<PAGE>
Page 1 of 126 pages
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Transition Period from to
For Quarter Ended September 30, 1997 Commission File Number 1-5112
ETHYL CORPORATION
(Exact name of registrant as specified in its charter)
VIRGINIA 54-0118820
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
330 SOUTH FOURTH STREET
P. O. BOX 2189
RICHMOND, VIRGINIA 23218-2189
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code - (804) 788-5000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports); and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Number of shares of common stock, $1 par value, outstanding as of October 31,
1997: 83,465,460
<PAGE>
ETHYL CORPORATION
I N D E X
Page
Number
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Balance Sheets - September 30, 1997 and
December 31, 1996 3 - 4
Consolidated Statements of Income - Three Months and Nine Months
Ended September 30, 1997 and 1996 5
Condensed Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1997 and 1996 6
Notes to Financial Statements 7 - 9
ITEM 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 10 - 15
PART II. OTHER INFORMATION
ITEM 5. Other Information 16
ITEM 6. Exhibits and Reports on Form 8-K 16
SIGNATURE 17
EXHIBIT INDEX 18
EXHIBIT 4.1 $750 Million Amended and Restated Competitive Advance,
Revolving Credit Facility and Term Loan Agreement 19 - 126
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
ETHYL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
September 30
1997 December 31
ASSETS (unaudited) 1996
------------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 12,906 $ 20,148
Accounts receivable, less allowance for
doubtful accounts (1997 - $2,367; 1996 -
$2,375) 141,388 177,788
Inventories:
Finished goods and work-in-process 180,196 179,322
Raw materials 20,629 21,498
Stores, supplies and other 9,294 9,782
------------- ------------
Total inventories 210,119 210,602
------------- ------------
Deferred income taxes and prepaid expenses 27,906 18,627
------------- ------------
Total current assets 392,319 427,165
------------- ------------
Property, plant and equipment, at cost 769,475 764,145
Less accumulated depreciation and
amortization (355,890) (333,268)
------------- ------------
Net property, plant and equipment 413,585 430,877
------------- ------------
Prepaid pension cost, other assets and
deferred charges 175,954 159,470
Goodwill and other intangibles - net
of amortization 71,292 77,657
------------- ------------
Total assets $ 1,053,150 $ 1,095,169
============= ============
<FN>
See accompanying notes to financial statements.
</TABLE>
3
<PAGE>
ETHYL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)
September 30
1997 December 31
LIABILITIES AND SHAREHOLDERS' EQUITY (unaudited) 1996
----------- -----------
Current liabilities:
Accounts payable $ 85,251 $ 74,939
Accrued expenses 63,362 64,167
Cash dividends payable 14,806 14,806
Long-term debt, current portion 6,740 6,701
Income taxes payable 9,417 20,298
----------- -----------
Total current liabilities 179,576 180,911
----------- -----------
Long-term debt 275,596 325,480
Other noncurrent liabilities 88,393 84,502
Deferred income taxes 61,173 64,376
Shareholders' equity:
Common stock ($1 par value)
Issued - 118,443,835 in 1997 and 1996 118,444 118,444
Additional paid-in capital 2,799 2,799
Foreign currency translation adjustments (10,332) (1,888)
Retained earnings 337,501 320,545
----------- -----------
448,412 439,900
----------- -----------
Total liabilities and shareholders' equity $ 1,053,150 $ 1,095,169
=========== ===========
See accompanying notes to financial statements.
4
<PAGE>
ETHYL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
----------------------- -----------------------
1997 1996 1997 1996
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Net sales $ 254,074 $ 304,169 $ 789,123 $ 845,674
Cost of goods sold 184,360 208,742 564,013 592,386
--------- ---------- --------- ----------
Gross profit 69,714 95,427 225,110 253,288
Selling, general and administrative expenses 21,150 26,027 67,079 75,870
Research, development and testing expenses 15,883 18,105 48,675 52,133
--------- ---------- --------- ----------
Operating profit 32,681 51,295 109,356 125,285
Interest and financing expenses 4,926 6,452 15,489 18,650
Other income, net (590) (303) (947) (1,258)
--------- ---------- --------- ----------
Income before income taxes 28,345 45,146 94,814 107,893
Income taxes 9,499 16,661 33,441 40,266
--------- ---------- --------- ----------
Net income $ 18,846 $ 28,485 $ 61,373 $ 67,627
========= ========== ========= ==========
Earnings per share $ .16 $ .24 $ .52 $ .57
========= ========== ========= ==========
Shares used to compute earnings per share 118,450 118,444 118,447 118,449
========= ========== ========= ==========
Cash dividends per share of common stock $ .125 $ .125 $ .375 $ .375
========= ========== ========= ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
5
<PAGE>
ETHYL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars In Thousands)
(Unaudited)
Nine Months Ended
September 30
--------------------
1997 1996
-------- --------
Cash and cash equivalents at beginning of year $ 20,148 $ 29,972
Cash flows from operating activities:
Net income 61,373 67,627
Adjustments to reconcile net income to cash flows
from operating activities:
Depreciation and amortization 46,887 43,116
Working capital decreases, net of effects from
acquisition 16,372 35,151
Other, net (9,383) 1,139
-------- --------
Cash provided from operating activities 115,249 147,033
-------- --------
Cash flows from investing activities:
Acquisition of business (net of $1,245 cash acquired) - (133,032)
Capital expenditures (28,446) (23,804)
Other, net 372 (2,123)
-------- --------
Cash used in investing activities (28,074) (158,959)
-------- --------
Cash flows from financing activities:
Repayment of long-term debt (50,000) -
Additional long-term debt - 59,000
Cash dividends paid (44,417) (44,416)
-------- --------
Cash (used in) provided from financing activities (94,417) 14,584
-------- --------
(Decrease)increase in cash and cash equivalents (7,242) 2,658
-------- --------
Cash and cash equivalents at end of period $ 12,906 $ 32,630
======== ========
See accompanying notes to financial statements.
6
<PAGE>
ETHYL CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(In Thousands Except Per-Share Amounts)
(Unaudited)
1. In the opinion of management, the accompanying consolidated financial
statements of Ethyl Corporation and Subsidiaries (the "Company")
contain all adjustments necessary to present fairly, in all material
respects, the Company's consolidated financial position as of
September 30, 1997, and the consolidated results of operations for the
three and nine- month periods ended September 30, 1997 and 1996, and
the consolidated cash flows for the nine-month periods ended September
30, 1997 and 1996. All adjustments are of a normal, recurring nature.
These financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the
December 31, 1996, Annual Report. The December 31, 1996, consolidated
balance sheet data was derived from audited financial statements but
does not include all disclosures required by generally accepted
accounting principles. The results of operations for the nine-month
period ended September 30, 1997, are not necessarily indicative of the
results to be expected for the full year.
2. On August 26, 1997, the Company announced a tender offer to purchase
up to 35.0 million shares of its common stock (about 30% of the
approximately 118.4 million shares outstanding) at prices not in
excess of $9.25 nor less than $7.75 per share. The Offer expired on
September 25, 1997, with approximately 35.5 million shares tendered.
On October 2, 1997, the Company purchased 34,999,995 shares at $9.25
per share, with the purchase price and related costs totaling about
$330.0 million. The purchase was financed under the Company's new
$900,000,000 Competitive Advance, Revolving Credit Facility and Term
Loan Agreement which increased the committed funds available for
borrowing. Subsequently, the Company has elected to reduce the
committed funds under that Agreement to $750,000,000 and, accordingly,
has entered into an Amended and Restated Competitive Advance,
Revolving Credit Facility and Term Loan Agreement.
On February 29, 1996, the Company completed the acquisition of the
worldwide lubricant additives business of Texaco Inc. ("Texaco"),
including manufacturing and blending facilities, identifiable
intangibles and working capital. The acquisition, accounted for under
the purchase method, included a cash payment of $134.3 million and a
future contingent payment of up to $60 million. The cash payment was
financed primarily under the Company's revolving credit agreement.
The payment of up to $60 million will become due on February 26, 1999,
with interest payable on the contingent debt until such date. The
actual amount of the contingent payment and total interest will be
determined using an agreed-upon formula based on volumes of certain
acquired product lines shipped during the calendar years 1996 through
1998, as specified in the contingent note agreement. Texaco retained
substantially all noncurrent liabilities.
As the Company's financial statements do not include any effects of
the purchase of the 34,999,995 shares, and the 1996 financial
statements only include seven months of operations of the acquired
lubricant additives business, the following selected unaudited pro
forma information is being provided to present a summary of the
financial position and results of operations of the Company as if the
purchase of shares and the acquisition of the Texaco worldwide
7
<PAGE>
ETHYL CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
(In Thousands Except Per-Share Amounts)
(Unaudited)
lubricant additives business had occurred as of January 1, 1996. The
pro forma information gives effect to adjustments for the reduction in
outstanding shares, additional debt, interest expense and related
income tax impact that would have been incurred to finance the
purchase of the shares. The pro forma information for the nine months
ended September 30, 1996, also includes the combined operations of the
Company and the worldwide lubricant additives business acquired from
Texaco for nine months, giving effect to adjustments for interest
expense that would have been incurred to finance the acquisition and
other purchase accounting adjustments. The pro forma data is for
informational purposes only and may not necessarily reflect the
financial position or results of operations of the Company had the
purchase of shares occurred on January 1, 1996, and had the acquired
business been part of the Company for the nine months ended September
30, 1996.
Nine Months Ended Nine Months Ended
September 30, 1997 September 30, 1996
------------------ ------------------
Net Sales $789,123 $894,849
Net Income $ 51,222 $ 58,882
Earnings Per Share $.61 $.71
Shares used to compute
earnings per share 83,447 83,449
September 30, 1997
------------------
Long-term debt $602,896
Shareholders' equity $121,112
Long-term debt as a percent
of capitalization 83.3%
3. Long-term debt consists of the following: September 30 December 31
1997 1996
------------ -----------
Variable-rate bank loans (average effective
interest rate was 6.0% for the nine-month
period ended September 30, 1997 and 5.9%
for the year 1996) $249,000 $299,000
8.6% to 8.86% Medium-Term Notes due through
2001 33,750 33,750
------- -------
Total long-term debt 282,750 332,750
Less unamortized discount (414) (569)
------- -------
Net long-term debt 282,336 332,181
Less current portion (6,740) (6,701)
------- -------
Long-term debt $275,596 $325,480
======= =======
(Long-term debt does not include any impact of the $60 million
contingent note related to the purchase of the lubricant additives
business from Texaco Inc.)
(Also, see note 2)
8
<PAGE>
ETHYL CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
(In Thousands Except Per-Share Amounts)
(Unaudited)
4. Recently Issued Accounting Standards:
Effective December 31, 1997, the Company will adopt Financial
Accounting Standards Board ("FASB") Statement No. 128 "Earnings
Per Share" which will supersede Accounting Principles Board
("APB") Opinion No. 15 "Earnings Per Share." This new statement
requires that "basic earnings per share" be computed by dividing
income available to common shareholders by the weighted average number
of common shares outstanding for the period. "Diluted earnings per
share," if different, reflects potential dilution if stock options or
other contracts would result in the issue or exercise of additional
shares of common stock that share in the earnings. "Basic earnings per
share" and "diluted earnings per share" will replace "primary earnings
per share" and "fully diluted earnings per share," respectively, as
described under APB Opinion No. 15, and must be reported on the income
statement.
FASB Statement No. 128 may not be adopted for quarterly periods prior
to December 31, 1997, but supplemental pro forma disclosure of the
impact of FASB Statement No. 128 may be reported. Presently,
management does not anticipate any material change in the earnings per
share amounts as a result of FASB Statement No. 128.
FASB Statement No. 130, "Reporting Comprehensive Income" is effective
for periods beginning after December 15, 1997, including interim
periods. This Statement establishes standards for reporting
"comprehensive income" in financial statements, either in the income
statement or in a separate statement, and also requires display of
"accumulated other comprehensive income" in a separate caption in the
equity section of the balance sheet. Material components of
accumulated other comprehensive income must also be disclosed in a
statement or in notes to financial statements. This statement only
modifies disclosures, including financial statement disclosures, and
does not result in other changes to financial statements.
FASB Statement No. 131, "Disclosures about Segments of an Enterprise
and Related Information" is effective for annual periods beginning
after December 15, 1997, and for interim periods after the year of
adoption. This statement establishes standards for reporting
information about operating segments, including related disclosures
about products and services, geographic areas, and major customers.
The Company has not identified what impact, if any, Statement No. 131
will have on operating segments reported, or on the financial
statements and related disclosures.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following is management's discussion and analysis of certain significant
factors affecting the Company's results of operations during the periods
included in the accompanying consolidated statements of income and changes in
the Company's financial condition since December 31, 1996. The Company's
results of operations for the third quarter and nine months of 1997 and the
third quarter and nine months of 1996 include the results of the lubricant
additives business of Texaco Inc. ("Texaco") since it was acquired on February
29, 1996, while the balance sheets at September 30, 1997, and December 31,
1996, include an allocation of the purchase price and other purchase
accounting adjustments as well as borrowings used to finance the acquisition.
Some of the information presented in the following discussion constitutes
forward-looking comments within the meaning of the Private Securities
Litigation Reform Act of 1995. Although the Company believes its expectations
are based on reasonable assumptions within the bounds of its knowledge of its
business and operations, there can be no assurance that actual results will
not differ materially from its expectations. Factors which could cause actual
results to differ from expectations include, without limitation, the timing of
orders received from customers, the gain or loss of significant customers,
competition from other manufacturers, changes in the demand for the Company's
products, increases in the cost of the product, changes in the market in
general and significant changes in new product introduction.
Results of Operations
Third Quarter 1997 Compared to Third Quarter 1996
Net sales for the third quarter of 1997 amounted to $254.1 million, down $50.1
million (16%) from $304.2 million in the 1996 third quarter. The decrease in
net sales was due to lower shipments ($35.4 million), and the impact of lower
selling prices ($14.7 million) which included an unfavorable foreign currency
effect. These decreases were caused by lower shipments and slightly lower
selling prices of lead antiknocks, reflecting market decline as well as
fluctuations in orders and shipping patterns, and lower shipments and lower
selling prices of most major petroleum additives products.
Cost of goods sold in the 1997 quarter of $184.4 million decreased $24.4
million (12%) from $208.7 million in the 1996 quarter. The overall decrease
was due to lower shipments ($18.8 million) primarily of petroleum additives
and lead antiknocks, as well as the impact of lower costs ($5.6 million) in
the 1997 quarter including a favorable foreign currency effect and net lower
per unit raw material costs. Lower costs of petroleum additives were partly
offset by higher costs of antiknocks.
Gross profit amounted to $69.7 million in the 1997 quarter versus $95.4
million in the 1996 quarter. As a result of a 16% decrease in net sales and a
12% decrease in cost of goods sold in 1997 from 1996, the gross profit margin
decreased to 27.4% in the third quarter 1997 from 31.4% in the third quarter
10
<PAGE>
1996. The lower margins mainly reflected reductions in shipments and margins
of antiknocks and a change in product mix due to an increase in the extent to
which sales and profits come from petroleum additives, as well as a net
unfavorable foreign currency effect.
Selling, general and administrative expenses combined with research,
development and testing expenses amounted to $37.0 million in the third
quarter 1997, down $7.1 million from $44.1 million in the third quarter 1996,
reflecting the Company's continuing application of strict cost controls. The
decrease primarily results from overall lower selling and administrative
expenses and research, development and testing expenses than in the 1996
period. Even though selling, general and administrative expenses combined
with research, development and testing expenses are 16% lower in 1997, as a
percentage of net sales, selling, general and administrative expenses,
including research, development and testing expenses, increased slightly to
14.6% during the 1997 quarter from 14.5% during the 1996 quarter reflecting
the effect of a slightly greater reduction in 1997 sales than in expenses.
Operating profit in the 1997 quarter decreased to $32.7 million, down $18.6
million (36%) from $51.3 million in the 1996 quarter. Most of the decrease
results from lower shipments and somewhat lower antiknock gross profit margins
in the 1997 quarter, as well as lower operating profit from lower shipments of
petroleum additives, and an unfavorable foreign currency effect. Lower
overall profit margins reflect a change in the product mix due to the
increase in the extent to which profits come from petroleum additives.
Interest expense in 1997 decreased 24% to $4.9 million from $6.5 million in
the 1996 quarter. The $1.6 million decline reflects approximately $1.7
million from a decrease in average debt outstanding, reflecting the use of the
Company's cash flow to reduce long-term debt, and $0.2 million from additional
interest costs capitalized, offset by approximately $0.2 million by higher
interest cost from slightly higher average interest rates for variable-rate
debt as well as $0.1 million from higher commitment and other fees.
Other income, net, increased to $590 thousand in the 1997 quarter from $303
thousand other income, net, in the 1996 quarter. The increase reflects
changes in a number of immaterial non-operating items.
Income Taxes
Income taxes in the third quarter 1997 were $9.5 million, down (43%) from
$16.7 million in the third quarter 1996, due primarily to a 37% decrease in
income before income taxes, but also reflecting the impact of a lower
effective income tax rate (33.5% in the 1997 quarter versus 36.9% in the 1996
quarter), primarily due to settlement of certain tax issues with the Internal
Revenue Service as well as lower state income taxes.
11
<PAGE>
Nine Months 1997 Compared to Nine Months 1996
Net sales for the nine months of 1997 amounted to $789.1 million, down $56.6
million (7%) from $845.7 million in the 1996 period. The decrease in net
sales was due to the impact of changes in volumes, including changes in
product mix, ($38.5 million) and lower selling prices ($18.1 million) which
included an unfavorable foreign currency effect. The overall volume of total
product shipments increased but, due to product mix, the dollar impact of
those shipments resulted in $38.5 million of the $56.6 million decrease in net
sales. The decreased sales reflected lower shipments of lead antiknocks,
reflecting market decline and fluctuations in orders and shipping patterns, as
well as lower shipments of other antiknocks, and lower selling prices of
petroleum additives, reflecting the competitive pricing conditions in this
business. This was partly offset by higher shipments of petroleum additives
as well as slightly higher selling prices for lead antiknocks. Sales included
revenues from the worldwide lubricant additives business acquired from Texaco
for nine months in the 1997 period versus only seven months in the 1996
period.
Cost of goods sold for nine months 1997 of $564.0 million decreased $28.4
million (5%) from $592.4 million in the 1996 quarter. The overall decrease
was due in part to the impact of the favorable foreign currency effect on
costs incurred in foreign (mainly European) currencies, the efficiency of
strict management of product supply procedures and lower per unit raw material
costs ($19.3 million) in the 1997 period and lower shipments ($9.1 million).
The lower costs were in petroleum additives. While lead and other antiknock
shipments were lower, shipments of petroleum additives increased. The costs
included cost of goods sold of the worldwide lubricant additives business
acquired from Texaco for nine months in the 1997 period versus seven months in
the 1996 period.
Gross profit amounted to $225.1 million in 1997 versus $253.3 million in 1996.
As a result of a 7% decrease in net sales and a 5% decrease in cost of goods
sold in 1997 from 1996, the gross profit margin decreased to 28.5% in the 1997
period from 30.0% in the 1996 period. The lower margins mainly reflected a
change in product mix, due to an increase in the extent to which sales and
profits come from petroleum additives, a net unfavorable foreign currency
effect and the competitive pricing conditions in the petroleum additives
business.
Selling, general and administrative expenses combined with research,
development and testing expenses amounted to $115.8 million in the nine months
1997, down $12.2 million from $128.0 million in the nine months 1996,
reflecting the Company's continuing application of strict cost controls. The
decrease included the overall benefit from cost controls as well as lower
expenses related to marketing activities for the Company's manganesed-based
octane improver, HiTEC(R) 3000 performance additive ("MMT") and lower selling
and administrative expenses for lead antiknocks. Research, development and
testing expenses were also down from the prior period. As a percentage of net
sales, selling, general and administrative expenses, including research,
development and testing expense decreased to 14.7% during the 1997 period from
15.1% during the 1996 period.
12
<PAGE>
Operating profit in the 1997 period decreased to $109.4 million, down $15.9
million (13%) from $125.3 million in the 1996 period. Most of the decrease
resulted from lower lead antiknock shipments, partly offset by improvements in
all other major product lines, including the benefit of the acquired lubricant
additives business, and lower selling, general and administrative expenses.
The lower profit margins reflect a change in the product mix due to the
increase in the extent to which profits come from petroleum additives.
Interest expense in 1997 decreased 17% to $15.5 million from $18.7 million in
the 1996 period. The $3.2 million decline reflects approximately a $3.6
million reduction from a decrease in average debt outstanding, reflecting the
use of the Company's cash flow to reduce long-term debt, offset by
approximately $0.3 million higher interest costs from higher average interest
rates for variable-rate debt as well as $0.1 million by a reduction in the
amount of interest costs capitalized and higher commitment and other fees.
Other income, net, decreased to $.9 million in the 1997 period from $1.3
million other income, net, in the 1996 period. The decrease reflects lower
interest income on short term securities as well as changes in a number of
immaterial non-operating items.
Income Taxes
Income taxes in the nine months of 1997 decreased 17% from the nine months of
1996, primarily due to a 12% decrease in income before income taxes, as well
as the impact of a lower effective income tax rate (35.3% in the 1997 period
versus 37.3% in the 1996 period), primarily due to settlement of certain
issues with the Internal Revenue Service as well as lower state income taxes
and other tax adjustments.
Financial Condition and Liquidity
Cash and cash equivalents at September 30, 1997, were about $12.9 million,
down $7.2 million from $20.1 million at year-end 1996. Cash flows were more
than sufficient to cover operating activities during the 1997 period. Cash
flows from operating activities of $115.2 million, together with utilization
of $7.2 million of cash on hand and about $0.4 of other items, were used to
cover capital expenditures of $28.4 million and cash dividends to shareholders
of $44.4 million, as well as repayments of $50.0 million in long-term debt.
Management anticipates that cash provided from operations in the future will
be sufficient to cover the Company's operating expenses, service debt
obligations, including reducing long-term debt, and make dividend payments to
shareholders.
The non-current portion of Ethyl's long-term debt amounted to $275.6 million
at September 30, 1997, representing a decrease in long-term debt of about
$50.0 million from December 31, 1996. The Company also has a contingent note
associated with the 1996 lubricant additives acquisition of up to $60 million
payable to Texaco. The actual amount due on the contingent note will be
determined using an agreed upon formula based on volumes of certain acquired
13
<PAGE>
product lines shipped during calendar years 1996 through 1998. The Company's
long-term debt as a percent of total capitalization was approximately 38.1% at
September 30, 1997, excluding the effect of the contingent note, compared to
42.5% at December 31, 1996. The Company continues to utilize a portion of its
cash flow to reduce long-term debt.
The Company's capital spending program over the next three to five years is
expected to be somewhat higher than in 1996. Capital spending for
environmental and safety projects on plant expansion and replacement related
construction will likely be about the same as current levels. The capital
spending is expected to be financed with cash provided from operations.
A discussion of recent changes in the Company's debt structure is included in
the Recent Developments section.
Recent Developments
Profit from lead antiknocks for 1997 is expected to be significantly below
the profit for 1996 due to the market declining faster than anticipated as
well as continuing fluctuations in lead orders. This is expected to cause the
Company's overall earnings for 1997 to fall below overall earnings for 1996.
In Canada, legislation was introduced in May 1995 in the Canadian Parliament
to restrict the interprovincial transport of the Company's manganesed-based
octane improver, HiTEC(R) 3000 performance additive ("MMT") in Canada as well
as the import of MMT into Canada. The legislation passed the House of Commons
in December 1996 and passed the Senate in April 1997. It was signed into law
on April 25, 1997, and became effective on June 23.
On September 10, 1996, the Company served notice of intent on the Canadian
government that the Company intended to file a claim against the Canadian
government for damages under the arbitration provisions of the North American
Free Trade Agreement ("NAFTA"). The NAFTA allows a company to bring before an
arbitration panel claims against a NAFTA government for alleged violations of
that country's obligations toward foreign investors as required by the Treaty.
The Company's management contends the legislation violates Canada's
obligations relating to national treatment and performance requirements and
constitutes expropriation which would cause a significant impact on the
Company's Toronto-based subsidiary. The Company filed its NAFTA claim on
April 14, 1997. The arbitration process is proceeding.
On August 26, 1997, the Company announced a tender offer to purchase up to
35.0 million shares of its common stock (about 30% of the approximately 118.4
million shares outstanding) at prices not to exceed $9.25 per share. The
Offer expired on September 25, 1997, with approximately 35.5 million shares
being tendered. On October 2, 1997, the Company purchased 34,999,995 shares
at $9.25 per share, with the purchase price and related costs totaling about
$330.0 million, which was financed under the Company's new Competitive Advance,
Revolving Credit Facility and Term Loan Agreement. (Pro forma information,
including long-term debt aggregating approximately $602.9 million, is
disclosed in Note 2 of the Notes to Financial Statements on Page 7.)
14
<PAGE>
The Company has elected to reduce the committed funds available for borrowing
with its principal lender from $900 million to $750 million and, accordingly,
has entered into an Amended and Restated Competitive Advance, Revolving Credit
Facility and Term Loan Agreement dated November 14, 1997, which reflects that
reduction.
The reduction in shares outstanding, together with the recently announced
reduction in the annual dividend from $.50 per share to $.25 per share,
significantly improves future cash flow amounts available for debt reduction
and other corporate purposes.
The Company now has approximately 83.4 million shares of its common stock
outstanding. Under existing authorization by its board of directors, the
Company has the authority to purchase up to approximately 14.2 million
additional shares. Any future purchases may be through open market
transactions, private transactions, or tender offers, and will depend on many
factors, including the market price of the shares, the Company's financial
position, and general economic and market conditions.
15
<PAGE>
PART II - Other Information
ITEM 5. Other Information
Refer to "Recent Developments" in Item 2 "Management's Discussion and
Analysis of Results of Operations and Financial Condition" on page 14.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits - 4.1 - $750 million Amended and Restated Competitive
Advance, Revolving Credit Facility and Term Loan Agreement dated
as of November 14, 1997.
(b) No reports on Form 8-K have been filed during the quarter for
which this report is filed.
16
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned there-unto duly authorized.
ETHYL CORPORATION
(Registrant)
Date: November 14, 1997 By: s/ J. Robert Mooney
J. Robert Mooney
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: November 14, 1997 By: s/ Wayne C. Drinkwater
Wayne C. Drinkwater
Controller
(Principal Accounting Officer)
17
<PAGE>
EXHIBIT INDEX
Page
Number
Number and Name of Exhibit
Exhibit 4.1 $750 Million Amended and Restated Competitive
Advance, Revolving Credit Facility and Term
Loan Agreement 19-126
18
<PAGE>
$750,000,000
AMENDED AND RESTATED COMPETITIVE ADVANCE,
REVOLVING CREDIT FACILITY AND TERM LOAN AGREEMENT
Dated as of November 14, 1997
among
ETHYL CORPORATION,
THE BANKS NAMED HEREIN,
NATIONSBANK, N.A.,
as Administrative Agent
and
WACHOVIA BANK, N.A. and
THE FIRST NATIONAL BANK OF CHICAGO,
as Co-Agents
<PAGE>
TABLE OF CONTENTS
ARTICLE I Definitions 1
Section 1.01. Defined Terms 1
Section 1.02. Terms Generally 17
ARTICLE II The Credits 17
Section 2.01. Commitments 17
Section 2.02. Loans and Letters of Credit 18
Section 2.03. Competitive Bid Procedure 23
Section 2.04. Committed Borrowing Procedure 26
Section 2.05. Refinancings 26
Section 2.06. Fees 27
Section 2.07. Notes: Repayment of Loans 28
Section 2.08. Interest on Loans 29
Section 2.09. Additional Interest: Alternate Rate of Interest 30
Section 2.10. Termination, Reduction & Extension of Commitments 30
Section 2.11. Prepayment of Loans 32
Section 2.12. Reserve Requirements: Change in Circumstances 32
Section 2.13. Change in Legality 34
Section 2.14. Indemnity 35
Section 2.15. Pro Rata Treatment, etc. 35
Section 2.16. Payments 36
Section 2.17. Taxes 36
Section 2.18. Certain Bank Obligations 39
ARTICLE III Representations and Warranties 40
Section 3.01. Organization, Corporate Powers 40
Section 3.02. Authorization 40
Section 3.03. Governmental Approval 41
Section 3.04. Financial Statements 41
Section 3.05. No Material Adverse Change 41
Section 3.06. Subsidiaries 41
Section 3.07. Litigation 42
Section 3.08. Tax Returns 42
Section 3.09. Properties 42
Section 3.10. Employee Benefit Plans 42
Section 3.11 Investment Company Act; Public Utility Holding Company Act 43
Section 3.12. Federal Reserve Regulations 43
Section 3.13. No Material Misstatements 43
Section 3.14. Compliance with Laws 43
Section 3.15. Environmental and Safety Matters 44
<PAGE>
Section 3.16. Use of Proceeds 44
ARTICLE IV Conditions of Lending 44
Section 4.01. Conditions to be Satisfied on Date of Each Borrowing 45
Section 4.02. Conditions to be Satisfied on the Restatement Date 45
ARTICLE V Affirmative Covenants 46
Section 5.01. Corporate Existence; Businesses and Properties 46
Section 5.02. Insurance 46
Section 5.03. Obligations and Taxes 47
Section 5.04. Financial Statements, Reports, etc. 47
Section 5.05. Litigation and Other Notices 48
Section 5.06. ERISA 48
Section 5.07. Access to Premises and Records 49
Section 5.08. Subsidiary Guarantors 49
Section 5.09. Use of Proceeds 50
ARTICLE VI Negative Covenants 50
Section 6.01. Liens, etc. 50
Section 6.02. Indebtedness of Subsidiaries 51
Section 6.03. Compliance with Regulations G, U and X 51
Section 6.04. Mergers, Consolidations and Sales of Assets 52
Section 6.05. Consolidated Leverage Ratio 52
Section 6.06. Consolidated Fixed Charge Coverage Ratio 52
Section 6.07. Consolidated Net Worth 52
Section 6.08. Loans & Investments to Foreign Subsidiaries 53
ARTICLE VII Events of Default 53
ARTICLE VIII The Administrative Agent 56
ARTICLE IX Miscellaneous 58
Section 9.01. Notices 58
Section 9.02. No Waivers; Amendments 59
Section 9.03. Right of Setoff 60
Section 9.04. Successors and Assigns 60
Section 9.05. Expenses; Indemnity 63
Section 9.06. Survival of Agreements, Representations & Warranties, etc. 63
Section 9.07. Governing Law 64
Section 9.08. Sharing of Setoffs 64
Section 9.09. Interest Rate Limitation 64
Section 9.10. Entire Agreement 65
Section 9.11. Waiver of Jury Trial 65
Section 9.12. Severability 65
Section 9.13. Counterparts 65
Section 9.14. Headings 65
<PAGE>
Section 9.15. Jurisdiction; Consent to Service of Process 66
Section 9.16. Binding Effect 66
Exhibits
Exhibit A-1 Form of Competitive Bid Request
Exhibit A-2 Form of Competitive Bid Invitation
Exhibit A-3 Form of Competitive Bid
Exhibit A-4 Form of Competitive Bid Accept/Reject Letter
Exhibit A-5 Form of Committed Borrowing Request
Exhibit B-1 Form of Competitive Note
Exhibit B-2 Form of Revolving Note
Exhibit B-3 Form of Term Note
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Administrative Questionnaire
Exhibit E Form of Joinder Agreement
Schedules
Schedule 2.01 Banks and Commitments
Schedule 3.06 Subsidiaries
Schedule 3.07 Litigation
Schedule 3.15 Environmental and Safety Matters
Schedule 6.01 Liens
Schedule 6.02 Indebtedness
<PAGE>
AMENDED AND RESTATED COMPETITIVE ADVANCE, REVOLVING CREDIT FACILITY AND
TERM LOAN AGREEMENT dated as of November 14, 1997 (this "Agreement" or the
"Amended and Restated Credit Agreement"), among ETHYL CORPORATION, a Virginia
corporation (hereinafter called the "Company"), the banks listed in Schedule
2.01 (the "Banks"), NATIONSBANK, N.A., a national banking association, as
administrative agent for the Banks under this Agreement (in such capacity, the
"Administrative Agent") and WACHOVIA BANK, N.A. and THE FIRST NATIONAL BANK OF
CHICAGO, as Co-Agents.
The Company has requested the Banks to extend credit to the Company in
order to enable it to borrow on a committed revolving credit basis and on a
term loan basis on and after the Effective Date and at any time and from time
to time prior to the Maturity Date (as hereinafter defined), a principal
amount not in excess of $750,000,000 at any time outstanding. The Company has
also requested the Banks to provide a procedure pursuant to which the Company
may invite the Banks to bid on an uncommitted basis on short-term borrowings
by the Company. The proceeds of borrowings hereunder are to be used for
general corporate purposes, including to refinance existing debt and to
finance acquisitions and common stock repurchases. This Amended and Restated
Credit Agreement is given in amendment to and restatement of that Competitive
Advance, Revolving Credit Facility and Term Loan Agreement dated as of August
26, 1997. The Banks are severally, and not jointly, willing to extend such
credit to the Company on the terms and conditions hereinafter set forth.
Accordingly, the Company, the Administrative Agent and the Banks agree as
follows:
ARTICLE I
Definitions
Section 1.01. Defined Terms.
As used in this Agreement, the following words and terms shall have the
meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Committed Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Administrative Fees" shall have the meaning assigned to such term in
Section 2.06(b).
"Administrative Questionnaire" shall mean an Administrative Questionnaire
in the form of Exhibit D.
<PAGE>
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with
the person specified.
"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" shall
mean the rate of interest per annum publicly announced from time to time by
the Administrative Agent as its prime rate in effect at its principal office;
each change in the Prime Rate shall be effective on the date such change is
publicly announced as effective. "Federal Funds Effective Rate" shall mean,
for any day, the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective
Rate shall be effective on the effective date of such change in the Prime Rate
or the Federal Funds Effective Rate, respectively.
"Applicable Facility Fee Percentage" shall mean on any date the applicable
percentage set forth below opposite the applicable Ratings or, under the
circumstances specified below, opposite the Consolidated Leverage Ratio:
S&P/Moody's Rating;
Consolidated Leverage Ratio Facility Fee
Category 1
BBB+/Baa1 or higher;
less than or equal to 1.0:1.0 .085%
Category 2
BBB/Baa2;
greater than 1.0:1.0 but less
than or equal to 1.75:1.0 .100%
Category 3
BBB-/Baa3;
greater than 1.75:1.0 but less
than or equal to 2.50:1.0 .125%
<PAGE>
Category 4
BB+/Ba1,
greater than 2.50:1.0 but less
than or equal to 3.25:1.0 .175%
Category 5
lower than BB+/Ba1;
greater than 3.25:1.0 .250%
For purposes of the foregoing, (i) if two Ratings shall be available and the
Ratings shall fall within different Categories specified above, the Applicable
Facility Fee Percentage shall be determined by reference to the Category in
which the higher of the two Ratings falls; (ii) if only one Rating shall be
available, then the Applicable Facility Fee Percentage shall be determined by
reference to the Category in which such Rating falls; and (iii) if no Ratings
shall be available, then the Applicable Facility Fee Percentage shall be
determined by reference to the Consolidated Leverage Ratio. If any Rating
shall be changed (other than as a result of a change in such rating agency's
rating system) such change shall be effective as of the date on which it is
first announced by the applicable rating agency. For purposes hereof, the
Applicable Facility Fee Percentage shall initially be set at Category 4 (until
the Ratings are adjusted to take into account the purchase of shares
contemplated hereunder). For purposes of the foregoing, the Consolidated
Leverage Ratio shall be determined as of the end of each fiscal quarter of the
Company based on the financial statements of the Company delivered for such
fiscal quarter pursuant to Section 5.04 and the ratio so determined shall be
effective from and including the Determination Date immediately following such
fiscal quarter end to but excluding the next following Determination Date (but
after giving effect, in any event, to the repurchase of shares contemplated
hereunder); provided, however, that the Consolidated Leverage Ratio for any
period during which the Company shall have failed to deliver the financial
statements required by Section 5.04 after having received from the
Administrative Agent notice of such non-delivery shall be deemed for the
purposes of this definition to correspond to Category 5 until such time as the
Administrative Agent receives such financial statements. Each change in the
Applicable Facility Fee Percentage shall apply during the period commencing on
the effective date of such change in the Ratings or the Consolidated Leverage
Ratio, as applicable, and ending on the date immediately preceding the
effective date of the next such change. If the rating system of Moody's or
S&P shall change, the Company and the Banks shall negotiate in good faith to
amend the references to specific ratings in this definition to reflect such
changed rating system (and pending or in the absence of any agreement the
Applicable Facility Fee Percentage will be determined by reference to the
other Rating or Ratings, if any).
"Applicable Margin" shall mean on any date, with respect to the Loans
comprising any Eurodollar Loan or ABR Loan, as the case may be, the applicable
spread set forth below opposite the applicable Ratings or, under the
circumstances specified below, opposite the Consolidated Leverage Ratio:
<PAGE>
<TABLE>
<CAPTION>
Revolving Loans Term Loans
S&P/Moody's Rating: Eurodollar Loan ABR Loan Eurodollar ABR Loan
Consolidated Leverage Ratio Spread Spread Spread Spread
<S> <C> <C> <C> <C>
Category 1 BBB+/Baa1 or higher;
Less than or equal to 1.0:1.0 .165% .000% .250% .000%
Category 2
BBB/Baa2;
Greater than 1.0:1.0 but less
Than or equal to 1.75:1.0 .225% .000% .325% .000%
Category 3
BBB-/Baa3;
Greater than 1.75:1.0 but less
Than or equal to 2.50:1.0 .300% .000% .425% .000%
Category 4
BB+Bal,
Greater than 2.50:1.0 but less
Than or equal to 3.25:1.0 .425% .000% .600% .000%
Category 5
Lower than BB+B/al;
Greater than 3.25:1.0 .500% .000% .750% .000%
</TABLE>
For purposes of the foregoing, (i) if two Ratings shall be available and the
Ratings shall fall within different Categories specified above, the Applicable
Margin shall be determined by reference to the Category in which the higher of
the two Ratings falls; (ii) if only one Rating shall be available, then the
Applicable Margin shall be determined by reference to the Category in which
such Rating falls; and (iii) if no Ratings shall be available, then the
Applicable Margin shall be determined by reference to the Consolidated
Leverage Ratio. If any Rating shall be changed (other than as a result of a
change in such rating agency's rating system) such change shall be effective
as of the date on which it is first announced by the applicable rating agency.
For purposes hereof, the Applicable Facility Fee Percentage shall initially be
set at Category 4 (until the Ratings are adjusted to take into account the
purchase of shares contemplated hereunder). For purposes of the foregoing,
the Consolidated Leverage Ratio shall be determined as of the end of each
fiscal quarter of the Company based on the financial statements of the Company
delivered for such fiscal quarter pursuant to Section 5.04 and the ratio so
determined shall be effective from and including the Determination Date
immediately following such fiscal quarter end to but excluding the next
following Determination Date (but after giving effect, in any event, to the
repurchase of shares contemplated hereunder); provided, however, that the
Consolidated Leverage Ratio for any period during which the Company shall have
failed to deliver the financial statements required by Section 5.04 after
having received from the Administrative Agent notice of such non-delivery
shall be deemed for the purposes of this definition to correspond to Category
5 until such time as the Administrative Agent receives such financial
statements. Each change in the Applicable Margin shall apply during the
<PAGE>
period commencing on the effective date of such change in the Ratings or the
Consolidated Leverage Ratio, as applicable, and ending on the date immediately
preceding the effective date of the next such change. If the rating system of
Moody's or S&P shall change, the Company and the Banks shall negotiate in good
faith to amend the references to specific ratings in this definition to
reflect such changed rating system (and pending or in the absence of any
agreement the Applicable Margin will be determined by reference to the other
Rating or Ratings, if any).
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Bank and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit C or such other form as shall be approved by the
Administrative Agent.
"Attributable Debt" shall mean, in connection with a Sale and Lease-Back
Transaction, the present value (discounted in accordance with GAAP at the debt
rate implied in the lease) of the obligations of the lessee for rental
payments during the term of the applicable lease.
"Attributed Principal Amount" shall mean, on any day, with respect to any
Securitization Transaction, the aggregate amount (with respect to any such
transaction, the "Invested Amount") paid to, or borrowed by, such person as of
such date under such Securitization Transaction, minus the aggregate amount
received by the party providing the financing and applied to reduction of the
Invested Amount under such Securitization Transaction.
"Banks" shall mean the banks and financial institutions party to this
Agreement, being the Revolving Lenders and the Term Lenders.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States, or any successor thereto.
"Borrowing" shall mean (i) a group of Loans of a single Type made by the
Banks (or, in the case of a Competitive Borrowing, by the Bank or Banks whose
Competitive Bids have been accepted pursuant to Section 2.03) on a single date
and as to which a single Interest Period is in effect and (ii) the issuance or
extension of Letters of Credit hereunder.
"Business Day" shall mean any day not a Saturday, Sunday or legal holiday
in the State of Virginia on which banks are open for business in New York
City, Charlotte, North Carolina and Richmond, Virginia; provided, however,
that, when used in connection with a Eurodollar Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London Interbank Market.
"Capitalized Lease Obligations" shall mean the obligations to pay rent or
other amounts under any lease of (or other arrangement conveying the right to
use) real and/or personal property which obligations are required to be
classified and accounted for as a capital lease on a balance sheet under GAAP,
and, for the purposes hereof, the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP.
<PAGE>
A "Change in Control" shall be deemed to have occurred if (a) any person
or group (within the meaning of Rule 13d-5 of the Securities and Exchange
Commission as in effect on the date hereof) other than Bruce C. Gottwald,
Floyd D. Gottwald, Jr. or members of their respective families, or investment
entities owned by any of them, shall own directly or indirectly, beneficially
or of record, shares representing more than 20% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of the
Company or any corporation directly or indirectly Controlling the Company; or
(b) a majority of the seats (other than vacant seats) on the board of
directors of the Company or any corporation directly or indirectly Controlling
the Company shall at any time be occupied by persons who were neither (i)
nominated by the management of the Company or by persons who were members of
the board of directors as of the Closing Date or members elected by two thirds
of such members, nor (ii) appointed by directors so nominated; provided,
however, that an event described in clause (a) above shall not constitute a
"Change in Control" if the acquisition of shares resulting in ownership of in
excess of the 20% threshold referred to in such clause (a) shall have been
approved, prior to the acquisition of such shares or the commencement by the
person or group referred to in such clause (a) of a tender offer for shares of
the Company that would result, if successful, in such person or group owning
in excess of such 20% threshold, by a majority of the members of the board of
directors of the Company who were either members of the board of directors as
of the date of this Agreement or nominated or appointed as provided in clauses
(b)(i) or (ii) above.
"Closing Date" shall mean August 26, 1997.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Commitment" shall mean the Revolving Commitment, the LOC Commitment and
the Term Loan Commitment.
"Committed Borrowing" shall mean a borrowing consisting of simultaneous
Revolving Loans from each of the Revolving Lenders.
"Committed Borrowing Request" shall mean a request made pursuant to
Section 2.04 in the form of Exhibit A-5.
"Competitive Bid" shall mean an offer by a Bank to make a Competitive Loan
pursuant to Section 2.03.
"Competitive Bid Accept/Reject Letter" shall mean a notification made by
the Company pursuant to Section 2.03(d) in the form of Exhibit A-4.
"Competitive Bid Rate" shall mean, as to any Competitive Bid made by a
Bank pursuant to Section 2.03(b), (i) in the case of a Eurodollar Competitive
Loan, the Margin, and (ii) in the case of a Fixed Rate Loan, the fixed rate of
interest offered by the Bank making such Competitive Bid.
<PAGE>
"Competitive Bid Request" shall mean a request made pursuant to Section
2.03 in the form of Exhibit A-1.
"Competitive Borrowing" shall mean a borrowing consisting of a Competitive
Loan or concurrent Competitive Loans from the Bank or Banks whose Competitive
Bids for such Borrowing have been accepted by the Company under the bidding
procedure described in Section 2.03.
"Competitive Loan" shall mean a Loan from a Bank to the Company pursuant
to the bidding procedure described in Section 2.03. Each Competitive Loan
shall be a Eurodollar Competitive Loan or a Fixed Rate Loan.
"Competitive Note" shall mean a promissory note of the Company in the form
of Exhibit B-1 executed and delivered as provided in Section 2.07.
"Consolidated" shall mean, as applied to any financial or accounting term,
such term determined on a consolidated basis for the Company and the
Subsidiaries in accordance with generally accepted accounting principles,
including principles of consolidation, consistent with those applied in the
preparation of the Consolidated financial statements referred to in Section
3.04.
"Consolidated EBITDA" means for any period for the Consolidated Group, the
sum of Consolidated Net Income plus Consolidated Interest Expense plus all
provisions for any Federal, state or other domestic and foreign income taxes
plus depreciation and amortization, in each case on a consolidated basis
determined in accordance with GAAP applied on a consistent basis, but
excluding for purposes hereof extraordinary gains and losses and related tax
effects thereon. Except as otherwise expressly provided, the applicable
period shall be for the four consecutive fiscal quarters ending as of the date
of determination.
"Consolidated Fixed Charge Coverage Ratio" means for any period for the
Consolidated Group, the ratio of Consolidated EBITDA minus capital
expenditures to Consolidated Fixed Charges.
"Consolidated Fixed Charges" means for any period for the Consolidated
Group, the sum of Consolidated Interest Expense plus scheduled payments of
Consolidated Funded Debt (and, without duplication, mandatory commitment
reductions, sinking fund payments and the like relating thereto in the
applicable period) plus dividends paid by the Company in cash or property
(other than dividends paid solely in shares of that class to the holders of
that class) and amounts paid for the purchase or redemption of shares of stock
(excluding for purposes hereof, the redemption of shares within one year after
the Closing Date up to $435,000,000), in each case on a consolidated basis
determined in accordance with GAAP applied on an consistent basis. Except as
otherwise expressly provided, the applicable period shall be for the four
consecutive fiscal quarters ending as of the date of determination.
<PAGE>
"Consolidated Funded Debt" means Indebtedness of the Consolidated Group
determined on a consolidated basis in accordance with GAAP applied on a
consistent basis.
"Consolidated Group" means the Company and its consolidated subsidiaries,
as determined in accordance with GAAP.
"Consolidated Interest Expense" means for any period for the Consolidated
Group, all interest expense, including the amortization of debt discount and
premium, and the interest component under capital leases, in each case on a
consolidated basis determined in accordance with GAAP applied on a
consolidated basis. Except as expressly provided otherwise, the applicable
period shall be for the four consecutive quarters ending as of the date of
determination.
"Consolidated Leverage Ratio" means, as of the last day of any fiscal
quarter, the ratio of Consolidated Funded Debt on such day to Consolidated
EBITDA for the period of four consecutive fiscal quarters ending as of such
day.
"Consolidated Net Income" means for any period for the Consolidated Group,
net income on a consolidated basis determined in accordance with GAAP applied
on a consistent basis, but excluding for purposes of determining the
Consolidated Leverage Ratio and Consolidated Fixed Charge Coverage Ratio, any
extraordinary gains or losses and related tax effects thereon. Except as
expressly provided otherwise, the applicable period shall be for the four
consecutive quarters ending as of the date of determination.
"Consolidated Net Worth" means, as for any date for the Consolidated
Group, shareholders' equity or net worth as determined in accordance with
GAAP.
"Control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a person,
whether through the ownership of voting securities, by contract or otherwise,
and "Controlling" and "Controlled" shall have meanings correlative thereto.
"Debt Transaction" shall mean with respect to any member of the
Consolidated Group, the sale, issuance or placement of Indebtedness for
borrowed money with an original maturity or commitment of more than one year,
whether or not evidenced by promissory note or other evidence of indebtedness
(excluding, for purposes hereof, intercompany indebtedness between members of
the Consolidated Group).
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"Designated Subsidiary" shall mean any Subsidiary that (a) has assets with
a total market value not in excess of $10,000 and (b) has not conducted any
business or other operations during the prior 12-month period.
<PAGE>
"Determination Date" shall mean the 60th day following the end of each of
the first three fiscal quarters in each fiscal year of the Company and the
120th day following the end of each fiscal year of the Company.
"Dollars", "dollars" or "$" shall mean dollars of lawful money of the
United States of America.
"Domestic Subsidiary" shall mean any Subsidiary organized and existing
under the laws of the United States, or any state thereof or the District of
Columbia.
"Effective Date" shall mean the date on which the conditions set forth in
Section 4.02 shall have been satisfied and the initial Borrowings shall have
been made under this Agreement, being August 28, 1997.
"Equity Transaction" shall mean, with respect to any member of the
Consolidated Group, any issuance of its capital stock or other equity
interest, other than an issuance (i) to a member of the Consolidated Group,
(ii) in connection with a conversion of debt securities to equity or (iii) in
connection with exercise by a present of former employee, officer or director
under a stock incentive plan, stock option plan, or other equity-based,
compensation plan or arrangement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414 of the Code.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Committed Loan" shall mean any Revolving Loan or Term Loan
bearing interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"Eurodollar Competitive Loan" shall mean any Competitive Loan bearing
interest at a rate determined by reference to the LIBO Rate in accordance with
the provisions of Article II.
"Eurodollar Loan" shall mean any Eurodollar Competitive Loan or Eurodollar
Committed Loan.
"Event of Default" shall have the meaning given to such term in Article
VII.
"Executive Officer" shall mean an executive officer as defined in Rule
13b-7 of the rules and regulations adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended.
<PAGE>
"Existing Letters of Credit" shall mean those Letters of Credit
outstanding on the Restatement Date and identified on Schedule 2.01(c).
"Facility Fee" shall have the meaning assigned to such term in Section
2.06(a).
"Fees" shall mean the Facility Fees and the Administrative Fees.
"Financial Officer" shall mean the Chief Financial Officer, the Vice
Chairman of the Board or the Treasurer of the Company.
"Financial Statements" shall mean (a) the Consolidated balance sheets of
the Company and its subsidiaries as at December 31, 1996, and the related
statements of income and changes in financial position for the fiscal year
then ended, reported on by Coopers & Lybrand, independent public accountants
and (b) the unaudited Consolidated balance sheets of the Company and its
subsidiaries as of June 30, 1997, and the related statements of income and
changes in financial position for the six-month period then ended, duly
certified by a Financial Officer of the Company.
"Fixed Rate Borrowing" shall mean a Borrowing comprised of Fixed Rate
Loans.
"Fixed Rate Loan" shall mean any Competitive Loan bearing interest at a
fixed percentage rate per annum (expressed in the form of a decimal to no more
than four decimal places) specified by the Bank making such Loan in its
Competitive Bid.
"Foreign Subsidiary" shall mean any Subsidiary organized under the laws of
any country or any political subdivision of any country, except for
Subsidiaries organized under the laws of the United States of America or
Canada or any political subdivision of the United States of America or Canada.
"GAAP" shall mean generally accepted accounting principles, applied on a
consistent basis.
"Governmental Authority" shall mean any Federal, state, local, or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Guarantee" of or by any person shall mean any obligation, contingent or
otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in
any manner, whether directly or indirectly, and including any obligation of
such person, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of
such Indebtedness, (b) to purchase property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (c) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
<PAGE>
enable the primary obligor to pay such Indebtedness; provided, however, that
the term Guarantee shall not include endorsements for collection or deposit,
in either case in the ordinary course of business.
"Guarantors" shall mean each of the persons identified as a Guarantor on
the signature page to the Subsidiary Guaranty and each other person which may
hereafter become a Guarantor by execution of a Joinder Agreement.
"Indebtedness" with respect to any person shall mean at any time, 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 upon which interest
charges are customarily paid, (iv) all obligations of such person under
conditional sale or other title retention agreements relating to property
purchased by such person, (v) all obligations of such person issued or assumed
as the deferred purchase price of property or services (other than accounts
payable to suppliers incurred in the ordinary course of business and not
overdue), (vi) all obligations of others secured by any Lien on property owned
or acquired by such person, whether or not the obligations secured thereby
have been assumed, (vii) all Capitalized Lease Obligations of such person,
(viii) the outstanding Attributed Principal Amount under all Securitization
Transactions, (ix) the principal balance outstanding under all synthetic
leases, tax retention operating leases, off-balance sheet loan or other
similar off-balance sheet financing product to which such person is a party,
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with GAAP and
(x) the Guarantees of such person.
"Interest Payment Date" shall mean (i) as to any Eurodollar Loan for which
the Interest Period is 1, 2 or 3 months, the last day of the Interest Period,
(ii) as to any Eurodollar Loan for which the Interest Period is 6 months, the
last day of the Interest Period and the date that would be the last day of an
Interest Period commencing on the same date but having a duration of 3 months,
(iii) as to any ABR Loan, the last day of March, June, September and December
in each year, or if such day is not a Business Day, the next succeeding
Business Day and (iv) as to any Fixed Rate Loan, the last day of the Interest
Period applicable thereto.
"Interest Period" shall mean: (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day (or if there is no corresponding day, the last day) in the
calendar month that is 1, 2, 3 or 6 months thereafter, as the Company may
elect, and thereafter, each period commencing on the last day of the next
preceding Interest Period for such Eurodollar Borrowing and ending on the
numerically corresponding day (or if there is no corresponding day, the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
Company may elect, (b) as to any ABR Borrowing, the period commencing on the
date of such Borrowing and ending on the Maturity Date or the date of
prepayment of such Borrowing and (c) as to any Fixed Rate Borrowing, the
period commencing on the date of such Borrowing and ending on the date
specified in the Competitive Bids in which the offer to make the Fixed Rate
Loans comprising such Borrowing were extended, which shall not be earlier than
seven days after the date of such Borrowing or later than 360 days after the
date of such Borrowing; provided, however, that if any Interest Period would
end on a day which shall not be a Business Day, such Interest Period shall be
<PAGE>
extended to the next succeeding Business Day unless, with respect to
Eurodollar Loans only, such next succeeding Business Day would fall in the
next calendar month, in which case such Interest Period shall end on the next
preceding Business Day. Interest shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest
Period.
"Issuing Lender" shall mean NationsBank, N.A.
"Issuing Lender's Fee" shall have the meaning assigned to such term in
Section 2.06(c)(ii).
"Joinder Agreement" shall mean a guaranty joinder agreement in
substantially the form attached as Exhibit E hereto.
"Letter of Credit" means Existing Letters of Credit and any letter of
credit issued by the Issuing Lender for the account of the Borrower in
accordance with the terms of Section 2.01(c).
"Letter of Credit Fee" shall have the meaning assigned to such term in
Section 2.06(c)(i).
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to the rate of interest determined by the
Administrative Agent on the basis of offered rates for deposits in dollars for
a period of time corresponding to such Interest Period (and commencing on the
first day of such Interest Period), appearing on Telerate Page 3750 (or, if,
for any reason, Telerate Page 3750 is not available, the Reuters Screen LIBO
Page) as of approximately 11:00 A.M. (London time) two (2) Business Days
before the first day of such Interest Period. As used herein, "Telerate Page
3750" means the display designated as page 3750 by Dow Jones Markets, Inc. (or
such other page as may replace such page on that service for the purpose of
displaying the British Bankers Association London interbank offered rates) and
"Reuters Screen LIBO Page" means the display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace the
LIBO page on that service for the purpose of displaying London interbank
offered rates of major banks).
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind whatsoever (including any conditional sale or other
title retention agreement, any lease in the nature thereof, and the filing of
or agreement to give any financing statement under the Uniform Commercial Code
of any jurisdiction).
"Loan" shall mean a Revolving Loan, a Competitive Loan or a Term Loan,
whether made as a Eurodollar Loan, an ABR Loan or a Fixed Rate Loan, as
permitted hereby.
"LOC Commitment" means the commitment of the Issuing Lender to issue, and
to honor payment obligations under, Letters of Credit hereunder and with
respect to each Revolving Lender, the commitment of each Revolving Lender to
purchase participation interests in the Letters of Credit up to such Revolving
Lender's LOC Committed Amount as specified in Schedule 2.01(a), as such amount
may be reduced from time to time in accordance with the provisions hereof.
<PAGE>
"LOC Committed Amount" means, collectively, the aggregate amount of all of
the LOC Commitments of the Lenders to issue and participate in Letters of
Credit as referenced in Section 2.01(c) and, individually, the amount of each
Lender's LOC Commitment as specified in Schedule 2.01.
"LOC Documents" means, with respect to any Letter of Credit, such Letter
of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments,
guarantees or other documents (whether general in application or applicable
only to such Letter of Credit) governing or providing for (i) the rights and
obligations of the parties concerned or at risk or (ii) any collateral
security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum amount
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (ii) the aggregate
amount of all drawings under Letters of Credit honored by the Issuing Lender
but not theretofore reimbursed.
"Margin" shall mean, as to any Eurodollar Competitive Loan, the margin
(expressed as a percentage rate per annum in the form of a decimal to no more
than four decimal places) to be added to or subtracted from the LIBO Rate in
order to determine the interest rate applicable to such Loan, as specified in
the Competitive Bid relating to such Loan.
"Margin Stock" shall mean "margin stock" as defined in Regulation U of the
Board.
"Material Adverse Effect" shall mean a materially adverse effect on the
business, assets, condition (financial or otherwise) or results of operations
of the Company and the Subsidiaries taken as a whole.
"Maturity Date" shall mean the fifth (5th) anniversary date of the
Effective Date, or any anniversary of such date to which the Maturity Date
shall have been extended pursuant to Section 2.10(d).
"Moody's" shall mean Moody's Investors Service, Inc., or any successor.
"Multiemployer Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which the Company or any ERISA Affiliate (other than
one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code) is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.
"NationsBank" means NationsBank, N.A., its successors and assigns.
"Note" or "Notes" shall mean a Revolving Note, a Competitive Note or a
Term Note of the Company executed and delivered under this Agreement.
<PAGE>
"Obligations" shall mean, collectively, the Revolving Obligations, the
Competitive Loans and the Term Loan.
"Participation Interest" shall mean the purchase by a Revolving Lender of
a participation in LOC Obligations as provided in Section 2.02(b) and in Loans
as provided in Section 9.04.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"person" shall mean any natural person, corporation, division of a
corporation, business trust, joint venture, association, company, partnership
or government, or any agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code that is maintained for current or former employees, or any
beneficiary thereof, of the Company or any ERISA Affiliate.
"Pro Forma Basis" shall mean, with respect to any transaction of merger or
consolidation, that such transaction shall be deemed to have occurred as of
the first day of the period of four fiscal quarters ending as of the most
recent fiscal quarter end preceding the date of such transaction with respect
to which the Administrative Agent and the Banks shall have received financial
statements and an officer's certificate in accordance with the provisions of
Section 5.04.
"Ratings" shall mean the ratings applicable to the senior, unsecured,
non-credit-enhanced, long-term debt of the Company established by S&P and
Moody's.
"Regulation D" shall mean Regulation D of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation G" shall mean Regulation G of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Reportable Event" shall mean any reportable event as defined in Section
4043(b) of ERISA or the regulations issued thereunder with respect to a Plan
(other than a Plan maintained by an ERISA Affiliate that is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code).
<PAGE>
"Required Banks" shall mean a Bank or Banks having Commitments
representing at least 66-2/3% of the Total Commitments or, for purposes of
acceleration pursuant to the provisions of Article VII, Banks holding
Obligations representing at least 66-2/3% of the aggregate principal amount of
the Obligations outstanding, and in addition, so long as any Bank shall have
aggregate Commitments in excess of 50% of the Total Commitments or, for
purposes of acceleration, in excess of 50% of the total Obligations
outstanding, the consent of at least four (4) Banks.
"Restatement Date" shall mean the date of this Amended and Restated Credit
Agreement.
"Revolving Commitment" shall mean, with respect to each Revolving Lender,
the commitment of such Revolving Lender to make Revolving Loans in an
aggregate principal amount up to the amount shown on Schedule 2.1 hereto as
its Revolving Commitment, as such amount may be reduced from time to time in
accordance with the provisions hereof. The Revolving Commitment shall be
deemed permanently terminated on the Maturity Date.
"Revolving Lenders" shall mean the Banks holding Revolving Commitments, as
identified on Schedule 2.1 hereto, and their successors and assigns.
"Revolving Loans" shall mean the revolving loans made by the Banks to the
Company pursuant to Section 2.01(a). Each Revolving Loan shall be a
Eurodollar Committed Loan or an ABR Loan.
"Revolving Obligations" shall mean, collectively, the Revolving Loans and
the LOC Obligations.
"Revolving Note" shall mean a promissory note of the Company in the form
of Exhibit B-2 executed and delivered as provided in Section 2.7.
"S&P" shall mean Standard & Poor's Ratings Services, a Division of The
McGraw Hill Corporation, Inc., or any successor.
"Sale and Lease-Back Transaction" shall mean, with respect to the Company
or any Subsidiary, any arrangement, directly or indirectly, with any person
whereby the Company or such Subsidiary shall sell or transfer any property,
real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other
property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred.
"Securitization Transaction" shall mean any financing transaction or
series of financing transactions that have been or may be entered into by a
member of the Consolidated Group pursuant to which such member of the
Consolidated Group may sell, convey or otherwise transfer to (i) a Subsidiary
or affiliate, or (ii) any other person, or may grant a security interest in,
any accounts, chattel paper, instruments or general intangibles, or interests
therein secured by the merchandise or services financed thereby (whether such
accounts, chattel paper, instruments or general intangibles are then existing
or arising in the future) of such member of the Consolidated Group, and any
<PAGE>
assets related thereto, including without limitation, all security interests
in merchandise or services financed thereby, the proceeds thereof, and other
assets which are customarily sold or in respect of which security interests
are customarily granted in connection with securitization transactions
involving such assets.
"Subsidiary" or "subsidiary" shall mean a subsidiary of the Company.
"Subsidiary Guaranty" shall mean the Guaranty Agreement dated as of the
Closing Date given to the Administrative Agent for the benefit of the Banks in
support of the Loans and obligations hereunder by the Subsidiaries of the
Company identified therein, as amended and modified.
"Term Borrowing" shall mean a borrowing consisting of simultaneous Term
Loans from each of the Term Lenders.
"Term Lenders" shall mean Banks holding Term Loan Commitments, as
identified on Schedule 2.1 hereto, and their successors and assigns.
"Term Loan" shall mean the term loan made by the Banks to the Company
pursuant to Section 2.01(b). Each Term Loan shall be a Eurodollar Committed
Loan or an ABR Loan.
"Term Loan Commitment" shall mean, with respect to each Term Lender, the
commitment of such Term Lender to make its portion of the Term Loan in the
principal amount shown on Schedule 2.1 hereto as its Term Loan Commitment (and
for purposes of making determinations of Required Banks hereunder after the
Effective Date, the principal amount outstanding on the Term Loan).
"Total Commitments" shall mean, collectively, the Total Revolving
Commitments and the Total Term Loan Commitments.
"Total Revolving Commitment" shall mean at any time the aggregate amount
of the Revolving Lenders' Revolving Commitments, as in effect at such time.
"Total Term Loan Commitments" shall mean at any time the aggregate amount
of the Term Lenders' Term Loan Commitments, as in effect (or outstanding, as
the case may be) from time to time.
"Type", when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, "Rate" shall include the
LIBO Rate, the Alternate Base Rate and the Fixed Rate.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
<PAGE>
Section 1.02. Terms Generally.
The definitions in Section 1.01 shall apply equally to both the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as
otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided, however, that if the Company notifies the Administrative Agent
that the Company wishes to amend any covenant in Article VI or any related
definition to eliminate the effect of any change in GAAP occurring after the
date of this Agreement on the operation of such covenant (or if the
Administrative Agent notifies the Company that the Required Banks wish to
amend Article VI or any related definition for such purpose), then the
Company's compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such covenant is amended
in a manner satisfactory to the Company and the Required Banks.
ARTICLE II
The Credits
Section 2.01. Commitments.
(a) Revolving Loans. Subject to the terms and conditions and relying upon
the representations and warranties herein set forth, each Revolving Lender,
severally and not jointly, agrees to make Revolving Loans to the Company, at
any time or from time to time on or after the Effective Date and until the
Maturity Date or until the Revolving Commitment of such Revolving Lender shall
have been terminated in accordance with the terms hereof, in an aggregate
principal amount at any time outstanding not exceeding the amount of such
Revolving Lender's Revolving Commitment, subject, however, to the conditions
that (i) with regard to the Revolving Lenders collectively, the aggregate
amount of Revolving Obligations plus Competitive Loans then outstanding shall
not exceed the Total Revolving Commitment, and (ii) with regard to each
Revolving Lender individually, such Revolving Lender's Revolving Loans plus
its pro rata share of LOC Obligations then outstanding shall not exceed such
Revolving Lender's Revolving Commitment. Each Revolving Lender's Revolving
Commitment is set forth opposite its respective name in Schedule 2.01. Such
Revolving Commitments may be terminated or reduced from time to time pursuant
to Section 2.10. Within the foregoing limits, the Company may borrow, repay
and reborrow hereunder on or after the Effective Date and prior to the
Maturity Date, subject to the terms, provisions and limitations set forth
herein. Upon the reasonable request of any Revolving Lender, the
Administrative Agent shall notify such Revolving Lender of the aggregate
principal amount of Competitive Loans, Revolving Loans and LOC Obligations
outstanding at such time. Nothing contained in this Section 2.01 shall
<PAGE>
preclude the Company from borrowing on a committed or a competitive basis
outside of this Agreement so long as any such borrowing is not otherwise
prohibited hereunder.
(b) Term Loan. Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Term Lender severally
and not jointly, agrees to make its portion of a term loan in the aggregate
principal amount of THREE HUNDRED MILLION DOLLARS ($300,000,000) to the
Company upon request on a Business Day from the Effective Date through October
3, 1997. Each Term Lender's Term Loan Commitment is set forth opposite its
respective name in Schedule 2.01. Amounts repaid on the Term Loan may not be
reborrowed.
(c) Letters of Credit. Subject to the terms and conditions hereof and of
the LOC Documents, if any, and such other terms and conditions which the
Issuing Lender may reasonably require, the Issuing Lender shall issue, and the
Revolving Lenders shall participate in, such Letters of Credit as the Company
may request as provided herein, in a form acceptable to the Issuing Lender,
for the purposes hereinafter set forth, on a Business Day from the Effective
Date until the Maturity Date; provided that (i) the aggregate amount of LOC
Obligations shall not exceed FIFTY MILLION DOLLARS ($50,000,000) at any time
(the "LOC Committed Amount"), (ii) with regard to the Revolving Lenders
collectively, the aggregate amount of Revolving Obligations plus Competitive
Loans then outstanding shall not exceed the Total Revolving Commitment, and
(iii) with regard to each Revolving Lender individually, such Revolving
Lender's Revolving Loans plus its pro rata share of LOC Obligations then
outstanding shall not exceed such Revolving Lender's Revolving Commitment.
Letters of Credit issued hereunder shall not have an original expiry date more
than one year from the date of issuance or extension, nor an expiry date,
whether as originally issued or by extension, extending beyond the Maturity
Date. Each Letter of Credit shall comply with the related LOC Documents. The
issuance date of each Letter of Credit shall be a Business Day.
Section 2.02. Loans and Letters of Credit.
(a) Loans.
(i) (A) Each Revolving Loan shall be made as part of a Borrowing
consisting of Revolving Loans made by the Revolving Lenders ratably in
accordance with their Revolving Commitments; provided, however, that the
failure of any Revolving Lender to make any Revolving Loan shall not in itself
relieve any other Revolving Lender of its obligation to lend hereunder (it
being understood, however, that no Revolving Lender shall be responsible for
the failure of any Revolving Lender to make any Revolving Loan required to be
made by such other Revolving Lender). Each Competitive Loan shall be made in
accordance with the procedures set forth in Section 2.03. The Revolving Loans
comprising any Borrowing shall be in a minimum aggregate principal amount of
$5,000,000 and in integral multiples thereof, in the case of Competitive
Loans, or $10,000,000 and in integral multiples of $1,000,000, in the case of
Revolving Loans (or, in either case, an aggregate principal amount equal to
the remaining balance of the available Revolving Commitments).
<PAGE>
(B) The Term Loan shall be made as part of a Borrowing on request
as provided in Section 2.01(b) consisting of the Term Loan made by the Term
Lenders ratably in accordance with their Term Commitments; provided that the
failure of any Term Lender to make its Term Loan shall not in itself relieve
any other Term Lender of its obligation to lend hereunder (it being
understood, however, that no Term Lender shall be responsible for the failure
of any other Term Lender to make its portion of the Term Loan required to be
made by such other Term Lender).
(ii) Each Competitive Borrowing shall be comprised entirely of Eurodollar
Competitive Loans or Fixed Rate Loans, and each Committed Borrowing and each
Term Borrowing shall be comprised entirely of Eurodollar Committed Loans or
ABR Loans, as the Company may request pursuant to Section 2.03 or 2.04, as
applicable. Each Bank may at its option fulfill its Commitment with respect
to any Eurodollar Loan by causing any domestic or foreign branch or Affiliate
of such Bank to make such Loan; provided that (i) any exercise of such option
shall not affect the obligation of the Company to repay such Loan in
accordance with the terms of this Agreement and the applicable Note and (ii)
the Company shall not be liable for increased costs under Section 2.12, 2.13
or 2.17 to the extent that (A) such costs could be avoided by the use of a
different branch or Affiliate to make Eurodollar Loans and (B) such use would
not, in the judgment of such Bank, entail any expense for which such Bank
shall not be indemnified hereunder or otherwise be disadvantageous to it.
Borrowings of more than one Type may be outstanding at the same time;
provided, however, that the Company shall not be entitled to request any
Borrowing which, if made, would result in an aggregate of more than five
separate Eurodollar Committed Loans of any Bank being outstanding hereunder at
any one time. For purposes of the foregoing, Loans having different Interest
Periods, regardless of whether they commence on the same date, shall be
considered separate Loans.
(iii) Subject to Section 2.05, each Bank shall make each Loan to be made
by it hereunder on the proposed date thereof by wire transfer of immediately
available funds to the Administrative Agent, not later than 12:00 noon,
Charlotte, North Carolina time, and the Administrative Agent shall by 3:00
p.m., Charlotte, North Carolina time, credit the amounts so received to the
general deposit account of the Company with the Administrative Agent or, if a
Borrowing shall not occur on such date because any condition precedent herein
specified shall not have been met, return the amounts so received to the
respective Banks. Competitive Loans shall be made by the Revolving Lenders
whose Competitive Bids therefor are accepted pursuant to Section 2.03 in the
amounts so accepted and Committed Loans shall be made by the Revolving Lenders
pro rata in accordance with Section 2.15. Unless the Administrative Agent
shall have received notice from a Bank prior to the date of any Borrowing that
such Bank will not make available to the Administrative Agent such Bank's
portion of such Borrowing, the Administrative Agent may assume that such Bank
has made such portion available to the Administrative Agent on the date of
such Borrowing in accordance with this paragraph (c) and the Administrative
Agent may, in reliance upon such assumption, make available to the Company on
such date a corresponding amount. If and to the extent that such Bank shall
<PAGE>
not have made such portion available to the Administrative Agent, such Bank
and the Company severally agree to repay to the Administrative Agent forthwith
on demand such corresponding amount, together with interest thereon, for each
day from the date such amount is made available to the Company until the date
such amount is repaid to the Administrative Agent at (i) in the case of the
Company, the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Bank, the Federal Funds Effective Rate.
If such Bank shall repay to the Administrative Agent such corresponding
amount, such amount shall constitute such Bank's Loan as part of such
Borrowing for purposes of this Agreement.
(iv) Notwithstanding any other provision of this Agreement, the Company
shall not be entitled to request (A) any Committed Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date with
respect to any Bank or (B) any Term Borrowing if the Interest Period requested
with respect thereto would extend beyond any principal amortization payment
date unless the portion of the Term Loan comprised of ABR Loans together with
the portion of the Term Loan comprised of Eurodollar Loans with Interest
Periods expiring prior to the date of the principal amortization payment is
due, is at least equal to the amount of such principal amortization payment
due on such date.
(b) Letters of Credit.
(i) Except for those Letters of Credit described on Schedule 2.01(c)
which shall be issued on the Restatement Date, the request for the issuance of
a Letter of Credit shall be submitted by the Company to the Issuing Lender at
least three (3) Business Days prior to the requested date of issuance (or such
shorter period as may be agreed by the Issuing Lender). The Issuing Lender
will provide to the Administrative Agent at least monthly, and more frequently
upon request, a detailed summary report on its Letters of Credit and the
activity thereon, in form and substance acceptable to the Administrative
Agent. In addition, the Issuing Lender will provide to the Administrative
Agent for dissemination to the Revolving Lenders at least quarterly, and more
frequently upon request, a detailed summary report on its Letters of Credit
and the activity thereon. The Issuing Lender will provide copies of the
Letters of Credit to the Administrative Agent and the Revolving Lenders
promptly upon request.
(ii) Each Revolving Lender, with respect to the Existing Letters of
Credit, hereby purchases a participation interest in such Existing Letters of
Credit, and with respect to Letters of Credit issued on or after the
Restatement Date, upon issuance of a Letter of Credit, shall be deemed to have
purchased without recourse a risk participation from the applicable Issuing
Lender in such Letter of Credit and the obligations arising thereunder, in
each case in an amount equal to its pro rata share of the obligations under
such Letter of Credit (based on the respective LOC Commitments of the
Revolving Lenders) and shall absolutely, unconditionally and irrevocably
assume, as primary obligor and not as surety, and be obligated to pay to the
Issuing Lender therefor and discharge when due, its pro rata share of the
obligations arising under such Letter of Credit. Without limiting the scope
<PAGE>
and nature of each Revolving Lender's participation in any Letter of Credit,
to the extent that the Issuing Lender has not been reimbursed as required
hereunder or under any such Letter of Credit, each such Revolving Lender shall
pay to the Issuing Lender its pro rata share of such unreimbursed drawing in
same day funds on the day of notification by the Issuing Lender of an
unreimbursed drawing pursuant to the provisions of subsection (iv) hereof.
The obligation of each Revolving Lender to so reimburse the Issuing Lender
shall be absolute and unconditional and shall not be affected by the
occurrence of a Default, an Event of Default or any other occurrence or event.
Any such reimbursement shall not relieve or otherwise impair the obligation of
the Company to reimburse the Issuing Lender under any Letter of Credit,
together with interest as hereinafter provided.
(iii) In the event of any drawing under any Letter of Credit, the
Issuing Lender will promptly notify the Company. Unless the Company shall
immediately notify the Issuing Lender that the Company intends to otherwise
reimburse the Issuing Lender for such drawing, the Company shall be deemed to
have requested that the Revolving Lenders make a Revolving Loan in the amount
of the drawing as provided herein on the related Letter of Credit, the
proceeds of which will be used to satisfy the related reimbursement
obligations. The Company promises to reimburse the Issuing Lender on the day
of drawing under any Letter of Credit (either with the proceeds of a Revolving
Loan obtained hereunder or otherwise) in same day funds. If the Company shall
fail to reimburse the Issuing Lender as provided hereinabove, the unreimbursed
amount of such drawing shall bear interest at a per annum rate equal to the
Alternate Base Rate plus one percent (1%). The Company's reimbursement
obligations hereunder shall be absolute and unconditional under all
circumstances irrespective of any rights of setoff, counterclaim or defense to
payment the Company may claim or have against the Issuing Lender, the
Administrative Agent, the Revolving Lenders, the beneficiary of the Letter of
Credit drawn upon or any other person, including without limitation any
defense based on any failure of the Company or any Subsidiary to receive
consideration or the legality, validity, regularity or unenforceability of the
Letter of Credit. The Issuing Lender will promptly notify the other Revolving
Lenders of the amount of any unreimbursed drawing and each Revolving Lender
shall promptly pay to the Administrative Agent for the account of the Issuing
Lender in Dollars and in immediately available funds, the amount of such
Revolving Lender's pro rata share of such unreimbursed drawing. Such payment
shall be made on the day such notice is received by such Revolving Lender from
the Issuing Lender if such notice is received at or before 2:00 P.M.
(Charlotte, North Carolina time) otherwise such payment shall be made at or
before 12:00 Noon (Charlotte, North Carolina time) on the Business Day next
succeeding the day such notice is received. If such Revolving Lender does not
pay such amount to the Issuing Lender in full upon such request, such
Revolving Lender shall, on demand, pay to the Administrative Agent for the
account of the Issuing Lender interest on the unpaid amount during the period
from the date of such drawing until such Revolving Lender pays such amount to
the Issuing Lender in full at a rate per annum equal to, if paid within two
(2) Business Days of the date that such Revolving Lender is required to make
payments of such amount pursuant to the preceding sentence, the Federal Funds
Rate and thereafter at a rate equal to the Alternate Base Rate. Each
Revolving Lender's obligation to make such payment to the Issuing Lender, and
the right of the Issuing Lender to receive the same, shall be absolute and
<PAGE>
unconditional, shall not be affected by any circumstance whatsoever and
without regard to the termination of this Agreement or the Commitments
hereunder, the existence of a Default or Event of Default or the acceleration
of the obligations of the Company hereunder and shall be made without any
offset, abatement, withholding or reduction whatsoever. Simultaneously with
the making of each such payment by a Revolving Lender to the Issuing Lender,
such Revolving Lender shall, automatically and without any further action on
the part of the Issuing Lender or such Revolving Lender, acquire a funded
interest in an amount equal to such payment (excluding the portion of such
payment constituting interest owing to the Issuing Lender) in the related
unreimbursed drawing portion of the LOC Obligation and in the interest thereon
and in the related LOC Documents, and shall have a claim against the Company
with respect thereto.
(iv) On any day on which the Company shall have requested, or been
deemed to have requested, a Revolving Loan advance to reimburse a drawing
under a Letter of Credit, the Administrative Agent shall give notice to the
Revolving Lenders that a Revolving Loan has been requested or deemed requested
by the Company to be made in connection with a drawing under a Letter of
Credit, in which case a Revolving Loan advance comprised of ABR Loans (or
Eurodollar Loans to the extent the Company has complied with the procedures of
Section 2.04 with respect thereto) shall be immediately made to the Company by
all Revolving Lenders (notwithstanding any termination of the Revolving
Commitment pursuant to Article VII) pro rata based on the respective LOC
Commitments of the Lenders (determined before giving effect to any termination
of the Revolving Commitments pursuant to Article VII) and the proceeds thereof
shall be paid directly to the Issuing Lender for application to the respective
LOC Obligations. Each such Revolving Lender hereby irrevocably agrees to make
its pro rata share of each such Revolving Loan immediately upon any such
request or deemed request in the amount, in the manner and on the date
specified in the preceding sentence notwithstanding (i) the amount of such
borrowing may not comply with the minimum amount for advances of Revolving
Loans otherwise required hereunder, (ii) whether any conditions specified in
Section 4.01 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) failure for any such request or deemed request for
Revolving Loan to be made by the time otherwise required hereunder, (v)
whether the date of such borrowing is a date on which Revolving Loans are
otherwise permitted to be made hereunder or (vi) any termination of the
Revolving Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Company or any Subsidiary), then each such
Revolving Lender hereby agrees that it shall forthwith purchase (as of the
date such borrowing would otherwise have occurred, but adjusted for any
payments received from the Company on or after such date and prior to such
purchase) from the Issuing Lender such participation in the outstanding LOC
Obligations as shall be necessary to cause each such Revolving Lender to share
in such LOC Obligations ratably (based upon the respective LOC Commitments of
the Revolving Lenders (determined before giving effect to any termination of
the Commitments pursuant to Article VII)), provided that in the event such
payment is not made on the day of drawing, such Revolving Lender shall pay in
addition to the Issuing Lender interest on the amount of its unfunded
<PAGE>
Participation Interest at a rate equal to, if paid within two (2) Business
Days of the date of drawing, the Federal Funds Rate, and thereafter at the
Alternate Base Rate.
(v) Notwithstanding anything to the contrary set forth in this
Agreement, including without limitation Section 2.01(c) hereof, a Letter of
Credit issued hereunder may contain a statement to the effect that such Letter
of Credit is issued for the account of a Subsidiary, provided that
notwithstanding such statement, the Company shall be the actual account party
for all purposes of this Agreement for such Letter of Credit and such
statement shall not affect the Company's reimbursement obligations hereunder
with respect to such Letter of Credit.
(vi) The renewal or extension of any Letter of Credit shall, for
purposes hereof, be treated in all respects the same as the issuance of a new
Letter of Credit hereunder.
(vii) The Issuing Lender may have the Letters of Credit be subject to
The Uniform Customs and Practice for Documentary Credits, as published as of
the date of issue by the International Chamber of Commerce (the "UCP"), in
which case the UCP may be incorporated therein and deemed in all respects to
be a part thereof.
Section 2.03. Competitive Bid Procedure.
(a) The Company may request the Revolving Lenders to make Competitive Bids
in respect of an aggregate amount of Competitive Borrowings at any time
outstanding not in excess of (i) the Total Revolving Commitment in effect at
such time less (ii) the aggregate Committed Borrowings outstanding at such
time. In order to request Competitive Bids, the Company shall hand deliver or
telecopy to the Administrative Agent a duly completed Competitive Bid Request
in the form of Exhibit A-1 hereto, to be received by the Administrative Agent
(i) in the case of a Eurodollar Competitive Borrowing, not later than 10:00
a.m., Charlotte, North Carolina time, four Business Days before a proposed
Competitive Borrowing and (ii) in the case of a Fixed Rate Borrowing, not
later than 10:00 a.m., Charlotte, North Carolina time, one Business Day before
a proposed Competitive Borrowing. No ABR Loan shall be requested in, or made
pursuant to, a Competitive Bid Request. A Competitive Bid Request that does
not conform substantially to the format of Exhibit A-1 may be rejected in the
Administrative Agent's sole discretion, and the Administrative Agent shall
promptly notify the Company of such rejection by telecopier. Such request
shall in each case refer to this Agreement and specify (x) whether the
Borrowing then being requested is to be a Eurodollar Borrowing or a Fixed Rate
Borrowing, (y) the date of such Borrowing (which shall be a Business Day) and
the aggregate principal amount thereof which shall be in a minimum principal
amount of $5,000,000 and in integral multiples thereof, and (z) the Interest
Period with respect thereto (which may not end after the Maturity Date (as
such date may have been extended pursuant to Section 2.10)). Promptly after
its receipt of a Competitive Bid Request that is not rejected as aforesaid,
the Administrative Agent shall invite by telecopier (in the form set forth in
Exhibit A-2 hereto) the Revolving Lenders to bid, on the terms and conditions
of this Agreement, to make Competitive Loans pursuant to the Competitive Bid
Request.
<PAGE>
(b) Each Revolving Lender may, in its sole discretion, make one or more
Competitive Bids to the Company responsive to any Competitive Bid Request;
provided, however, that no Revolving Lender may make a Competitive Bid in
response to any Competitive Bid Request for which the Interest Period
requested would end after the Maturity Date with respect to such Revolving
Lender. Each Competitive Bid by a Revolving Lender must be received by the
Administrative Agent via telecopier, in the form of Exhibit A-3 hereto, (i) in
the case of a Eurodollar Competitive Borrowing, not later than 9:30 a.m.,
Charlotte, North Carolina time, three Business Days before a proposed
Competitive Borrowing and (ii) in the case of a Fixed Rate Borrowing, not
later than 9:30 a.m., Charlotte, North Carolina time, on the day of a proposed
Competitive Borrowing. Multiple bids will be accepted by the Administrative
Agent. Competitive Bids that do not conform substantially to the format of
Exhibit A-3 may be rejected by the Administrative Agent after conferring with,
and upon the instruction of, the Company, and the Administrative Agent shall
notify the Revolving Lender making such nonconforming bid of such rejection as
soon as practicable. Each Competitive Bid shall refer to this Agreement and
specify (x) the principal amount (which shall be in a minimum principal amount
of $5,000,000 and in integral multiples thereof and which may equal the entire
principal amount of the Competitive Borrowing requested by the Company) of the
Competitive Loan or Loans that the Revolving Lender is willing to make to the
Company, (y) the Competitive Bid Rate or Rates at which the Revolving Lender
is prepared to make the Competitive Loan or Loans and (z) the Interest Period
and the last day thereof. If any Revolving Lender shall elect not to make a
Competitive Bid, such Revolving Lender shall so notify the Administrative
Agent via telecopier (I) in the case of Eurodollar Competitive Loans, not
later than 9:30 a.m., Charlotte, North Carolina time, three Business Days
before a proposed Competitive Borrowing, and (II) in the case of Fixed Rate
Loans, not later than 9:30 a.m., Charlotte, North Carolina time, on the day of
a proposed Competitive Borrowing; provided, however, that failure by any
Revolving Lender to give such notice shall not cause such Revolving Lender to
be obligated to make any Competitive Loan as part of such Competitive
Borrowing. A Competitive Bid submitted by a Revolving Lender pursuant to this
paragraph (b) shall be irrevocable.
(c) The Administrative Agent shall promptly notify the Company by
telecopier of all the Competitive Bids made, the Competitive Bid Rate, the
Interest Period and the principal amount of each Competitive Loan in respect
of which a Competitive Bid was made and the identity of the Revolving Lender
that made each bid. The Administrative Agent shall send a copy of all
Competitive Bids to the Company for its records as soon as practicable after
completion of the bidding process set forth in this Section 2.03.
(d) The Company may in its sole and absolute discretion, subject only to
the provisions of this paragraph (d), accept or reject any Competitive Bid
referred to in paragraph (c) above. The Company shall notify the
Administrative Agent by telephone, confirmed by telecopier in the form of a
Competitive Bid Accept/Reject Letter, whether and to what extent it has
decided to accept or reject any of or all the bids referred to in paragraph
(c) above, (x) in the case of a Eurodollar Competitive Borrowing, not later
than 10:30 a.m., Charlotte, North Carolina time, three Business Days before a
proposed Competitive Borrowing, and (y) in the case of a Fixed Rate Borrowing,
not later than 10:30 a.m., Charlotte, North Carolina time, on the day of a
proposed Competitive Borrowing; provided, however, that (i) the failure by
<PAGE>
the Company to give such notice shall be deemed to be a rejection of all the
bids referred to in paragraph (c) above, (ii) the Company shall not accept a
bid made at a particular Competitive Bid Rate if the Company has decided to
reject a bid made at a lower Competitive Bid Rate, (iii) the aggregate amount
of the Competitive Bids accepted by the Company shall not exceed the principal
amount specified in the Competitive Bid Request, (iv) if the Company shall
accept a bid or bids made at a particular Competitive Bid Rate but the amount
of such bid or bids shall cause the total amount of bids to be accepted by the
Company to exceed the amount specified in the Competitive Bid Request, then
the Company shall accept a portion of such bid or bids in an amount equal to
the amount specified in the Competitive Bid Request less the amount of all
other Competitive Bids accepted with respect to such Competitive Bid Request,
which acceptance, in the case of multiple bids at such Competitive Bid Rate,
shall be made pro rata in accordance with the amount of each such bid at such
Competitive Bid Rate, and (v) except pursuant to clause (iv) above, no bid
shall be accepted for a Competitive Loan unless such Competitive Loan is in a
minimum principal amount of $5,000,000 and an integral multiple thereof;
provided further, however, that if a Competitive Loan must be in an amount
less than $5,000,000 because of the provisions of clause (iv) above, such
Competitive Loan may be for a minimum of $500,000 or any integral multiple
thereof, and in calculating the pro rata allocation of acceptances of portions
of multiple bids at a particular Competitive Bid Rate pursuant to clause (iv)
the amounts shall be rounded to integral multiples of $500,000 in a manner
which shall be in the discretion of the Company. A notice given by the
Company pursuant to this paragraph (d) shall be irrevocable.
(e) The Administrative Agent shall promptly notify each bidding Revolving
Lender whether or not its Competitive Bid has been accepted (and if so, in
what amount and at what Competitive Bid Rate) by telecopy sent by the
Administrative Agent, and each successful bidder will thereupon become bound,
subject to the other applicable conditions hereof, to make the Competitive
Loan in respect of which its bid has been accepted.
(f) A Competitive Bid Request shall not be made within five Business Days
after the date of any previous Competitive Bid Request.
(g) If the Administrative Agent shall elect to submit a Competitive Bid in
its capacity as a Revolving Lender, it shall submit such bid directly to the
Company one half of an hour earlier than the latest time at which the other
Banks are required to submit their bids to the Administrative Agent pursuant
to paragraph (b) above.
(h) All notices required by this Section 2.03 shall be given in accordance
with Section 9.01.
Section 2.04. Committed Borrowing Procedure.
In order to request a Committed Borrowing, the Company shall hand deliver
or telecopy (or notify by telephone and promptly confirm by hand delivery or
telecopy) to the Administrative Agent the information requested by the form of
Committed Borrowing Request attached as Exhibit A-5 hereto (a) in the case of
a Eurodollar Committed Borrowing, not later than 10:30 a.m., Charlotte, North
Carolina time, three Business Days before a proposed Borrowing and (b) in the
<PAGE>
case of an ABR Borrowing, not later than 10:30 a.m., Charlotte, North Carolina
time, on the day of a proposed Borrowing. No Fixed Rate Loan shall be
requested or made pursuant to a Committed Borrowing Request. Such notice
shall be irrevocable and shall in each case specify (i) whether the Borrowing
then being requested is to be a Eurodollar Committed Borrowing or an ABR
Borrowing; (ii) the date of such Committed Borrowing (which shall be a
Business Day) and the amount thereof; and (iii) if such Borrowing is to be a
Eurodollar Committed Borrowing, the Interest Period with respect thereto. If
no election as to the Type of Committed Borrowing is specified in any such
notice, then the requested Committed Borrowing shall be an ABR Borrowing. If
no Interest Period with respect to any Eurodollar Committed Borrowing is
specified in any such notice, then the Company shall be deemed to have
selected an Interest Period of one month's duration. If the Company shall not
have given notice in accordance with this Section 2.04 of its election to
refinance a Committed Borrowing prior to the end of the Interest Period in
effect for such Borrowing, then the Company shall (unless such Borrowing is
repaid at the end of such Interest Period) be deemed to have given notice of
an election to refinance such Borrowing with an ABR Borrowing. The
Administrative Agent shall promptly advise the Banks of any notice given
pursuant to this Section 2.04 and of each Bank's portion of the requested
Borrowing.
Section 2.05. Refinancings.
The Company may refinance all or any part of any Borrowing with a
Borrowing of the same or a different Type made pursuant to Section 2.03 or
Section 2.04, subject to the conditions and limitations set forth herein and
elsewhere in this Agreement, including refinancings of Competitive Borrowings
with Committed Borrowings and Committed Borrowings with Competitive
Borrowings. Any Borrowing or part thereof so refinanced shall be deemed to be
repaid in accordance with Section 2.07 with the proceeds of a new Borrowing
hereunder and the proceeds of the new Borrowing, to the extent they do not
exceed the principal amount of the Borrowing being refinanced, shall not be
paid by the Banks to the Administrative Agent or by the Administrative Agent
to the Company pursuant to Section 2.02(c); provided, however, that (i) if the
principal amount extended by a Bank in a refinancing is greater than the
principal amount extended by such Bank in the Borrowing being refinanced, then
such Bank shall pay such difference to the Administrative Agent for
distribution to the Banks described in (ii) below, (ii) if the principal
amount extended by a Bank in the Borrowing being refinanced is greater than
the principal amount being extended by such Bank in the refinancing, the
Administrative Agent shall return the difference to such Bank out of amounts
received pursuant to (i) above, and (iii) to the extent any Bank fails to pay
the Administrative Agent amounts due from it pursuant to (i) above, any Loan
or portion thereof being refinanced with such amounts shall not be deemed
repaid in accordance with Section 2.07 and shall be payable by the Company.
Section 2.06. Fees.
(a) The Company agrees to pay to each Revolving Lender, through the
Administrative Agent, on each March 31, June 30, September 30 and December 31
and on the date on which the Revolving Commitment of such Revolving Lender
shall be reduced or terminated as provided herein, a commitment fee (a
<PAGE>
"Facility Fee") at a rate per annum equal to the Applicable Facility Fee
Percentage from time to time in effect on the average daily amount of the
Revolving Commitment of such Bank during the preceding quarter (or shorter
period commencing with the Closing Date or ending with the Maturity Date or
any date on which the Commitment of such Bank shall be terminated). All
Facility Fees shall be computed on the basis of the actual number of days
elapsed in a year of 360 days. The Facility Fee due to each Revolving Lender
shall commence to accrue on the Closing Date, and shall cease to accrue on the
earlier of the Maturity Date and the termination of the Commitment of such
Revolving Lender as provided herein.
(b) The Company agrees to pay the Administrative Agent, for its own
account, (i) administrative fees at the times and in the amounts agreed upon
in the letter agreement dated August 22, 1997, between the Company and the
Administrative Agent and (ii) such Competitive Bid auction fees as shall be
agreed upon by the Company and the Administrative Agent from time to time
(collectively, the "Administrative Fees").
(c) (i) In consideration of the LOC Commitment hereunder, the Company
agrees to pay to the Administrative Agent for the ratable benefit of the
Revolving Lenders a fee (the "Letter of Credit Fee") equal to the Applicable
Margin for Revolving Loans which are Eurodollar Loans per annum on the average
daily maximum amount available to be drawn under Letters of Credit from the
date of issuance to the date of expiration. The Letter of the Credit Fee
shall be payable quarterly in arrears on the 15th day following the last day
of each calendar quarter for the immediately preceding quarter (or portion
thereof) beginning with the first such date to occur after the Restatement
Date.
(ii) In addition to the Letter of Credit Fee, the Company shall pay
to the Issuing Lender for its own account without sharing by the other Lenders
(A) a fronting and negotiation fee of one-eighth of one percent (1/8%) per
annum on the average daily maximum amount available to be drawn under Letters
of Credit from the date of issuance to the date of expiration, or such other
amount as may be mutually agreed upon by the Company and the Issuing Lender,
and (B) customary charges of the Issuing Lender with respect to the issuance,
amendment, transfer, administration, cancellation and conversion of, and
drawings under, such Letters of Credit (collectively, the "Issuing Lender's
Fees").
(d) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the appropriate Banks. Once paid, none of the Fees paid by the Company
shall be refundable under any circumstances, except in the case of manifest
error.
Section 2.07. Notes; Repayment of Loans.
The Competitive Loans made by each Revolving Lender shall be evidenced by
a single Competitive Note duly executed on behalf of the Company, dated the
Restatement Date, in substantially the form attached hereto as Exhibit B-1
with the blanks appropriately filled, payable to such Revolving Lender in a
principal amount equal to the Total Revolving Commitment. The Revolving Loans
made by each Revolving Lender shall be evidenced by a single Revolving Note
duly executed on behalf of the Company, dated the Restatement Date, in
<PAGE>
substantially the form attached hereto as Exhibit B-2 with the blanks
appropriately filled, payable to such Bank in a principal amount equal to the
Revolving Commitment of such Revolving Lender. The Term Loan made by each
Term Lender shall be evidenced by a single Term Note duly executed on behalf
of the Company, dated the Restatement Date, in substantially the form attached
hereto as Exhibit B-3 with the blanks appropriately filled, payable to such
Term Lender in the principal amount equal to the Term Commitment of such Term
Lender. Each Competitive Note, each Revolving Note and each Term Note shall
bear interest from the date thereof on the outstanding principal balance
thereof as set forth in Section 2.08. Each Bank shall, and is hereby
authorized by the Company to, endorse on the schedule attached to the relevant
Note held by such Bank (or on a continuation of such schedule attached to each
such Note and made a part thereof), or otherwise to record in such Bank's
internal records, an appropriate notation evidencing the date and amount of
each Competitive Loan, Revolving Loan or Term Loan, as applicable, of such
Bank, each payment or prepayment of principal of any Competitive Loan,
Revolving Loan or Term Loan, as applicable, and the other information provided
for on such schedule; provided, however, that the failure of any Bank to make
such a notation or any error therein shall not in any manner affect the
obligation of the Company to repay the Competitive Loans, Revolving Loan or
Term Loans, as applicable, made by such Bank in accordance with the terms of
the relevant Note. The outstanding principal balance of each Competitive Loan
and Committed Loan, as evidenced by the relevant Note, shall be payable on the
last day of the Interest Period applicable to such Loan and on the Maturity
Date. The outstanding principal balance of Term Loan, as evidenced by the
relevant Term Note, shall be due on the last day of the Interest Period
applicable to such Loan (subject to refinancing as provided herein) and in
twenty (20) consecutive quarterly installments as follows:
January 2, 1998 $10,000,000
February 28, 1998 $10,000,000
May 28, 1998 $10,000,000
August 28, 1998 $10,000,000
January 2, 1999 $ 5,000,000
February 28, 1999 $ 5,000,000
May 28, 1999 $ 5,000,000
August 28, 1999 $ 5,000,000
January 2, 2000 $15,000,000
February 28, 2000 $15,000,000
May 28, 2000 $15,000,000
August 28, 2000 $15,000,000
January 2, 2001 $20,000,000
February 28, 2001 $20,000,000
May 28, 2001 $20,000,000
August 28, 2001 $20,000,000
January 2, 2002 $25,000,000
February 28, 2002 $25,000,000
May 28, 2002 $25,000,000
August 28, 2002 $25,000,000
------------
$300,000,000
<PAGE>
Section 2.08. Interest on Loans.
(a) Subject to the provisions of Section 2.09, the Loans comprising each
ABR Borrowing shall bear interest (computed on the basis of the actual number
of days elapsed over a year of 365 or 366 days, as the case may be, when
determined by reference to the Prime Rate and over a year of 360 days at all
other times) at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin.
(b) Subject to the provisions of Section 2.09, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to
(i) in the case of each Eurodollar Committed Loan, the LIBO Rate for the
Interest Period in effect for such Borrowing plus the Applicable Margin, and
(ii) in the case of each Eurodollar Competitive Loan, the LIBO Rate for the
Interest Period in effect for such Borrowing plus the Margin offered by the
Revolving Lender making such Loan and accepted by the Company pursuant to
Section 2.03.
(c) Subject to the provisions of Section 2.09, each Fixed Rate Loan shall
bear interest at a rate per annum (computed on the basis of the actual number
of days elapsed over a year of 360 days) equal to the fixed rate of interest
offered by the Revolving Lender making such Loan and accepted by the Company
pursuant to Section 2.03.
(d) Interest on each Loan shall be payable on each Interest Payment Date
applicable to such Loan. The LIBO Rate or the Alternate Base Rate for each
Interest Period or day within an Interest Period shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
manifest error.
Section 2.09. Additional Interest; Alternate Rate of Interest.
(a) If the Company shall default in the payment of the principal of or
interest on any Loan or any other amount becoming due hereunder, the Company
shall on demand from time to time pay interest on any overdue payment of
principal and other amounts (other than interest) and, to the extent permitted
by law, on overdue payments of interest up to the date of actual payment
(after as well as before judgment):
(i) in the case of principal of or interest on an ABR Loan or a
Eurodollar Loan, at a rate determined by the Administrative Agent (such
determination to be conclusive and binding on the Company) to be 1% per
annum above the rate which would otherwise be payable on such Loans in
accordance with the provisions herein; and
(ii) in the case of any other amount payable hereunder (other than
principal of or interest on any Loan referred to in clause (i) above), at
a rate 1% per annum above the Alternate Base Rate.
(b) In the event, and on each occasion, that on the day two Business Days
prior to the commencement of any Interest Period for a Eurodollar Loan, the
<PAGE>
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Company) that dollar deposits in the principal
amount of such Eurodollar Loan are not generally available in the London
Interbank Market, or that the rate at which such dollar deposits are being
offered will not adequately and fairly reflect the cost to the Banks of making
or maintaining the principal amount of such Eurodollar Loan during such
Interest Period, or that reasonable means do not exist for ascertaining the
LIBO Rate, the Administrative Agent shall, as soon as practicable thereafter,
give written, telegraphic or telephonic notice of such determination to the
Company and the Banks, and any request by the Company for a Eurodollar Loan or
for conversion to or maintenance of a Eurodollar Loan pursuant to the terms of
this Agreement shall be deemed a request for an ABR Borrowing. After such
notice shall have been given and until the circumstances giving rise to such
notice no longer exist, each request for a Eurodollar Loan shall be deemed to
be a request for an ABR Borrowing. Each determination by the Administrative
Agent hereunder shall be conclusive absent manifest error.
Section 2.10. Termination, Reduction and Extension of Commitments.
(a) The Revolving Commitments shall be automatically terminated on the
Maturity Date.
(b) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Company may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Total Revolving Commitment; provided, however, that (i) each partial
reduction of the Total Revolving Commitment shall be in a minimum principal
amount of $10,000,000 and in integral multiples thereof and (ii) no such
termination or reduction shall be made which would reduce the Total Revolving
Commitment to an amount less than the aggregate outstanding principal amount
of the Competitive Loans.
(c) In addition to voluntary reductions under subsection (b), the Total
Revolving Commitments shall be permanently reduced by an amount up to $250
million from one hundred percent (100%) of the net cash proceeds received from
any Debt Transaction, Equity Transaction or Securitization Transaction
(d) Each reduction in the Total Revolving Commitment hereunder shall be
made ratably among the Revolving Lenders in accordance with their respective
Revolving Commitments. The Company shall pay to the Administrative Agent for
the account of the Revolving Lenders, on the date of each termination or
reduction, the Facility Fees on the amount of the Revolving Commitments so
terminated or reduced accrued to the date of such termination or reduction.
(e) Not later than the date 60 days prior to the first or any subsequent
anniversary of the date hereof, the Company may deliver to the Administrative
Agent (which shall promptly transmit to each Revolving Lender) a notice
requesting that the Revolving Commitments be extended to the first anniversary
of the Maturity Date. Within 30 days after its receipt of any such notice,
each Revolving Lender shall notify the Administrative Agent of its willingness
<PAGE>
or unwillingness so to extend its Commitment. Any Revolving Lender that shall
fail so to notify the Administrative Agent within such period shall be deemed
to have declined to extend its Revolving Commitment. If Revolving Lenders
holding a majority in amount of the Revolving Commitments agree to extend
their Revolving Commitments, the Administrative Agent shall so notify the
Company and each Revolving Lender that shall have consented to such request,
whereupon (i) the respective Revolving Commitments of such consenting
Revolving Lenders and each other Revolving Lender that shall consent to the
extension of its Revolving Commitment prior to the expiration of its
respective 30-day period shall without further act be extended to the first
anniversary of the Maturity Date at the time in effect, (ii) the term
"Maturity Date" shall thenceforth mean, as to the Revolving Loans of such
consenting Revolving Lenders, such first anniversary and (iii) the Revolving
Commitments of the non-extending Revolving Lenders shall terminate on the
Maturity Date in effect prior to such extension and the Revolving Loans and
other amounts owed to such Revolving Lenders shall become due and payable on
such date. If Revolving Lenders holding a majority in amount of the Revolving
Commitments shall not have agreed to extend their Revolving Commitments, then
none of the Revolving Commitments shall be extended and the Maturity Date
shall remain unchanged. In the event that any Revolving Lender shall have
declined or been deemed to have declined to extend its Revolving Commitment
and the Revolving Commitments of other Revolving Lender shall have been
extended, the Company shall have the right, but not the obligation, at its own
expense, upon notice to such Revolving Lender and the Administrative Agent, to
replace such Revolving Lender prior to the termination of such Revolving
Lender's Revolving Commitment (in accordance with and subject to the
restrictions contained in Section 9.04) at the end of the applicable Interest
Period with an assignee willing to agree that its Revolving Commitment will
terminate on the extended Maturity Date, and such Revolving Lender hereby
agrees to transfer and assign without recourse (in accordance with and subject
to the restrictions contained in Section 9.04) all its interests, rights and
obligations under this Agreement to such assignee; provided, however, that (i)
no such assignment shall conflict with any law or any rule, regulation or
order of any Governmental Authority and (ii) the Company or such assignee, as
the case may be, shall pay to the affected Revolving Lender in immediately
available funds on the date of such assignment the principal of and interest
accrued to the date of payment on the Loans made by such Revolving Lender
hereunder and all other amounts accrued for such Revolving Lender's account or
owed to it hereunder.
Section 2.11. Prepayment of Loans.
(a) The Company shall have the right at any time and from time to time to
prepay the Term Loan and any Committed Borrowing, in whole or in part, without
premium or penalty (but in any event subject to Section 2.14), upon prior
written, telecopy or telephonic notice to the Administrative Agent given no
later than 10:30 a.m., Charlotte, North Carolina time, one Business Day before
any proposed prepayment; provided, however, that each such partial prepayment
shall be in a minimum principal amount of $10,000,000 and in integral
multiples of $1,000,000. The Company shall not have the right to prepay any
Competitive Borrowing. Amounts prepaid on the Term Loan shall be applied to
scheduled principal installments in inverse order of maturity.
<PAGE>
(b) On the date of any termination or reduction of the Revolving
Commitments pursuant to Section 2.10, the Company shall pay or prepay so much
of the Committed Borrowings as shall be necessary in order that the aggregate
principal amount of the Competitive Loans and Revolving Loans outstanding will
not exceed the Total Revolving Commitment after giving effect to such
termination or reduction.
(c) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing to be prepaid, shall be irrevocable and
shall commit the Company to prepay such Borrowing (or portion thereof) by the
amount stated therein. All prepayments on Eurodollar Loans under this Section
shall be accompanied by accrued interest on the principal amount being prepaid
to the date of prepayment.
Section 2.12. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the date hereof
any change in applicable law or regulations or in the interpretation or
administration thereof (including, without limitation, any request, guideline
or policy not having the force of law) by any Governmental Authority charged
with the administration or interpretation thereof shall occur which shall
impose, modify or deem applicable any reserve, special deposit or similar
requirement (including a tax) against any assets held by, deposits with or for
the account of or credit extended by such Bank (including any reserve
requirement that may be applicable to "eurocurrency liabilities" under and as
defined in Regulation D) or shall impose upon such Bank or the London
interbank market any other condition with respect to this Agreement or the
Eurodollar Loans or Fixed Rate Loans made by such Bank and the result of any
of the foregoing shall be to increase the cost to such Bank of making or
maintaining any Eurodollar Loan or Fixed Rate Loan hereunder or to reduce the
amount of any payment (whether of principal, interest or otherwise) by an
amount deemed by such Bank to be material, then and in each such case the
Company shall pay to such Bank, as provided in paragraph (c) below, such
amounts as shall be necessary to compensate such Bank for such cost, reduction
or payment; provided, however, that the Company may, at its option and upon
written notice to the Administrative Agent and the Banks, either (i) elect to
convert such Loan of such Bank into an ABR Loan upon the payment by the
Company of the increased costs described above incurred prior to such
conversion and any amount owing in respect of Section 2.14 hereof, it being
understood that (A) for purposes of Section 2.11, such ABR Loan shall be
subject to prepayment only at such times and on such conditions as the Loan
from which it was converted and (B) upon such increased costs being
eliminated, or reduced by an amount deemed sufficient by the Company, such ABR
Loan will be converted into a Loan of the same Type as the Loan previously
converted into such ABR Loan having an Interest Period expiring on the same
date as the Loan previously converted into such ABR Loan or (ii) with the
prior consent of the Required Banks, elect to convert all (but not less than
all) Loans of all Banks of the same Type and Interest Period as the Loan
subject to such change into Loans of a different Type upon the payment of all
amounts that are due under this Section 2.12(a) and Section 2.14.
Notwithstanding the foregoing, no Bank shall be entitled to request
compensation under this paragraph with respect to any Competitive Loan if it
shall have been aware of the change giving rise to such request at the time of
submission of the Competitive Bid pursuant to which such Competitive Loan
shall have been made.
<PAGE>
(b) If any Bank shall have determined that the adoption after the date
hereof of any law, rule, regulation, agreement or guideline regarding capital
adequacy, or any change in any law, rule, regulation, agreement or guideline
regarding capital adequacy or in the interpretation or administration of any
law, rule, regulation, agreement or guideline regarding capital adequacy by
any Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Bank (or any lending office of such Bank) or any
Bank's holding company with any request or directive regarding capital
adequacy issued under any law, rule, regulation or guideline (whether or not
having the force of law) of any such authority, central bank or comparable
agency issued after the date hereof, has or would have the effect of reducing
the rate of return on such Bank's capital or on the capital of such Bank's
holding company, if any, as a consequence of this Agreement or the Loans made
by such Bank pursuant hereto to a level below that which such Bank or such
Bank's holding company could have achieved but for such applicability,
adoption, change or compliance by an amount deemed by such Bank to be
material, then from time to time the Company shall pay to such Bank following
receipt of a certificate of such Bank to such effect in accordance with
paragraph (c) below such additional amount or amounts as will compensate such
Bank or such Bank's holding company on an after-tax basis for any such
reduction suffered.
(c) Each Bank shall promptly deliver to the Company from time to time one
or more certificates setting forth the amounts due to such Bank under
paragraphs (a) and (b) above, the changes as a result of which such amounts
are due and the manner of computing such amounts. Each such certificate shall
be conclusive in the absence of manifest error. The Company shall pay to each
Bank the amounts shown as due on any such certificate within 10 days after its
receipt of the same. No failure on the part of any Bank to demand
compensation under paragraph (a) or (b) above on any one occasion shall
constitute a waiver of its right to demand such compensation with respect to
such period or any other period, except that no Bank shall be entitled to
compensation under this Section 2.12 for any costs incurred or reduction
suffered with respect to any date unless such Bank shall have notified the
Company that it will demand compensation for such costs or reductions not more
than 90 days after the later of (i) such date and (ii) the date on which such
Bank shall have become aware of such costs or reductions. The protection of
this Section 2.12 shall be available to each Bank regardless of any possible
contention of the invalidity or inapplicability of any law, rule, regulation,
guideline or other change or condition which shall have occurred or been
imposed and shall give rise to any demand by such Bank for compensation
hereunder.
(d) Promptly after actual notice to any Bank that a change referred to in
paragraph (a) or (b) above has occurred, such Bank will give notice of such
occurrence to the Company and the Administrative Agent and, unless all the
Eurodollar Loans giving rise to any such increased costs shall have been
converted to Loans of another type, such Bank will, for a period of 30 days
after the giving of such notice, use reasonable efforts to specify a new
Eurodollar lending office with respect to its Commitment and the Eurodollar
Loans held by it with a view to mitigating the consequences of such occurrence
to the greatest extent practicable unless in the opinion of such Bank such
specification might at such time or in the future have an adverse effect upon
it.
<PAGE>
Section 2.13. Change in Legality.
(a) Notwithstanding anything to the contrary contained in Section 2.18 or
elsewhere in this Agreement, if any change after the date hereof in law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it
unlawful for a Bank to make or maintain any Eurodollar Loan or to give effect
to its obligations as contemplated hereby with respect to any Eurodollar Loan,
then, by written notice to the Company and the Administrative Agent, such Bank
may:
(i) declare that Eurodollar Loans will not thereafter be made by such
Bank hereunder, whereupon such Bank shall not submit a Competitive Bid in
response to a request for Eurodollar Competitive Loans and any request by
the Company for a Eurodollar Committed Borrowing shall, as to such Bank
only, be deemed a request for an ABR Loan unless such declaration shall be
subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, whereupon all of such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such
notice as provided in paragraph (b) below.
(b) For purposes of this Section 2.13, a notice to the Company by any Bank
pursuant to paragraph (a) above shall be effective with respect to outstanding
Eurodollar Loans, if lawful, on the last day of the then current Interest
Period; in all other cases, such notice shall be effective on the date of
receipt by the Company.
Section 2.14. Indemnity.
The Company shall reimburse each Bank on demand for any loss incurred or
to be incurred by it in the reemployment of the funds released by any
prepayment or conversion of any Eurodollar Loan or Fixed Rate Loan required or
permitted by any other provision of this Agreement if such Loan is prepaid or
converted other than on the last day of any Interest Period for such Loan.
Such loss shall be the difference as reasonably determined by such Bank
between the amount that would have been realized by such Bank for the
remainder of such Interest Period for such Loan based on the interest rate
applicable thereto hereunder during such Interest Period and any lesser amount
that would be realized by such Bank in reemploying the funds received in
prepayment by making a Loan of the same type in the principal amount prepaid
during the period from the date of prepayment to the end of the Interest
Period of the Loan being prepaid. Without duplication of the foregoing
indemnity payments, the Company will indemnify each Bank against any actual
loss or expense which such Bank may sustain or incur as a consequence of (a)
any failure by the Company to borrow or to refinance any Loan hereunder after
irrevocable notice of such borrowing or refinancing, (b) any default in
payment or prepayment of the principal amount of any Loan or any part thereof
or interest accrued thereon, as and when due and payable (at the due date
thereof, by notice of prepayment or otherwise), or (c) the occurrence of any
Event of Default, including but not limited to any loss or expense sustained
or incurred in liquidating or employing deposits from third parties acquired
to effect or maintain such Loan or any part thereof. Each Bank shall provide
<PAGE>
to the Company a statement, signed by an officer of such Bank and explaining
the amount and calculation of any such actual loss or expense, which statement
shall, in the absence of manifest error, be conclusive with respect to the
parties hereto.
Section 2.15. Pro Rata Treatment, etc.
Except as required under Section 2.10(e) or 2.13, (i) each Committed
Borrowing, each payment or prepayment of principal of any Committed Borrowing,
each payment of interest on the Revolving Loans, each payment of the Facility
Fees and the Letter of Credit Fees, each reduction of the Revolving
Commitments and each refinancing of any Borrowing with a Committed Borrowing
of any Type, shall be made pro rata among the Revolving Lenders in accordance
with their respective Revolving Commitments (or, if such Revolving Commitments
shall have expired or been terminated, in accordance with the respective
principal amounts of their outstanding Revolving Loans) and (ii) each Term
Borrowing, each payment or prepayment of principal on the Term Loan and each
refinancing of a Term Borrowing shall be made pro rata among the Term Lenders
in accordance with their respective Term Loan Commitments (and, after the
making of the Term Loan, in accordance with the principal amount of their
outstanding Term Loan). Each payment of principal of any Competitive
Borrowing shall be allocated pro rata among the Revolving Lenders
participating in such Borrowing in accordance with the respective principal
amounts of their outstanding Competitive Loans comprising such Borrowing.
Each payment of interest on any Competitive Borrowing shall be allocated pro
rata among the Revolving Lenders participating in such Borrowing in accordance
with the respective amounts of accrued and unpaid interest on their
outstanding Competitive Loans comprising such Borrowing. For purposes of
determining the available Revolving Commitments of the Revolving Lenders at
any time (but not for purposes of Section 2.06(a)), each outstanding
Competitive Borrowing shall be deemed to have utilized the Revolving
Commitments of the Banks (including those Revolving Lenders which shall not
have made Revolving Loans as part of such Competitive Borrowing) pro rata in
accordance with such respective Revolving Commitments. Each Bank agrees that
in computing such Bank's portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Bank's percentage of
such Borrowing to the next higher or lower whole dollar amount.
Section 2.16. Payments.
(a) The Company shall make each payment (including principal of or
interest on any Borrowing or any Fees or other amounts) hereunder not later
than 12:00 (noon), Charlotte, North Carolina time, on the date when due in
dollars to the Administrative Agent at its offices at 101 North Tryon Street,
Independence Center, 15th Floor, NC1-001-15-02, Charlotte, North Carolina
28255, Attn: Agency Services, in immediately available funds.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may
be made on the next succeeding Business Day, and such extension of time shall
in such case be included in the computation of interest or Fees, if
applicable.
<PAGE>
Section 2.17. Taxes.
(a) Any and all payments by the Company hereunder shall be made, in
accordance with Section 2.16, free and clear of and without deduction for any
and all current or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding (i) taxes
imposed on or measured by all or part of the gross or net income (but not
including any such tax in the nature of a withholding tax) of the
Administrative Agent or any Bank (or any transferee or assignee thereof,
including a participation holder (any such entity a "Transferee")), in each
case by the jurisdiction under the laws of which the Administrative Agent or
such Bank (or Transferee) is organized or has its applicable lending office or
any political subdivision of any thereof and (ii) taxes that would not have
been imposed if the only connection between the Administrative Agent or any
Bank (or Transferee), or any Affiliate thereof, and the jurisdiction imposing
such taxes were activities of the Administrative Agent or such Bank (or
Transferee) pursuant to or in respect of this Agreement (including entering
into, lending money or extending credit pursuant to, receiving payments under
or enforcing this Agreement) (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities, collectively or
individually, "Taxes"). If the Company shall be required to deduct any Taxes
from or in respect of any sum payable hereunder to any Bank (or any
Transferee) or the Administrative Agent, (i) the sum payable shall be
increased by the amount (an "additional amount") necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.17) such Bank (or Transferee) or the
Administrative Agent (as the case may be) shall receive an amount equal to the
sum it would have received had no such deductions been made, (ii) the Company
shall make such deductions and (iii) the Company shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) In addition, the Company agrees to pay to the relevant Governmental
Authority in accordance with applicable law any current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise similarly with respect to, this
Agreement and the Notes ("Other Taxes").
(c) The Company will indemnify each Bank (or Transferee) and the
Administrative Agent for the full amount of Taxes and Other Taxes paid by such
Bank (or Transferee) or the Administrative Agent, as the case may be, and any
liability (including penalties, interest and expenses (including reasonable
attorney's fees and expenses)) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant Governmental Authority. A certificate as to the amount of such
payment or liability prepared by a Bank, or the Administrative Agent on its
behalf, absent manifest error, shall be final, conclusive and binding for all
purposes. Such indemnification shall be made within 30 days after the date
the Bank (or Transferee) or the Administrative Agent, as the case may be,
makes written demand therefor. Each Bank (or Transferee) or the
Administrative Agent shall make written demand for indemnification no later
than 120 days after the earlier of (i) the date on which such Bank (or
Transferee) or the Administrative Agent makes such payment of Taxes or Other
<PAGE>
Taxes and (ii) the date on which such Governmental Authority makes written
demand upon such Bank (or Transferee) or the Administrative Agent for payment
of such Taxes or Other Taxes.
(d) If a Bank (or Transferee) or the Administrative Agent shall become
aware that it is entitled to claim a refund, credit or reduction in tax from a
Governmental Authority in respect of Taxes or Other Taxes as to which it has
been indemnified by the Company, or with respect to which the Company has paid
additional amounts, pursuant to this Section 2.17, it shall promptly notify
the Company of the availability of such refund claim, credit or reduction in
tax and shall, within 30 days after receipt of a request by the Company, make
a claim to such Governmental Authority for such refund, credit or reduction in
tax at the Company's expense. If a Bank (or Transferee) or the Administrative
Agent receives a refund (including pursuant to a claim for refund made
pursuant to the preceding sentence) or realizes a credit or reduction in tax
in respect of any Taxes or Other Taxes as to which it has been indemnified by
the Company or with respect to which the Company has paid additional amounts
pursuant to this Section 2.17, it shall within 30 days from the date of such
receipt pay over the amount of such refund or benefit of such credit or
reduction in tax to the Company (but only to the extent of indemnity payments
made, or additional amounts paid, by the Company under this Section 2.17 with
respect to the Taxes or Other Taxes giving rise to such refund, credit or
reduction in tax), net of all reasonable out-of-pocket expenses of such Bank
(or Transferee) or the Administrative Agent and without interest (other than
interest paid by the relevant Governmental Authority with respect to such
refund, credit or reduction in tax); provided, however, that the Company, upon
the request of such Bank (or Transferee) or the Administrative Agent, agrees
to repay the amount paid over to the Company (plus penalties, interest or
other charges) to such Bank (or Transferee) or the Administrative Agent in the
event such Bank (or Transferee) or the Administrative Agent is required to
repay such refund, credit or reduction in tax to such Governmental Authority.
(e) As soon as practicable after the date of any payment of Taxes or Other
Taxes by the Company to the relevant Governmental Authority, the Company will
deliver to the Administrative Agent, at its address referred to in Section
9.01, the original or a certified copy of a receipt issued by such
Governmental Authority evidencing payment thereof.
(f) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.17 shall
survive the payment in full of the principal of and interest on all
Obligations made hereunder.
(g) Each Bank (or Transferee) that is organized under the laws of a
jurisdiction other than the United States, any State thereof or the District
of Columbia (a "Non-U.S. Bank") shall deliver to each of the Company and the
Administrative Agent (i) two copies of either United States Internal Revenue
Service Form 1001 or Form 4224 (whichever is applicable, or (ii) in the case
of a Non-U.S. Bank claiming exemption from U.S. Federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of "portfolio
interest", a Form W-8, or any subsequent versions thereof or successors
thereto and a certificate representing that such Non-U.S. Bank is not a bank
for purposes of Section 881(c) of the Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Code) of the Company and is
not a controlled foreign corporation related to the Company (within the
<PAGE>
meaning of Section 864(d)(4) of the Code), in either case properly completed
and duly executed by such Non-U.S. Bank claiming complete exemption from, or
reduced rate of, U.S. Federal withholding tax on payments by the Company under
this Agreement. Such forms shall be delivered by each Non-U.S. Bank on or
before the date it becomes a party to this Agreement (or, in the case of a
Transferee that is a participation holder, on or before the date such
participation holder becomes a Transferee hereunder) and on or before the
date, if any, such Non-U.S. Bank changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
each Non-U.S. Bank shall deliver such forms promptly upon (or, if reasonably
practicable, prior to) the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Bank. Notwithstanding any other provision of this
Section 2.17(g), a Non-U.S. Bank shall not be required to deliver any form
pursuant to this Section 2.17(g) that such Non-U.S. Bank is not legally able
to deliver. Each Bank (or Transferee) that is organized under the laws of the
United States or any state thereof or the District of Columbia shall deliver
to the Company an original copy of Internal Revenue Service Form W-9 (or
applicable successor form) properly completed and duly executed by such Bank
(or Transferee).
(h) The Company shall not be required to indemnify any Non-U.S. Bank, or
to pay any additional amounts to any Non-U.S. Bank, in respect of United
States Federal withholding tax (or any withholding tax imposed by a state that
applies only when such United States Federal withholding tax is imposed)
pursuant to paragraph (a) or (c) above to the extent that: (i) the obligation
to withhold amounts with respect to United States Federal withholding tax
existed on the date such Non-U.S. Bank became a party to this Agreement (or,
in the case of a Transferee that is a participation holder, on the date such
participation holder became a Transferee hereunder) or, with respect to
payments to a New Lending Office, the date such Non-U.S. Bank designated such
New Lending Office with respect to a Loan; provided, however, that this clause
(i) shall not apply to any Transferee or New Lending Office that becomes a
Transferee or New Lending Office as a result of an assignment, participation,
transfer or designation made at the request of the Company; and provided
further, however, that this clause (i) shall not apply to the extent the
indemnity payment or additional amounts any Transferee, or Bank (or
Transferee) through a New Lending Office, would be entitled to receive
(without regard to this clause (i)) do not exceed the indemnity payment or
additional amounts that the person making the assignment, participation or
transfer to such Transferee, or Bank (or Transferee) making the designation of
such New Lending Office, would have been entitled to receive in the absence of
such assignment, participation, transfer or designation; or (ii) the
obligation to make such indemnification or to pay such additional amounts
would not have arisen but for a failure by such Non-U.S. Bank to comply with
the provisions of paragraph (g) above.
(i) Any Bank (or Transferee) claiming any indemnity payment or additional
amounts payable pursuant to this Section 2.17 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document reasonably requested in writing by the Company or to change the
jurisdiction of its applicable lending office if the making of such a filing
or change would avoid the need for or reduce the amount of any such indemnity
payment or additional amounts that may thereafter accrue and would not, in the
good faith determination of such Bank (or Transferee), be otherwise
disadvantageous to such Bank (or Transferee).
<PAGE>
(j) Nothing contained in this Section 2.17 shall require any Bank (or
Transferee) or the Administrative Agent to make available any of its tax
returns (or any other information that it deems to be confidential or
proprietary).
Section 2.18. Certain Bank Obligations.
In the event (a) any Bank delivers a certificate requesting compensation
pursuant to Section 2.12, (b) any Bank delivers a notice described in Section
2.13 or (c) the Company is required to pay any additional amount to any Bank
or any Governmental Authority on account of any Bank, pursuant to Section
2.17, the Company may require such Bank to transfer and assign, at the end of
the applicable Interest Period, without recourse, all of its interests, rights
and obligations under this Agreement to an assignee which shall assume such
assigned obligations (which assignee may be another Bank, if such Bank accepts
such assignment); provided, that
(i) such assignment shall not conflict with any law, rule or
regulation or order of any court or other Governmental Authority having
jurisdiction and
(ii) the Company or such assignee shall have paid to the assigning
Bank in immediately available funds an amount equal to the sum of the
principal of and interest accrued to the date of such payment on the
outstanding Loans of such Bank, plus all Facility Fees and other amounts
accrued for the account of such Bank or owed to it hereunder (including
any amounts under Section 2.12, 2.14 or 2.17); provided, further, that if
prior to any such transfer and assignment the circumstances or event that
resulted in such Bank's claim for compensation under Section 2.12 or
notice under Section 2.13 or the amount paid pursuant to Section 2.17, as
the case may be, cease to cause such Bank to suffer increased costs or
reductions in amounts received or receivable or reduction in return on
capital, or cease to have the consequences specified in Section 2.13, or
cease to result in amounts being payable under Section 2.17, as the case
may be, or if such Bank shall waive its right to claim further
compensation under Section 2.12 or 2.17 in respect of such circumstances
or event or shall withdraw its notice under Section 2.13 or in respect of
such circumstances or event, as the case may be, then such Bank shall not
thereafter be required to make any such transfer and assignment hereunder
if it has not already done so.
ARTICLE III
Representations and Warranties
The Company represents and warrants to the Administrative Agent and the
Banks that as of the Restatement Date and as of the date of each
Borrowing, to the extent provided in Article IV:
<PAGE>
Section 3.01. Organization, Corporate Powers.
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Virginia; each
Subsidiary which is not a Foreign Subsidiary is duly organized, validly
existing and in good standing, and each Foreign Subsidiary is duly
organized and validly existing, in each case under the laws of the
jurisdiction of its organization; (b) the Company and each of its
Subsidiaries (i) has the corporate power and authority to own its property
and to carry on its business as now conducted and as proposed to be
conducted and (ii) is qualified to do business in every jurisdiction where
such qualification is necessary except where the failure so to qualify
would not have a materially adverse effect on the condition, financial or
otherwise, of the Company and the Subsidiaries taken as a whole; and (c)
the Company has the corporate power to execute, deliver and perform this
Agreement, to borrow hereunder and to execute and deliver the Notes.
Section 3.02. Authorization.
The execution, delivery and performance of this Agreement, the borrowings
hereunder and the execution and delivery of the Notes (a) have been duly
authorized by all requisite corporate action on the part of the Company
and (b) will not (i) violate (A) any provision of law, statute, rule or
regulation, the articles of incorporation or By-laws of the Company or any
Subsidiary, (B) any applicable order of any court or other agency of
government or (c) any indenture, any agreement for borrowed money, any
bond, note or other similar instrument or any other material agreement to
which the Company or any Subsidiary is a party or by which the Company or
any Subsidiary or any of their respective property is bound, (ii) be in
conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any such indenture, agreement,
bond, note, instrument or other material agreement or (iii) result in the
creation or imposition of any Lien of any nature whatsoever upon any
property or assets of the Company or any Subsidiary. This Agreement
constitutes, and the Notes when delivered hereunder will constitute,
legal, valid and binding obligations of the Company enforceable against
the Company in accordance with their respective terms.
Section 3.03. Governmental Approval.
No action, consent or approval of, or registration or filing with, or any
other action by any Governmental Authority is required in connection with
the execution, delivery and performance by the Company of this Agreement,
the borrowings hereunder or the execution, delivery and performance of the
Notes.
Section 3.04. Financial Statements.
The Financial Statements (subject, in the case of the interim statements
included in the Financial Statements to year-end audit adjustments) fairly
present the financial condition and results of operations of the Company
and the Subsidiaries for the periods then ended. The balance sheets and
the notes thereto included in the Financial Statements disclose all
material liabilities, direct or contingent, of the Company and the
<PAGE>
Subsidiaries as of the dates thereof to the extent required to be
reflected thereon in accordance with GAAP. The Financial Statements were
prepared in accordance with GAAP.
Section 3.05. No Material Adverse Change.
There has been no material adverse change in the business, assets,
condition (financial or otherwise) or results of operations of the Company
and the Subsidiaries taken as a whole since June 30, 1997 (except as
disclosed in the Form 10Q for the second quarter of 1997).
Section 3.06. Subsidiaries.
Schedule 3.06 hereto sets forth a complete and accurate chart of all of
the Subsidiaries other than Designated Subsidiaries as of the Restatement
Date, showing as of the Restatement Date (as to each such Subsidiary) the
jurisdiction of its incorporation. All of the outstanding shares of each
class of stock of each of the Subsidiaries, other than qualifying or
similar shares as may be required by law, are owned as of the Restatement
Date (directly or indirectly) by the Company and none of such shares are
covered by outstanding options, warrants, rights of conversion or purchase
and similar rights at the date hereof. All the outstanding capital stock
of each of the Subsidiaries (other than the Designated Subsidiaries) (x)
has been validly issued, is fully paid and nonassessable and (y) to the
extent owned by the Company or one or more of the Subsidiaries (other than
the Designated Subsidiaries) (as shown in Schedule 3.06) is owned free and
clear of all Liens.
Section 3.07. Litigation.
Except as set forth in Schedule 3.07 hereto or in the Company's Reports on
Form 10-K, Form 10-Q, Form 8-K or any successor forms thereto, as filed
with the Securities and Exchange Commission, there are not any actions,
suits or proceedings at law or in equity or by or before any governmental
instrumentality or other agency now pending or, to the knowledge of the
Company, threatened (and reasonably likely to be commenced) against or
affecting the Company or any of the Subsidiaries or any property or rights
of the Company or any of the Subsidiaries as to which there is a
reasonable likelihood of an adverse determination and which, if adversely
determined, would individually or in the aggregate materially impair the
right of the Company and the Subsidiaries taken as a whole to carry on
business substantially as now being conducted or would result in a
Material Adverse Effect.
Section 3.08. Tax Returns.
The Company and each of the Subsidiaries have filed or caused to be filed
all Federal and state tax returns and all local tax returns which, to the
knowledge of the Company, are required to be filed and have paid or caused
to be paid all taxes as shown on such returns or on any assessment
received by it or by any of them to the extent that such taxes have become
due, except taxes the validity of which is being contested in good faith
by appropriate proceedings and with respect to which the Company or such
Subsidiary, as the case may be, shall have set aside on its books such
reserves as are required by GAAP with respect to any such tax so
contested.
<PAGE>
Section 3.09. Properties.
The Company and its Subsidiaries have good and marketable title to, or
valid leasehold interests in, all their respective properties and assets
reflected on the Consolidated balance sheet dated June 30, 1997, included
in the Financial Statements, except for such properties and assets as have
been disposed of since June 30, 1997 (a) as no longer used or useful in
the conduct of their respective businesses or (b) as have been disposed of
in the ordinary course of business, and all such properties and assets are
free and clear of all mortgages, pledges, liens, charges and other
encumbrances of any nature whatsoever, except such as are not prohibited
by the provisions of Section 6.01.
Section 3.10. Employee Benefit Plans.
Each of the Company and its ERISA Affiliates is in compliance in all
material respects with the applicable provisions of ERISA and the Code
(insofar as it relates to the Plans, the Multiemployer Plans and related
matters) and the regulations and published interpretations thereunder. No
Reportable Event has occurred with respect to any Plan with vested
unfunded liabilities in excess of $10,000,000 administered by the Company
or any of the ERISA Affiliates or any administrator designated by the
Company or any of its ERISA Affiliates. The present value of all unfunded
vested liabilities under Plans administered by the Company, its ERISA
Affiliates and administrators designated by the Company or any of its
ERISA Affiliates does not exceed in the aggregate 5% of the Consolidated
Net Worth. Neither the Company nor any ERISA Affiliate has incurred any
Withdrawal Liability that has not been fully satisfied and that materially
adversely affects the financial condition of the Company and its ERISA
Affiliates taken as a whole. Neither the Company nor any ERISA Affiliate
has received any notification that any Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and neither the Company nor any ERISA Affiliate reasonably expects
any Multiemployer Plan to be in reorganization or to be terminated, where
such reorganization or termination has resulted or can reasonably be
expected to result in an increase in the contributions required to be made
to such Plan that would materially and adversely affect the financial
condition of the Company and its ERISA Affiliates taken as a whole.
Section 3.11. Investment Company Act; Public Utility Holding Company Act.
Neither the Company nor any Subsidiary is an "investment company" as that
term is defined in or is otherwise subject to regulation under, the
Investment Company Act of 1940. Neither the Company nor any Subsidiary is
a "holding company" as that term is defined in, or is otherwise subject to
regulation under, the Public Utility Holding Company Act of 1935.
Section 3.12. Federal Reserve Regulations.
Neither the Company nor any Subsidiary is engaged principally, or as one
of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock (within the meaning of
Regulation U), and no part of the proceeds of the Loans hereunder will be
<PAGE>
used directly or indirectly to purchase or carry Margin Stock or to extend
credit to others for the purpose of directly or indirectly purchasing or
carrying Margin Stock or for any purpose that would violate, or be
inconsistent with, the provisions of Regulations G, U or X.
Section 3.13. No Material Misstatements.
To the best of the Company's knowledge, with respect to the Company, no
information, report, financial statement, exhibit or schedule furnished by
or on behalf of the Company to the Administrative Agent or any Bank in
connection with the negotiation of this Agreement or any Note or included
therein contains any misstatement of fact, or omitted or omits to state
any fact necessary to make the statements therein not misleading, where
such misstatement or omission would be material to the interests of the
Banks with respect to the Company's performance of its obligations
hereunder.
Section 3.14. Compliance with Laws.
Neither the Company nor any of the Subsidiaries, nor any of their
respective properties or assets, is (a) in violation of, nor will the
continued operation of their properties and assets as currently conducted
violate, any law, rule, regulation or statute (including any zoning,
building, environmental and safety law, ordinance, code or approval or any
building permits) or (b) in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority, where such
violation or default could reasonably be expected to result in a Material
Adverse Effect.
Section 3.15. Environmental and Safety Matters.
Except as set forth in Schedule 3.15, the Company and each Subsidiary is
in compliance in all material respects with all Federal, state, local and
other statutes, ordinances, orders, judgments, rulings and regulations
relating to environmental pollution or to environmental regulation or
control or to employee health or safety, except where the failure to do so
would not be reasonably likely, individually or in the aggregate, to
result in a Material Adverse Effect. Except as set forth in Schedule
3.15, neither the Company nor any Subsidiary has received notice of any
material failure so to comply, which non-compliance neither has been
remedied nor is being contested in good faith by the Company nor is the
subject of the Company's good faith efforts to achieve compliance. Except
as set forth in Schedule 3.15, the Company's and the Subsidiaries'
facilities do not manage any hazardous wastes, hazardous substances,
hazardous materials, toxic substances, toxic pollutants or substances
similarly denominated, as those terms or similar terms are used in the
Resource Conservation and Recovery Act, the Comprehensive Environmental
Response Compensation and Liability Act, as amended by the Superfund
Amendment and Reauthorization Act, the Hazardous Materials Transportation
Act, the Toxic Substance Control Act, the Clean Air Act, as amended, the
Clean Water Act, the Occupational Health and Safety Act or any other
applicable law relating to environmental pollution or employee health and
safety, in violation in any material respect of any law or any regulations
promulgated pursuant thereto, except where the failure to do so would not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect. Except as set forth in Schedule 3.15, the
<PAGE>
Company is aware of no events, conditions or circumstances involving
environmental pollution or contamination or employee health or safety that
would be reasonably likely to result in a Material Adverse Effect.
Section 3.16. Use of Proceeds.
The proceeds of Revolving Loans and the Term Loan will be used to purchase
common stock of the Company, to refinance existing Indebtedness and to
finance working capital and other corporate purposes.
ARTICLE IV
Conditions of Lending
The obligations of the Banks to make Loans hereunder are subject to the
satisfaction of the following conditions:
Section 4.01. Conditions to be Satisfied on Date of Each Borrowing.
In the case of each Borrowing to be made hereunder, including each
Borrowing in which Loans are refinanced with new Loans as contemplated by
Section 2.05:
(a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03 or 2.04, as the case may be.
(b) The representations and warranties set forth in Article III (except,
in the case of a refinancing that does not increase the aggregate
principal amount of the Loans of any Bank outstanding, the representations
set forth in Sections 3.05 and 3.07) shall be true and correct in all
material respects on and as of the date of such Borrowing with the same
effect as though such representations and warranties had been made on and
as of such date, except to the extent that such representations and
warranties expressly relate to an earlier date.
(c) At the time of each such Borrowing, the Company shall be in compliance
with all the terms and provisions set forth herein on its part to be
observed or performed, and immediately after such Borrowing no Default or
Event of Default shall have occurred and be continuing.
(d) Each Bank that shall not have previously received an appropriate Note
shall have received a duly executed Competitive Note, Revolving Note or
Term Note, as applicable, payable to its order and otherwise complying
with the provisions of Section 2.07.
Each Borrowing hereunder shall be deemed to constitute a representation and
warranty by the Company on the date of such Borrowing as to the matters
specified in paragraphs (b) and (c) of this Section.
<PAGE>
Section 4.02. Conditions to be Satisfied on the Restatement Date.
The Administrative Agent shall have received on or before the Restatement
Date:
(a) executed copies of this Agreement, the Notes and the Subsidiary
Guaranty;
(b) opinions of counsel to the Company and the Guarantors relating to this
Agreement, the Notes and the Subsidiary Guaranty from counsel and in such
form reasonably acceptable to the Administrative Agent and the Banks (in
substantially the form provided on the Closing Date);
(c) certified copies of articles of incorporation, bylaws, resolutions,
good standing certificates, or their equivalent, for the Company and the
Guarantors (as delivered on the Closing Date updated to the Restatement
Date by officer's certificate); and
(d) payment of all fees due in connection with the effectiveness of this
Agreement.
ARTICLE V
Affirmative Covenants
The Company covenants and agrees with the Administrative Agent and the
Banks that, so long as this Agreement shall remain in effect or the principal
of or interest on any Loan, the Commitment Fee or any other expenses or
amounts payable hereunder shall be unpaid, unless the Required Banks shall
otherwise consent in writing, it will, and will cause each of the Subsidiaries
to:
Section 5.01. Corporate Existence; Businesses and Properties.
Do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its corporate existence, material rights, licenses,
permits and franchises, comply with all laws and regulations applicable to
it and conduct its business in substantially the same manner as heretofore
conducted or as at the time permitted under applicable law; at all times
maintain and preserve all property used or useful in the conduct of its
business and keep the same in good repair, working order and condition,
and from time to time make, or cause to be made, all needful and proper
repairs, renewals and replacements thereto necessary in order that the
business carried on in connection therewith may be properly conducted at
all times; provided, however, that nothing contained in this Section 5.01
(a) shall prevent the Company or any Subsidiary from ceasing or omitting
to exercise any rights, licenses, permits or franchises (including, in the
case of a Subsidiary only, the corporate existence thereof) which in the
judgment of the Company can no longer be advantageously exercised or (b)
shall prevent the Company or any Subsidiary from selling, abandoning or
otherwise disposing of any property, the retention of which in the
judgment of the Company is inadvisable to the business of the Company or
any Subsidiary, or prevent any liquidation of any Subsidiary or any merger
or consolidation or sale thereof.
<PAGE>
Section 5.02. Insurance.
(a) Keep its insurable properties adequately insured at all times by
financially sound and reputable insurers; (b) maintain such other insurance,
to such extent and against such risks, including fire and other risks insured
against by extended coverage, as is customary with companies in the same or
similar businesses; (c) maintain in full force and effect public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by the Company or any Subsidiary, as the case
may be, in such amount as the Company or such Subsidiary, as the case may be,
shall reasonably deem necessary; and (d) maintain such other insurance as may
be required by law.
Section 5.03. Obligations and Taxes.
Pay all of its Indebtedness and obligations promptly and in accordance
with their terms and pay and discharge promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property, before the same shall become
in default, as well as all lawful claims for labor, materials and supplies or
otherwise which, if unpaid, might give rise to a Lien upon such properties or
any part thereof; provided, however, that neither the Company nor any of the
Subsidiaries shall be required to pay and discharge or to cause to be paid and
discharged any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and the Company or such Subsidiary, as the case may be, shall set
aside on its books such reserves as are required by generally accepted
accounting principles with respect to any such tax, assessment, charge, levy
or claim so contested.
Section 5.04. Financial Statements, Reports, etc.
In the case of the Company, furnish directly to the Administrative Agent
and to each of the Banks:
(a) within 120 days after the end of each fiscal year of the Company
(being December 31 in each calendar year), its Consolidated balance sheets,
Consolidated statements of income and Consolidated statements of cash flows
showing the Consolidated financial condition of the Company and the
Subsidiaries as of the close of such fiscal year and the results of its
operations and the operations of the Subsidiaries during such year, all the
foregoing consolidated financial statements to be audited by Coopers &
Lybrand, independent public accountants, or other independent public
accountants acceptable to the Required Banks and accompanied by an opinion of
such accountant (which shall not be qualified in any material respect) to the
effect that such consolidated financial statements fairly present the
financial condition and results of operations of the Company and the
Subsidiaries on a consolidated basis in accordance with GAAP;
(b) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year, unaudited Consolidated balance sheets,
<PAGE>
Consolidated statements of income and Consolidated statements of cash flows
showing the financial condition and results of operations of the Company and
the Subsidiaries on a consolidated basis as of the end of each such quarter
and for the then elapsed portion of the fiscal year, certified by a Financial
Officer of the Company as presenting fairly the financial position and results
of operations of the Company and such Subsidiaries and as having been prepared
in accordance with GAAP (except for such changes therein as are approved by
the independent accountants for the Company), in each case subject to normal
year-end audit adjustments;
(c) concurrently with (a) and (b) above, a certificate of the firm or
person referred to therein (which certificate furnished by the independent
accountants referred to in paragraph (a) above may be limited to the best of
its knowledge and to accounting matters and may disclaim responsibility for
legal interpretations) (i) certifying that no Default or Event of Default has
occurred, or, if such a Default or Event of Default has occurred, specifying
the nature and extent thereof and, in the case of the certificate furnished by
a Financial Officer of the Company, specifying any corrective action taken or
proposed to be taken with respect thereto and (ii) setting forth computations
in reasonable detail satisfactory to the Administrative Agent demonstrating
compliance with the covenants contained in Section 6.05 and 6.06;
(d) promptly after the same become publicly available and to the extent
not required to be furnished by any other provision of this Section 5.04, (i)
copies of all proxy statements, financial statements and reports that the
Company sends to its stockholders and (ii) copies of all regular, periodic and
special reports, and all registration statements relating to transactions
requiring a vote of stockholders of the Company or filed on Form S-1, S-2 or
S-3 under the Securities Act of 1933, which the Company or any Subsidiary
files with the Securities and Exchange Commission, or any Governmental
Authority which may be substituted therefor, or with any national securities
exchange, or distributed to its shareholders, as the case may be; and
(e) promptly, from time to time, such other information regarding the
operations, business affairs and condition (financial or otherwise) of the
Company and the Subsidiaries as each Bank through the Administrative Agent may
reasonably request; provided, however, that the Company shall not be obligated
to disclose, or to permit any examination which will disclose, technical
knowledge or confidential trade information, except where appropriate
safeguards exist that prevent dissemination of such information in a manner
detrimental to the Company's competitive position.
Section 5.05. Litigation and Other Notices.
Give the Administrative Agent and each Bank prompt written notice of the
following:
(a) any Default or Event of Default, specifying the nature and extent
thereof and the corrective action (if any) proposed to be taken with respect
thereto;
(b) the filing or commencement of (or any threat or notice of intention of
any person to file or commence where such filing or commencement is reasonably
likely) any action, suit or proceeding, whether at law or in equity or by or
<PAGE>
before any Governmental Authority, against the Company or any Affiliate
thereof as to which there is a reasonable likelihood of an adverse
determination and that, if adversely determined, could reasonably be
anticipated to result in Material Adverse Effect; and
(c) any development that has resulted in, or could reasonably be
anticipated to result in, a Material Adverse Effect.
Section 5.06. ERISA.
(a) Comply in all material respects with the applicable provisions of
ERISA and the Code (insofar as it relates to the Plans, the Multiemployer
Plans or related matters) and (b) furnish to the Administrative Agent and each
Bank, (i) as soon as possible after, and in any event within 30 days after any
Executive Officer of the Company or any ERISA Affiliate knows or has reason to
know that, any Reportable Event with respect to any Plan with vested unfunded
liabilities in excess of $10,000,000 has occurred, a statement of a Financial
Officer setting forth details as to such Reportable Event and the action that
the Company proposes to take with respect thereto, together with a copy of the
notice, if any, of such Reportable Event given to PBGC, (ii) promptly after
receipt thereof, a copy of any notice the Company or any Subsidiary may
receive from PBGC relating to the intention of PBGC to terminate any Plan with
vested unfunded liabilities in excess of $10,000,000 or to appoint a trustee
to administer any such Plan, (iii) within 10 days after the due date for
filing with the PBGC pursuant to Section 412(n) of the Code a notice of
failure to make a required installment or other payment with respect to a Plan
with vested unfunded liabilities in excess of $10,000,000, a statement of a
Financial Officer setting forth details as to such failure and the action that
the Company proposes to take with respect thereto, together with a copy of any
such notice given to the PBGC, and (iv) promptly and in any event within 30
days after receipt thereof by the Company or any ERISA Affiliate from the
sponsor of a Multiemployer Plan, a copy of each notice received by the Company
or any ERISA Affiliate concerning (A) the imposition of Withdrawal Liability
or (B) a determination that a Multiemployer Plan is, or is expected to be,
terminated or in reorganization, both within the meaning of Title IV of ERISA.
Section 5.07. Access to Premises and Records.
Maintain financial records in accordance with GAAP, and permit
representatives of the Administrative Agent and of each Bank that shall make a
request therefor through the Agent to have access to such financial records
and the premises of the Company and each Subsidiary at reasonable times and to
make such extracts from such records as such representatives deem necessary,
and permit any such representatives to discuss the affairs, finances and
condition of the Company or any Subsidiary with the officers thereof and
independent accountants therefor.
Section 5.08. Subsidiary Guarantors.
Where Domestic Subsidiaries of the Company which are not Guarantors
hereunder ("Non-Guarantor Domestic Subsidiaries") shall at any time constitute
more than (the "Threshold Requirement"):
<PAGE>
(a) in any instance for any such Non-Guarantor Domestic Subsidiary, five
percent (5%) of consolidated assets for the Consolidated Group or five percent
(5%) of consolidated revenues for the Consolidated Group, or
(b) in the aggregate for all such Non-Guarantor Domestic Subsidiaries, ten
percent (10%) of consolidated assets for the Consolidated Group or ten percent
(10%) of consolidated revenues for the Consolidated Group,
then the Company shall (i) promptly notify the Administrative Agent thereof,
and promptly cause such Domestic Subsidiary or Domestic Subsidiaries to become
a Guarantor by execution of a Joinder Agreement, such that immediately after
joinder as a Guarantor, the remaining Non-Guarantor Domestic Subsidiaries
shall not in any instance, or in the aggregate, exceed the Threshold
Requirement, and (ii) deliver with the Joinder Agreement, supporting
resolutions, incumbency certificates, corporate formation and organizational
documentation and opinions of counsel as the Administrative Agent may
reasonably request.
Section 5.09. Use of Proceeds.
Proceeds of the Loans will be used solely for the purposes provided in
Section 3.16.
ARTICLE VI
Negative Covenants
The Company covenants and agrees with the Administrative Agent and the
Banks that, so long as this Agreement shall remain in effect or the principal
of or interest on any Note, the Commitment Fee or any other expenses or
amounts payable hereunder shall be unpaid, unless the Required Banks otherwise
consent in writing, it will not, and it will not cause, permit or suffer any
of the Subsidiaries, directly or indirectly, to:
Section 6.01. Liens, etc.
Create, incur, assume or suffer to exist any Lien upon or with respect to
any of its assets or properties (including stock or other securities of any
person, including any Subsidiary) now owned or hereafter acquired or assign or
otherwise convey any right to receive income or revenues; provided that the
foregoing restrictions shall not apply to mortgages, deeds of trust, pledges,
liens, security interests or other charges or encumbrances:
(a) for taxes, assessments or governmental charges or levies on property
of the Company or any Subsidiary if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are being contested
<PAGE>
in good faith and by appropriate proceedings and with respect to which the
Company or Subsidiary shall have set aside adequate reserves in accordance
with GAAP with respect thereto;
(b) imposed by law, such as carrier's, warehousemen's and mechanics' liens
and other similar liens, which arise in the ordinary course of business with
respect to obligations not yet due or being contested in good faith and by
appropriate proceedings and with respect to which the Company or Subsidiary
shall have set aside adequate reserves in accordance with GAAP with respect
thereto;
(c) arising out of pledges or deposits under workmen's compensation laws,
unemployment insurance, old age pensions, or other social security or
retirement benefits, or similar legislation;
(d) other attachments, liens, charges, pledges, deposits, encumbrances, or
other security interests incidental to the conduct of its business or the
ownership of its property and assets which were not incurred in connection
with the borrowing of money or the obtaining of advances or credit, and which
do not in the aggregate materially detract from the value of its property or
assets or materially impair the use thereof in the operation of its business;
(e) Liens on the assets or properties of a Subsidiary in favor of the
Company or another Subsidiary to secure Indebtedness of such Subsidiary to the
Company or such other Subsidiary;
(f) any Lien on property or assets of the Company or any Subsidiary
existing on the date hereof and set forth on Schedule 6.01 and any Lien that
replaces such an existing Lien; provided, however, that the principal amount
of the Indebtedness secured by the replacing Lien does not exceed the
principal amount of Indebtedness secured by such existing Lien at the time of
replacement of the existing Lien or cover property different from the property
covered by the existing Lien;
(g) Liens on property or assets of the Company or any Subsidiary granted
in connection with Sale and Lease-Back Transactions, provided that the
aggregate amount of Attributable Debt in connection with such Sale and
Lease-Back Transactions shall not at any time be in excess of $80,000,000; and
(h) Liens other than those referred to in subparagraphs (a) through (g)
above, provided that the aggregate amount of all Indebtedness that is secured
or evidenced by Liens other than those referred to in subparagraphs (a)
through (e) and (g) above does not at any time exceed an amount equal to 10%
of Consolidated Net Worth.
Section 6.02. Indebtedness of Subsidiaries.
Permit any of the Subsidiaries to create, incur or assume any Indebtedness
other than (a) the Subsidiary Guaranty, (b) Indebtedness for borrowed money
existing on the date hereof and set forth in Schedule 6.02 and any extensions,
<PAGE>
renewals or replacements of such Indebtedness, (c) Indebtedness incurred in
connection with any Sale and Lease-Back Transaction permitted under Section
6.01(g), (d) Indebtedness owed to the Company or to any other direct or
indirect wholly-owned Subsidiary and (e) Indebtedness (in addition to that
specified in (a) through (d) above) in an aggregate principal amount as to all
Subsidiaries not in excess of $20,000,000.
Section 6.03. Compliance with Regulations G, U and X.
Incur, create or assume any Indebtedness or other liability or make any
investment, capital contribution, loan, advance or extension of credit or take
or permit to be taken any other action or permit to exist any event permitted
by this Credit Agreement but for the provisions of this Section 6.03, if such
action or event would result in this Agreement, the Loans hereunder, the use
of the proceeds thereof or the other transactions contemplated hereby
violating or being inconsistent with Regulations G, U or X, including without
limitation the provisions of said Regulations relating to withdrawal and
substitution of collateral.
Section 6.04. Mergers, Consolidations and Sales of Assets.
Merge into or consolidate with any other person, or permit any other
person to merge into or consolidate with it, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all
or substantially all of its assets (whether now owned or hereafter acquired)
or any capital stock of any Subsidiary, except that (a) the Company and any
Subsidiary may purchase and sell inventory in the ordinary course of business,
(b) if at the time thereof and immediately after giving effect thereto on a
Pro Forma Basis no Default or Event of Default shall have occurred and be
continuing (i) any wholly owned Subsidiary or any other person may merge into
the Company in a transaction in which the Company is the surviving
corporation, (ii) any wholly owned Subsidiary may merge into or consolidate
with any other wholly owned Subsidiary in a transaction in which the surviving
entity is a wholly owned Subsidiary and no person other than the Company or a
wholly owned Subsidiary receives any consideration and (iii) so long as (A)
the Ratings of the surviving corporation are better than or equal to the
Ratings of the Company and (B) the surviving corporation agrees in writing to
assume the obligations of the Company under this Agreement, the Company may
merge into or consolidate with any other person, (c) the Company may sell 100%
of the capital stock of any Subsidiary for fair market value, as determined in
good faith by the Company's board of directors, provided such sale does not
constitute a sale of all or substantially all of the Company's assets and (d)
the Company may sell any portion of the capital stock of any Subsidiary in
connection with the establishment of a joint venture for the purpose of
developing a product or business related to any of the Company's existing
lines of business as of the date of this Agreement.
Section 6.05. Consolidated Leverage Ratio.
Permit the Consolidated Leverage Ratio as of the end of each fiscal
quarter to be greater than 3.5:1.0.
<PAGE>
Section 6.06. Consolidated Fixed Charge Coverage Ratio.
Permit the Consolidated Fixed Charge Coverage Ratio as of the end of each
fiscal quarter to be less than 1.25:1.0.
Section 6.07. Consolidated Net Worth.
Permit Consolidated Net Worth at any time to be less than an amount equal
to 85% of Consolidated Net Worth at June 30, 1997 (after adjustment to give
effect to share repurchases within one year after the Closing Date
contemplated in connection herewith up to $435,000,000) plus, beginning with
the fiscal year ending December 31, 1998, as of the end of each fiscal year,
50% of Consolidated Net Income (but not less than zero) for the year then
ended, such increases to be cumulative.
Section 6.08. Loans and Investments to Foreign Subsidiaries.
Permit additional loans and investments (other than extension of normal
credit terms in connection with the sale of inventory or providing of services
in the ordinary course of business) in and to Foreign Subsidiaries by the
Company and its Domestic Subsidiaries after the Closing Date (that is, in
excess of loans and investments existing on the Closing Date) to exceed
$50,000,000 at any time outstanding.
ARTICLE VII
Events of Default
In the case of the happening of any of the following events (hereinafter
called Events of Default):
(a) any representation or warranty made or deemed made in connection with
this Agreement or with the execution and delivery of the Notes or the
borrowings hereunder or any statement or representation made in any report,
certificate, financial statement or other instrument furnished by the Company
to the Administrative Agent or the Banks pursuant to this Agreement or shall
prove to have been false or misleading in any respect material to the
interests of the Banks with respect to the Company's performance of its
obligations hereunder when made or delivered or when deemed made in accordance
with the terms hereof;
(b) default shall be made in the payment of the principal of or interest
on any Loan or of the Commitment Fee or any other amount due under this
Agreement, when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise and in the case of interest on the Notes, the Commitment
Fee or such other amounts, except principal, such default shall continue
unremedied for a period of 10 days;
<PAGE>
(c) default shall be made in the due observance or performance of any
covenant, condition or agreement contained in Section 5.01, 5.05 or 5.08 or in
Article VI;
(d) default shall be made in the due observance or performance of any
other covenant, condition or agreement to be observed or performed by the
Company or any Subsidiary pursuant to the terms hereof or any of the other
Credit Documents and such default shall continue unremedied for 30 days after
written notice thereof to the Company by the Administrative Agent or the
Required Banks;
(e) the Company or any Subsidiary shall fail to pay any principal or
interest, regardless of amount, due in respect of Indebtedness in a principal
amount greater than $25,000,000, owing by the Company or such Subsidiary
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period,
if any, specified in the agreement or instrument relating to such
Indebtedness; or the Company or any Subsidiary shall fail to perform any term,
covenant or agreement on its part to be performed under any agreement or
instrument evidencing or securing or relating to any such Indebtedness, if the
effect of such failure is to cause or to permit the holder or holders of such
Indebtedness to accelerate the maturity of such Indebtedness;
(f) the Company or any Subsidiary other than a Designated Subsidiary shall
(i) voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (ii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator or similar official for the Company
or any Subsidiary other than a Designated Subsidiary or for a substantial part
of its property, (iii) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (iv) make a general
assignment for the benefit of creditors, (v) become unable, admit in writing
its inability or fail generally to pay its debts as they become due or (vi)
take corporate action for the purpose of effecting any of the foregoing;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction (or the Company or
any Subsidiary other than a Designated Subsidiary shall consent to the
institution of, or fail to contest in a timely and appropriate manner, any such
proceeding or the filing of any such petition) seeking (i) relief in respect of
the Company or any Subsidiary other than a Designated Subsidiary, or of a
substantial part of its property, under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other Federal, state or foreign
bankruptcy, insolvency or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator or similar official for the Company or any
Subsidiary other than a Designated Subsidiary or for a substantial part of its
property or (iii) the winding-up or liquidation of the Company or any
Subsidiary other than a Designated Subsidiary; and such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall continue unstayed and in effect for 30
days;
(h) one or more final judgments from which no further appeal can be taken
for the payment of money in an aggregate amount in excess of $25,000,000 shall
<PAGE>
be rendered against the Company and/or a Subsidiary, and the same shall remain
undischarged for a period of 60 consecutive days during which execution shall
not be effectively stayed;
(i) (i) a Reportable Event or Reportable Events, or a failure to make a
required installment or other payment (within the meaning of Section 412(n)(1)
of the Code) shall have occurred with respect to any Plan or Plans with vested
unfunded liabilities in an aggregate amount in excess of $10,000,000 and,
within 30 days after the reporting of such Reportable Event to the
Administrative Agent or after the receipt by the Administrative Agent of the
statement required pursuant to Section 5.06, the Administrative Agent shall
have notified the Company in writing that (A) the Required Banks have made a
determination that, on the basis of such Reportable Event or Reportable Events
or the failure to make a required payment, there are reasonable grounds for
the termination of such Plan or Plans by the PBGC or for the appointment by
the appropriate United States District Court of a trustee to administer such
Plan or Plans or for the imposition of a Lien in favor of such Plan or Plans
and (B) as a result thereof an Event of Default exists hereunder; or (ii) a
trustee shall be appointed by a United States District Court to administer any
Plan with vested unfunded liabilities in excess of $10,000,000; or (iii) the
PBGC shall institute proceedings to terminate any Plan with vested unfunded
liabilities in excess of $10,000,000;
(j) (i) the Company or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan, (ii) the Company or such ERISA Affiliate does not
have reasonable grounds for contesting such Withdrawal Liability or is not in
fact contesting such Withdrawal Liability in a timely and appropriate manner
and (iii) the amount of the Withdrawal Liability specified in such notice,
when aggregated with all other amounts required to be paid to Multiemployer
Plans in connection with Withdrawal Liabilities (determined as of the date or
dates of such notification), either (A) exceeds $10,000,000 or requires
payments exceeding $2,500,000 in any year or (B) is less than $10,000,000 but
remains unpaid 30 days after such payment is due;
(k) the Company or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, if solely as a result of such reorganization or termination the
aggregate annual contributions of the Company and its ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or have been or are being
terminated have been or will be increased over the amounts required to be
contributed to such Multiemployer Plans for their most recently completed plan
years by an amount exceeding $2,500,000;
(l) there shall have occurred a Change in Control; or
(m) the guaranty given by any Guarantor shall cease to be in full force
and effect, or any Guarantor shall deny or disaffirm its obligations under the
guaranty;
then, and in every such event and at any time thereafter during the
continuance of such event, the Administrative Agent may, and upon written
request from the Required Banks shall, by notice to the Company, take any one
or more of the following actions, at the same or different times: (i)
<PAGE>
terminate the Commitments, (ii) declare the Loans to be forthwith due and
payable, whereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Company accrued hereunder, shall become
forthwith due and payable without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the Company,
anything contained herein or in the Notes to the contrary notwithstanding and
(iii) direct the Company to pay to the Administrative Agent cash collateral in
the amount of LOC Obligations then outstanding. Notwithstanding the
foregoing, if an Event of Default specified in paragraph (f) or (g) above
occurs with respect to the Company or any Subsidiary, the Commitments shall
automatically terminate and the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Company accrued hereunder, shall become immediately due and payable and cash
collateral in the amount of LOC Obligations then outstanding shall be
automatically and immediately due and payable, without any action by any Bank
or the Administrative Agent and without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived, anything
contained herein or in the Notes to the contrary notwithstanding.
ARTICLE VIII
The Administrative Agent
In order to expedite the transactions contemplated by this Agreement,
NationsBank, N.A. is hereby appointed to act as Administrative Agent on behalf
of the Banks. Each of the Banks, and each subsequent holder of any Note by
its acceptance thereof, hereby irrevocably authorizes the Administrative Agent
to take such actions on behalf of such Bank or holder and to exercise such
powers as are specifically delegated to the Administrative Agent by the terms
and provisions hereof, together with such actions and powers as are reasonably
incidental thereto. The Administrative Agent is hereby expressly authorized
by the Banks, without hereby limiting any implied authority, (a) to receive on
behalf of the Banks all payments of principal of and interest on the Loans and
all other amounts due to the Banks hereunder, and promptly to distribute to
each Bank its proper share of each payment so received; (b) to give notice on
behalf of each of the Banks to the Company of any Event of Default specified
in this Agreement of which the Administrative Agent has actual knowledge
acquired in connection with its agency hereunder; and (c) to distribute to
each Bank copies of all notices, financial statements and other materials
delivered by the Company pursuant to this Agreement as received by the
Administrative Agent.
Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful misconduct,
or be responsible for any statement, warranty or representation herein or the
contents of any document delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance or observance by
the Company of any of the terms, conditions, covenants or agreements contained
in this Agreement. The Administrative Agent shall not be responsible to the
Banks or the holders of the Notes for the due execution, genuineness,
validity, enforceability or effectiveness of this Agreement, the Notes or any
other instruments or agreements. The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof until it
<PAGE>
shall have received from the payee of such Note notice, given as provided
herein, of the transfer thereof in compliance with Section 9.04. The
Administrative Agent shall in all cases be fully protected in acting, or
refraining from acting, in accordance with written instructions signed by the
Required Banks (or such greater percentage of Banks as may be required
hereunder) and, except as otherwise specifically provided herein, such
instructions and any action or inaction pursuant thereto shall be binding on
all the Banks and each subsequent holder of any Note. The Administrative
Agent shall, in the absence of knowledge to the contrary, be entitled to rely
on any instrument or document believed by it in good faith to be genuine and
correct and to have been signed or sent by the proper person or persons.
Neither the Administrative Agent nor any of its directors, officers, employees
or agents shall have any responsibility to the Company on account of the
failure of or delay in performance or breach by any other Bank or the Company
of any of their respective obligations hereunder or in connection herewith.
The Administrative Agent may execute any and all duties hereunder by or
through agents or employees and shall be entitled to rely upon the advice of
legal counsel selected by it with respect to all matters arising hereunder and
shall not be liable for any action taken or suffered in good faith by it in
accordance with the advice of such counsel.
The Banks hereby acknowledge that the Administrative Agent shall be under
no duty to take any discretionary action permitted to be taken by it pursuant
to the provisions of this Agreement unless it shall be requested in writing to
do so by the Required Banks.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided below, the Administrative Agent may resign at any time by
notifying the Banks and the Company. Upon any such resignation, the Required
Banks, with the consent of the Company (which consent shall not be
unreasonably withheld), shall have the right to appoint a successor. If no
successor shall have been so appointed by the Required Banks and shall have
accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent
may, on behalf of the Banks, appoint a successor Administrative Agent which
shall be a bank having a combined capital and surplus of at least $500,000,000
or an Affiliate of any such bank. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor bank, such successor shall
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. After
the Administrative Agent's resignation hereunder, the provisions of this
Article and Section 9.05 shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.
With respect to the Loans made by it hereunder and the Notes issued to it,
the Administrative Agent in its individual capacity and not as Administrative
Agent shall have the same rights and powers as any other Bank and may exercise
the same as though it were not the Administrative Agent, and the
Administrative Agent and its Affiliates may accept deposits from, lend money
to and generally engage in any kind of business with the Company or any
Subsidiary or other Affiliate thereof as if it were not the Administrative
Agent.
Each Bank agrees (i) to reimburse the Administrative Agent, on demand, in
the amount of its pro rata share (based on its Commitment hereunder) of any
<PAGE>
expenses incurred for the benefit of the Banks by the Administrative Agent,
including counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Banks, which shall not have been reimbursed
by the Company and (ii) to indemnify and hold harmless the Administrative
Agent and any of its directors, officers, employees or agents, on demand, in
the amount of such pro rata share, from and against any and all liabilities,
taxes, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against it in its capacity as the
Administrative Agent or any of them in any way relating to or arising out of
this Agreement or any action taken or omitted by it or any of them under this
Agreement, to the extent the same shall not have been reimbursed by the
Company; provided, however, that no Bank shall be liable to the Administrative
Agent or any such director, officer, employee or agent for any portion of such
liabilities, taxes, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence or wilful misconduct of the Administrative Agent or any of its
directors, officers, employees or agents.
Each Bank acknowledges that it has, independently and without reliance
upon the Administrative 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 Administrative Agent or any
other Bank and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder.
ARTICLE IX
Miscellaneous
Section 9.01. Notices.
Except as otherwise expressly provided herein, notices and other
communications provided for herein shall be in writing and shall be delivered
or mailed or sent by telecopy addressed,
(a) if to the Company, in all cases to it at
330 South Fourth Street
Richmond, Virginia 23219
Telephone: (804) 788-5402
Telecopy: (804) 788-5406
Attention of Secretary;
<PAGE>
(b) if to NationsBank, N.A., either individually or in its capacity as
Administrative Agent, in all cases to it at
101 North Tryon Street
Independence Center, 15th Floor
NC1-001-15-02
Charlotte, North Carolina 28255
Telephone: (704) 386-9046
Telecopy: (704) 388-9436
Attention of: Agency Services; and
(c) if to any other Bank, in all cases to it at the address listed next to
its name in Schedule 2.01.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given (i)
on the date of receipt, if delivered by hand or overnight courier service or
sent by telecopy, (ii) on the date five Business Days after dispatch if sent
by registered or certified mail, and (iii) on the date of receipt, if by
telephone, in each case addressed to such party as provided in this Section or
in accordance with the latest unrevoked direction from such party.
Section 9.02. No Waivers; Amendments.
(a) No failure or delay of the Administrative Agent or of any Bank in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the
Banks and holders of the Notes hereunder are cumulative and not exclusive of
any rights or remedies which they would otherwise have. No waiver of any
provision of this Agreement or the Notes nor consent to any departure by the
Company therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
No notice or demand on the Company in any case shall entitle the Company to
any other or further notice or demand in similar or other circumstances. Each
holder of any of the Notes shall be bound by any amendment, modification,
waiver or consent authorized as provided herein, whether or not such Note
shall have been marked to indicate such amendment, modification, waiver or
consent.
(b) Neither this Agreement nor any provision hereof may be amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Company and the Required Banks; provided, however, that no such
agreement shall (i) decrease the principal amount of, or extend the maturity
of or the scheduled dates for the payment of principal of or interest on, any
Loan or LOC Obligations, or waive or excuse any such payment or any part
thereof or reduce the rate of interest on any Loan, without the written
<PAGE>
consent of each holder affected thereby, (ii) increase or extend the
Commitment or decrease the Facility Fees of any Bank without the written
consent of each Bank affected thereby, (iii) amend or modify the definition of
"Required Banks" or the provisions of this Section 9.02 or Section 9.08
without the written consent of each Bank, (iv) release all or substantially
all of the Guarantors from their obligations under the Subsidiary Guaranty, or
(v) amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder, without the written consent of the
Administrative Agent. Each Bank and holder of any Note shall be bound by any
modification or amendment authorized by this Section regardless of whether its
Notes shall be marked to make reference thereto, and any consent by any Bank
or holder of a Note pursuant to this Section shall bind any person
subsequently acquiring a Note from it, whether or not such Note shall be so
marked.
Section 9.03. Right of Setoff.
If an Event of Default shall have occurred and be continuing that in the
good faith judgment of any Bank shall materially compromise in any respect
such Bank's interest as a Bank hereunder, such Bank is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time
owing by such Bank to, or for the credit or the account of, the Company
against any of and all the obligations of the Company now or hereafter
existing under this Agreement held by such Bank, irrespective of whether or
not such Bank shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Bank under this Section
are in addition to other rights and remedies (including other rights of
setoff) which such Bank may have.
Section 9.04. Successors and Assigns.
(a) Whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the permitted successors and assigns
of such party; and all covenants, promises and agreements by or on behalf of
the Company, the Administrative Agent or the Banks that are contained in this
Agreement shall bind and inure to the benefit of their respective successors
and assigns.
(b) Each Bank may assign to one or more assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Obligations at the time owing to it and the
Notes held by it); provided, however, that (i) except in the case of an
assignment to a Bank or an Affiliate of such Bank, each of the Company and the
Administrative Agent must give its prior written consent to such assignment
(which consent shall not be unreasonably withheld or delayed), (ii) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Agreement, (iii) the amount
of the Commitment of the assigning Bank subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$15,000,000 (except in the case of assignments to a Bank or an affiliate of a
Bank) without the prior written consent of the Company, which consent will not
be unreasonably withheld or delayed, and the Administrative Agent, (iv) the
parties to each such assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with the Note or
<PAGE>
Notes subject to such assignment and a processing and recordation fee of
$3,500 and (v) the assignee, if it shall not be a Bank, shall deliver to the
Administrative Agent an Administrative Questionnaire. Upon acceptance and
recording pursuant to paragraph (e) of this Section 9.04, from and after the
effective date specified in each Assignment and Acceptance, which effective
date shall be at least five Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of
a Bank under this Agreement and (B) the assigning Bank thereunder shall, to
the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an
assigning Bank's rights and obligations under this Agreement, such Bank shall
cease to be a party hereto but shall continue to be entitled to the benefits
of Sections 2.12, 2.13, 2.17 and 9.05 (to the extent that such Bank's
entitlement to such benefits arose out of such Bank's position as a Bank prior
to the applicable assignment), as well as to any Fees accrued for its account
and not yet paid). Notwithstanding the foregoing, any Bank assigning its
rights and obligations under this Agreement may retain any Competitive Loans
made by it outstanding at such time, and in such case shall retain its rights
hereunder in respect of any Loans so retained until such Loans have been
repaid in full in accordance with this Agreement.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Bank thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Bank warrants that it is the legal and beneficial owner of
the interest being assigned thereby, free and clear of any adverse claim and
that its Commitment, and the outstanding balances of its Loans, in each case
without giving effect to assignments thereof which have not become effective,
are as set forth in such Assignment and Acceptance, (ii) except as set forth
in (i) above, such assigning Bank makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto, or the financial condition of the Company or any Subsidiary or the
performance or observance by the Company or any Subsidiary of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee represents and warrants that it is
legally authorized to enter into such Assignment and Acceptance; (iv) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the most recent financial statements delivered pursuant to Section
5.04 and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Acceptance; (v) such assignee will independently and without reliance upon the
Administrative Agent, such assigning Bank or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under this
Agreement; (vi) such assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Administrative Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Agreement are required to be
performed by it as a Bank.
<PAGE>
(d) The Administrative Agent shall maintain at one of its offices a copy
of each Assignment and Acceptance and the names and addresses of the Banks,
and the Commitment of, and principal amount of the Loans owing to, each Bank
pursuant to the terms hereof from time to time (the "Register"). The entries
in the Register shall be conclusive in the absence of manifest error and the
Company, the Administrative Agent and the Banks may treat each person whose
name is recorded in the Register pursuant to the terms hereof as a Bank
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Company and any Bank at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Bank and an assignee together with the Note or Notes
subject to such assignment, an Administrative Questionnaire completed in
respect of the assignee (unless the assignee shall already be a Bank
hereunder), the processing and recordation fee referred to in paragraph (b)
above and, if required, the written consent of the Company and the
Administrative Agent to such assignment, the Administrative Agent shall (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Banks.
Within five Business Days after receipt of notice, the Company, at its own
expense, shall execute and deliver to the Administrative Agent, in exchange
for the surrendered Note(s), (x) a new Competitive Note to the order of such
assignee in an amount equal to the Total Commitment and/or Revolving Note and
Term Note, as appropriate, to the order of such assignee in an amount equal to
the portion of the Commitment assumed by it pursuant to such Assignment and
Acceptance and, (y) if the assigning Bank has retained a Commitment, a new
Note to the order of such assigning Bank in a principal amount equal to the
Commitment retained by it. Such new Revolving Note and Term Notes shall be in
an aggregate principal amount equal to the aggregate principal amount of such
surrendered Note(s); such new Notes shall be dated the date of the surrendered
Notes which they replace and shall otherwise be in substantially the form of
Exhibit B-1 or B-2 hereto, as appropriate. Canceled Notes shall be returned
to the Company.
(f) Each Bank may without the consent of the Company or the Administrative
Agent sell participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it and the Notes held by it);
provided, however, that (i) such Bank's obligations under this Agreement shall
remain unchanged, (ii) such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the
participating banks or other entities shall be entitled to the benefit of the
cost protection provisions contained in Sections 2.12, 2.13 and 2.17 to the
same extent as if they were Banks and (iv) the Company, the Administrative
Agent and the other Banks shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under this
Agreement, and such Bank shall retain the sole right to enforce the
obligations of the Company relating to the Loans and to approve any amendment,
modification or waiver of any provision of this Agreement (other than
amendments, modifications or waivers decreasing any Fees payable hereunder or
the amount of principal of or the rate at which interest is payable on the
Loans, extending the final scheduled maturity of the Loans or any date
scheduled for the payment of interest on the Loans or extending the
Commitments).
<PAGE>
(g) Any Bank or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Company furnished to such Bank by
or on behalf of the Company, provided that, prior to any such disclosure of
information designated by the Company as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information.
It is understood that confidential information relating to the Company would
not ordinarily be provided in connection with assignments or participations of
Competitive Loans.
(h) Any Bank may at any time assign all or any portion of its rights under
this Agreement and the Notes issued to it to a Federal Reserve Bank; provided
that no such assignment shall release a Bank from any of its obligations
hereunder.
Section 9.05. Expenses; Indemnity.
(a) The Company agrees to pay all reasonable out-of-pocket expenses
incurred by the Administrative Agent in connection with the preparation of
this Agreement or in connection with any amendments, modifications or waivers
of the provisions hereof (whether or not the transactions hereby contemplated
shall be consummated) or incurred by the Administrative Agent or any Bank in
connection with the enforcement or protection of their rights in connection
with this Agreement or in connection with the Loans made or the Notes issued
hereunder, including the reasonable fees, charges and disbursements of Moore &
Van Allen, PLLC, counsel for the Administrative Agent, and, in connection with
any such enforcement or protection, the reasonable fees, charges and
disbursements of any other counsel for the Administrative Agent or any Bank.
The Company further agrees that it shall indemnify the Banks from and hold
them harmless against any documentary taxes, assessments or charges made by
any Governmental Authority by reason of the execution and delivery of this
Agreement.
(b) The Company agrees to indemnify the Administrative Agent, each Bank,
each of their Affiliates and each of the foregoing persons' respective
directors, officers, employees and agents (each such person being called an
"Indemnitee") against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees, charges and disbursements, incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a
result of (i) the execution or delivery of this Agreement or any instrument or
agreement contemplated hereby, the arrangement or syndication of the credit
facilities provided for hereby, performance by the parties hereto of their
respective obligations hereunder or the consummation of the transactions
contemplated hereby, (ii) the use of the proceeds of the Loans or (iii) any
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of
such Indemnitee.
<PAGE>
Section 9.06. Survival of Agreements, Representations and Warranties, etc.
All warranties, representations and covenants made by the Company herein
or in any certificate or other instrument delivered by it or on its behalf in
connection with this Agreement shall be considered to have been relied upon by
the Banks and shall survive the making of the Loans herein contemplated and
the issuance and delivery to the Banks of the Notes regardless of any
investigation made by the Banks or on their behalf and shall continue in full
force and effect so long as any amount due or to become due hereunder is
outstanding and unpaid and so long as the Commitments have not been
terminated. All statements in any such certificate or other instrument shall
constitute representations and warranties by the Company hereunder.
Section 9.07. Governing Law.
This Agreement and the Notes shall be construed in accordance with and
governed by the laws of the Commonwealth of Virginia.
Section 9.08. Sharing of Setoffs.
If one or more Events of Default shall occur, the holder of any Loan shall
have the right, in addition to and not in limitation of any right which any
such holder may have under applicable law or otherwise, to set off against the
unpaid balance of any Loan or Loans or participation therein held by it any
debt owing to the Company by such holder, including, without limitation, any
funds in any deposit account maintained by the Company with such holder, and
nothing in this Agreement shall be deemed a waiver or prohibition of any
Bank's right of banker's lien or setoff. Each holder of a Loan agrees that,
if it shall through the exercise of a right of banker's lien, setoff,
counterclaim or otherwise obtain payment (voluntary or involuntary) in respect
of any Loan or Loans as a result of which the unpaid principal portion of its
Loans shall be proportionately less than the unpaid principal portion of the
Loans of any other Bank, it shall be deemed to have simultaneously purchased
from such other holder a participation in the Loan held by such other holder
so that the aggregate unpaid principal amount of the Loan or Loans and
participations in Notes held by each holder shall be in the same proportion to
the aggregate unpaid principal amount of all Loans then outstanding as the
principal amount of such Loan held by it prior to such exercise of banker's
lien, setoff or counterclaim or receipt of other payment was to the principal
amount of all Loans outstanding prior to such exercise of banker's lien,
setoff or counterclaim or receipt of other payment, and it shall promptly
remit to each such holder the amount of the participation thus deemed to have
been purchased. The Company expressly consents to the foregoing arrangements
and agrees that any holder of a participation in a Loan so acquired may
exercise any and all rights of banker's lien, setoff, counterclaim or
otherwise with respect to any and all moneys owing by such holder to the
Company as fully as if such holder were a holder of a Loan in the amount of
such participation. If all or any portion of any such excess payment is
thereafter recovered from the holder which received the same, the purchase
provided for herein shall be deemed to have been rescinded to the extent of
such recovery, without interest.
<PAGE>
Section 9.09. Interest Rate Limitation.
Notwithstanding anything herein or in the Notes to the contrary, if at any
time the applicable interest rate, together with all fees and charges which
are treated as interest under applicable law (collectively the "Charges"), as
provided for herein or in any other document executed in connection herewith,
or otherwise contracted for, charged, received, taken or reserved by any Bank,
shall exceed the maximum lawful rate (the "Maximum Rate") which may be
contracted for, charged, taken, received or reserved by such Bank in
accordance with applicable law, the rate of interest payable under the Notes
held by such Bank, together with all Charges payable to such Bank, shall be
limited to the Maximum Rate.
Section 9.10. Entire Agreement.
This Agreement constitutes the entire contract between the parties
relative to the subject matter hereof. Any previous agreement among the
parties with respect to the subject matter hereof is superseded by this
Agreement. Nothing in this Agreement, expressed or implied, is intended to
confer upon any party other than the parties hereto and thereto any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
Section 9.11. Waiver of Jury Trial.
Each party hereto hereby waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect of any
litigation directly or indirectly arising out of, under or in connection with
this Agreement. Each party hereto (a) certifies that no representative, agent
or attorney of any other party has represented, expressly or otherwise, that
such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (b) acknowledges that it and the other parties hereto
have been induced to enter into this Agreement by, among other things, the
mutual waivers and certifications in this Section 9.11.
Section 9.12. Severability.
In the event any one or more of the provisions contained in this Agreement
should be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and
therein shall not in any way be affected or impaired thereby. The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
Section 9.13. Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall constitute an original but all of which when taken together shall
constitute but one contract, and shall become effective as provided in Section
9.16.
<PAGE>
Section 9.14. Headings.
Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
Section 9.15. Jurisdiction; Consent to Service of Process.
(a) The Company hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any Virginia State court
or Federal court of the United States of America sitting in Richmond,
Virginia, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Virginia State or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any Bank may otherwise have to bring any action or
proceeding relating to this Agreement against the Company or its properties in
the courts of any jurisdiction.
(b) The Company hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any Virginia State
or Federal court. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
Section 9.16. Binding Effect.
This Agreement shall become effective when it shall have been executed by
the Company and the Administrative Agent and when the Administrative Agent
shall have received copies hereof which, when taken together, bear the
signatures of each Bank, and thereafter shall be binding upon and inure to the
benefit of the Company, the Administrative Agent and each Bank and their
respective successors and assigns, except that the Company shall not have the
right to assign or delegate any of its rights or duties hereunder or any
interest herein without the prior consent of all the Banks.
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers as of the day and year first
above written.
ETHYL CORPORATION,
By: /s/ J. Robert Mooney
Name: J. Robert Mooney
Title: Senior Vice President and
Chief Financial Officer
NATIONSBANK, N.A.,
acting individually and as
Administrative Agent,
By: /s/ E. Turner Coggin
Name: E. Turner Coggin
Title: Senior Vice President
THE YASUDA TRUST AND BANKING
COMPANY, LIMITED
By: /s/Rohn Laudenschlager
Name: Rohn Laudenschlager
Title: Senior Vice President
THE BANK OF NEW YORK
By: /s/ Ann Marie Hughes
Name: Ann Marie Hughes
Title: Assistant Vice President
THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED
By:
Name:
Title:
<PAGE>
CRESTAR BANK
By: /s/ Christopher B. Werner
Name: Christopher B. Werner
Title: Vice President
CREDIT LYONNAIS ATLANTA AGENCY
By:
Name:
Title:
WACHOVIA BANK, N.A.
By: /s/ Charlene A. Johnson
Name: Charlene A. Johnson
Title: Senior Vice President
STANDARD CHARTERED BANK
By: /s/ Kristina McDavid
Name: Kristina McDavid
Title: Vice President
By: /s/ Francois P. Dorival-Bordes
Name: Francois P. Dorival-Bordes
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/ John V. Velton
Name: John V. Velton
Title: Joint General Manager
THE SUMITOMO BANK, LIMITED
NEW YORK BRANCH
By: /s/ Suresh S. Tata
Name: Suresh S. Tata
Title: Senior Vice President
<PAGE>
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Robert G. Sperhac
Name: Robert G. Sperhac
Title: Vice President
<PAGE>
EXHIBIT A-1
FORM OF
COMPETITIVE BID REQUEST
NationsBank, N.A., as Administrative Agent
for the Banks referred to below
101 North Tryon Street, 15th Floor
NC1-001-15-02
Charlotte, NC 28255
Attn: Agency Services
[Date]
Ladies and Gentlemen:
The undersigned, Ethyl Corporation, a Virginia corporation (the
"Company"), refers to the Amended and Restated Competitive Advance, Revolving
Credit Facility and Term Loan Agreement dated as of November 14, 1997 (as
amended, modified, extended or restated from time to time, the "Credit
Agreement"), among the Company, the Banks party thereto, and NationsBank,
N.A., as Administrative Agent. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. The Company hereby gives you notice pursuant to Section
2.03(a) of the Credit Agreement that it requests a Competitive Borrowing under
the Credit Agreement, and in that connection sets forth below the terms on
which such Competitive Borrowing is requested to be made:
(A) Interest Rate Basis(1) --------- --------- ---------
(B) Date of Competitive Borrowing
(which is a Business Day) --------- --------- ---------
(C) Interest Period and the last
day thereof(2) --------- --------- ---------
(D) Principal Amount of
Competitive Borrowing(3) $--------- $-------- $---------
- -----------------------
(1) Eurodollar Competitive Loan or Fixed Rate Loan.
(2) Which shall be subject to the definition of "Interest Period" and end not
later than the Maturity Date.
(3) Not less than $5,000,000 and in integral multiples thereof.
A-1-1
<PAGE>
Upon acceptance of any or all of the Loans offered by the Banks in
response to this request, the Company shall be deemed to affirm as of such
date the representations and warranties made in the Credit Agreement to the
extent specified in Article IV thereof.
Very truly yours,
ETHYL CORPORATION,
By
Title: (Responsible Officer)
Copy to:
NationsBank, N.A.
1111 East Main Street
4th Floor Pavilion
Richmond, VA 23277
Attn: E. Turner Coggin
A-1-2
<PAGE>
EXHIBIT A-2
FORM OF
COMPETITIVE BID INVITATION
[Name of Bank]
[Address]
[Date]
Ladies and Gentlemen:
Reference is made to the Amended and Restated Competitive Advance,
Revolving Credit Facility and Term Loan Agreement dated as of November 14,
1997 (as amended, modified, extended or restated from time to time, the
"Credit Agreement"), among Ethyl Corporation, a Virginia corporation (the
"Company"), the Banks party thereto and NationsBank, N.A., as Administrative
Agent. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement. The Company
made a Competitive Bid Request on _______, 19__, pursuant to Section 2.03(a)
of the Credit Agreement, and in that connection you are invited to submit a
Competitive Bid by [Date]/[Time].4 Your Competitive Bid must comply with
Section 2.03(b) of the Credit Agreement and the terms set forth below on which
the Competitive Bid Request was made:
(A) Interest Rate Basis -----------------------
(B) Date of Competitive Borrowing -----------------------
(C) Interest Period and the last
day thereof -----------------------
(D) Principal Amount of
Competitive Borrowing $______________________
- -----------------------
(4) The Competitive Bid must be received by the Administrative Agent (i) in
the case of Eurodollar Competitive Loans, not later than 9:30 a.m., New
York City time, three Business Days before a proposed Competitive
Borrowing, and (ii) in the case of Fixed Rate Loans, no later than 9:30
a.m., New York City time, on the Business Day of a proposed Competitive
Borrowing.
A-2-1
<PAGE>
Very truly yours,
NATIONSBANK, N.A.,
as Administrative Agent,
By_________________________
Title:
A-2-2
<PAGE>
EXHIBIT A-3
FORM OF
COMPETITIVE BID
NationsBank, N.A., as Administrative Agent
for the Banks referred to below
101 North Tryon Street, 15th Floor
NC1-001-15-02
Charlotte, NC 28255
Attn: Agency Services
[Date]
Ladies and Gentlemen:
The undersigned, [Name of Bank], refers to Amended and Restated
Competitive Advance, Revolving Credit Facility and Term Loan Agreement dated
as of November 14, 1997 (as amended, modified, extended or restated from time
to time, the "Credit Agreement"), among Ethyl Corporation, a Virginia
corporation (the "Company"), the Banks party thereto and NationsBank, N.A., as
Administrative Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
The undersigned hereby makes a Competitive Bid pursuant to Section 2.03(b) of
the Credit Agreement, in response to the Competitive Bid Request made by the
Company on _______, 19__, and in that connection sets forth below the terms on
which such Competitive Bid is made:
(A) Interest Period and last
day thereof --------- --------- ---------
(B) Principal Amount(5) $________ $________ $________
(C) Competitive Bid Rate(6) --------- --------- ---------
_______________________
(5) Not less than $5,000,000 or greater than the requested Competitive
Borrowing and in integral multiples of $5,000,000. Multiple bids will be
accepted by the Administrative Agent.
(6) I.e., LIBOR + or - __%, in the case of Eurodollar Competitive Loans or
__%, in the case of Fixed Rate Loans.
A-3-1
<PAGE>
The undersigned hereby confirms that it is prepared, subject to the
conditions set forth in the Credit Agreement, to extend credit to the Company
upon acceptance by the Company of this bid in accordance with Section 2.03(d)
of the Credit Agreement.
Very truly yours,
[NAME OF BANK],
By
Title:
Copy to:
NationsBank, N.A.
1111 East Main Street
4th Floor Pavilion
Richmond, VA 23277
Attn: E. Turner Coggin
A-3-2
<PAGE>
EXHIBIT A-4
FORM OF
COMPETITIVE BID ACCEPT/REJECT LETTER
[Date]
NationsBank, N.A., as Administrative Agent
for the Banks referred to below
101 North Tryon Street, 15th Floor
NC1-001-15-02
Charlotte, NC 28255
Attn: Agency Services
Ladies and Gentlemen:
The undersigned, Ethyl Corporation (the "Company"), refers to the Amended
and Restated Competitive Advance, Revolving Credit Facility and Term Loan
Agreement dated as of November 14, 1997 (as amended, modified, extended or
restated from time to time, the "Credit Agreement"), among the Company, the
Banks party thereto and NationsBank, N.A., as Administrative Agent.
In accordance with Section 2.03(c) of the Credit Agreement, we have
received a summary of bids in connection with our Competitive Bid Request
dated ___________ and in accordance with Section 2.03(d) of the Credit
Agreement, we hereby accept the following bids for maturity on [date]:
Principal Amount Fixed Rate/Margin Bank
$ [%]/[+/-. __%]
$
We hereby reject the following bids:
Principal Amount Fixed Rate/Margin Bank
$ [%]/[+/-. __%]
$
A-4-1
<PAGE>
The $________ should be deposited in Chemical Bank account number
[____________] on [date].
Very truly yours,
ETHYL CORPORATION,
By
Name:
Title:
A-4-2
<PAGE>
EXHIBIT A-5
FORM OF
COMMITTED BORROWING REQUEST
NationsBank, N.A., as Administrative Agent
for the Banks referred to below
101 North Tryon Street, 15th Floor
NC1-001-15-02
Charlotte, NC 28255
Attn: Agency Services
[Date]
Ladies and Gentlemen:
The undersigned, Ethyl Corporation, a Virginia corporation (the
"Company"), refers to the Amended and Restated Competitive Advance, Revolving
Credit Facility and Term Loan Agreement dated as of November 14, 1997 (as
amended, modified, extended or restated from time to time, the "Credit
Agreement"), among the Company, the Banks party thereto and NationsBank, N.A.,
as Administrative Agent. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. The Company hereby gives you notice pursuant to Section 2.04 of the
Credit Agreement that it requests a Committed Borrowing under the Credit
Agreement, and in that connection sets forth below the terms on which such
Committed Borrowing is requested to be made:
(A) Date of Committed Borrowing
(which is a Business Day) ____________________________
(B) Principal Amount of
Committed Borrowing(7) $____________________________
(C) Interest rate basis(8) ____________________________
(D) Interest Period and the
last day thereof(9) ____________________________
Upon acceptance of any or all of the Loans made by the Banks in response
to this request, the Company shall be deemed to have represented and warranted
(but only to the extent required by Section 4.01 of the Credit Agreement) that
the conditions to lending specified in Section 4.01(b) and (c) of the Credit
Agreement have been satisfied.
________________________
(7) Not less than $10,000,000 and in integral multiples of $1,000,000.
(8) Eurodollar Loan or ABR Loan.
(9) Which shall be subject to the definition of "Interest Period" and end not
later than the Maturity Date.
A-5-1
<PAGE>
Very truly yours,
ETHYL CORPORATION,
By
Title: [Responsible Officer]
Copy to:
NationsBank, N.A.
1111 East Main Street
4th Floor Pavilion
Richmond, VA 23277
Attn: E. Turner Coggin
A-5-2
<PAGE>
EXHIBIT B-1
FORM OF COMPETITIVE NOTE
$450,000,000 Richmond, Virginia
November 14, 1997
FOR VALUE RECEIVED, the undersigned, ETHYL CORPORATION, a Virginia
corporation (the "Company"), hereby promises to pay to the order of
_________________ (the "Bank"), at the office of NationsBank, N.A. (the
"Agent"), at 101 N. Tryon Street, 15th Floor, NC1-001-15-02, Charlotte, North
Carolina 28255, Attn: Agency Services, (i) on the last day of each Interest
Period as defined in the Amended and Restated Competitive Advance, Revolving
Credit Facility and Term Loan Agreement dated as of November 14, 1997, among
the Company, the Banks party thereto, and the Agent (as amended, modified,
extended or restated from time to time, the "Credit Agreement"), the aggregate
unpaid principal amount of all Competitive Loans made by the Bank to the
Company pursuant to Section 2.03 of the Credit Agreement to which such
Interest Period applies and (ii) on the Maturity Date (as defined in the
Credit Agreement), the lesser of the principal sum of Four Hundred Fifty
Million Dollars ($450,000,000) and the aggregate unpaid principal amount of
all Competitive Loans made by the Bank to the Company pursuant to Section 2.03
of the Credit Agreement, in lawful money of the United States of America in
immediately available funds, and to pay interest from the date hereof on such
principal amount from time to time outstanding, in like funds, at said office,
at the rate or rates per annum and payable on the dates determined pursuant to
the Credit Agreement.
The Company promises to pay interest, on demand, on any overdue principal
and, to the extent permitted by law, overdue interest from their due dates at
the rate or rates determined as set forth in the Credit Agreement.
The Company hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance. All borrowings evidenced by this
Competitive Note and all payments and prepayments of the principal hereof and
interest hereon and the respective dates thereof shall be endorsed by the
holder hereof on the schedule attached hereto and made a part hereof, or on a
continuation thereof which shall be attached hereto and made a part hereof, or
otherwise recorded by such holder in its internal records; provided, however,
that the failure of the holder hereof to make such a notation or any error in
such a notation shall not in any manner affect the obligations of the Company
to make payments of principal and interest in accordance with the terms of
this Competitive Note and the Credit Agreement.
This Competitive Note is one of the Competitive Notes referred to in the
Credit Agreement which, among other things, contains provisions for the
B-1-1
<PAGE>
acceleration of the maturity hereof upon the happening of certain events, for
prepayment of the principal hereof prior to the maturity thereof under certain
circumstances and for the amendment or waiver of certain provisions of the
Credit Agreement, all upon the terms and conditions therein specified. This
Competitive Note shall be construed in accordance with and governed by the
laws of the Commonwealth of Virginia and any applicable laws of the United
States of America.
ETHYL CORPORATION,
By
Name:
Title:
B-1-2
<PAGE>
Loans and Payments
Unpaid Name of
Payments Principal Person
Amount Interest Interest Balance Making
Date of Loan Rate Period Principal Interest of Note Notation
B-1-3
<PAGE>
EXHIBIT B-2
FORM OF REVOLVING NOTE
$[_______________] Richmond, Virginia
November 14, 1997
FOR VALUE RECEIVED, the undersigned, ETHYL CORPORATION, a Virginia
corporation (the "Company"), hereby promises to pay to the order of (the
"Bank"), at the office of NationsBank, N.A. (the "Agent"), at 101 N. Tryon
Street, 15th Floor, NC1-001-15-02, Charlotte, North Carolina 28255, Attn:
Agency Services, on (i) the last day of each Interest Period as defined in the
Amended and Restated Competitive Advance, Revolving Credit Facility and Term
Loan Agreement dated as of November 14, 1997, among the Company, the Banks
party thereto, and the Agent (as amended, modified, extended or restated from
time to time, the "Credit Agreement"), the aggregate unpaid principal amount
of all Revolving Loans made by the Bank to the Company pursuant to Sections
2.02 and 2.04 of the Credit Agreement to which such Interest Period applies
and (ii) the Maturity Date, the lesser of the principal sum of [__________]
Dollars ($[_____]) and the aggregate unpaid principal amount of all Revolving
Loans made by the Bank to the Company pursuant to Sections 2.02 and 2.04 of
the Credit Agreement, in lawful money of the United States of America in
immediately available funds, and to pay interest from the date hereof on such
principal amount from time to time outstanding, in like funds, at said office,
at a rate or rates per annum and payable on the dates determined pursuant to
the Credit Agreement.
The Company promises to pay interest, on demand, on any overdue principal
and, to the extent permitted by law, overdue interest from their due dates at
the rate or rates determined as set forth in the Credit Agreement.
The Company hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
All borrowings evidenced by this Revolving Note and all payments and
prepayments of the principal hereof and interest hereon and the respective
dates thereof shall be endorsed by the holder hereof on the schedule attached
hereto and made a part hereof, or on a continuation thereof which shall be
attached hereto and made a part hereof, or otherwise recorded by such holder
in its internal records; provided, however, that the failure of the holder
hereof to make such a notation or any error in such a notation shall not in
any manner affect the obligations of the Company to make payments of principal
and interest in accordance with the terms of this Revolving Note and the
Credit Agreement.
This Revolving Note is one of the Revolving Notes referred to in the
Credit Agreement which, among other things, contains provisions for the
B-2-1
<PAGE>
acceleration of the maturity hereof upon the happening of certain events, for
prepayment of the principal hereof prior to the maturity thereof and for the
amendment or waiver of certain provisions of the Credit Agreement, all upon
the terms and conditions therein specified. This Revolving Note shall be
construed in accordance with and governed by the laws of the Commonwealth of
Virginia and any applicable laws of the United States of America.
ETHYL CORPORATION,
By
Name:
Title:
B-2-2
<PAGE>
Loans and Payments
Unpaid Name of
Payments Principal Person
Amount Type of Interest Balance Making
Date of Loan Loan Period Principal Interest of Note Notation
B-2-3
<PAGE>
EXHIBIT B-3
FORM OF TERM NOTE
$[_______________] Richmond, Virginia
November 14, 1997
FOR VALUE RECEIVED, the undersigned, ETHYL CORPORATION, a Virginia
corporation (the "Company"), hereby promises to pay to the order of (the
"Bank"), at the office of NationsBank, N.A. (the "Agent"), at 101 N. Tryon
Street, 15th Floor, NC1-001-15-02, Charlotte, North Carolina 28255, Attn:
Agency Services, the principal amount of ___________ Dollars ($__________)on
(i) the last day of each Interest Period as defined in the Amended and
Restated Competitive Advance, Revolving Credit Facility and Term Loan
Agreement dated as of November 14, 1997, among the Company, the Banks party
thereto, and the Agent (as amended, modified, extended or restated from time
to time, the "Credit Agreement"), the aggregate unpaid principal amount of the
Term Loan made by the Bank to the Company pursuant to Section 2.02 of the
Credit Agreement to which such Interest Period applies and (ii) the Bank's pro
rata share of principal amortization payments provided on the Term Loan
pursuant to Section 2.07, in lawful money of the United States of America in
immediately available funds, and to pay interest from the date hereof on such
principal amount from time to time outstanding, in like funds, at said office,
at a rate or rates per annum and payable on the dates determined pursuant to
the Credit Agreement.
The Company promises to pay interest, on demand, on any overdue principal
and, to the extent permitted by law, overdue interest from their due dates at
the rate or rates determined as set forth in the Credit Agreement.
The Company hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
All borrowings evidenced by this Term Note and all payments and
prepayments of the principal hereof and interest hereon and the respective
dates thereof shall be endorsed by the holder hereof on the schedule attached
hereto and made a part hereof, or on a continuation thereof which shall be
attached hereto and made a part hereof, or otherwise recorded by such holder
in its internal records; provided, however, that the failure of the holder
hereof to make such a notation or any error in such a notation shall not in
any manner affect the obligations of the Company to make payments of principal
and interest in accordance with the terms of this Term Note and the Credit
Agreement.
This Term Note is one of the Term Notes referred to in the Credit
Agreement which, among other things, contains provisions for the acceleration
of the maturity hereof upon the happening of certain events, for prepayment of
B-3-1
<PAGE>
the principal hereof prior to the maturity thereof and for the amendment or
waiver of certain provisions of the Credit Agreement, all upon the terms and
conditions therein specified. This Term Note shall be construed in accordance
with and governed by the laws of the Commonwealth of Virginia and any
applicable laws of the United States of America.
ETHYL CORPORATION,
By
Name:
Title:
B-3-2
<PAGE>
Loans and Payments
Unpaid Name of
Payments Principal Person
Amount Type of Interest Balance Making
Date of Loan Loan Period Principal Interest of Note Notation
B-3-3
<PAGE>
EXHIBIT C
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Competitive Advance,
Revolving Credit Facility and Term Loan Agreement dated as of November 14,
1997, (as amended, modified, extended or restated from time to time, the
"Credit Agreement"), among Ethyl Corporation, a Virginia corporation (the
"Company"), the Banks party thereto (the "Banks"), and NationsBank, N.A., as
administrative agent for the Banks (in such capacity, the "Administrative
Agent"). Terms defined in the Credit Agreement are used herein with the same
meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse,
from the Assignor, effective as of the effective date set forth on the
following page, the interests set forth on the following page (the "Assigned
Interest") in the Assignor's rights and obligations under the Credit
Agreement, including, without limitation, the interests set forth on the
following page in the Commitment of the Assignor on the effective date and the
Loans owing to the Assignor which are outstanding on the effective date,
together with unpaid interest accrued on the assigned Loans to the effective
date and the amount, if any, set forth on the following page of the Fees
accrued to the effective date for the account of the Assignor. Each of the
Assignor and the Assignee hereby makes and agrees to be bound by all the
representations, warranties and agreements set forth in Section 9.04(c) of the
Credit Agreement, a copy of which has been received by each such party. From
and after the effective date (i) the Assignee shall be a party to and be bound
by the provisions of the Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations of
a Bank thereunder and under the Credit Agreement or any other document issued
in connection therewith and (ii) the Assignor shall, to the extent of the
interests assigned by this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Credit Agreement.
2. This Assignment and Acceptance is being delivered to the Agent together
with (i) the Notes evidencing the Loans included in the Assigned Interest,
(ii) if the Assignee is organized under the laws of a jurisdiction outside the
United States, the forms prescribed by the Internal Revenue Service of the
United States certifying as to the Assignee's exemption from withholding taxes
with respect to all payments to be made to the Assignee under the Credit
Agreement or such other documents as are necessary to indicate that all such
payments are subject to such tax at a rate reduced by an applicable tax
treaty, all duly completed and executed by such Assignee, (iii) if the
Assignee is not already a Bank under the Credit Agreement, an Administrative
Questionnaire and (iv) a processing and recordation fee of $3,500.
3. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia.
Date of Assignment:
C-1
<PAGE>
Legal Name of Assignor
Legal Name of Assignee
Assignee's Address for Notices
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment):
Percentage Assigned
of Facility and Commitment
(set forth, to at least 8
Principal Amount Assigned decimals, as a percentage of
(and Identifying Information the Facility and the aggregate
Facility to individual Competive Loans) Commitment of all Banks
thereunder)
Commitment $ %
Assigned
Revolving Loans $ %
Letter of Credit $ %
Obligations:
Competivie Loans:$ %
Term Loan: $ %
Fees Assigned
(if any): $ %
C-2
<PAGE>
The terms set forth above and
on the preceding page are
hereby agreed to: [Accepted
_____________, as Assignor NATIONSBANK, N.A., as Administrative Agent
By: By:
Name: Name:
Title: Title:
____________, as Assignee ETHYL CORPORATION,
By: By:
Name: Name:
Title: Title:
C-3
<PAGE>
EXHIBIT D
ADMINISTRATIVE QUESTIONNAIRE
ETHYL CORPORATION
Please accurately complete the following information and return via FAX to the
attention of Jeffrey Pugh at NationsBank Agency Services as soon as possible.
FAX Number: 704-388-9436
LEGAL NAME OF YOUR INSTITUTION TO APPEAR IN DOCUMENTATION:
______________________________________________________________________________
GENERAL INFORMATION - DOMESTIC RATE LENDING OFFICE:
Institution Name:_____________________________________________________________
Street Address:_______________________________________________________________
City, State, Zip Code:________________________________________________________
GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:
Institution Name:_____________________________________________________________
Street Address:_______________________________________________________________
City, State, Zip Code:________________________________________________________
CREDIT CONTACTS/NOTIFICATION METHODS:
Primary Contact:______________________________________________________________
Street Address:_______________________________________________________________
City, State, Zip Code:________________________________________________________
Phone Number:_________________________________________________________________
FAX Number:___________________________________________________________________
Backup Credit Contact:________________________________________________________
Street Address:_______________________________________________________________
City, State, Zip Code:________________________________________________________
Phone Number:_________________________________________________________________
FAX Number:___________________________________________________________________
TAX WITHHOLDING:
UNITED STATES
Non-Resident Alien or Foreign Corporation or Other Foreign Entity
________________YES _______________NO
If yes, please enclose Form 4224, 1001 or W-8. If no, please enclose Form W-9.
Tax ID Number___________________________________________
D-1
<PAGE>
CONTACTS/NOTIFICATION METHODS:
ADMINISTRATIVE CONTACTS - BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.
Contact:______________________________________________________________________
Street Address:_______________________________________________________________
City, State, Zip Code:________________________________________________________
Phone Number:_________________________________________________________________
FAX Number:___________________________________________________________________
Telex & Answer Back:__________________________________________________________
PAYMENT INSTRUCTIONS:
Name of Bank where funds are to be transferred:
______________________________________________________________________________
Routing Transit/ABA number of Bank where funds are to be transferred:
______________________________________________________________________________
Name of Account, if applicable:_______________________________________________
Account Number:_______________________________________________________________
Additional Information:_______________________________________________________
______________________________________________________________________________
BID LOAN NOTIFICATIONS:
Contact:______________________________________________________________________
Street Address:_______________________________________________________________
City, State, Zip Code:________________________________________________________
Phone Number:_________________________________________________________________
Fax Number:___________________________________________________________________
MAILINGS:
Please specify who should receive financial information:
Name:_________________________________________________________________________
Street Address:_______________________________________________________________
City, State, Zip Code:________________________________________________________
It is very important that all of the above information is accurately filled in
and returned promptly. If there is someone other than yourself who should
receive this questionnaire, please notify us of their name and FAX number and
we will FAX them a copy of the questionnaire. If you have any questions,
please call Jeffrey Pugh at 704-386-9046, telecopy 704-388-9436.
D-2
<PAGE>
EXHIBIT E
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of ________________,
19__, is by and between ______________________, a ___________________ (the
"Applicant Guarantor"), and NATIONSBANK, N.A., in its capacity as
Administrative Agent under that certain Credit Agreement dated as of November
14, 1997 (as amended and modified, the "Credit Agreement") by and among ETHYL
CORPORATION, a Virginia corporation, and the Banks identified therein and
NationsBank, N.A., as Administrative Agent. All of the defined terms in the
Credit Agreement are incorporated herein by reference.
The Applicant Guarantor has indicated its desire to become a Guarantor or
is required by the terms of Section 5.08 of the Credit Agreement to become, a
Guarantor under the Subsidiary Guaranty.
Accordingly, the Applicant Guarantor hereby agrees as follows with the
Administrative Agent, for the benefit of the Lenders:
1. The Applicant Guarantor hereby acknowledges, agrees and confirms that,
by its execution of this Agreement, the Applicant Guarantor will be deemed to
be a party to the Subsidiary Guarantor and a "Guarantor" for all purposes
under the Subsidiary Guaranty, and shall have all of the obligations of a
Guarantor thereunder as if it had executed the Subsidiary Guarantor. The
Applicant Guarantor agrees to be bound by, all of the terms, provisions and
conditions contained in the Subsidiary Guaranty, including without limitation
all of the undertakings and waivers set forth therein. Without limiting the
generality of the foregoing terms of this paragraph 1, the Applicant Guarantor
hereby (A) jointly and severally together with the other Guarantors,
guarantees to each Bank and the Administrative Agent as provided in the
Subsidiary Guaranty, the prompt payment and performance of the Guaranteed
Obligations in the Subsidiary Guaranty in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof,
and (B) agrees that if any of the Guaranteed Obligations are not paid or
performed in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise), the Applicant Guarantor will,
jointly and severally together with the other Guarantors, promptly pay and
perform the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, as a mandatory prepayment, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.
2. The Applicant Guarantor acknowledges and confirms that it has received
a copy of the Subsidiary Guaranty, the Credit Agreement and the Schedules and
Exhibits thereto.
E-1
<PAGE>
3. The Applicant Guarantor hereby waives acceptance by the Administrative
Agent and the Lenders of the guaranty by the Applicant Guarantor under Section
4 of the Credit Agreement upon the execution of this Joinder Agreement by the
Applicant Guarantor.
4. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
5. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the Commonwealth of Virginia.
IN WITNESS WHEREOF, the Applicant Guarantor has caused this Joinder
Agreement to be duly executed by its authorized officers, and the
Administrative Agent, for the benefit of the Lenders, has caused the same to
be accepted by its authorized officer, as of the day and year first above
written.
APPLICANT GUARANTOR
By:
Name:
Title:
Address for Notices:
Attn:
Telephone:
Telecopy:
Acknowledged and accepted:
NATIONSBANK, N.A., as Administrative Agent
By:
Name:
Title:
E-2
<PAGE>
<TABLE>
Schedule 2.01
to Credit Agreement
Lenders and Commitments
<CAPTION>
Revolving LOC Term Loan
Lender Commitment Percent Commitment Percent Commitment Percent
<S> <C> <C> <C> <C> <C> <C>
NationsBank, N.A. $315,909,090.91 70.202021% $23,181,818.18 46.363637% $139,090,909.09 46.363637%
101 North Tryon Street
Independence Center,
15th Floor
NC1-001-15-02
Charlotte, NC 28255
Attn: Jeffrey Pugh,
Agency Services
Ph: (704)386-9046
Fx: (704)388-9436
with a copy to:
NationsBnk,N.A.
1111 East Main Street
4th Floor Pavilion
Richmond, VA 23227
Attn: E. Turner Coggin
Ph: (804) 788-3455
Fx: (804) 788-3669
The Bank of New York $11,363,636.36 2.525253% $2,272,727.27 4.545455% $13,636,363.64 4.545455%
One Wall Street
New York, New York 10286
Attn: Ann Marie Hughes
Ph: (212) 635-1339
Fx: (212) 635-6434
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Revolving LOC Term Loan
Lender Commitment Percent Commitment Percent Commitment Percent
<S> <C> <C> <C> <C> <C> <C>
The Long-Term Credit Bank of
Japan, $11,363,636.36 2.525253% $2,272,727.27 4.545455% $13,636,363.64 4.545455%
Limited
245 Peachtree Center
Avenue, N.E.
Suite 2801, Marquis One Tower
Atlanta, Georgia 30303
Attn: Thomas N. Meyer
Ph: (404) 659-7210
Fx: (404) 658-9751
Crestar Bank $15,909,090.91 3.535354% $3,181,818.18 6.363636% $19,090,909.09 6.363636%
919 East Main Street
Richmond, Virginia 23219
Attn: Christopher B. Werner
Ph: (804) 782-5998
Fx: (804) 782-5413
Credit Lyonnais Atlanta
Agency $11,363,636.36 2.525253% $2,272,727.27 4.545455% $13,636,363.64 4.545455%
303 Peachtree Street, N.E.
Suite 4400
Atlanta, Georgia 30308
Attn: Walter Robinson
Ph: (404) 524-3700
Fx: (404) 584-5249
Wachovia Bank, N.A $22,727,272.73 5.050505% $4,545,454.54 9.090909% $27,272,727.27 9.090909%
100 North Main Street
Winston-Salem, North Carolina 27150
Attn: Michael H. Trainor
Ph: (910) 732-2530
Fx: (910) 732-6935
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Revolving LOC Term Loan
Lender Commitment Percent Commitment Percent Commitment Percent
<S> <C> <C> <C> <C> <C> <C>
Standard Chartered Bank $11,363,636.36 2.525253% $2,272,727.27 4.545455% $13,636,363.64 4.545455%
7 World Trade Center
New York, New York 10048
Attn: Francois P. Dorival-Bordes
Ph: (212) 667-0223
Fx: (212) 667-0780
The Industrial Bank of Japan,
Limited $15,909,090.91 3.535354% $3,181,818.18 6.363636% $19,090,909.09 6.363636%
1251 Avenue of the Americas
New York, New York 10020-1104
Attn: John Dippo
Ph: (212) 282-3412
Fx: (212) 282-4488
The Sumitomo Bank, Limited, $11,363,636.36 2.525253% $2,272,727.27 4.545455% $13,636,363.64 4.545455%
New York Brance
277 Park Avenue
New York, New York 10172
Attn: MunYoung Kim
Ph: (212) 224-4151
Fx: (212) 224-5188
The First National Bank of
Chicago $22,727,272.73 5.050505% $4,545,454.54 9.090909% $27,272,727.27 9.090909%
One First National Plaza,
Suite 0363
Chicago, Illinois 60670
Attn: Robert Sperhac
Ph: (312) 732-6371
Fx: (312) 732-3055
--------------- ---------- ------------- ---------- --------------- -----------
$450,000,000.00 100.000000% $50,000,000.00 100.000000% $300,000,000.00 100.000000%
</TABLE>
<PAGE>
Schedule 2.01(c)
Existing Letters of Credit
None.
<PAGE>
Schedule 3.06
Subsidiaries
The following is a list of the significant subsidiaries of the registrant as
of November 14, 1997. Each such subsidiary does business under its corporate
name.
Jurisdiction of
Subsidiary Incorporation
EID Corporation Liberia
Ethyl Additive N.V. Belgium
Ethyl Asia Pacific Company Virginia
Ethyl Brasil Aditivos S.A. Brazil
Ethyl Canada Inc. Province of Ontario, Canada
Ethyl Europe S.A. Belgium
Ethyl Foreign Sales Corporation U.S. Virgin Islands
Ethyl Interamerica Corporation Delaware
Ethyl Japan Corporation Japan
Ethyl Korea Limited Korea
Ethyl Mineraloel-Additive GmbH Germany
Ethyl Petroleum Additives, Inc. Delaware
Ethyl Petroleum Additives Limited United Kingdom
Ethyl Shipping Company Limited United Kingdom
<PAGE>
Schedule 3.07
Litigation
None.
<PAGE>
Schedule 3.15
Environmental and Safety Matters
Ethyl Corporation
1. Louisiana Department of Environmental Quality (La. DEQ), Penalty
Assessment, Docket No. GWP-88-003, Penalty Assessment dated May 5, 1988,
regarding alleged violation of RCRA groundwater monitoring requirements,
decision dated January 29, 1990 assessing penalty of $8,111, affirmed by
Secretary on August 31, 1991, and appealed to Louisiana First Circuit Court
of Appeal, where the appeal is pending.
2. La. DEQ Penalty Assessment HEP-89-784, issued November 30, 1989, seeks
penalty of $38,000 in regard to alleged violations of RCRA, and is under
administrative appeal.
3. La. DEQ Penalty Assessment HEP-91-0339, issued August 15, 1991, seeks
$15,000 penalty in regard to alleged violations of RCRA, and is under
administrative appeal.
4. La. DEQ Penalty Assessment HEP-90-0644, issued November 17, 1992, seeks
$51,183 in regard to alleged violations of RCRA, and is under administrative
appeal.
<PAGE>
Schedule 6.01
Liens
None.
<PAGE>
Schedule 6.02
Indebedness
None.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 12906
<SECURITIES> 0
<RECEIVABLES> 141388
<ALLOWANCES> 2367
<INVENTORY> 210119
<CURRENT-ASSETS> 392319
<PP&E> 769475
<DEPRECIATION> 355890
<TOTAL-ASSETS> 1053150
<CURRENT-LIABILITIES> 179576
<BONDS> 275596
<COMMON> 118444
0
0
<OTHER-SE> 329968
<TOTAL-LIABILITY-AND-EQUITY> 1053150
<SALES> 789123
<TOTAL-REVENUES> 789123
<CGS> 564013
<TOTAL-COSTS> 679767
<OTHER-EXPENSES> (947)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15489
<INCOME-PRETAX> 94814
<INCOME-TAX> 33441
<INCOME-CONTINUING> 61373
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 61373
<EPS-PRIMARY> .52
<EPS-DILUTED> .52
</TABLE>
