient to reimburse
such Bank for any funding losses, calculated as
provided in Section 2.13 as if such Loans had been
prepaid on the date of such purchase.
ARTICLE III
CONDITIONS
SECTION 3.01. Closing. The closing hereunder
shall occur upon receipt by the Agent of the following
documents, each dated the Closing Date unless otherwise
indicated:
(a) a duly executed Note of the Company for the
account of each Bank dated on or before the Closing
Date complying with the provisions of Section 2.05;
(b) an opinion of Gerald L. Gherlein, Executive
Vice President and General Counsel of the Company,
substantially in the form of Exhibit E hereto;
(c) an opinion of Davis Polk & Wardwell, special
counsel for the Agent, substantially in the form of
Exhibit F hereto; and
(d) all documents the Agent may reasonably
request relating to the existence of the Company, the
corporate authority for and the validity of this
Agreement and the Company's Notes, all in form and
substance satisfactory to the Agent.
The Agent shall promptly notify the Company and the Banks of
the Closing Date, and such notice shall be conclusive and
binding on all parties hereto.
SECTION 3.02. Borrowings. The obligation of any
Bank to make a Loan on the occasion of any Borrowing is
subject to the satisfaction of the following conditions:
(a) the fact that the Closing Date shall have
occurred on or prior to June 30, 1994;
(b) receipt (or deemed receipt) by the Agent of a
Notice of Borrowing as required by Section 2.02 or
2.03, as the case may be;
(c) the fact that, immediately after such
Borrowing, the aggregate outstanding principal amount
of the Loans will not exceed the aggregate amount of
the Commitments;
(d) if the aggregate outstanding principal amount
of the Loans immediately after such Borrowing will
exceed $100,000,000, the fact that the Westinghouse
DCBU Acquisition shall have been consummated prior to
or substantially concurrently with such Borrowing;
(e) the fact that, immediately before and after
such Borrowing, (i) in the case of a Refunding
Borrowing, no Event of Default shall have occurred and
be continuing and (ii) in the case of any other
Borrowing, no Default shall have occurred and be
continuing and no "Event of Default" (as defined in the
One Year Credit Agreement) shall have occurred and be
continuing; and
(f) the fact that (i) the representations and
warranties of the Company contained in this Agreement
shall be true on and as of the date of such Borrowing,
(ii) if a Subsidiary Guaranty has theretofore been
executed and delivered in accordance with Section 5.11,
the representations and warranties of the relevant
Subsidiary Guarantor contained in such Subsidiary
Guaranty shall be true on and as of the date of such
Borrowing and (iii) if the Borrower is an Eligible
Subsidiary, the representations and warranties of such
Eligible Subsidiary contained in this Agreement shall
be true on and as of the date of such Borrowing, except
that this clause (f) shall not apply to (x) in the case
of a Refunding Borrowing, the representations and
warranties set forth in Sections 4.04(c), 4.05, 4.06,
4.07, 4.08 and 4.09 as to any matter which has
theretofore been disclosed in writing by the Company to
the Banks and (y) the representations and warranties
set forth in Sections 4.02(b) and 4.12.
Each Borrowing hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of
such Borrowing as to the facts specified in clauses (c), (d)
(if applicable), (e) and (f) of this Section.
SECTION 3.03. First Borrowing by Each Eligible
Subsidiary. The obligation of each Bank to make a Loan on
the occasion of the first Borrowing by each Eligible
Subsidiary is subject to the satisfaction of the following
further conditions:
(a) receipt by the Agent for the account of
each Bank of a duly executed Note of such Eligible
Subsidiary, dated on or before the date of such
Borrowing, complying with the provisions of
Section 2.05;
(b) receipt by the Agent of one or more
opinions of counsel for such Eligible Subsidiary
acceptable to the Agent, which taken together
cover the matters set forth in Exhibit I hereto;
and
(c) receipt by the Agent of all documents
which it may reasonably request relating to (i)
the existence of such Eligible Subsidiary, (ii)
the corporate or partnership authority for and the
validity of the Election to Participate of such
Eligible Subsidiary, this Agreement and the Notes
of such Eligible Subsidiary and (iii) the
corporate authorization by the board of directors
of the Company of the guaranty set forth in
Article X hereof with respect to such Eligible
Subsidiary, in each case in form and substance
satisfactory to the Agent.
Each opinion referred to in clause (b) above shall be dated
no more than five Euro-Dollar Business Days before the date
of the first Borrowing by such Eligible Subsidiary.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The
Company is a corporation duly incorporated, validly existing
and in good standing under the laws of Ohio, and has all
corporate powers and all Material governmental licenses,
authorizations, consents and approvals required to carry on
its business as now conducted.
SECTION 4.02. Corporate and Governmental
Authorization; No Contravention. (a) The execution,
delivery and performance by the Company of this Agreement
and its Notes are within the Company's corporate powers,
have been duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable
law or regulation or of the amended articles of
incorporation or amended regulations of the Company or of
any agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or any of its
Subsidiaries or result in the creation or imposition of any
Lien on any asset of the Company or any of its Subsidiaries.
(b) The consummation of the Westinghouse DCBU
Acquisition will not contravene, or constitute a default
under, any provision of applicable law or regulation or of
the amended articles of incorporation or amended regulations
of the Company or of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Company
or any of its Subsidiaries or, to the best of the Company's
knowledge, Westinghouse or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of the Company and
the Company's Notes, when executed and delivered in
accordance with this Agreement, will constitute valid and
binding obligations of the Company, in each case enforceable
in accordance with its terms, except as may be limited by
(i) bankruptcy, insolvency or other similar laws affecting
the rights and remedies of creditors generally and (ii)
general principles of equity.
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the Company
and its Consolidated Subsidiaries as of December 31, 1992
and the related consolidated statements of income,
shareholders' equity and cash flows for the fiscal year then
ended, reported on by Ernst & Young and set forth in the
Company's 1992 Form 10-K, a copy of which has been delivered
to each of the Banks, fairly present, in conformity with
generally accepted accounting principles, the consolidated
financial position of the Company and its Consolidated
Subsidiaries as of such date and their consolidated results
of operations and cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of
the Company and its Consolidated Subsidiaries as of
September 30, 1993 and the related unaudited consolidated
statements of income, shareholders' equity and cash flows
for the nine months then ended, set forth in the Company's
quarterly report for the fiscal quarter ended September 30,
1993 as filed with the Securities and Exchange Commission on
Form 10-Q, a copy of which has been delivered to each of the
Banks, fairly present, on a basis consistent with the
financial statements referred to in subsection (a) of this
Section (except that certain operations previously reported
as discontinued are now included in continuing operations),
the consolidated financial position of the Company and its
Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such
six month period (subject to normal year-end adjustments).
(c) Since September 30, 1993 there has been no
material adverse change in the business, financial position,
results of operations or prospects of the Company and its
Consolidated Subsidiaries, considered as a whole (a
"Material Adverse Change"). The parties hereto agree that
the changes reflected or to be reflected in the Company's
financial statements as of the date and as of a result of
the Westinghouse DCBU Acquisition, to the extent disclosed
to the Banks in the Information Documents, do not in
themselves constitute a Material Adverse Change and will not
be taken into account in determining whether any Material
Adverse Change has occurred.
SECTION 4.05. Litigation. There is no action,
suit or proceeding pending against, or to the knowledge of
the Company threatened against or affecting, the Company or
any of its Subsidiaries before any court or arbitrator or
any governmental body, agency or official in which there is
a reasonable possibility of an adverse decision which would
have a Material Adverse Effect or an adverse effect on the
rights or remedies of the Agent or the Banks under this
Agreement or the Notes or which in any manner draws into
question the validity of this Agreement or the Notes.
SECTION 4.06. Compliance with ERISA. Each member
of the ERISA Group has fulfilled its obligations under the
minimum funding standards of ERISA and the Internal Revenue
Code with respect to each Plan and is in compliance in all
respects with the presently applicable provisions of ERISA
and the Internal Revenue Code with respect to each Plan,
except to the extent that non-fulfillment or non-compliance
could not reasonably be expected to result in a Material
Adverse Effect. The members of the ERISA Group have not (i)
sought a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code in respect of any
Plan, except for waivers of amounts not exceeding
$25,000,000 in the aggregate, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or
in respect of any Benefit Arrangement, or made any amendment
to any Plan or Benefit Arrangement, which has resulted or
could result in the imposition of a Lien or the posting of a
bond or other security under ERISA or the Internal Revenue
Code to secure a liability in excess of $25,000,000 or (iii)
incurred any liability in excess of $25,000,000 under Title
IV of ERISA other than a liability to the PBGC for premiums
under Section 4007 of ERISA.
SECTION 4.07. Environmental Matters. The Company
regularly reviews those contingencies known to it with
respect to which there is a reasonable possibility that
Environmental Laws may have a foreseeable adverse effect on
the business, operations and properties of the Company and
its Subsidiaries. In the course of such reviews it
identifies and evaluates associated liabilities and costs
(including, without limitation, capital or operating
expenditures required for clean-up or closure of properties
presently or previously owned, capital or operating
expenditures required to achieve or maintain compliance with
environmental protection standards imposed by law or as a
condition of any license, permit or contract, related
constraints on operating activities, including the periodic
or permanent shutdown of a facility or reduction in the
level of or change in the nature of operations conducted
thereat, costs or liabilities in connection with off-site
disposal of wastes or Hazardous Substances, and actual or
potential liabilities to third parties, including employees,
and related costs and expenses). On the basis of such
reviews, the Company has reasonably concluded that such
associated liabilities and costs, including the costs of
compliance with Environmental Laws, are unlikely to have a
Material Adverse Effect.
SECTION 4.08. Taxes. United States Federal
income tax returns of the Company and its Subsidiaries have
been examined and closed through the fiscal year ended
December 31, 1987. The Company and its Subsidiaries have
filed all United States Federal income tax returns and all
other material tax returns which are required to be filed by
them and have paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Company or any
Subsidiary, except any such assessment that is being
contested by the Company or any Subsidiary in good faith by
appropriate proceedings. The charges, accruals and reserves
on the books of the Company and its Subsidiaries in respect
of taxes or other governmental charges are, in the opinion
of the Company, adequate.
SECTION 4.09. Subsidiaries. All of the Company's
Subsidiaries (except Insignificant Subsidiaries) are
corporations duly incorporated or partnerships duly
organized, validly existing and in good standing under the
laws of their respective jurisdictions of incorporation or
organization, and have all corporate or partnership powers
and all Material governmental licenses, authorizations,
consents and approvals required to carry on their respective
businesses as now conducted.
SECTION 4.10. Not an Investment Company. The
Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
SECTION 4.11. Full Disclosure. The information
set forth in the Information Documents was true and accurate
in all Material respects on the date as of which such
information was stated or certified, except that the Company
makes no representation whatsoever (express or implied) with
respect to (a) any statements, estimates or projections with
respect to the future performance of the Company and its
Subsidiaries or (b) any historical financial information
concerning Westinghouse Electric Corporation and its
Distribution and Control Business Unit except as it pertains
to 1992. All information hereafter furnished by the Company
at any meeting to which all the Banks are invited or
hereafter furnished in writing by the Company to the Agent
or any Bank pursuant to or in connection with this Agreement
will be true and accurate (in all respects that are material
in relation to any Bank's decision to take or refrain from
taking any action requested by the Company or to exercise or
refrain from exercising any remedy under Article VI hereof)
on the date as of which such information is stated or
certified, subject to the exception set forth in the
preceding sentence. The Company has disclosed to the Banks
in writing any and all facts which have a Material Adverse
Effect (or with respect to which, in the Company's good
faith opinion, a reasonable possibility exists that they may
have a Material Adverse Effect).
SECTION 4.12. Liens. On the date of this
Agreement, the aggregate principal amount of Debt
outstanding which is secured by Liens on assets of the
Company or any Subsidiary does not exceed $50,000,000.
ARTICLE V
COVENANTS
The Company agrees that, so long as any Bank has
any Commitment hereunder or any amount payable under any
Note remains unpaid:
SECTION 5.01. Information. The Company will
deliver to each of the Banks:
(a) as soon as available and in any event within
120 days after the end of each fiscal year of the
Company, a consolidated balance sheet of the Company
and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated statements of
income, shareholders' equity and cash flows for such
fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all
reported on in a manner acceptable to the Securities
and Exchange Commission by Ernst & Young or other
independent public accountants of nationally recognized
standing;
(b) as soon as available and in any event within
60 days after the end of each of the first three
quarters of each fiscal year of the Company, a
condensed consolidated balance sheet of the Company and
its Consolidated Subsidiaries as of the end of such
quarter, the related condensed consolidated statements
of income for such quarter and for the portion of the
Company's fiscal year ended at the end of such quarter
and the related condensed statement of cash flows for
such portion of the Company's fiscal year, setting
forth in the case of such statements of income and cash
flows in comparative form the figures for the
corresponding periods in the Company's previous fiscal
year, all certified by the chief financial officer or
the chief accounting officer of the Company (subject to
normal year-end adjustments) as to fairness of
presentation and consistency with the most recent
audited financial statements referred to in Section
4.04(a) or 5.01(a), except for changes in accounting
principles disclosed in such officer's certificate and
approved by the firm of independent public accountants
which reported on such audited financial statements;
(c) simultaneously with the delivery of each set
of financial statements referred to in clauses (a) and
(b) above, a certificate of the chief financial officer
or the chief accounting officer of the Company
(i) setting forth in reasonable detail the calculations
required to establish whether the Company was in
compliance with the requirements of Section 5.07 on the
date of such financial statements and (ii) stating
whether any Default exists on the date of such
certificate and, if any Default then exists, setting
forth the details thereof and the action which the
Company is taking or proposes to take with respect
thereto;
(d) within ten Domestic Business Days after any
financial officer of the Company obtains knowledge of
any Default, if such Default is then continuing, a
certificate of the chief financial officer or the chief
accounting officer of the Company setting forth the
details thereof and the action which the Company is
taking or proposes to take with respect thereto;
(e) promptly upon the mailing thereof to the
shareholders of the Company generally, copies of all
financial statements, reports and proxy statements so
mailed;
(f) promptly upon the filing thereof, copies of
all registration statements (other than the exhibits
thereto and any registration statements on Form S-8 or
its equivalent) and reports on Forms 10-K, 10-Q and 8-K
(or their equivalents) which the Company shall have
filed with the Securities and Exchange Commission;
(g) if and when any member of the ERISA Group
(i) gives or is required to give, with respect to any
Plan which has Unfunded Liabilities, notice to the PBGC
of any "reportable event" (as defined in Section 4043
of ERISA) which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or
knows that the plan administrator of any such Plan has
given or is required to give notice of any such
reportable event, a copy of the notice of such
reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice
that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title
IV of ERISA of an intent to terminate, impose liability
(other than for premiums under Section 4007 of ERISA)
in respect of, or appoint a trustee to administer any
Plan, a copy of such notice; (iv) applies for a waiver
of the minimum funding standard under Section 412 of
the Internal Revenue Code, a copy of such application;
(v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives
notice of any withdrawal from any Plan pursuant to
Section 4063 of ERISA, a copy of such notice; or (vii)
fails to make any payment or contribution to any Plan
or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or
Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or
other security to secure a liability, a certificate of
the chief financial officer or the chief accounting
officer of the Company setting forth details as to such
occurrence and the action, if any, which the Company or
applicable member of the ERISA Group is required or
proposes to take; provided that the copies referred to
in this subsection (g) shall be required to be
delivered as a result of any event specified in clauses
(i) through (vii) of this subsection (g) only if such
event, together with all other such events within the
previous twelve months, represents actual or potential
liabilities of one or more members of the ERISA Group
in an aggregate amount in excess of $10,000,000 and/or
relates to a Plan or Plans having aggregate Unfunded
Liabilities in excess of $10,000,000 (for which purpose
each event specified in clauses (ii), (vi) and (vii)
shall be deemed to represent an actual liability of a
member of the ERISA Group in the amount set forth in
the relevant notice);
(h) promptly upon the chief financial officer,
chief accounting officer or treasurer of the Company
obtaining knowledge thereof, notice of any change in
any rating by S&P or Moody's of any outstanding senior
unsecured long-term debt of the Company or any public
announcement by S&P or Moody's that such a rating is
under review for possible downgrade; and
(i) from time to time such additional information
regarding the financial position or business of the
Company and its Subsidiaries as the Agent, at the
request of any Bank, may reasonably request.
In addition, if any Bank requests financial statements of
the Eligible Subsidiaries and states that it is required to
obtain such financial statements by a law, rule or
regulation applicable to it, or an interpretation thereof by
a governmental authority, central bank or comparable agency
charged with the administration thereof, or a request or
directive (whether or not having the force of law) of any
such authority, central bank or comparable agency, then,
within 30 days after receiving such request or, if later,
within 120 days after the end of the relevant fiscal year of
the Company, the Company will deliver to such Bank financial
statements of each Eligible Subsidiary, including a balance
sheet and the related statements of income, shareholders'
equity (if such a statement exists) and cash flows for such
fiscal year, certified by a financial officer of the Company
to be the financial statements of such Eligible Subsidiary
used by the Company as working papers in preparing the
financial statements delivered pursuant to Section 5.01(a).
SECTION 5.02. Payment of Obligations. The
Company will pay and discharge, and will cause its
Subsidiaries to pay and discharge, at or before maturity,
all their respective obligations and liabilities, including,
without limitation, tax liabilities, except where the same
may be contested in good faith by appropriate proceedings or
where the failure to pay and discharge them would not have a
Material Adverse Effect. The Company and its Subsidiaries
will maintain, on a consolidated basis, in accordance with
generally accepted accounting principles, appropriate
reserves for the accrual of any of the same.
SECTION 5.03. Maintenance of Property; Insurance.
(a) The Company will, and will cause its Subsidiaries to,
keep all property useful and necessary in their respective
businesses in good working order and condition, ordinary
wear and tear excepted, except where the failure to do so
would not have a Material Adverse Effect.
(b) The Company and its Subsidiaries (except
Insignificant Subsidiaries) will maintain (either in the
name of the Company or in such Subsidiaries' own names),
with financially sound and responsible insurance companies
(which may include so-called captive insurance companies),
insurance on all their respective properties in at least
such amounts and against at least such risks (and with such
risk retention) as are usually insured against in the same
general area by companies of established repute engaged in
the same or a similar business; and will furnish to the
Banks, upon request from the Agent, information presented in
reasonable detail as to the insurance so carried.
SECTION 5.04. Conduct of Business and Maintenance
of Existence. The Company will continue, and will cause its
Subsidiaries (except Insignificant Subsidiaries) to
continue, to engage in the vehicle components and electrical
and electronics controls businesses, and will preserve,
renew and keep in full force and effect, and will cause its
Subsidiaries (except Insignificant Subsidiaries) to
preserve, renew and keep in full force and effect their
respective corporate or partnership existences and their
respective rights, privileges and franchises necessary or
desirable in the normal conduct of business; provided that
nothing in this Section 5.04 shall prohibit (i) the merger
of a Subsidiary into the Company or the merger or
consolidation of a Subsidiary with or into another Person if
the corporation surviving such consolidation or merger is a
Subsidiary and if, in each case, after giving effect
thereto, no Default shall have occurred and be continuing,
(ii) the termination of the corporate or partnership
existence of any Subsidiary if the Company in good faith
determines that such termination is in the best interest of
the Company and is not materially disadvantageous to the
Banks, (iii) any sale, lease or transfer of assets or any
sale of the stock of a Subsidiary which is otherwise
permitted by Section 5.09 or (iv) the Company or any
Subsidiary from entering into businesses in addition to
those of the general type now conducted by the Company and
its Subsidiaries.
SECTION 5.05. Compliance with Laws. The Company
will comply, and cause each Subsidiary to comply, in all
respects with all applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA
and the rules and regulations thereunder), except where the
necessity of compliance therewith is contested in good faith
by appropriate proceedings or where it is not probable that
the failure to comply therewith will result in a reduction
of more than 25% of the Company's Adjusted Consolidated Net
Worth, as shown in its most recent financial statements
furnished in accordance with Section 5.01(a) or 5.01(b).
SECTION 5.06. Inspection of Property, Books and
Records. The Company will keep, and will cause each
Subsidiary to keep, books of record and account in which
entries shall be made of dealings and transactions in
relation to its business and activities, all to the extent
required to permit its consolidated financial statements to
be audited and reported on without qualification in
accordance with generally accepted accounting principles and
practices. The Company will permit, and will cause each
Subsidiary to permit, representatives of any Bank at such
Bank's expense to visit any of their respective properties
(such representatives to be accompanied by an officer of the
Company or his designee) and to discuss their respective
affairs, finances and accounts with officers of the Company
or their designees, all at such reasonable times and as
often as may reasonably be desired. During any period in
which (i) Level III Status or Level IV Status exists or (ii)
a Default exists, the Company will permit, and will cause
each Subsidiary to permit, representatives of any Bank, at
such Bank's expense (except as provided in Section
11.03(a)(ii)), to inspect any of their respective
properties, to examine and make abstracts from any of their
respective books and records (except to the extent covered
by attorney-client or other privilege) and to discuss their
respective affairs, finances and accounts with their
respective officers and independent public accountants, all
at such reasonable times and as often as may reasonably be
desired; provided that, at the Company's request, an officer
of the Company or his designee may be present at any such
discussion with independent public accountants. Any
information so obtained by any Bank shall be kept
confidential in accordance with its Confidentiality
Agreement.
SECTION 5.07. Leverage Ratio. The ratio of
Consolidated Debt to Consolidated Capitalization shall not
exceed (i) 0.60:1 on any day prior to April 1, 1995 or (ii)
0.50:1 on April 1, 1995 or any day thereafter; provided that
the foregoing permitted ratio shall be reduced prior to
April 1, 1995 to (x) 0.55:1 if and when Adjusted
Consolidated Net Worth shall be increased, on a cumulative
basis after September 30, 1993, by more than $150,000,000 as
a result of the issuance or sale of equity by the Company
and (y) 0.50:1 if and when Adjusted Consolidated Net Worth
shall be increased, on a cumulative basis after September
30, 1993, by more than $300,000,000 as a result of the
issuance or sale of equity by the Company.
SECTION 5.08. Negative Pledge. After the date of
this Agreement, the Company will not, and will not permit
any Subsidiary to, create, assume or suffer to be created
any Lien on any asset now owned or hereafter acquired by it,
except:
(a) any Lien existing on any asset of any
corporation at the time such corporation becomes a
Subsidiary and not created in contemplation of such
event;
(b) any Lien on any asset securing Debt incurred
or assumed for the purpose of financing all or any part
of the cost of acquiring such asset, provided that such
Lien attaches to such asset concurrently with or within
90 days after the acquisition thereof;
(c) any Lien on any asset of any corporation
existing at the time such corporation is merged or
consolidated with or into the Company or a Subsidiary
and not created in contemplation of such event;
(d) any Lien existing on any asset prior to the
acquisition thereof by the Company or a Subsidiary and
not created in contemplation of such acquisition;
(e) any Lien arising out of the refinancing,
extension, renewal or refunding of any Debt secured by
any Lien permitted by any of the foregoing clauses of
this Section, provided that such Debt is not increased
and is not secured by any additional assets;
(f) Liens arising in the ordinary course of its
business which (i) do not secure Debt and (ii) do not
secure any single obligation (or any group of related
obligations) in an amount exceeding $100,000,000; and
(g) Liens not otherwise permitted by the
foregoing clauses of this Section securing Debt in an
aggregate principal amount at any time outstanding not
to exceed 10% of Adjusted Consolidated Net Worth.
SECTION 5.09. Consolidations, Mergers and Sales
of Assets. The Company will not (i) consolidate with or
merge into any other Person or (ii) sell, lease or otherwise
transfer or permit any of its Subsidiaries to sell, lease or
otherwise transfer, directly or indirectly, all or
substantially all of the assets of the Company and its
Subsidiaries, taken as a whole, to any other Person;
provided that nothing in this Section 5.09 shall prohibit
the Company from consolidating with or merging into another
Person if:
(i) immediately after such consolidation or
merger substantially all the shares of stock of the
surviving company are owned by the former stockholders
of the Company;
(ii) immediately after such consolidation or
merger the corporation into which the Company shall
have been consolidated or merged shall not be in
default in the performance or observance of any of the
terms, covenants and conditions of this Agreement to be
kept or performed by the Company;
(iii) the corporation into which the Company shall
have been consolidated or merged shall be a corporation
organized under the laws of the United States of
America or any State thereof;
(iv) the due and punctual payment of the
principal of (and premium, if any) and interest on all
of the Loans according to their tenor and the due and
punctual performance and observance of all the
covenants and conditions of this Agreement to be
performed or observed by the Company, shall be
expressly assumed, pursuant to documentation in form
and substance satisfactory to the Agent, and executed
and delivered by the corporation into which the Company
shall have been consolidated or merged;
(v) immediately after such consolidation or
merger the chief financial officer or chief accounting
officer of the Company shall deliver to the Agent a
certificate stating that as of the time immediately
after the effective date of such consolidation or
merger the covenants of the Company contained in this
Section 5.09 have been complied with and the successor
corporation is not in Default under the provisions of
this Agreement; and
(vi) immediately after such merger the Company
shall have delivered to the Agent an opinion of counsel
reasonably satisfactory to the Agent to the effect that
the conditions set forth in this Section 5.09 have been
met.
SECTION 5.10. Use of Proceeds. The proceeds of
the Loans made under this Agreement will be used by the
Borrowers for their general corporate or partnership
purposes and the financing of acquisitions. None of such
proceeds will be used in violation of any applicable law or
regulation.
SECTION 5.11. Subsidiary Guaranty. The Company
has advised the Banks that the assets acquired in the
Westinghouse DCBU Acquisition, certain other assets of the
Company and/or its Subsidiaries relating to their Industrial
Control and Power Distribution business and the related
marketing and sales operations will be transferred to the
Subsidiary Guarantors. Substantially concurrently with
transferring or causing such assets to be transferred to the
Subsidiary Guarantors, the Company will cause each
Subsidiary Guarantor to (i) in consideration of such
transfer of assets to it, execute a Subsidiary Guaranty and
deliver it to the Agent, (ii) execute a contribution
agreement among the Subsidiary Guarantors in form and
substance reasonably satisfactory to the Agent and (iii)
deliver to the Agent an opinion of counsel for such
Subsidiary Guarantor, substantially in the form of Exhibit K
hereto.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more
of the following events ("Events of Default") shall have
occurred and be continuing:
(a) any principal of any Loan shall not be paid
when due or any interest on any Loan, any fees or any
other amount payable hereunder shall not be paid within
five Domestic Business Days after the due date thereof;
(b) the Company shall fail (i) to observe or
perform any covenant contained in Section 5.07 or 5.08
for 30 days after a financial officer of the Company
shall become aware of such failure or (ii) to observe
or perform any covenant contained in Section 5.09, 5.10
or 5.11;
(c) any Borrower shall fail to observe or perform
any covenant or agreement contained in this Agreement
(other than those covered by clause (a) or (b) above)
for 30 days after written notice thereof has been given
to the Company by the Agent at the request of any Bank;
(d) any representation, warranty, certification
or statement made by any Borrower in this Agreement or
by a Subsidiary Guarantor in its Subsidiary Guaranty or
by any Borrower in any certificate, financial statement
or other document delivered pursuant to this Agreement
or by a Subsidiary Guarantor in any certificate or
other document delivered pursuant to its Subsidiary
Guaranty shall prove to have been incorrect (in any
respect that is material in relation to any Bank's
decision to take or refrain from taking any action
requested by the Company or to exercise or refrain from
exercising any remedy under this Article VI) when made
or deemed made;
(e) the Company or any Subsidiary shall fail to
make any payment in respect of any Material Debt when
due or within any applicable grace period;
(f) any event or condition shall occur which (i)
results in the acceleration of the maturity of any
Material Debt or (ii) any applicable grace period
having expired, permits the holder of such Debt or any
Person acting on such holder's behalf to accelerate the
maturity thereof; provided that this clause (f) shall
not apply to (x) any voluntary call or voluntary
prepayment of any Debt by the Company or the relevant
Subsidiary, (y) the right of the holders of the
Company's 8% Debentures due August 15, 2006 to request,
during the period from June 15, 1996 to July 15, 1996,
inclusive, repayment of such debentures, in accordance
with the terms of such debentures, or the exercise of
such right by any such holder or (z) the right of the
holders of notes issued by the Eaton Corporation Share
Purchase and Investment Plan Trust and guaranteed by
the Company to require the Company to purchase such
notes upon the occurrence of a "Debt Downgrade", as
defined in Exhibit L, or the exercise of such right by
any such holder;
(g) one or more of the Company and its
Subsidiaries (except Insignificant Subsidiaries) shall
commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar
official of it or any substantial part of its property,
or shall consent to any such relief or to the
appointment of or taking possession by any such
official in an involuntary case or other proceeding
commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the
foregoing;
(h) an involuntary case or other proceeding shall
be commenced against one or more of the Company and its
Subsidiaries (except Insignificant Subsidiaries)
seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar
official of it or any substantial part of its property,
and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60
days; or an order for relief shall be entered against
one or more of the Company and its Subsidiaries (except
Insignificant Subsidiaries) under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to
pay when due (after taking into account any approved
and granted payment date extensions) an amount or
amounts aggregating in excess of $50,000,000 which it
shall have become liable to pay under Title IV of
ERISA; or notice of intent to terminate a Material Plan
shall be filed under Section 4041(c) of ERISA by any
member of the ERISA Group, any plan administrator or
any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer any Material
Plan; or a condition shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating
that any Material Plan must be terminated; or there
shall occur a complete or partial withdrawal from, or a
default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans
which could cause one or more members of the ERISA
Group to incur a current payment obligation in excess
of $50,000,000;
(j) a judgment or order for the payment of money
in excess of $50,000,000 shall be rendered against the
Company or any Subsidiary and such judgment or order
shall continue unsatisfied and unstayed for a period of
30 days; or
(k) any person or group of persons (within the
meaning of Section 13 or 14 of the Securities Exchange
Act of 1934, as amended) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said
Act) of 35% or more of the outstanding shares of common
stock of the Company; or, during any period of 12
consecutive calendar months, individuals who were
directors of the Company on the first day of such
period shall cease to constitute a majority of the
board of directors of the Company;
then, and in every such event, the Agent shall (i) if
requested by Banks having more than 50% in aggregate amount
of the Commitments, by notice to the Borrowers terminate the
Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in
aggregate principal amount of the Loans, by notice to the
Borrowers declare the Notes (together with accrued interest
thereon) to be, and the Notes shall thereupon become,
immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby
waived by each Borrower; provided that in the case of any of
the Events of Default specified in clause (g) or (h) above
with respect to the Company, without any notice to any
Borrower or any other act by the Agent or the Banks, the
Commitments shall thereupon terminate and the Notes
(together with accrued interest thereon) shall become
immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby
waived by each Borrower.
SECTION 6.02. Notice of Default. The Agent shall
give notice to the Company under Section 6.01(c) promptly
upon being requested to do so by any Bank and shall
thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization.
Each Bank irrevocably appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such
powers under this Agreement and the Notes as are delegated
to the Agent by the terms hereof or thereof, together with
all such powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan
Guaranty Trust Company of New York shall have the same
rights and powers under this Agreement as any other Bank and
may exercise or refrain from exercising the same as though
it were not the Agent, and Morgan Guaranty Trust Company of
New York and its affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with
the Company or any Subsidiary or affiliate of the Company as
if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations
of the Agent hereunder are only those expressly set forth
herein. Without limiting the generality of the foregoing,
the Agent shall not be required to take any action with
respect to any Default, except as expressly provided in
Article VI.
SECTION 7.04. Consultation with Experts. The
Agent may consult with legal counsel (who may be counsel for
any Borrower), independent public accountants and other
experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or
experts.
SECTION 7.05. Liability of Agent. Neither the
Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be liable for
any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks
or (ii) in the absence of its own gross negligence or
willful misconduct. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers,
agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this
Agreement or any borrowing hereunder; (ii) the performance
or observance of any of the covenants or agreements of any
Borrower; (iii) the satisfaction of any condition specified
in Article III, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness
or genuineness of this Agreement (except with respect to the
Agent in its capacity as such), the Notes or any other
instrument or writing furnished in connection herewith. The
Agent shall not incur any liability by acting in reliance
upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile
transmission or similar writing) believed by it to be
genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall,
ratably in accordance with its Commitment, indemnify the
Agent, its affiliates and their respective directors,
officers, agents and employees (to the extent not reimbursed
by the Borrowers) against any cost, expense (including
reasonable counsel fees and disbursements), claim, demand,
action, loss or liability (except such as result from such
indemnitees' gross negligence or willful misconduct) that
such indemnitees may suffer or incur in connection with this
Agreement or any action taken or omitted by such indemnitees
hereunder.
SECTION 7.07. Credit Decision. Each Bank
acknowledges that it has, independently and without reliance
upon the Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the 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 decisions in taking or not taking any action
under this Agreement.
SECTION 7.08. Successor Agent. The Agent may
resign at any time by giving notice thereof to the Banks and
the Company. Upon any such resignation, the Required Banks
shall have the right, after consultation with the Company,
to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Required Banks, and shall have
accepted such appointment, within 30 days after the retiring
Agent gives notice of resignation, then the retiring Agent
may, on behalf of the Banks, appoint a successor Agent,
which shall be a commercial bank organized or licensed under
the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at
least $50,000,000. Upon the acceptance of its appointment
as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all
the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this
Article shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent.
SECTION 7.09. Agent's Fee. The Company shall pay
to the Agent for its own account fees in the amounts and at
the times previously agreed upon between the Company and the
Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of
any Interest Period for any Fixed Rate Borrowing:
(a) the Agent is advised by the Reference Banks
that deposits in dollars (in the applicable amounts)
are not being offered to the Reference Banks in the
relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks
having 50% or more of the aggregate amount of the
Commitments advise the Agent that the Adjusted CD Rate
or the London Interbank Offered Rate, as the case may
be, as determined by the Agent will not adequately and
fairly reflect the cost to such Banks of funding their
CD Loans or Euro-Dollar Loans, as the case may be, for
such Interest Period,
the Agent shall forthwith give notice thereof to the
Borrowers and the Banks, whereupon until the Agent notifies
the Borrowers that the circumstances giving rise to such
suspension no longer exist, the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be,
shall be suspended. Unless the relevant Borrower notifies
the Agent at least two Domestic Business Days before the
date of any Fixed Rate Borrowing for which a Notice of
Borrowing has previously been given that it elects not to
borrow on such date, (i) if such Fixed Rate Borrowing is a
Committed Borrowing, such Borrowing shall instead be made as
a Base Rate Borrowing and (ii) if such Fixed Rate Borrowing
is a Money Market LIBOR Borrowing, the Money Market LIBOR
Loans comprising such Borrowing shall bear interest for each
day from and including the first day to but excluding the
last day of the Interest Period applicable thereto at the
Base Rate for such day.
SECTION 8.02. Illegality. If, on or after the
date of this Agreement, the adoption of any applicable law,
rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by
any Bank (or its Euro-Dollar Lending Office) with any
request or directive (whether or not having the force of
law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for any Bank (or
its Euro-Dollar Lending Office) to make, maintain or fund
its Euro-Dollar Loans to any Borrower and such Bank shall so
notify the Agent, the Agent shall forthwith give notice
thereof to the other Banks and the relevant Borrower,
whereupon until such Bank notifies the relevant Borrower and
the Agent that the circumstances giving rise to such
suspension no longer exist, the obligation of the relevant
Bank to make Euro-Dollar Loans to such Borrower shall be
suspended. Before giving any notice to the Agent pursuant
to this Section, such Bank shall designate a different
Euro-Dollar Lending Office if such designation will avoid
the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such
Bank. If such Bank shall determine that it may not lawfully
continue to maintain and fund any of its outstanding
Euro-Dollar Loans to the relevant Borrower to maturity and
shall so specify in such notice, such Borrower shall
immediately prepay in full the then outstanding principal
amount of each such Euro-Dollar Loan, together with accrued
interest thereon. Concurrently with prepaying each such
Euro-Dollar Loan, such Borrower shall borrow a Base Rate
Loan in an equal principal amount from such Bank (on which
interest and principal shall be payable contemporaneously
with the related Euro-Dollar Loans of the other Banks), and
such Bank shall make such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return.
(a) If on or after (x) the date hereof, in the case of any
Committed Loan or any obligation to make Committed Loans or
(y) the date of the related Money Market Quote, in the case
of any Money Market Loan, the adoption of any applicable
law, rule or regulation, or any change in any applicable
law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by
any Bank (or its Applicable Lending Office) with any request
or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency shall
impose, modify or deem applicable any reserve (including,
without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but
excluding (i) with respect to any CD Loan, any such
requirement included in an applicable Domestic Reserve
Percentage and (ii) with respect to any Euro-Dollar Loan,
any such requirement with respect to which such Bank is
entitled to compensation during the relevant Interest Period
under Section 2.15), special deposit, insurance assessment
(excluding, with respect to any CD Loan, any such
requirement reflected in an applicable Assessment Rate) or
similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or
its Applicable Lending Office) or on the United States
market for certificates of deposit or the London interbank
market any other condition affecting its Fixed Rate Loans,
its Note or its obligation to make Fixed Rate Loans and the
result of any of the foregoing is to increase the cost to
such Bank (or its Applicable Lending Office) of making or
maintaining any Fixed Rate Loan to any Borrower, or to
reduce the amount of any sum received or receivable by such
Bank (or its Applicable Lending Office) under this Agreement
or under its Note with respect thereto, by an amount deemed
by such Bank to be material, then, within 15 days after
demand by such Bank (with a copy to the Agent), the Company
shall pay to such Bank such additional amount or amounts as
will compensate such Bank for such increased cost or
reduction.
(b) If any Bank shall have determined that, after
the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any
such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with
the interpretation or administration thereof, or any request
or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank
or comparable agency, has or would have the effect of
reducing the rate of return on capital of such Bank (or its
Parent) as a consequence of such Bank's obligations
hereunder to a level below that which such Bank (or its
Parent) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, within 15
days after demand by such Bank (with a copy to the Agent),
the Company shall pay to such Bank such additional amount or
amounts as will compensate such Bank (or its Parent) for
such reduction.
(c) Each Bank will promptly notify the Company
and the Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such
Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. A
certificate of any Bank claiming compensation under this
Section and setting forth the additional amount or amounts
to be paid to it hereunder shall be conclusive in the
absence of manifest error. In determining such amount, such
Bank may use any reasonable averaging and attribution
methods.
SECTION 8.04. Taxes. (a) Any and all payments
by any Borrower to or for the account of any Bank or the
Agent hereunder or under any Note shall be made free and
clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank and the Agent, taxes
imposed on its income, and franchise taxes imposed on it, by
the jurisdiction under the laws of which such Bank or the
Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Bank, taxes
imposed on its income, and franchise or similar taxes
imposed on it, by the jurisdiction of such Bank's Applicable
Lending Office or any political subdivision thereof (all
such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If any Borrower shall
be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or under any Note to any Bank or
the Agent, (i) the sum payable shall be increased as
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 8.04) such Bank or the Agent (as the case
may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such
Borrower shall make such deductions, (iii) such Borrower
shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable
law and (iv) such Borrower shall furnish to the Agent, at
its address specified in or pursuant to Section 11.01, the
original or a certified copy of a receipt evidencing payment
thereof.
(b) In addition, each Borrower agrees to pay any
present or future stamp or documentary taxes and any other
excise or property taxes, or charges or similar levies which
arise from any payment made by it hereunder or under any of
its Notes or, in the case of the Company, from the execution
or delivery of, or otherwise with respect to, this Agreement
or any Note (hereinafter referred to as "Other Taxes").
(c) The Company agrees to indemnify each Bank and
the Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable
under this Section 8.04) paid by such Bank or the Agent (as
the case may be) and any liability (including penalties,
interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 30 days
from the date such Bank or the Agent (as the case may be)
makes demand therefor, setting forth a complete explanation
and calculation thereof. If any such indemnification is
made, such Bank will, at the Company's reasonable request
and expense, contest such Taxes and Other Taxes in good
faith; provided that such Bank shall not be required to
continue any such contest if in the opinion of its counsel
there is both (i) a reasonable doubt that such contest will
be successful and (ii) a reasonable possibility that the
continuation thereof will adversely affect the resolution of
other tax issues affecting such Bank. If any such contest
is successful, such Bank will remit to the relevant Borrower
the amount recovered (but not more than the amount of the
indemnification paid by such Borrower).
(d) Each Bank organized under the laws of a
jurisdiction outside the United States, on or prior to the
date of its execution and delivery of this Agreement in the
case of each Bank listed on the signature pages hereof and
on or prior to the date on which it becomes a Bank in the
case of each other Bank, and from time to time thereafter if
requested in writing by any Borrower (but only so long as
such Bank remains lawfully able to do so), shall provide
such Borrower with Internal Revenue Service form 1001 or
4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Bank is
entitled to benefits under an income tax treaty to which the
United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that
the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or
business in the United States. For any period with respect
to which a Bank has failed to provide Borrower with the
appropriate form pursuant to this Section 8.04(d),
withholding tax will be considered excluded from "Taxes" as
defined in Section 8.04(a). If the form provided by a Bank
at the time such Bank first becomes a party to this
Agreement indicates a United States interest withholding tax
rate in excess of zero, withholding tax at such rate shall
be considered excluded from "Taxes" as defined in Section
8.04(a).
(e) For any period with respect to which a Bank
has failed to provide the Company or a requesting Borrower
with the appropriate form pursuant to Section 8.04(d)
(unless such failure is due to a change in treaty, law or
regulation occurring subsequent to the date on which a form
originally was required to be provided), such Bank shall not
be entitled to indemnification under Section 8.04(a) with
respect to Taxes imposed by the United States; provided,
however, that should a Bank, which is otherwise exempt from
or subject to a reduced rate of withholding tax, become
subject to Taxes because of its failure to deliver a form
required hereunder, the relevant Borrower shall take such
steps as such Bank shall reasonably request to assist such
Bank to recover such Taxes.
(f) If any Borrower is required to pay additional
amounts to or for the account of any Bank pursuant to this
Section 8.04, then such Bank will change the jurisdiction of
its Applicable Lending Office so as to eliminate or reduce
any such additional payment which may thereafter accrue if
such change, in the judgment of such Bank, is not otherwise
disadvantageous to such Bank.
SECTION 8.05. Base Rate Loans Substituted for
Affected Fixed Rate Loans. If (i) the obligation of any
Bank to make Euro-Dollar Loans to any Borrower has been
suspended pursuant to Section 8.02 or (ii) any Bank has
demanded compensation under Section 8.03 or 8.04 from any
Borrower with respect to its CD Loans or Euro-Dollar Loans
and such Borrower shall, by at least five Euro-Dollar
Business Days' prior notice to such Bank through the Agent,
have elected that the provisions of this Section shall apply
to such Bank, then, unless and until such Bank notifies such
Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer exist:
(a) all Loans of such Bank to such Borrower which
would otherwise be made by such Bank as CD Loans or
Euro-Dollar Loans, as the case may be, shall be made
instead as Base Rate Loans (on which interest and
principal shall be payable contemporaneously with the
related Fixed Rate Loans of the other Banks), and
(b) after each of its CD Loans or Euro-Dollar
Loans, as the case may be, to such Borrower has been
repaid, all payments of principal which would otherwise
be applied to repay such Fixed Rate Loans shall be
applied to repay its Base Rate Loans instead.
SECTION 8.06. Substitution of Bank. If (i) the
obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has
demanded compensation under Section 8.03 or 8.04, the
Company shall have the right, with the assistance of the
Agent, to seek a mutually satisfactory substitute bank or
banks ("Substitute Banks") (which may be one or more of the
Banks) to purchase the Committed Loans and assume the
Commitment of such Bank (the "Exiting Bank"). The Exiting
Bank shall, upon reasonable notice and payment to it of the
purchase price agreed between it and the Substitute Bank or
Banks (or, failing such agreement, a purchase price equal to
the outstanding principal amount of its Committed Loans and
interest accrued thereon to but excluding the date of
payment), assign all of its rights and obligations under
this Agreement and the Notes (including its Commitment but
excluding its Money Market Loans, if any, unless it
otherwise agrees) to the Substitute Bank or Banks, and the
Substitute Bank or Banks shall assume such rights and
obligations, in accordance with Section 11.06(c) hereof. In
connection with any such sale, the relevant Borrowers shall
compensate the Exiting Bank for any funding losses as
provided in Section 2.13 and the Company shall pay to the
Exiting Bank its facility fee accrued to but excluding the
date of such sale.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
OF ELIGIBLE SUBSIDIARIES
Each Eligible Subsidiary shall, by signing and
delivering its Election to Participate, represent and
warrant as of the date thereof that:
SECTION 9.01. Corporate or Partnership Existence
and Power. It is a corporation duly incorporated or a
partnership duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation
or organization and is, and at the time of each borrowing by
it hereunder will be, a Wholly-Owned Consolidated Subsidiary
of the Company.
SECTION 9.02. Corporate or Partnership and
Governmental Authorization; No Contravention. The execution
and delivery by it of its Election to Participate and its
Notes, and the performance by it of its obligations under
this Agreement and its Notes, are within its corporate or
partnership powers, have been duly authorized by all
necessary corporate or partnership action, require no action
by or in respect of, or filing with, any governmental body,
agency or official and do not contravene, or constitute a
default under, any provision of applicable law or regulation
or of its certificate of incorporation or partnership
agreement or by-laws, if any, or of any agreement, judgment,
injunction, order, decree or other instrument binding upon
the Company or such Eligible Subsidiary or result in the
creation or imposition of any Lien on any asset of the
Company or any of its Subsidiaries.
SECTION 9.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of such Eligible
Subsidiary and its Notes, when executed and delivered in
accordance with this Agreement, will constitute valid and
binding obligations of such Eligible Subsidiary, in each
case enforceable in accordance with its terms, except as may
be limited by (i) bankruptcy, insolvency or other similar
laws affecting the rights and remedies of creditors
generally and (ii) general principles of equity.
SECTION 9.04. Taxes. Except as disclosed in its
Election to Participate, there are no Taxes or Other Taxes
imposed by any country, or any taxing authority thereof or
therein, in the nature of withholding or otherwise, which
are imposed on any payment to be made by such Eligible
Subsidiary pursuant to this Agreement or its Notes, or are
imposed on or by virtue of the execution, delivery or
enforcement of its Election to Participate or its Notes.
ARTICLE X
GUARANTY
SECTION 10.01. The Guaranty. The Company hereby
unconditionally guarantees the full and punctual payment
(whether at stated maturity, upon acceleration or otherwise)
of the principal of and interest on each Note issued by any
Eligible Subsidiary pursuant to this Agreement, and the full
and punctual payment of all other amounts payable by any
Eligible Subsidiary under this Agreement. Upon failure by
any Eligible Subsidiary to pay punctually any such amount,
the Company shall forthwith on demand pay the amount not so
paid at the place and in the manner specified in this
Agreement.
SECTION 10.02. Guaranty Unconditional. The
obligations of the Company under this Article X shall be
unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement,
compromise, waiver or release in respect of any
obligation of any Eligible Subsidiary under this
Agreement or any Note, by operation of law or
otherwise;
(ii) any modification or amendment of or
supplement to this Agreement or any Note;
(iii) any release, impairment, non-perfection or
invalidity of any direct or indirect security for any
obligation of any Eligible Subsidiary under this
Agreement or any Note;
(iv) any change in the corporate or partnership
existence, structure or ownership of any Eligible
Subsidiary, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting
any Eligible Subsidiary or its assets or any resulting
release or discharge of any obligation of any Eligible
Subsidiary contained in this Agreement or any Note;
(v) the existence of any claim, set-off or other
rights which the Company may have at any time against
any Eligible Subsidiary, the Agent, any Bank or any
other Person, whether in connection herewith or any
unrelated transactions, provided that nothing herein
shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating
to or against any Eligible Subsidiary for any reason of
this Agreement or any Note, or any provision of
applicable law or regulation purporting to prohibit the
payment by any Eligible Subsidiary of the principal of
or interest on any Note or any other amount payable by
it under this Agreement; or
(vii) any other act or omission to act or delay of
any kind by any Eligible Subsidiary, the Agent, any
Bank or any other Person or any other circumstance
whatsoever which might, but for the provisions of this
clause (vii), constitute a legal or equitable discharge
of the Company's obligations hereunder.
SECTION 10.03. Discharge Only Upon Payment In
Full; Reinstatement In Certain Circumstances. The Company's
obligations under this Article X shall remain in full force
and effect until the Commitments shall have terminated and
the principal of and interest on the Notes of each Eligible
Subsidiary and all other amounts payable by each Eligible
Subsidiary under this Agreement shall have been paid in
full. If at any time any payment of the principal of or
interest on any Note of any Eligible Subsidiary or any other
amount payable by any Eligible Subsidiary under this
Agreement is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization
of such Eligible Subsidiary or otherwise, the Company's
obligations under this Article X with respect to such
payment shall be reinstated at such time as though such
payment had been due but not made at such time.
SECTION 10.04. Waiver by the Company. The
Company irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not provided for herein, as
well as any requirement that at any time any action be taken
by any Person against any Eligible Subsidiary or any other
Person.
SECTION 10.05. Subrogation. The Company
irrevocably waives any and all rights to which it may be
entitled, by operation of law or otherwise, upon making any
payment pursuant to this Article X, to be subrogated to the
rights of the payee against an Eligible Subsidiary with
respect to such payment or against any direct or indirect
security therefor, or otherwise to be reimbursed,
indemnified or exonerated by or for the account of an
Eligible Subsidiary in respect thereof.
SECTION 10.06. Stay of Acceleration. If
acceleration of the time for payment of any amount payable
by any Eligible Subsidiary under this Agreement or its Notes
is stayed upon the insolvency, bankruptcy or reorganization
of such Eligible Subsidiary, all such amounts otherwise
subject to acceleration under the terms of this Agreement
shall nonetheless be payable by the Company hereunder
forthwith on demand by the Agent made at the request of the
Required Banks.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices. All notices, requests
and other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission
or similar writing) and shall be given to such party:
(w) in the case of the Company or the Agent, at its address
or telex or facsimile transmission number set forth on the
signature pages hereof, (x) in the case of any Eligible
Subsidiary, at its address or telex or facsimile
transmission number set forth in its Election to
Participate, (y) in the case of any Bank, at its address or
telex or facsimile transmission number set forth in its
Administrative Questionnaire or (z) in the case of any
party, such other address or telex or facsimile transmission
number as such party may hereafter specify for the purpose
by notice to the Agent and the Company. Each such notice,
request or other communication shall be effective (i) if
given by telex, when such telex is transmitted to the telex
number specified in or pursuant to this Section and the
appropriate answerback is received, (ii) if given by mail,
72 hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid or
(iii) if given by any other means, when delivered at the
address specified in or pursuant to this Section; provided
that notices to the Agent under Article II or Article VIII
shall not be effective until received.
SECTION 11.02. No Waivers. No failure or delay
by the Agent or any Bank in exercising any right, power or
privilege hereunder or under any Note shall operate as a
waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.
SECTION 11.03. Expenses; Indemnification.
(a) The Company shall pay (i) all out-of-pocket expenses of
the Agent, including fees and disbursements of special
counsel for the Agent, in connection with the preparation
and administration of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged
Default hereunder and (ii) if an Event of Default occurs,
all out-of-pocket expenses incurred by the Agent and each
Bank, including fees and disbursements of counsel, in
connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.
(b) The Borrowers agree jointly and severally to
indemnify the Agent and each Bank, their respective
affiliates and the respective directors, officers, agents
and employees of the foregoing (each an "Indemnitee") and
hold each Indemnitee harmless from and against any and all
liabilities, losses, damages, costs and expenses of any
kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such
Indemnitee in connection with any investigative,
administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of this Agreement or
any actual or proposed use of proceeds of Loans hereunder;
provided that no Indemnitee shall have the right to be
indemnified hereunder for (i) such Indemnitee's own gross
negligence or willful misconduct as determined by a court of
competent jurisdiction, (ii) any breach by such Indemnitee
of a contract between such Indemnitee and a third party,
(iii) any misrepresentation by such Indemnitee to a third
party, except to the extent that such misrepresentation is
based on information supplied by the Company or any of its
Subsidiaries, (iv) any claim by any Bank against the Agent
or another Bank, or any claim by the Agent against any Bank,
except to the extent that such claim is based on actions
taken or not taken in reliance on information supplied or
actions taken by the Company or any of its Subsidiaries or
(v) any settlement of any investigative, administrative or
judicial proceeding entered into without the consent of the
Company, which consent will not be unreasonably withheld.
At its own expense, each Borrower shall have the right to
participate in (but not control) the defense of any action
with respect to which it may have an indemnity obligation
hereunder.
SECTION 11.04. Sharing of Set-Offs. Each Bank
agrees that if it shall, by exercising any right of set-off
or counterclaim or otherwise, receive payment of a
proportion of the aggregate amount of principal and interest
due with respect to any Note of any Borrower held by it
which is greater than the proportion received by any other
Bank in respect of the aggregate amount of principal and
interest due with respect to any Note of such Borrower held
by such other Bank, the Bank receiving such proportionately
greater payment shall purchase such participations in the
Notes of such Borrower held by the other Banks, and such
other adjustments shall be made, as may be required so that
all such payments of principal and interest with respect to
the Notes of such Borrower held by the Banks (including any
payments by Subsidiary Guarantors) shall be shared by the
Banks pro rata; provided that nothing in this Section shall
impair the right of any Bank to exercise any right of
set-off or counterclaim it may have and to apply the amount
subject to such exercise to the payment of indebtedness or
other obligations of the relevant Borrower or Subsidiary
Guarantor other than its indebtedness under the Notes or its
guaranty of such indebtedness. Each Borrower agrees, to the
fullest extent it may effectively do so under applicable
law, that any holder of a participation in a Note of such
Borrower, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim
and other rights with respect to such participation as fully
as if such holder of a participation were a direct creditor
of such Borrower in the amount of such participation.
SECTION 11.05. Amendments and Waivers. Any
provision of this Agreement, the Notes or any Subsidiary
Guaranty may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the
Company (or the relevant Subsidiary Guarantor, in the case
of a Subsidiary Guaranty) and by the Required Banks (and, if
the rights or duties of the Agent are affected thereby, by
the Agent); provided that no such amendment or waiver shall,
unless signed by all the Banks, (i) increase or decrease the
Commitment of any Bank (except for a ratable decrease in the
Commitments of all Banks) or subject any Bank to any
additional obligation, (ii) reduce the principal of or rate
of interest on any Loan or any fees hereunder, (iii)
postpone the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder or for the
termination of any Commitment, (iv) change the percentage of
the Commitments or of the aggregate unpaid principal amount
of the Notes, or the number of Banks, which shall be
required for the Banks or any of them to take any action
under this Section or any other provision of this Agreement,
(v) release the Company from any of its obligations as
guarantor under Section 10.01 or (vi) release any Subsidiary
Guarantor from any of its obligations as guarantor under
Section 2 of its Subsidiary Guaranty; and provided further
that no such amendment, waiver or modification shall, unless
signed by an Eligible Subsidiary, (w) subject such Eligible
Subsidiary to any additional obligation, (x) increase the
principal of or rate of interest on any outstanding Loan of
such Eligible Subsidiary, (y) accelerate the stated maturity
of any outstanding Loan of such Eligible Subsidiary or (z)
change this proviso.
SECTION 11.06. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns, except that (i) no Borrower may
assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all Banks,
and (ii) no Bank may assign or transfer any of its rights
under this Agreement except in accordance with the terms of
this Section.
(b) Any Bank may at any time grant to one or more
banks or other institutions (each a "Participant")
participating interests in its Commitment or any or all of
its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon
notice to the Borrowers and the Agent, such Bank shall
remain responsible for the performance of its obligations
hereunder, and the Borrowers and the Agent shall continue to
deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement.
Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the
obligations of the Borrowers hereunder including, without
limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that
such participation agreement may provide that such Bank will
not agree to any modification, amendment or waiver of this
Agreement described in clause (i), (ii) or (iii) of Section
11.05 without the consent of the Participant. The Borrowers
agree that each Participant shall, to the extent provided in
its participation agreement, be entitled to the benefits of
Section 2.15 and Article VIII with respect to its
participating interest. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall
be given effect for purposes of this Agreement only to the
extent of a participating interest granted in accordance
with this subsection (b).
(c) Any Bank may at any time assign to one or
more banks or other institutions (each an "Assignee") all,
or a proportionate part of all, of its rights and
obligations under this Agreement and the Notes, and each
such Assignee shall assume such rights and obligations (or a
proportionate part thereof), pursuant to an Assignment and
Assumption Agreement in substantially the form of Exhibit M
hereto executed by such Assignee and such transferor Bank,
with (and subject to) the subscribed consent of the Company
and the Agent (such consent by the Agent not to be
unreasonably withheld); provided that (i) the amount
assigned to each Assignee which was not theretofore a Bank
shall be at least $10,000,000, (ii) if an Assignee is an
affiliate of such transferor Bank having a rating of BBB+ or
higher, or Baa1 or higher, by any two of S&P, Moody's and
Duff and Phelps Credit Rating Company, no such consent shall
be required and (iii) any such assignment may, but need not,
include rights of the transferor Bank in respect of
outstanding Money Market Loans. Upon execution and delivery
of such instrument and payment by the Assignee to such
transferor Bank of the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a
Bank party to this Agreement and shall have all the rights
and obligations of a Bank with a Commitment as set forth in
such instrument of assumption, and the transferor Bank shall
be released from its obligations hereunder to a
corresponding extent, and no further consent or action by
any party shall be required. Upon the consummation of any
assignment pursuant to this subsection (c), the transferor
Bank, the Agent and the Borrowers shall make appropriate
arrangements so that, if required, new Notes are issued to
the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Agent an administrative fee
for processing such assignment in the amount of $2,500. If
the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall
deliver to the Company and the Agent certification as to
exemption from deduction or withholding of any United States
federal income taxes in accordance with Section 8.04.
(d) Any Bank may at any time assign all or any
portion of its rights under this Agreement and its Note to a
Federal Reserve Bank. No such assignment shall release the
transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee
of any Bank's rights shall be entitled to receive any
greater payment under Section 8.03 or 8.04 than such Bank
would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the
Company's prior written consent or by reason of the
provisions of Section 8.02, 8.03 or 8.04 requiring such Bank
to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances
giving rise to such greater payment did not exist.
SECTION 11.07. Collateral. Each of the Banks
represents to the Agent and each of the other Banks that it
in good faith is not relying upon any "margin stock" (as
defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 11.08. Governing Law; Submission to
Jurisdiction. This Agreement and each Note shall be
governed by and construed in accordance with the laws of the
State of New York. Each Borrower hereby submits to the
nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New
York State court sitting in New York City for purposes of
all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. Each
Borrower irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to
the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought
in such a court has been brought in an inconvenient forum.
SECTION 11.09. Counterparts; Integration;
Effectiveness. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement and the
Confidentiality Agreements constitute the entire agreement
and understanding among the parties hereto and supersede any
and all other prior agreements and understandings, oral or
written, relating to the subject matter hereof. This
Agreement shall become effective upon receipt by the Agent
of counterparts hereof signed by each of the parties hereto
(or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the
Agent in form satisfactory to it of telegraphic, telex or
other written confirmation from such party of execution of a
counterpart hereof by such party).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the day and year first above
written.
EATON CORPORATION
By /s/ J. M. Carmont
Title: Vice President and
Treasurer
And by /s/ S. R. Hardis
Title: Vice Chairman and
Chief Financial and
Administrative Officer
Eaton Center
Cleveland, Ohio 44114-2584
Telex number: 687-3223
Facsimile transmission
number: 216-523-4787
<PAGE>
$37,500,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Timothy S. Broadbent
Title: Vice President
$37,500,000 J.P. MORGAN DELAWARE
By /s/ David J. Morris
Title: Vice President
$65,000,000 CHEMICAL BANK
By /s/ Rosemary Bradley
Title: Vice President
<PAGE>
Co-Agents
$55,000,000 BANKERS TRUST COMPANY,
as Bank and Co-Agent
By /s/ Edward G. Benedict
Title: Vice President
$55,000,000 CREDIT SUISSE,
as Bank and Co-Agent
By /s/ Christopher J. Eldin
Title: Member of Senior
Management
By /s/ William R. Ziglar
Title: Associate
$55,000,000 THE FIRST NATIONAL BANK OF
CHICAGO, as Bank and Co-Agent
By /s/ Marguerite C. Canestraro
Title: Vice President
<PAGE>
Co-Agents
$55,000,000 NATIONSBANK OF NORTH
CAROLINA, N.A.,
as Bank and Co-Agent
By /s/ Jay Johnston
Title: Vice President
$55,000,000 SOCIETY NATIONAL BANK,
as Bank and Co-Agent
By /s/ Helen W. France
Title: Vice President
<PAGE>
$35,000,000 DEUTSCHE BANK AG NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES
By /s/ Jeffrey N. Wieser
Title: Director
By /s/ Gregory M. Hill
Title: Vice President
$35,000,000 NATIONAL CITY BANK
By /s/ Robert C. Rowe
Title: Account Officer
$35,000,000 TRUST COMPANY BANK
By /s/ Ruth E. Whitner
Title: Banking Officer
By /s/ Deborah S. Armstrong
Title: Group Vice President
$35,000,000 WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK AND
CAYMAN ISLANDS BRANCHES
By /s/ Stephen W. Frey
Title: Vice President
By /s/ Karen E. Hoplock
Title: Associate
_________________
Total Commitments
$555,000,000
=================
<PAGE>
AGENTS
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Timothy S. Broadbent
Title: Vice President
60 Wall Street
New York, New York 10260-0060
Attention: Timothy S. Broadbent
Telex number: 177615
Facsimile transmission
number: 212-648-5336
CHEMICAL BANK,
as Managing Agent
By /s/ Rosemary Bradley
Title: Vice President
270 Park Avenue
New York, New York 10017
Attention: Rosemary Bradley
Facsimile transmission
number: 212-972-9854
<PAGE>
EXHIBIT A
THE TRANSFER OR ASSIGNMENT OF THIS NOTE IS SUBJECT
TO THE RESTRICTIONS CONTAINED IN THE CREDIT
AGREEMENT REFERRED TO BELOW, INCLUDING (WITH
CERTAIN EXCEPTIONS) THE PRIOR CONSENT OF EATON
CORPORATION.
NOTE
New York, New York
, 199
For value received, [name of Borrower], a
[jurisdiction of incorporation or organization]
[corporation] [partnership] (the "Borrower"), promises to
pay to the order of
(the "Bank"), for the account of its Applicable Lending
Office, the unpaid principal amount of each Loan made by the
Bank to the Borrower pursuant to the Credit Agreement
referred to below on the last day of the Interest Period
relating to such Loan. The Borrower promises to pay
interest on the unpaid principal amount of each such Loan on
the dates and at the rate or rates provided for in the
Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States
in Federal or other immediately available funds at the
office of Morgan Guaranty Trust Company of New York, 60 Wall
Street, New York, New York.
All Loans made to the Borrower by the Bank, the
respective types and maturities thereof and all repayments
of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the
foregoing information with respect to each such Loan then
outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule
attached to and made a part hereof; provided that the
failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the
Five Year Credit Agreement dated as of January 25, 1994
among Eaton Corporation, the banks and Co-Agents listed on
the signature pages thereof, Chemical Bank, as Managing
Agent, and Morgan Guaranty Trust Company of New York, as
Agent (as the same may be amended from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement
are used herein with the same meanings. Reference is made
to the Credit Agreement for provisions for the prepayment
hereof and the acceleration of the maturity hereof.
The payment in full of the principal of and
interest on this note [(i) has been unconditionally
guaranteed by Eaton Corporation, pursuant to the provisions
of the Credit Agreement, and (ii)] has been or is to be
unconditionally guaranteed by one or more Subsidiaries of
Eaton Corporation.
[NAME OF BORROWER]
By________________________
Title:
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
_________________________________________________________________
_
Amount of
Amount of Type of Principal Maturity
Notation
Date Loan Loan Repaid Date Made
By
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
_________________________________________________________________
_
<PAGE>
EXHIBIT B
Form of Money Market Quote Request
[Date]
To: Morgan Guaranty Trust Company of New York
(the "Agent")
From: [Name of Borrower]
Re: Five Year Credit Agreement (the "Credit
Agreement") dated as of January 25, 1994
among Eaton Corporation, the Banks and Co-
Agents listed on the signature pages thereof,
Chemical Bank, as Managing Agent, and the
Agent
We hereby give notice pursuant to Section 2.03 of
the Credit Agreement that we request Money Market Quotes for
the following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money
Market [Margin] [Absolute Rate]. [The applicable base rate
is the London Interbank Offered Rate.]
Terms used herein have the meanings assigned to
them in the Credit Agreement.
[NAME OF BORROWER]
By________________________
Title:
EXHIBIT C
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes to [Name
of Borrower] (the "Borrower")
Pursuant to Section 2.03 of the Five Year Credit
Agreement dated as of January 25, 1994 (the "Credit
Agreement") among Eaton Corporation, the Banks and Co-Agents
parties thereto, Chemical Bank, as Managing Agent, and the
undersigned, as Agent, we are pleased on behalf of the
Borrower to invite you to submit Money Market Quotes to the
Borrower for the following proposed Money Market
Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money
Market [Margin] [Absolute Rate]. [The applicable base rate
is the London Interbank Offered Rate.]
Any Bank making a Money Market Loan may be
required to refund such Loan under certain circumstances, as
provided in Section 2.03(h) of the Credit Agreement.
Please respond to this invitation by no later than
[2:00 P.M.] [9:15 A.M.] (New York City time) on [date].
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By______________________
Authorized Officer
<PAGE>
EXHIBIT D
Form of Money Market Quote
To: Morgan Guaranty Trust Company of New York,
as Agent
Re: Money Market Quote to [Name of Borrower]
(the "Borrower")
In response to your invitation on behalf of the
Borrower dated _____________, 19__, we hereby make the
following Money Market Quote on the following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the
following principal amounts, for the following Interest
Periods and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
$
$
[Provided, that the aggregate principal amount of Money
Market Loans for which the above offers may be accepted
shall not exceed $____________.]**
__________
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not
exceed principal amount requested. Specify aggregate
limitation if the sum of the individual offers exceeds the
amount the Bank is willing to lend. Bids must be made for
$5,000,000 or a larger multiple of $1,000,000.
(notes continued on following page)
We understand and agree that the offer(s) set
forth above, subject to the satisfaction of the applicable
conditions set forth in the Five Year Credit Agreement dated
as of January 25, 1994 among Eaton Corporation, the Banks
and Co-Agents listed on the signature pages thereof,
Chemical Bank, as Managing Agent, and yourselves, as Agent,
irrevocably obligates us to make the Money Market Loan(s)
for which any offer(s) are accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
__________
*** Not less than one month or not less than 7 days, as
specified in the related Invitation. No more than five bids
are permitted for each Interest Period.
**** Margin over or under the London Interbank Offered Rate
determined for the applicable Interest Period. Specify
percentage (to the nearest 1/10,000 of 1%) and specify
whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest
1/10,000 of 1%).
EXHIBIT E
OPINION OF
COUNSEL FOR THE COMPANY
To the Banks, the Co-Agents,
the Managing Agent and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
I am the Executive Vice President and General
Counsel of Eaton Corporation (the "Company") and have acted
as such in connection with the Five Year Credit Agreement
(the "Credit Agreement") dated as of January 25, 1994 among
the Company, the banks and Co-Agents listed on the signature
pages thereof, Chemical Bank, as Managing Agent, and Morgan
Guaranty Trust Company of New York, as Agent. Terms defined
in the Credit Agreement are used herein as therein defined.
This opinion is being rendered to you pursuant to Section
3.01(b) of the Credit Agreement.
I have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and
other instruments and have conducted such other
investigations of fact and law as I have deemed necessary or
advisable for purposes of this opinion.
Upon the basis of the foregoing, I am of the
opinion that:
1. The Company is a corporation duly
incorporated, validly existing and in good standing under
the laws of Ohio, and has all corporate powers and all
Material governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted.
2. The execution, delivery and performance by the
Company of the Credit Agreement and its Notes are within the
Company's corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of
the amended articles of incorporation or amended regulations
of the Company or of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Company
or any of its Subsidiaries or result in the creation or
imposition of any Lien on any asset of the Company or any of
its Subsidiaries.
3. The Credit Agreement constitutes a valid and
binding agreement of the Company and its Notes constitute
valid and binding obligations of the Company, in each case
enforceable in accordance with its terms, except as may be
limited by (i) bankruptcy, insolvency or other similar laws
affecting the rights and remedies of creditors generally and
(ii) general principles of equity.
4. There is no action, suit or proceeding pending
against, or to the best of my knowledge threatened against
or affecting, the Company or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or
official, in which there is a reasonable possibility of an
adverse decision which would have a Material Adverse Effect
or an adverse effect on the rights or remedies of the Agent
or the Banks under this Agreement or the Notes or which in
any manner draws into question the validity of the Credit
Agreement or the Notes.
Very truly yours,
<PAGE>
EXHIBIT F
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
To the Banks, the Co-Agents,
the Managing Agent and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the
Five Year Credit Agreement dated as of January 25, 1994 (the
"Credit Agreement") among Eaton Corporation, an Ohio
corporation (the "Company"), the banks and Co-Agents listed
on the signature pages thereof, Chemical Bank, as Managing
Agent, and Morgan Guaranty Trust Company of New York, as
Agent (the "Agent"), and have acted as special counsel for
the Agent for the purpose of rendering this opinion pursuant
to Section 3.01(c) of the Credit Agreement. Terms defined
in the Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and
other instruments and have conducted such other
investigations of fact and law as we have deemed necessary
or advisable for purposes of this opinion.
Upon the basis of the foregoing, we are of the
opinion that the Credit Agreement constitutes a valid and
binding agreement of the Company and the Notes constitute
valid and binding obligations of the Company, in each case
enforceable in accordance with its terms, except as may be
limited by (i) bankruptcy, insolvency or other similar laws
affecting the rights and remedies of creditors generally and
(ii) general principles of equity.
We are members of the Bar of the State of New York
and the foregoing opinion is limited to the laws of the
State of New York and the federal laws of the United States
of America. Insofar as the foregoing opinion involves
matters governed by the laws of Ohio, we have relied,
without independent investigation, upon the opinion of
Gerald L. Gherlein, Executive Vice President and General
Counsel of the Company, a copy of which has been delivered
to you. In giving the foregoing opinion, we express no
opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any
Bank is located which limits the rate of interest that such
Bank may charge or collect.
This opinion is rendered solely to you in
connection with the above matter. This opinion may not be
relied upon by you for any other purpose or relied upon by
any other person without our prior written consent.
Very truly yours,
<PAGE>
EXHIBIT G
FORM OF ELECTION TO PARTICIPATE
__________, 19__
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
for the Banks under the Five Year Credit
Agreement dated as of January 25, 1994 (as
amended from time to time, the "Credit
Agreement") among Eaton Corporation, such
Banks, the Co-Agents listed on the signature
pages thereof, Chemical Bank, as Managing
Agent, and such Agent
Dear Sirs:
Reference is made to the Credit Agreement
described above. Terms not defined herein which are defined
in the Credit Agreement have for the purposes hereof the
meaning provided therein.
The undersigned, [name of Eligible Subsidiary], a
[corporation][partnership] organized under the laws of
[jurisdiction of incorporation or organization], elects to
be an Eligible Subsidiary for purposes of the Credit
Agreement, effective from the date hereof until an Election
to Terminate shall have been delivered to the Agent on
behalf of the undersigned in accordance with the Credit
Agreement.
The undersigned confirms that the representations
and warranties set forth in Articles IV and IX of the Credit
Agreement are true and correct as to the undersigned as of
the date hereof. The undersigned agrees to perform all the
obligations of an Eligible Subsidiary under, and to be bound
in all respects by the terms of, the Credit Agreement,
including without limitation Sections 11.03(b) and 11.08
thereof, as if the undersigned were a signatory party
thereto.
[Tax disclosure pursuant to Section 9.04]
<PAGE>
The address to which all notices to the
undersigned under the Credit Agreement should be directed
is: . This instrument shall be construed in
accordance with and governed by the laws of the State of New
York.
Very truly yours,
[NAME OF ELIGIBLE SUBSIDIARY]
By____________________________
Title:
The undersigned confirms that [name of Eligible
Subsidiary] is an Eligible Subsidiary for purposes of the
Credit Agreement described above.
EATON CORPORATION
By____________________________
Title:
Receipt of the above Election to Participate is
acknowledged on and as of the date set forth above.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By____________________________
Title:
<PAGE>
EXHIBIT H
FORM OF ELECTION TO TERMINATE
__________,
19__
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
for the Banks under the Five Year Credit
Agreement dated as of January 25, 1994 (as
amended from time to time, the "Credit
Agreement") among Eaton Corporation, such
Banks, the Co-Agents listed on the signature
pages thereof, Chemical Bank, as Managing
Agent, and such Agent
Dear Sirs:
Reference is made to the Credit Agreement
described above. Terms not defined herein which are defined
in the Credit Agreement have for the purposes hereof the
meaning provided therein.
The undersigned, Eaton Corporation, an Ohio
corporation, elects to terminate the status of [name of
Eligible Subsidiary], a [corporation][partnership] organized
under the laws of [jurisdiction of incorporation or
organization] (the "Designated Subsidiary"), as an Eligible
Subsidiary for purposes of the Credit Agreement, effective
as of the date hereof. The undersigned represents and
warrants that all principal and interest on all Notes of the
Designated Subsidiary and all other amounts payable by such
Designated Subsidiary pursuant to the Credit Agreement have
been paid in full on or prior to the date hereof.
Notwithstanding the foregoing, this Election to Terminate
shall not affect any obligation of the Designated Subsidiary
under the Credit Agreement or under any of its Notes
heretofore incurred.
This instrument shall be construed in accordance
with and governed by the laws of the State of New York.
Very truly yours,
EATON CORPORATION
By__________________________
Title:
Receipt of the above Election to Terminate is
hereby acknowledged on and as of the date set forth above.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By__________________________
Title:
<PAGE>
EXHIBIT I
OPINION OF COUNSEL FOR THE BORROWER
(BORROWINGS BY ELIGIBLE SUBSIDIARIES)
[Dated as provided in
Section 3.03 of the
Credit Agreement]
To the Banks, the Co-Agents,
the Managing Agent and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
I am counsel to [name of Eligible Subsidiary], a
[corporation] [partnership] organized under the laws of
[jurisdiction of incorporation or organization] (the
"Borrower"), and give this opinion pursuant to Section
3.03(b) of the Five Year Credit Agreement dated as of
January 25, 1994 (the "Credit Agreement") among Eaton
Corporation (the "Company"), the banks and Co-Agents listed
on the signature pages thereof, Chemical Bank, as Managing
Agent, and Morgan Guaranty Trust Company of New York, as
Agent. Terms defined in the Credit Agreement are used
herein as therein defined.
I have examined originals or copies, certified or
otherwise identified to my satisfaction, of such documents,
corporate [and partnership] records, certificates of public
officials and other instruments and have conducted such
other investigations of fact and law as I have deemed
necessary or advisable for purposes of this opinion.
Upon the basis of the foregoing, I am of the
opinion that:
1. The Borrower is a [corporation duly
incorporated] [partnership duly organized], validly existing
and in good standing under the laws of [jurisdiction of
incorporation or organization], and is a Wholly-Owned
Consolidated Subsidiary of the Company.
2. The execution and delivery by the Borrower of
its Election to Participate and its Notes and the
performance by the Borrower of its obligations under the
Credit Agreement and its Notes are within the Borrower's
[corporate] [partnership] powers, have been duly authorized
by all necessary [corporate] [partnership] action, require
no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable
law or regulation or of the [certificate of incorporation]
[partnership agreement] [or by-laws] of the Borrower or of
any agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or the Borrower or
result in the creation or imposition of any Lien on any
asset of the Company or any of its Subsidiaries.
3. The Credit Agreement constitutes a valid and
binding agreement of the Borrower and its Notes constitute
valid and binding obligations of the Borrower, in each case
enforceable in accordance with its terms, except as may be
limited by (i) bankruptcy, insolvency or other similar laws
affecting the rights and remedies of creditors generally and
(ii) general principles of equity.
4. Except as disclosed in the Borrower's Election
to Participate, there are no Taxes or Other Taxes imposed by
[jurisdiction of incorporation or organization and, if
different, principal place of business], or any taxing
authority thereof or therein, in the nature of withholding
or otherwise, which are imposed on any payment to be made by
the Borrower pursuant to the Credit Agreement or its Notes,
or are imposed on or by virtue of the execution, delivery or
enforcement of its Election to Participate or its Notes.
Very truly yours,
<PAGE>
EXHIBIT J
SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY dated as of , 19
made by [SUBSIDIARY GUARANTOR], a [jurisdiction of
incorporation/organization] [corporation/[limited] [general]
partnership] (with its successors, the "Subsidiary
Guarantor"), to MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Agent (with its successors in such capacity, the
"Agent").
W I T N E S S E T H:
WHEREAS, this Subsidiary Guaranty relates to the
Five Year Credit Agreement dated as of January 25, 1994
among EATON CORPORATION (the "Company"), the Banks party
thereto (the "Banks"), the Co-Agents party thereto, CHEMICAL
BANK, as Managing Agent, and the Agent (the "Credit
Agreement"), which provides, subject to the terms and
conditions thereof, for loans to the Company and to its
Eligible Subsidiaries by the Banks in the aggregate
principal amount of up to $555,000,000;
WHEREAS, in order to induce the Banks, the Co-
Agents, the Managing Agent and the Agent to enter into the
Credit Agreement, the Company agreed that, substantially
concurrently with transferring, or causing to be
transferred, to the Subsidiary Guarantor and/or to one or
more other Wholly-Owned Consolidated Subsidiaries the assets
expected to be acquired in the Westinghouse DCBU Acquisition
and certain other assets of the Company and/or its
Subsidiaries relating to their Industrial Control and Power
Distribution business, and the related marketing and sales
operations (collectively, the "Asset Transfer"), it would
cause the Subsidiary Guarantor, in consideration of such
transfer of assets to it, to enter into this guaranty; and
WHEREAS, the Asset Transfer is being consummated
substantially concurrently with the execution and delivery
of this Subsidiary Guaranty;
NOW, THEREFORE, in consideration of the foregoing
and the mutual agreements contained herein, the parties
hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not
otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.
SECTION 2. The Guaranty. The Subsidiary
Guarantor hereby unconditionally guarantees the full and
punctual payment (whether at stated maturity, upon
acceleration or otherwise) of the principal of and interest
on each Note issued by any Borrower pursuant to the Credit
Agreement, and the full and punctual payment of all other
amounts payable by any Borrower under the Credit Agreement.
Upon failure by any Borrower to pay punctually any such
amount, the Subsidiary Guarantor shall forthwith on demand
pay the amount not so paid at the place and in the manner
specified in the Credit Agreement.
SECTION 3. Guaranty Unconditional. The
obligations of the Subsidiary Guarantor hereunder shall be
unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement,
compromise, waiver or release in respect of any
obligation of any Borrower under the Credit Agreement
or any Note, by operation of law or otherwise;
(ii) any modification or amendment of or
supplement to the Credit Agreement or any Note;
(iii) any release, impairment, non-perfection or
invalidity of any direct or indirect security for any
obligation of any Borrower under the Credit Agreement
or any Note;
(iv) any change in the corporate or partnership
existence, structure or ownership of any Borrower, or
any insolvency, bankruptcy, reorganization or other
similar proceeding affecting any Borrower or its assets
or any resulting release or discharge of any obligation
of any Borrower contained in the Credit Agreement or
any Note;
(v) the existence of any claim, set-off or other
rights which the Subsidiary Guarantor may have at any
time against any Borrower, the Agent, any Bank or any
other Person, whether in connection herewith or any
unrelated transactions, provided that nothing herein
shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating
to or against any Borrower for any reason of the Credit
Agreement or any Note, or any provision of applicable
law or regulation purporting to prohibit the payment by
any Borrower of the principal of or interest on any
Note or any other amount payable by any Borrower under
the Credit Agreement; or
(vii) any other act or omission to act or delay of
any kind by any Borrower, the Agent, any Bank or any
other Person or any other circumstance whatsoever which
might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the
Subsidiary Guarantor's obligations hereunder.
SECTION 4. Discharge Only Upon Payment In Full;
Reinstatement In Certain Circumstances. The Subsidiary
Guarantor's obligations hereunder shall remain in full force
and effect until the Commitments shall have terminated and
the principal of and interest on the Notes of each Borrower
and all other amounts payable by each Borrower under the
Credit Agreement shall have been paid in full. If at any
time any payment of the principal of or interest on any Note
of any Borrower or any other amount payable by any Borrower
under the Credit Agreement is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or
reorganization of such Borrower or otherwise, the Subsidiary
Guarantor's obligations hereunder with respect to such
payment shall be reinstated at such time as though such
payment had been due but not made at such time.
SECTION 5. Waiver by the Subsidiary Guarantor.
The Subsidiary Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not
provided for herein, as well as any requirement that at any
time any action be taken by any Person against any Borrower
or any other Person.
SECTION 6. Subrogation. The Subsidiary Guarantor
irrevocably waives any and all rights to which it may be
entitled, by operation of law or otherwise, upon making any
payment hereunder to be subrogated to the rights of the
payee against a Borrower with respect to such payment or
against any direct or indirect security therefor, or
otherwise to be reimbursed, indemnified or exonerated by or
for the account of a Borrower in respect thereof.
SECTION 7. Limit of Liability. The obligations
of the Subsidiary Guarantor hereunder shall be limited to an
aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance under
Section 548 of the United States Bankruptcy Code or any
comparable provisions of any applicable state law. To the
extent permitted by applicable law, said largest amount
shall be calculated after taking into account any
contribution rights that the Subsidiary Guarantor may have
against other guarantors of the same obligations.
SECTION 8. Stay of Acceleration. If acceleration
of the time for payment of any amount payable by any
Borrower under the Credit Agreement or its Notes is stayed
upon the insolvency, bankruptcy or reorganization of such
Borrower, all such amounts otherwise subject to acceleration
under the terms of the Credit Agreement shall nonetheless be
payable by the Subsidiary Guarantor hereunder forthwith on
demand by the Agent made at the request of the Required
Banks.
SECTION 9. Rights of Set-Off. The Subsidiary
Guarantor agrees, to the fullest extent it may effectively
do so under applicable law, that any holder of a
participation in any Note, whether or not acquired pursuant
to the arrangements set forth in Section 11.04 of the Credit
Agreement, may exercise rights of set-off or counterclaim
and other rights with respect to such participation as fully
as if such holder of a participation were a direct creditor
of the Subsidiary Guarantor in the amount of such
participation.
SECTION 10. Representations and Warranties.
The Subsidiary Guarantor represents and warrants that:
(a) [Corporate] [Partnership] Existence and
Power. The Subsidiary Guarantor is a [corporation duly
incorporated] [partnership duly organized], validly existing
and in good standing under the laws of its jurisdiction of
[incorporation] [organization] and is a Wholly-Owned
Consolidated Subsidiary of the Company.
(b) [Corporate] [Partnership] and Governmental
Authorization; No Contravention. The execution and delivery
by the Subsidiary Guarantor of this Subsidiary Guaranty, and
the performance by it of its obligations under this
Subsidiary Guaranty, are within its [corporate]
[partnership] powers, have been duly authorized by all
necessary [corporate] [partnership] action, require no
action by or in respect of, or filing with, any governmental
body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law
or regulation or of its [certificate of incorporation]
[partnership agreement] [or by-laws], or of any agreement,
judgment, injunction, order, decree or other instrument
binding upon the Company or Subsidiary Guarantor or result
in the creation or imposition of any Lien on any asset of
the Company or any of its Subsidiaries.
(c) Binding Effect. This Subsidiary Guaranty
constitutes a valid and binding agreement of the Subsidiary
Guarantor, enforceable in accordance with its terms, except
as may be limited by (i) bankruptcy, insolvency or other
similar laws affecting the rights and remedies of creditors
generally and (ii) general principles of equity.
SECTION 11. Amendments and Waivers. Any
provision of this Subsidiary Guaranty may be amended or
waived as provided, but only as provided, in Section 11.05
of the Credit Agreement.
SECTION 12. Notices. All notices, requests and
other communications to any party hereunder shall be given
in accordance with Section 11.01 of the Credit Agreement,
and in the case of the Subsidiary Guarantor, shall be given
to it at its address or telex or facsimile transmission
number set forth on the signature page hereof.
SECTION 13. No Waivers. No failure or delay by
the Agent or any Bank in exercising any right, power or
privilege hereunder or under any Note shall operate as a
waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.
SECTION 14. Governing Law. This Subsidiary
Guaranty shall be governed by and construed in accordance
with the laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the Subsidiary Guarantor has
caused this Subsidiary Guaranty to be executed and delivered
by its duly authorized officers as of the date first above
written.
[Subsidiary Guarantor]
By_________________________
Title:
And by
Title:
[Address]
[Address]
Telex number:
Facsimile transmission
number:
<PAGE>
EXHIBIT K
OPINION OF COUNSEL FOR THE SUBSIDIARY GUARANTOR
[Date]
To the Banks, the Co-Agents,
the Managing Agent and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
I am counsel to [name of Subsidiary Guarantor], a
[corporation incorporated] [partnership organized] under the
laws of [jurisdiction of incorporation or organization] (the
"Subsidiary Guarantor"), and give this opinion pursuant to
Section 5.11 of the Five Year Credit Agreement dated as of
January 25, 1994 (the "Credit Agreement") among Eaton
Corporation (the "Company"), the banks and Co-Agents listed
on the signature pages thereof, Chemical Bank, as Managing
Agent, and Morgan Guaranty Trust Company of New York, as
Agent. Terms defined in the Credit Agreement are used
herein as therein defined.
I have examined executed copies of the Subsidiary
Guaranty dated as of , 199 signed by the
Subsidiary Guarantor (the "Subsidiary Guaranty") and the
contribution agreement referred to in Section 5.11 of the
Credit Agreement (the "Contribution Agreement") and
originals or copies, certified or otherwise identified to my
satisfaction, of such documents, corporate [and partnership]
records, certificates of public officials and other
instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, I am of the
opinion that:
1. The Subsidiary Guarantor is a [corporation
duly incorporated] [partnership duly organized], validly
existing and in good standing under the laws of
[jurisdiction of incorporation or organization], and is a
Wholly-Owned Consolidated Subsidiary of the Company.
2. The execution and delivery by the Subsidiary
Guarantor of the Subsidiary Guaranty and the Contribution
Agreement and the performance by the Subsidiary Guarantor of
its obligations under the Subsidiary Guaranty and the
Contribution Agreement are within the Subsidiary Guarantor's
[corporate] [partnership] powers, have been duly authorized
by all necessary [corporate] [partnership] action, require
no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable
law or regulation or of the [certificate of incorporation]
[partnership agreement] [or by-laws] of the Subsidiary
Guarantor or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Company or the
Subsidiary Guarantor or result in the creation or imposition
of any Lien on any asset of the Company or any of its
Subsidiaries.
3. Each of the Subsidiary Guaranty and the
Contribution Agreement constitutes a valid and binding
agreement of the Subsidiary Guarantor, enforceable in
accordance with its terms, except as may be limited by (i)
bankruptcy, insolvency or other similar laws affecting the
rights and remedies of creditors generally and (ii) general
principles of equity.
Very truly yours,
<PAGE>
Exhibit L
Definition of "Debt Downgrade"
as set forth in the Note and Guaranty Agreement dated
as of December 7, 1990
among Eaton Corporation, as Guarantor, the Eaton Corporation
Share Purchase and Investment Plan Trust, acting by and
through Ameritrust Company National Association, as Trustee,
as Issuer, and the lenders listed on the
signature pages t hereof
"Debt Downgrade" means
(i) the rating of the Guarantor's senior
unsecured funded debt securities by both S&P and
Moody's in a rating category below Investment Grade, or
if such debt securities are not rated by both S&P and
Moody's, but only by one of them, such rating in a
rating category below Investment Grade by either S&P or
Moody's and by any other nationally recognized
statistical rating organization selected by Principal
Mutual Life Insurance Company or Credit Suisse and
consented to in writing by the holders of more than 50%
in unpaid principal amount of the Notes at the time
outstanding (which holders shall include Credit Suisse
and Principal Mutual Life Insurance Company),
(ii) if such debt securities are not at the time
rated by (a) either S&P or Moody's and (b) any other
nationally recognized statistical rating organization
as aforesaid, the rating of such debt securities by any
nationally recognized statistical rating organization
selected by Principal Mutual Life Insurance Company or
Credit Suisse and consented to in writing by the
holders of more than 50% in unpaid principal amount of
the Notes at the time outstanding (which holders shall
include Credit Suisse and Principal Mutual Life
Insurance Company), in a rating category below
Investment Grade, pursuant to a request for a private
rating made by the Guarantor or the holder or holders
of at least 5% of the unpaid principal amount of the
Notes at the time outstanding,
(iii) if no such debt securities of the Guarantor
are rated, the rating of the Notes by S&P, Moody's or
such other nationally recognized rating agency selected
by Principal Mutual Life Insurance Company or Credit
Suisse and consented to in writing by the holders of
more than 50% in unpaid principal amount of the Notes
at the time outstanding (which holders shall include
Credit Suisse and Principal Mutual Life Insurance
Company), in a rating category below Investment Grade
pursuant to a request for a private rating made by the
Guarantor or the holder or holders of at least 5% of
the unpaid principal amount of the Notes at the time
outstanding, or
(iv) if a rating agency for a private rating is
selected and consented to as specified in clause (ii)
or (iii) above and the Guarantor has not delivered to
each holder of a Note a copy of a private rating from
such rating agency rating such debt securities or the
Notes, as the case may be, in a rating category of
Investment Grade or higher within 60 days of such
consent.
For purposes of this definition, "S&P" means Standard &
Poor's Corporation or any successor thereto; "Moody's" means
Moody's Investor Service, Inc. or any successor thereto; and
"Investment Grade" means a rating category of or higher than
"BBB-" with respect to S&P, a rating category of or higher
than "Baa3" with respect to Moody's and a comparable rating
category with respect to any other rating organization
selected as specified above.
<PAGE>
EXHIBIT M
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among
[ASSIGNOR] (the "Assignor"), [ASSIGNEE] (the "Assignee"),
EATON CORPORATION (the "Company") and MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement
(the "Agreement") relates to the Five Year Credit Agreement
dated as of January 25, 1994 among the Company, the Assignor
and the other Banks party thereto, as Banks, the Co-Agents
party thereto, Chemical Bank, as Managing Agent, and the
Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement,
the Assignor has a Commitment to make Loans to the Company
and its Eligible Subsidiaries in an aggregate principal
amount at any time outstanding not to exceed $__________;
WHEREAS, Committed Loans made to the Company and
its Eligible Subsidiaries by the Assignor under the Credit
Agreement in the aggregate principal amount of $__________
are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the
Assignee all of the rights of the Assignor under the Credit
Agreement in respect of a portion of its Commitment
thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of each of
its outstanding Committed Loans, and the Assignee proposes
to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing
and the mutual agreements contained herein, the parties
hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not
otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby
assigns and sells to the Assignee all of the rights of the
Assignor under the Credit Agreement to the extent of the
Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the
obligations of the Assignor under the Credit Agreement to
the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the
principal amount of the Committed Loans made by the Assignor
outstanding at the date hereof. Upon the execution and
delivery hereof by the Assignor, the Assignee, the Company
and the Agent and the payment of the amounts specified in
Section 3 required to be paid on the date hereof (i) the
Assignee shall, as of the date hereof, succeed to the rights
and be obligated to perform the obligations of a Bank under
the Credit Agreement with a Commitment in an amount equal to
the Assigned Amount, and (ii) the Commitment of the Assignor
shall, as of the date hereof, be reduced by a like amount
and the Assignor released from its obligations under the
Credit Agreement to the extent such obligations have been
assumed by the Assignee. The assignment provided for herein
shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the
assignment and sale contemplated in Section 2 hereof, the
Assignee shall pay to the Assignor on the date hereof in
Federal funds the amount heretofore agreed between them. It
is understood that facility fees accrued to the date hereof
are for the account of the Assignor and such fees accruing
from and including the date hereof are for the account of
the Assignee. Each of the Assignor and the Assignee hereby
agrees that if it receives any amount under the Credit
Agreement which is for the account of the other party
hereto, it shall receive the same for the account of such
other party to the extent of such other party's interest
therein and shall promptly pay the same to such other party.
SECTION 4. Consent of the Company and the Agent.
This Agreement is conditioned upon the consent of the
Company and the Agent pursuant to Section 11.06(c) of the
Credit Agreement. The execution of this Agreement by the
Company and the Agent is evidence of this consent. Pursuant
to Section 11.06(c) the Company agrees to execute and
deliver a Note [and to cause each Eligible Subsidiary to
execute and deliver a Note] payable to the order of the
Assignee to evidence the assignment and assumption provided
for herein.
SECTION 5. Non-Reliance on Assignor. The
Assignor makes no representation or warranty in connection
with, and shall have no responsibility with respect to, the
solvency, financial condition, or statements of any
Borrower, or the validity and enforceability of the
obligations of any Borrower in respect of the Credit
Agreement or any Note. The Assignee acknowledges that it
has, independently and without reliance on the Assignor, and
based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to
enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the
business, affairs and financial condition of the Borrowers.
SECTION 6. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of
the State of New York.
SECTION 7. Counterparts. This Agreement may be
signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their duly
authorized officers as of the date first above written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
EATON CORPORATION
By__________________________
Title:
And by
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By__________________________
Title
