UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 30, 1994
- - - - OR -
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-8207
THE HOME DEPOT, INC.
(Exact name of registrant
as specified in its charter)
Delaware 95-3261426
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2727 Paces Ferry Road Atlanta, Georgia 30339
(Address of principal executive offices) (Zip Code)
(404) 433-8211
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed
since last report.)
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
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
$.05 par value 452,984,000 Shares, as of November 14, 1994
Page 1 of 14
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THE HOME DEPOT, INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
October 30, 1994
Page
Part I. Financial Information:
Item 1. Financial Statements
CONSOLIDATED STATEMENTS OF EARNINGS -
Three-Month and Nine-Month Periods
Ended October 30, 1994 and October 31,
1993.................................................... 3
CONSOLIDATED CONDENSED BALANCE SHEETS -
As of October 30, 1994 and January 30,
1994..................................................... 4
CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS - Nine-Month Period
Ended October 30, 1994 and October 31,
1993..................................................... 5
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL
STATEMENTS............................................... 6
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial
Condition...............................................8-11
Part II. Other Information:
Item 4. Submission of Matters to a Vote on Security
Holders................................................ 12
Item 6. Exhibits and Reports on 8-
K...................................................... 12
Signature
Page................................................... 13
Index to
Exhibits............................................... 14
Page 2 of 14
<PAGE>
PART I. FINANCIAL INFORMATION
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
October 30, October 31, October 30, October 31,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net Sales $3,240,050 $2,317,372 $9,399,215 $6,951,346
Cost of Merchandise Sold
2,359,482 1,691,186 6,814,073 5,061,626
Gross Profit
880,568 626,186 2,585,142 1,889,720
Operating Expenses:
Selling and Store Operating
575,951 406,160 1,633,950 1,200,741
Pre-opening 13,911 10,024 33,690 20,344
General and Administrative
59,317 45,360 167,101 137,232
Total Operating Expenses
649,179 461,544 1,834,741 1,358,317
Operating Income
231,389 164,642 750,401 531,403
Interest Income (Expense):
Interest Income 7,017 13,862 23,739 46,559
Interest Expense (9,132) (6,716) (27,348) (23,481)
Interest, Net (2,115) 7,146 (3,609) 23,078
Earnings Before Income Taxes
229,274 171,788 746,792 554,481
Income Taxes 88,500 68,370 288,270 209,760
Net Earnings $ 140,774 $ 103,418 $ 458,522 $ 344,721
Earnings Per Common and
Common Equivalent Share (Note 4)
$ .31 $ .23 $ 1.00 $ .76
Dividends Per Share
$ .04 $ .03 $ .11 $ .08
Weighted Average Number of
Common and Common
Equivalent Shares (Note 4)
476,075 452,925 475,567 452,878
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Page 3 of 14
<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
October 30, January 30,
1994 1994
<S> <C> <C>
ASSETS
Current Assets:
Cash and Cash Equivalents $ 289,148 $ 99,997
Short-Term Investments 50,626 330,976
Accounts Receivable, Net 271,289 198,431
Merchandise Inventories 1,717,806 1,293,477
Other Current Assets 50,142 43,720
Total Current Assets 2,379,011 1,966,601
Property and Equipment, at cost 3,460,262 2,618,428
Less: Accumulated Depreciation and Amortization
(325,194) (247,524)
Net Property and Equipment 3,135,068 2,370,904
Long-Term Investments held Available for Sale
87,781 281,623
Cost in Excess of the Fair Value of Net
Assets Acquired, Net 88,396 19,503
Other 47,435 62,258
$5,737,691 $4,700,889
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 885,141 $ 521,246
Accrued Salaries and Related Expenses 242,589 167,489
Sales Taxes Payable 87,442 57,590
Other Accrued Expenses 249,989 183,901
Income Taxes Payable 24,282 40,303
Current Installments of Long-Term Debt 22,529 2,109
Total Current Liabilities 1,511,972 972,638
Convertible Subordinated Debt 804,990 804,990
Long-Term Debt, Net of Current Installments
71,490 77,272
Other Long-Term Liabilities 5,528 4,062
Deferred Income Taxes 13,678 27,827
Minority Interest 48,783 ---
Stockholders' Equity:
Common Stock - 452,195,000 shares outstanding
at 10/30/94 and 449,364,000 shares outstanding
at 01/30/94 22,609 22,468
Paid-in Capital 1,494,207 1,436,029
Retained Earnings 1,809,428 1,400,575
Cumulative Translation Adjustments (2,264) (121)
Unrealized Holding Loss on Investments (810) ---
3,323,170 2,858,951
Less Notes Receivable from ESOP 41,920 44,851
Total Stockholders' Equity 3,281,250 2,814,100
$5,737,691 $4,700,889
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Page 4 of 14
<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
October 30, 1994 October 31, 1993
Cash Provided from Operations:
<S> <C> <C>
Net Earnings $ 458,522 $ 344,721
Reconciliation of Net Earnings to Net Cash
Provided by Operations:
Depreciation and Amortization 94,175 65,014
Increase in Accounts Payable
and Accrued Expenses 506,249 283,214
Increase in Merchandise Inventories
(371,012) (240,551)
(Decrease) Increase in Income Taxes Payable
(5,874) 29,550
Increase in Receivables, Net (60,439) (23,728)
Other, Net 8,426 (16,547)
Total 171,525 96,952
Net Cash Provided by Operations
630,047 441,673
Cash Flows From Investing Activities:
Capital Expenditures (801,104) (592,102)
Initial Acquisition of Canadian Partnership Interest
(161,548) ---
Sale (Purchase) of Short-Term Investments, Net
92,068 (128,735)
Purchase of Long-Term Investments (67,710) (673,319)
Proceeds from Maturities of Long-Term Investments
44,846 250,394
Proceeds from Sale of Long-Term Investments
403,738 706,296
Proceeds from Sale of Property and Equipment
41,266 23,511
Repayments of Advances
Secured by Real Estate, Net 6,425 (1,683)
Net Cash Used in Investing Activities
(442,019) (415,638)
Cash Flows From Financing Activities:
Proceeds from Sales of
Common Stock, Net 48,172 48,209
Cash Received from ESOP 2,931 3,207
Principal Repayments of Long-Term Debt (310) (1,073)
Cash Dividends Paid to Stockholders (49,670) (36,878)
Net Cash Provided by Financing Activities
1,123 13,465
Increase in Cash and
Cash Equivalents 189,151 39,500
Cash and Cash Equivalents,
Beginning of Period 99,997 121,744
Cash and Cash Equivalents,
End of Period $ 289,148 $ 161,244
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Page 5 of 14
<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Significant Accounting Policies:
Basis of Presentation
The accompanying consolidated condensed financial
statements have been prepared in accordance with the
instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting
of normal reoccurring accruals) considered necessary for a
fair presentation have been included. These statements
should be read in conjunction with the consolidated
financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended
January 30, 1994 as filed with the Securities and Exchange
Commission (File No. 1-8207).
2. Acquisition of Interest in Canadian Company
Effective February 28, 1994, the Company entered into a
partnership and, as a result, acquired 75% of Aikenhead's
Home Improvement Warehouse, now known as The Home Depot
Canada, which was operating seven warehouse-style home
improvement stores at the time of the acquisition in
Toronto, London and Kitchener, Ontario, Canada. Subsequent
to the acquisition, the partnership has opened five stores
which include one store each in Edmonton and Calgary,
Alberta and Toronto, Ontario and two stores in Vancouver,
British Columbia.
At any time after the sixth anniversary of the
purchase, the Company has the option to purchase, or the
other partner has the right to cause the Company to
purchase, the remaining 25% of The Home Depot Canada. The
option price is based on the lesser of fair market value or
a value to be determined by an agreed-upon formula as of
the option exercise date.
The purchase price paid for the 75% interest in The
Home Depot Canada was approximately $162,000,000 and is
being accounted for by the purchase method of accounting.
The excess purchase price over the estimated fair value of
the net assets as of the acquisition date has been recorded
as goodwill and will be amortized over 40 years.
3. Accounting for Investments
In the first quarter of fiscal 1994, the Company
implemented Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity
Securities" (SFAS 115). This standard addresses the
accounting and reporting for investments in equity
securities that have readily determinable fair values and
for all investments in debt securities. Under SFAS 115,
the Company is required to classify its debt and marketable
equity securities in one of three categories: trading,
available for sale, or held to maturity. Trading
securities are bought and held primarily for the purpose of
selling them in the near term. Held to maturity securities
are securities that the Company has the ability and intent
to hold until maturity. All other securities not included
in trading or held to maturity are classified as available
for sale.
Trading securities are recorded at fair value with
unrealized gains and losses included in earnings. Held to
maturity securities are recorded at amortized cost,
adjusted for amortization or accretion of premiums or
discounts. Unrealized gains and losses on securities
available for sale are excluded from earnings and are
reported as a separate component of stockholders' equity
until realized.
SFAS 115 has not had a significant impact on the
Company's results of operations.
Page 6 of 14
<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
4. Earnings Per Share
Earnings per common and common equivalent share are based
on the weighted average number of shares and equivalent
shares outstanding. Common equivalent shares used in the
calculation of earnings per share for the three and nine
month periods ended October 30, 1994 represent options to
purchase shares granted under the Company's employee stock
option and stock purchase plans.
The Company's 4.5% Convertible Subordinated Notes
("Notes"), due February 15, 1997, which were issued in
1992, are common stock equivalents. The Notes may be
redeemed at the election of the Company, as a whole or in
part, at any time on or after March 3, 1995 at the
applicable redemption price. The Notes are convertible
into common stock at a current conversion price of $38.75
per share, subject to adjustment in certain events. For
the three and nine month periods ended October 30, 1994,
the Notes were dilutive and are assumed to be converted as
of the beginning of the respective accounting periods for
purposes of calculating earnings per share. Earnings per
share is calculated by dividing net earnings, adjusted for
tax effected net interest and issue costs on the Notes,
amounting to $5,606,000 and $15,946,000 for the three and
nine month periods ended October 30, 1994, respectively, by
weighted average shares. Weighted average number of common
and common equivalent shares include shares issuable under
the stock plans mentioned above and the 20,774,000 shares
issuable upon conversion of the Notes.
For the three and nine month periods ended October 31,
1993 the Notes were not dilutive and therefore were
excluded from the earnings per share calculation.
5. Reclassifications
Certain balances in prior fiscal years have been
reclassified to conform with the presentation adopted in
the current fiscal year.
Page 7 of 14
<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The data below reflect selected sales data and the percentage relationship
between sales and major categories in the Consolidated Statements of Earnings
and the percentage change in the dollar amounts of each of the items.
<TABLE>
<CAPTION>
Percentage
Increase/Decrease
3 Months Ended 9 Months Ended in Dollar
Oct 30, Oct 31, Oct 30, Oct 31, Amounts
1994 1993 1994 1993 3 Mos 9 Mos
<S> <C> <C> <C> <C> <C> <C>
Selected Consolidated
Statements of Earnings Data
Net Sales 100.0% 100.0% 100.0% 100.0% 39.8% 35.2%
Gross Profit 27.2 27.0 27.5 27.2 40.6 36.8
Operating Expenses:
Selling and Store
Operating 17.8 17.5 17.4 17.3 41.8 36.1
Pre-Opening .4 .4 .3 .3 38.8 65.6
General and Administrative
1.8 2.0 1.8 2.0 30.8 21.8
Total Operating Expenses
20.0 19.9 19.5 19.6 40.7 35.1
Operating Income
7.2 7.1 8.0 7.6 40.5 41.2
Interest Income (Expense):
Interest Income
.2 .6 .3 .7 (49.4) (49.0)
Interest Expense
(.3) (.3) (.3) (.3) 36.0 16.5
Interest, Net
(.1) .3 0.0 .4 N/A N/A
Earnings Before Income Tax
7.1 7.4 8.0 8.0 33.5 34.7
Income Taxes 2.7 2.9 3.1 3.0 29.4 37.4
Net Earnings
4.4% 4.5% 4.9% 5.0% 36.1% 33.0%
Selected Consolidated Sales Data
Number of Customer Transactions
77,162,000 58,947,000 226,793,000 177,057,000 30.9% 28.1%
Average Amount of Sales Per Transaction
$ 41.99 $ 39.31 $ 41.44 $ 39.26 6.8 5.6
Weighted Average
Weekly Sales Per Operating Store
$817,000 $764,000 $828,000 $789,000 6.9 4.9
Weighted Average Sales Per Square Foot
$ 414 $ 401 $ 420 $ 414 3.2 1.4
</TABLE>
Page 8 of 14
<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(CONTINUED)
RESULTS OF OPERATIONS
Sales for the third quarter of fiscal 1994 increased 40% to
$3,240,050,000 compared to sales of $2,317,372,000 for the third
quarter of fiscal 1993. For the first nine months of fiscal
1994 sales increased 35% to $9,399,215,000 compared to sales of
$6,951,346,000 for the comparable period of fiscal 1993. This
sales increase was attributable to new stores (313 at the end of
the third quarter of fiscal 1994 compared to 242 at the end of
the third quarter of fiscal 1993) and a comparable store-for-
store sales increase of 9% for the third quarter of fiscal 1994.
The percentage increase in comparable store sales would have
been 11% for the quarter after excluding all sales from the ten
stores in southern Florida that were significantly affected in
fiscal 1993 by Hurricane Andrew. For the first nine months of
fiscal 1994, comparable store-for-store sales increased 7%, but
would have been 9% without the ten southern Florida stores
referred to above.
Gross profit as a percent of sales was 27.2% for the third
quarter of fiscal 1994 compared to 27.0% for the comparable
period of fiscal 1993. For the first nine months of fiscal
1994, gross profit as a percent of sales was 27.5% compared to
27.2% for the comparable period of fiscal 1993. These increases
were attributable to, among other things, changes in merchandise
mix.
Operating expenses as a percent of sales increased to 20.0% for
the third quarter of fiscal 1994 compared to 19.9% for the
comparable period of fiscal 1993. For the first nine months of
fiscal 1994, operating expenses as a percent of sales decreased
to 19.5% from 19.6% for the comparable period of fiscal 1993.
Selling and store operating expenses as a percent of sales
increased to 17.8% and 17.4% for the third quarter and first
nine months of fiscal 1994, respectively, compared to 17.5% and
17.3% for the third quarter and first nine months of fiscal
1993, respectively. For the quarter, this increase was
primarily attributable to costs related to store relocations and
also an expansion of the Company's advertising programs. For
the nine months, the increase was attributable to seven store
relocations in fiscal 1994 compared to three relocations in the
comparable period of fiscal 1993. Pre-opening expenses as a
percent of sales were 0.4% and 0.3% for both the third quarter
and first nine months of fiscal 1994 and fiscal 1993,
respectively. General and administrative expenses as a percent
of sales decreased to 1.8% for both the third quarter and first
nine months of fiscal 1994 compared to 2.0% for both the
comparable periods of fiscal 1993. These decreases were
attributable to economies from increased sales volume and
continued focus on cost controls.
Interest income as a percent of sales decreased to 0.2% and 0.3%
for the third quarter and first nine months of fiscal 1994,
respectively, from 0.6% and 0.7% for the third quarter and first
nine months of fiscal 1993, respectively. This decrease was
attributable to a lower investment base and lower effective
yields due to shorter maturities. Interest expense as a percent
of sales was 0.3% for both the third quarter and first nine
months of fiscal 1994 and fiscal 1993.
Page 9 of 14
<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(CONTINUED)
RESULTS OF OPERATIONS--(Continued)
The Company's combined Federal and state effective income tax
rate decreased to 38.6% for the third quarter of fiscal 1994
compared to 39.8% for the same period of fiscal 1993 due to the
retroactive implementation of the Omnibus Budget Reconciliation
Act of 1993. For the first nine months of fiscal 1994, the
Company's combined Federal and state effective income tax rate
increased to 38.6% from 37.8% for the same period of fiscal
1993. This increase was attributable to the reason noted above
as well as lower tax advantaged investments. Statement of
Financial Accounting Standards No. 109 "Accounting for Income
Taxes" was implemented in first quarter of fiscal 1993 which
reduced the Federal and state effective rate to 37.8% for the
first nine months of fiscal 1993, but for the adoption of SFAS
No. 109, the combined Federal and state effective rate would
have been 38.2% for the same period.
Net earnings as a percent of sales was 4.4% for the third
quarter of fiscal 1994 compared to 4.5% for the same period of
fiscal 1993. This decrease was attributable to lower net
interest income and higher operating expenses, offset partially
by higher gross profits and lower taxes, as described above.
For the first nine months of both fiscal 1994, net earnings as
a percent sales was 4.9% compared to 5.0% for the comparable
period of fiscal 1993. This decrease was attributable to lower
net interest income and higher income taxes, offset partially by
higher gross profits and lower operating expenses, as described
above.
Earnings per share was $.31 and $1.00 for the third quarter and
first nine months of fiscal 1994, compared to $.23 and $.76 for
the third quarter and first nine months of fiscal 1993,
respectively.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow generated from store operations provides the Company
with a significant source of liquidity. Additionally, a
significant portion of the Company's inventory is financed under
vendor credit terms.
During the first nine months of fiscal 1994, the Company opened
43 stores, acquired seven stores in Canada, relocated seven of
its existing stores and closed one store. During the remainder
of fiscal 1994, the Company plans to open approximately 27
additional new stores and relocate two existing stores. Of the
70 new stores and nine relocations planned for fiscal 1994, it
is expected that 72 will be owned and seven will be leased. The
Company currently plans to open approximately 85 new stores and
may relocate nine stores during fiscal 1995. Although some of
these locations will be leased directly, it is expected that
many may be obtained through the purchase of pre-existing
leasehold interests, the acquisition of land parcels and the
construction or purchase of buildings during fiscal 1994. While
the cost of new stores to be constructed and owned by the
Company varies widely, principally due to land costs, new store
costs (including land, building and fixtures) are currently
estimated to average approximately $12,600,000 per location.
The Company may purchase leasehold interests at varying amounts
depending upon the value of such properties. The cost to
remodel (including leasehold interests) and fixture stores to be
leased is expected to average approximately $4,000,000 per
store. In addition, each new store will require approximately
$2,500,000 to finance inventories, net of vendor financing.
Page 10 of 14
<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES--(Continued)
In addition, the Company paid approximately $162,000,000 on
February 28, 1994 in conjunction with the acquisition of a 75%
interest in Aikenhead's Home Improvement Warehouse (now known as
The Home Depot Canada) in Canada. After six years, the Company
has the option to purchase, or the other partner has the right
to cause the Company to purchase, the remaining 25% of The Home
Depot Canada. At the time of acquisition, Aikenhead's was
operating seven stores and the Company currently operates 12
stores in Canada all under the name, "The Home Depot."
The Company expects to commence a $300,000,000 commercial paper
program prior to the end of the 1994 fiscal year. The program
is backed by a $300,000,000 credit agreement entered into by a
consortium of five banks. As of October 30, 1994, the Company
had $339,774,000 in cash and short-term investments as well as
$87,781,000 in long-term investments. Management believes that
its current cash position, the proceeds from short-term and
long-term investments, commercial paper program, internally
generated funds, and/or the ability to obtain alternate sources
of financing should enable the Company to complete its capital
expenditure programs, including store expansion and renovation,
through the next several fiscal years.
IMPACT OF INFLATION AND CHANGING PRICES
Although the Company cannot accurately determine the precise
effect of inflation on its operations, it does not believe
inflation has had a material effect on sales or results of
operations.
Page 11 of 14
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
During the third quarter of fiscal 1994, no matters
were submitted to a vote of security holders.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10 $300,000 Credit Agreement dated as of
November 2, 1994 among The Home Depot,
Inc., the Banks Listed Therein and
Wachovia Bank of Georgia, N.A., as
Agent (without exhibits)
11.1 Computation of Earnings per Common and
Common Equivalent Share
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the
quarter ended October 30, 1994.
Page 12 of 14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
THE HOME DEPOT, INC.
(Registrant)
By: /s/ Arthur M. Blank
Arthur M. Blank
President
/s/ Ronald M. Brill
Ronald M. Brill
Executive Vice President
Chief Financial Officer
(Date)
Page 13 of 14
<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit Description
10 $300,000,000 Credit Agreement dated as of
November 2, 1994 among The Home Depot, Inc., the
Banks Listed Therein and Wachovia Bank of Georgia,
N.A., as Agent (without exhibits)
11.1 Computation of Earnings per Common and Common
Equivalent Share
27 Financial Data Schedule
Page 14 of 14
<PAGE>
Exhibit 10
$300,000,000
CREDIT AGREEMENT
dated as of
November 2, 1994
among
THE HOME DEPOT, INC.,
The Banks Listed Herein
and
WACHOVIA BANK OF GEORGIA, N.A.,
as Agent
TABLE OF CONTENTS
CREDIT AGREEMENT
Page
ARTICLE I
DEFINITIONS . . . . . . . . . . . 1
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Accounting Terms and Determinations . . . . . . 15
SECTION 1.03. References . . . . . . . . . . . . . . . . . . 15
SECTION 1.04. Use of Defined Terms . . . . . . . . . . . . . 16
SECTION 1.05. Terminology . . . . . . . . . . . . . . . . . . 16
ARTICLE II
THE CREDITS . . . . . . . . . . . 16
SECTION 2.02. Method of Borrowing . . . . . . . . . . . . . . 16
SECTION 2.03. Money Market Loans . . . . . . . . . . . . . . 19
SECTION 2.04. Notes . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.05. Maturity of Loans . . . . . . . . . . . . . . . 23
SECTION 2.06. Interest Rates . . . . . . . . . . . . . . . . 24
SECTION 2.07. Fees; Calculations . . . . . . . . . . . . . . 25
SECTION 2.08. Optional Termination or Reduction of
Commitments . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.09. Termination of Commitments . . . . . . . . . . 26
SECTION 2.10. Optional Prepayments . . . . . . . . . . . . . 26
SECTION 2.11. Mandatory Prepayments . . . . . . . . . . . . . 27
SECTION 2.12. General Provisions as to Payments . . . . . . . 27
SECTION 2.13. Computation of Interest and Fees . . . . . . . 29
ARTICLE III
(i)
CONDITIONS TO BORROWINGS . . . . . . . . 29
SECTION 3.01. Conditions to First Borrowing . . . . . . . . . 29
SECTION 3.02. Conditions to All Borrowings . . . . . . . . . 30
ARTICLE IV-A
REPRESENTATIONS AND WARRANTIES . . . . . . 31
SECTION 4.01. Corporate Existence and Power . . . . . . . . . 31
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.03. Binding Effect . . . . . . . . . . . . . . . . 32
SECTION 4.04. Financial Information . . . . . . . . . . . . . 32
SECTION 4.05. No Litigation . . . . . . . . . . . . . . . . . 32
SECTION 4.06. Compliance with ERISA . . . . . . . . . . . . . 32
SECTION 4.07. Compliance with Laws; Payment of Taxes . . . . 33
SECTION 4.08. Significant Subsidiaries . . . . . . . . . . . 33
SECTION 4.09. Investment Company Act . . . . . . . . . . . . 33
SECTION 4.10. Public Utility Holding Company Act . . . . . . 33
SECTION 4.11. Ownership of Property; Liens . . . . . . . . . 34
SECTION 4.12. No Default . . . . . . . . . . . . . . . . . . 34
SECTION 4.13. Full Disclosure . . . . . . . . . . . . . . . . 34
SECTION 4.14. Environmental Matters . . . . . . . . 34
SECTION 4.15. Capital Stock . . . . . . . . . . . . . . . . . 35
SECTION 4.16. Margin Stock . . . . . . . . . . . . . . . . . 35
SECTION 4.17. Insolvency . . . . . . . . . . . . . . . . . . 35
ARTICLE IV-B
REPRESENTATIONS AND WARRANTIES OF THE BANKS AND THE AGENT 35
SECTION 4.18. Agent and Bank Corporate Existence and Power . 36
(ii)
SECTION 4.19. Agent and Bank Binding Effect . . . . . . . . . 36
ARTICLE V
COVENANTS . . . . . . . . . . . . 36
SECTION 5.01. Information . . . . . . . . . . . . . . . . . . 36
SECTION 5.02. Inspection of Property, Books and Records . . . 38
SECTION 5.03. Ratio of Consolidated Funded Debt to
Consolidated Total Tangible Capital . . . . . . . . . . 38
SECTION 5.04. Negative Pledge . . . . . . . . . . . . . . . . 38
SECTION 5.05. Maintenance of Existence . . . . . . . . . . . 39
SECTION 5.06. Dissolution . . . . . . . . . . . . . . . . . . 40
SECTION 5.07. Consolidations, Mergers and Sales of Assets . . 40
SECTION 5.08. Use of Proceeds . . . . . . . . . . . . . . . . 40
SECTION 5.09. Compliance with Laws; Payment of Taxes . . . . 40
SECTION 5.10. Insurance . . . . . . . . . . . . . . . . . . . 41
SECTION 5.11. Maintenance of Property . . . . . . . . . 41
SECTION 5.12. Environmental Notices . . . . . . . . . . . . . 41
SECTION 5.13. Environmental Matters . . . . . . . . . . . . . 41
SECTION 5.14. Environmental Release . . . . . . . . . . . . . 42
SECTION 5.15. Debt of Subsidiaries . . . . . . . . . . . . . 42
ARTICLE VI
DEFAULTS . . . . . . . . . . . . 42
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . 42
SECTION 6.02. Notice of Default . . . . . . . . . . . . . . . 45
ARTICLE VII
THE AGENT . . . . . . . . . . . . 45
SECTION 7.01. Appointment; Powers and Immunities . . . . . . 45
(iii)
SECTION 7.02. Reliance by Agent . . . . . . . . . . . . . . . 46
SECTION 7.03. Defaults . . . . . . . . . . . . . . . . . . . 46
SECTION 7.04. Rights of Agent as a Bank . . . . . . . . . . . 46
SECTION 7.05. Indemnification . . . . . . . . . . . . . . . . 47
SECTION 7.06 CONSEQUENTIAL DAMAGES . . . . . . . . . . . . . 47
SECTION 7.07. Payee of Note Treated as Owner . . . . . . . . 47
SECTION 7.08. Nonreliance on Agent and Other Banks . . . . . 48
SECTION 7.09. Failure to Act . . . . . . . . . . . . . . . . 48
SECTION 7.10. Resignation or Removal of Agent . . . . . . . . 48
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION . . . . . 49
SECTION 8.01. Basis for Determining Interest Rate Inadequate
or Unfair . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 8.02. Illegality . . . . . . . . . . . . . . . . . . 49
SECTION 8.03. Increased Cost and Reduced Return . . . . . . . 50
SECTION 8.04. Base Rate Loans Substituted for Euro-Dollar
Loans . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 8.05. Compensation . . . . . . . . . . . . . . . . . 53
ARTICLE IX
MISCELLANEOUS . . . . . . . . . . . 53
SECTION 9.01. Notices . . . . . . . . . . . . . . . . . . . . 53
SECTION 9.02. No Waivers . . . . . . . . . . . . . . . . . . 53
SECTION 9.03. Expenses; Documentary Taxes . . . . . . . . . . 54
SECTION 9.04. Indemnification . . . . . . . . . . . . . . . . 54
SECTION 9.05. Sharing of Setoffs . . . . . . . . . . . . . . 58
SECTION 9.06. Amendments and Waivers . . . . . . . . . . . . 58
SECTION 9.07. No Margin Stock Collateral . . . . . . . . . . 59
(iv)
SECTION 9.08. Successors and Assigns . . . . . . . . . . . . 59
SECTION 9.09. Confidentiality . . . . . . . . . . . . . . . . 62
SECTION 9.10. Representation by Banks . . . . . . . . . . . . 62
SECTION 9.11. Obligations Several . . . . . . . . . . . . . . 63
SECTION 9.12. Georgia Law . . . . . . . . . . . . . . . . . . 63
SECTION 9.13. Severability . . . . . . . . . . . . . . . . . 63
SECTION 9.14. Interest . . . . . . . . . . . . . . . . . . . 63
SECTION 9.15. Interpretation . . . . . . . . . . . . . . . . 64
SECTION 9.16. Consent to Jurisdiction . . . . . . . . . . . 64
SECTION 9.17. Counterparts . . . . . . . . . . . . . . . . . 64
EXHIBIT A-1 Form of Syndicated Loan Note
EXHIBIT A-2 Form of Money Market Loan Note
EXHIBIT B Form of Opinion of Counsel for the Borrower
EXHIBIT C Form of Opinion of Special Counsel for the Agent
EXHIBIT D Form of Assignment and Acceptance
EXHIBIT E Form of Notice of Borrowing
EXHIBIT F Form of Compliance Certificate
EXHIBIT G Form of Closing Certificate
EXHIBIT H Form of Money Market Quote Request
EXHIBIT I Form of Money Market Quote
Schedule 4.08 Significant Subsidiaries
(v)
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of November 2, 1994 among THE
HOME DEPOT, INC., the BANKS listed on the signature pages hereof
and WACHOVIA BANK OF GEORGIA, N.A., as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in
this Section 1.01 shall, for all purposes of this Agreement and
any amendment hereto (except as herein otherwise expressly
provided or unless the context otherwise requires), have the
meanings set forth herein:
"Adjusted London Interbank Offered Rate" applicable to
any Interest Period means a rate per annum equal to the quotient
obtained (rounded upwards, if necessary, to the next higher
1/16th of 1%) by dividing (i) the applicable London Interbank
Offered Rate for such Interest Period by (ii) 1.00 minus the
Euro-Dollar Reserve Percentage. The Adjusted London Interbank
Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve
Percentage.
"Affiliate" means (i) any Person that directly, or
indirectly through one or more intermediaries, controls the
Borrower (a "Controlling Person"), (ii) any Person (other than
the Borrower or a Subsidiary) which is controlled by or is under
common control with a Controlling Person, or (iii) any Person
(other than a Subsidiary) of which the Borrower owns, directly or
indirectly, 20% or more of the common stock or equivalent equity
interests. As used herein, the term "control" means 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.
"Agent" means Wachovia Bank of Georgia, N.A., a
national banking association organized under the laws of the
United States of America, in its capacity as agent for the Banks
hereunder, and its successors and permitted assigns in such
capacity.
"Agent's Letter Agreement" means that certain letter
agreement, dated as of June 21, 1994 between the Borrower and the
Agent relating to the structure of the Loans, and certain fees
from time to time payable by the Borrower to the Agent, together
with all amendments and modifications thereto.
"Agreement" means this Credit Agreement, together with
all amendments and supplements hereto.
"Applicable Margin" means (i) with respect to Base Rate
Loans, 0%; and (ii) with respect to Euro-Dollar Loans, (w) if the
Borrower's ratio of Consolidated Funded Debt to Consolidated
Total Tangible Capital is equal to or less than 0.25 to 1.0,
0.15%, (x) if the Borrower's ratio of Consolidated Funded Debt to
Consolidated Total Tangible Capital is greater than or equal to
0.26 to 1.0 but equal to or less than 0.35 to 1.0, 0.175%, (y) if
the Borrower's ratio of Consolidated Funded Debt to Consolidated
Total Tangible Capital is greater than or equal to 0.36 to 1.0
but equal to or less than 0.45 to 1.0, 0.20%, and (z) if the
Borrower's ratio of Consolidated Funded Debt to Consolidated
Total Tangible Capital is greater than 0.46 to 1.0, 0.25%. The
determination of the Applicable Margin from time to time shall be
made in accordance with Section 2.07(b).
"Assignee" has the meaning set forth in Section
9.08(c).
"Assignment and Acceptance" means an Assignment and
Acceptance executed in accordance with Section 9.08(c) in the
form attached hereto as Exhibit D.
"Authority" has the meaning set forth in Section 8.02.
"Bank" means each bank listed on the signature pages
hereof as having a Commitment, and its successors and assigns.
"Base Rate" means for any Base Rate Loan for any day,
the rate per annum equal to the higher as of such day of (i) the
Prime Rate, and (ii) one-half of one percent above the Federal
Funds Rate. For purposes of determining the Base Rate for any
day, changes in the Prime Rate shall be effective on the date of
each such change.
"Base Rate Loan" means a Loan to be made as a Base Rate
Loan pursuant to the applicable Notice of Borrowing, Section
2.02(f), or Article VIII, as applicable.
"Borrower" means The Home Depot, Inc., a Delaware
corporation, and its successors and its permitted assigns.
"Borrowing" means a borrowing hereunder consisting of
Loans made to the Borrower at the same time by the Banks pursuant
to Article II. A Borrowing is a Base Rate Borrowing" if such
Loans are Base Rate Loans or a "Euro-Dollar Borrowing" if such
Loans are Euro-Dollar Loans. A Borrowing is a "Syndicated
Borrowing" if it is made pursuant to Section 2.01. A Borrowing
is a "Money Market Borrowing" if it is made pursuant to Section
2.03.
2
"Capital Stock" means any nonredeemable capital stock
of the Borrower or any Consolidated Subsidiary (to the extent
issued to a Person other than the Borrower), whether common or
preferred.
"CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. 9601 et. seq. and its
implementing regulations and amendments.
"CERCLIS" means the Comprehensive Environmental
Response Compensation and Liability Inventory System established
pursuant to CERCLA.
"Change in Control" means (i) any Person or two or more
Persons acting in concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934) of
40.0% or more of the outstanding shares of the voting stock of
the Borrower; or (ii) as of any date a majority of the Board of
Directors of the Borrower consists of individuals who were not
either (A) directors of the Borrower as of the corresponding date
of the previous year, (B) selected or nominated to become
directors by the Board of Directors of the Borrower of which a
majority consisted of individuals described in clause (A), or (C)
selected or nominated to become directors by the Board of
Directors of the Borrower of which a majority consisted of
individuals described in clause (A) and individuals described in
clause (B).
"Change of Law" shall have the meaning set forth in
Section 8.02.
"Closing Certificate" has the meaning set forth in
Section 3.01(e).
"Closing Date" means November 2, 1994.
"Code" means the Internal Revenue Code of 1986, as
amended, or any successor Federal tax code.
"Commitment" means, with respect to each Bank, the
amount set forth opposite the name of such Bank on the signature
pages hereof, as such amount may be reduced from time to time
pursuant to Sections 2.07 and 2.08.
"Compliance Certificate" has the meaning set forth in
Section 5.01(c).
"Consolidated Funded Debt" means at any date the Debt
of the Borrower and its Consolidated Subsidiaries consisting of
(i) the types of Debt described in clauses (i),(ii), (iii) and
(iv) of the definition of Debt contained in this Agreement, (ii)
3
an amount equal to 800.0% of the aggregate of all obligations
under operating leases for the Fiscal Year following the last
Fiscal Year for which audited financial statements have been
supplied to the Banks as contained in the Borrower's Annual
Report on Form 10K, and (iii) Guaranties of Debt of other Persons
of the types described in clauses (i) and (ii) above, determined
on a consolidated basis as of such date.
"Consolidated Operating Profits" means, for any period,
the Operating Profits of the Borrower and its Consolidated
Subsidiaries.
"Consolidated Subsidiary" means at any date any
Subsidiary or other entity the accounts of which, in accordance
with GAAP, would be consolidated with those of the Borrower in
its consolidated financial statements as of such date.
"Consolidated Tangible Net Worth" means, at any time,
Stockholders' Equity, less the sum of the value, as set forth or
reflected on the most recent consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries, prepared in
accordance with GAAP, of:
(A) Any surplus resulting from any write-up of
assets subsequent to January 30, 1994;
(B) All assets which would be treated as
intangible assets for balance sheet presentation purposes under
GAAP, including without limitation goodwill (whether representing
the excess of cost over book value of assets acquired, or
otherwise), trademarks, tradenames, copyrights, patents and
technologies, and unamortized debt discount and expense;
(C) To the extent not included in (B) of this
definition, any amount at which shares of Capital Stock of the
Borrower appear as an asset on the balance sheet of the Borrower
and its Consolidated Subsidiaries;
(D) Loans or advances to stockholders, directors,
officers or employees; and
(E) To the extent not included in (B) of this
definition, deferred expenses.
"Consolidated Total Assets" means, at any time, the
total assets of the Borrower and its Consolidated Subsidiaries,
determined on a consolidated basis, as set forth or reflected on
the most recent consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries, prepared in accordance with GAAP.
4
"Consolidated Total Tangible Capital" means, at any
time, the sum of (i) Consolidated Tangible Net Worth, and (ii)
Consolidated Funded Debt.
"Controlled Group" means all members of a controlled
group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414 of
the Code.
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in
the ordinary course of business, (iv) the capitalized lease
obligations of such Person as lessee under capital leases, (v)
all obligations of such Person to reimburse any bank or other
Person in respect of amounts payable under a banker's
acceptance, (vi) all Redeemable Preferred Stock of such Person
(in the event such Person is a corporation), (vii) all
obligations of such Person to reimburse any bank or other Person
in respect of amounts that have actually been paid under a letter
of credit or similar instrument, (viii) all Debt of others
secured by a Lien on any asset of such Person, whether or not
such Debt is assumed by such Person (provided, that, for purposes
of this clause (viii), non-recourse Debt in excess of the value
of the asset securing such Debt shall not be counted), and (ix)
all Debt of others Guaranteed by such Person.
"Default" means any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or waived,
become an Event of Default.
"Default Rate" means, with respect to any Loan, on any
day, the sum of 2% plus the interest rate (including the
Applicable Margin) applicable to such Loan hereunder.
"Dividends" means for any period the sum of all
dividends paid or declared during such period in respect of any
Capital Stock and Redeemable Preferred Stock (other than
dividends paid or payable in the form of additional Capital
Stock).
"Dollars" or "$" means dollars in lawful currency of
the United States of America.
"Domestic Business Day" means any day except a
Saturday, Sunday or other day on which commercial banks in
Georgia are authorized by law to close.
5
"Environmental Authority" means any foreign, federal,
state, local or regional government that exercises any form of
jurisdiction or authority under any Environmental Requirement.
"Environmental Authorizations" means all licenses,
permits, orders, approvals, notices, registrations or other legal
prerequisites for conducting the business of the Borrower or any
Subsidiary required by any Environmental Requirement.
"Environmental Judgments and Orders" means all
judgments, decrees or orders arising from or in any way
associated with any Environmental Requirements, whether or not
entered upon consent, or written agreements with an Environmental
Authority or other entity arising from or in any way associated
with any Environmental Requirement, whether or not incorporated
in a judgment, decree or order.
"Environmental Liabilities" means any liabilities,
whether accrued, contingent or otherwise, arising from and in any
way associated with any Environmental Requirements.
"Environmental Notices" means notice from any
Environmental Authority or by any other person or entity, of
possible or alleged noncompliance with or liability under any
Environmental Requirement, including without limitation any
complaints, citations, demands or requests from any Environmental
Authority or from any other person or entity for correction of
any violation of any Environmental Requirement or any
investigations concerning any violation of any Environmental
Requirement.
"Environmental Proceedings" means any judicial or
administrative proceedings arising from or in any way associated
with any Environmental Requirement.
"Environmental Releases" means releases as defined in
CERCLA or under any applicable state or local environmental law
or regulation.
"Environmental Requirements" means any legal
requirement relating to health, safety or the environment and
applicable to the Borrower, any Subsidiary or the Properties,
including but not limited to any such requirement under CERCLA or
similar state legislation and all federal, state and local laws,
ordinances, regulations, orders, writs, decrees and common law.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, or any successor law.
Any reference to any provision of ERISA shall also be deemed to
be a reference to any successor provision or provisions thereof.
6
"Euro-Dollar Business Day" means any Domestic Business
Day on which dealings in Dollar deposits are carried out in the
London interbank market.
"Euro-Dollar Loan" means a Loan to be made as a
Euro-Dollar Loan pursuant to the applicable Notice of Borrowing.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement for a member bank of the Federal Reserve
System in respect of "Eurocurrency Liabilities" (or in respect of
any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is
determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any
Bank to United States residents). The Adjusted London Interbank
Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve
Percentage.
"Event of Default" has the meaning set forth in Section
6.01.
"Federal Funds Rate" means, for any day, the rate per
annum (rounded upward, if necessary, to the next higher 1/100th
of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if the
day for which such rate is to be determined is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business Day,
and (ii) if such rate is not so published for any day, the
Federal Funds Rate for such day shall be the average rate charged
to the Agent on such day on such transactions, as determined by
the Agent.
"Fiscal Quarter" means any fiscal quarter of the
Borrower.
"Fiscal Year" means any fiscal year of the Borrower.
"GAAP" means generally accepted accounting principles
applied on a basis consistent with those which, in accordance
with Section 1.02, are to be used in making the calculations for
purposes of determining compliance with the terms of this
Agreement.
7
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly
guaranteeing any Debt or other obligation of any other Person
and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or other obligation of
such other Person (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to
take-or-pay, or to maintain financial statement conditions or
otherwise) or (ii) to the extent that such an arrangement would
be considered to be a guaranty under GAAP, entered into for the
purpose of assuring in any other manner the obligee of such Debt
or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part),
provided that the term Guarantee shall not include endorsements
for collection or deposit in the ordinary course of business.
The term "Guarantee" used as a verb has a corresponding meaning.
For purposes hereof, the amount of any Guarantee shall be deemed
to be equal to the lesser of (i) any stated amount of the
guarantee or (ii) the outstanding amount of the obligation
directly or indirectly guaranteed.
"Hazardous Materials" includes, without limitation, (a)
solid or hazardous waste, as defined in the Resource Conservation
and Recovery Act of 1980, 42 U.S.C. 6901 et seq. and its
implementing regulations and amendments, or in any applicable
state or local law or regulation, (b) "hazardous substance",
"pollutant", or "contaminant" as defined in CERCLA, or in any
applicable state or local law or regulation, (c) gasoline, or any
other petroleum product or by-product, including, crude oil or
any fraction thereof, or (d) pesticides, as defined in the
Federal Insecticide, Fungicide, and Rodenticide Act of 1975, or
in any applicable state or local law or regulation, as each such
Act, statute or regulation may be amended from time to time.
"Interest Period" means: (1) with respect to each
Euro-Dollar Borrowing, the period commencing on the date of such
Borrowing and ending on the numerically corresponding day in the
first, second, third or sixth month thereafter, as the Borrower
may elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period (subject to paragraph (c)
below) which would otherwise end on a day which is not a
Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
8
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall, subject to
paragraph (c) below, end on the last Euro-Dollar Business
Day of the appropriate subsequent calendar month; and
(c) no Interest Period may be selected which begins
before the Termination Date and would otherwise end after
the Termination Date.
(2) with respect to each Base Rate Borrowing, the period
commencing on the date of such Borrowing and ending 30 days
thereafter; provided that: ________
(a) any Interest Period (subject to paragraph (b)
below) which would otherwise end on a day which is not a
Domestic Business Day shall be extended to the next
succeeding Domestic Business Day; and
(b) no Interest Period which begins before the
Termination Date and would otherwise end after the
Termination Date may be selected.
"Investment" means any investment in any other Person,
by means of purchase or acquisition of obligations of or
securities issued by such Person, capital contribution to such
Person, loan or advance to such Person, making of a time deposit
with such Person, Guarantee or assumption of any obligation of
such Person.
"Lending Office" means, as to each Bank, its office
located at its address set forth on the signature pages hereof
(or identified on the signature pages hereof as its Lending
Office or such other office as such Bank may hereafter designate
as its Lending Office) by notice to the Borrower and the Agent.
"Lien" means, with respect to any asset, any mortgage,
deed to secure debt, deed of trust, lien, pledge, charge,
security interest, security title, preferential arrangement which
has the practical effect of constituting a security interest or
encumbrance, or encumbrance or servitude of any kind in respect
of such asset to secure or assure payment of a Debt or a
Guarantee, whether by consensual agreement or by operation of
statute or other law, or by any agreement, contingent or
otherwise, to provide any of the foregoing. For the purposes of
this Agreement, the Borrower or any Subsidiary shall be deemed to
own subject to a Lien any asset which it has acquired or holds
subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title
retention agreement relating to such asset; exclusive, however,
of (i) any liens for taxes or governmental charges either not yet
9
delinquent or which are being contested in good faith by
appropriate proceedings, (ii) liens not securing Debt which are
created by or relating to any legal proceeding which at the time
are being contested in good faith by appropriate proceedings or
(iii) any other statutory or inchoate lien securing amounts other
than Debt which are not delinquent.
"Loan" means a Base Rate Loan, Euro-Dollar Loan,
Syndicated Loan or Money Market Loan, and "Loans" means Base Rate
Loans, Euro-Dollar Loans, Syndicated Loans or Money Market Loans,
or any or all of them, as the context shall require.
"Loan Documents" means this Agreement, the Notes, any
other document to which the Borrower is a party evidencing,
relating to or securing the Loans, and any other document or
instrument delivered from time to time in connection with this
Agreement, the Notes or the Loans, as such documents and
instruments may be amended or supplemented from time to time.
"London Interbank Offered Rate" applicable to any Euro-
Dollar Loan means for the Interest Period of such Euro-Dollar
Loan, the rate per annum determined on the basis of the offered
rate for deposits in Dollars of amounts equal or comparable to
the principal amount of such Euro-Dollar Loan offered for a term
comparable to such Interest Period, which rates appear on the
Reuters Screen LIBO Page as of 11:00 A.M., London time, 2 Euro-
Dollar Business Days prior to the first day of such Interest
period, provided that (i) if more than one such offered rate
appears on the Reuters Screen LIBO Page, the "London Interbank
Offered Rate" will be the arithmetic average (rounded upward, if
necessary, to the next higher 1/100th of 1%) of such offered
rates; (ii) if no such offered rates appear on such page, the
"London Interbank Offered Rate" for such Interest Period will be
the arithmetic average (rounded upward, if necessary, to the next
higher 1/100th of 1%) of rates quoted by not less than 2 major
banks in New York City, selected by the Agent, at approximately
10:00 A.M., New York City time, 2 Euro-Dollar Business Days prior
to the first day of such Interest Period, for deposits in Dollars
offered to leading European banks for a period comparable so such
Interest Period in an amount comparable to the principal amount
of such Euro-Dollar Loan. .
"Margin Stock" means "margin stock" as defined in
Regulations G, T, U or X.
"Material Adverse Effect" means, with respect to any
event, act, condition or occurrence of whatever nature (including
any adverse determination in any litigation, arbitration, or
governmental investigation or proceeding), whether singly or in
conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or
not related, a material adverse change in, or a material adverse
10
effect upon, any of (a) the financial condition, operations,
business, or properties of the Borrower and its Consolidated
Subsidiaries taken as a whole, (b) the rights and remedies of the
Agent or the Banks under the Loan Documents, or the ability of
the Borrower to perform its obligations under the Loan Documents
to which it is a party, as applicable, or (c) the legality,
validity or enforceability of any Loan Document, which, in the
case of clauses (b) and (c), would reasonably be expected to
result in either the Agent or any Bank not obtaining the
practical realization of the significant benefits purported to be
provided thereby; provided, however, that in no event shall
either the Borrower's denial of access to the commercial paper
market or the concequences thereof, in and of itself, be deemed
to constitute a Material Adverse Effect.
"Money Market Loan Notes" means the promissory notes of
the Borrower, substantially in the form of Exhibit A-2,
evidencing the obligation of the Borrower to repay Money Market
Loans, together with all amendments, consolidations,
modifications, renewals and supplements thereto.
"Money Market Loans" means Loans made pursuant to the
terms and conditions set forth in Section 2.03 hereof.
"Money Market Quote" has the meaning specified in
Section 2.03.
"Money Market Quote Request" has the meaning specified
in Section 2.03.
"Money Market Rate" has the meaning specified in
Section 2.03.
"Multiemployer Plan" shall have the meaning set forth
in Section 4001(a)(3) of ERISA.
"Net Income" means, as applied to any Person for any
period, the aggregate amount of net income of such Person, after
taxes, for such period, as determined in accordance with GAAP.
"Notes" means, individually and collectively, as the
context shall require, each of the Syndicated Loan Notes and
Money Market Loan Notes.
"Notice of Borrowing" has the meaning set forth in
Section 2.02.
"Operating Profits" means, as applied to any Person for
any period, the operating income of such Person for such period,
as determined in accordance with GAAP.
11
"Participant" has the meaning set forth in Section
9.08(b).
"PBGC" means the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, a corporation, a
partnership, an unincorporated association, a trust or any other
entity or organization, including, but not limited to, a
government or political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time an employee pension benefit
plan which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and is
either (i) maintained by a member of the Controlled Group for
employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes
contributions and to which a member of the Controlled Group is
then making or accruing an obligation to make contributions or
has within the preceding 5 plan years made contributions.
"Prime Rate" refers to that interest rate so
denominated and set by Wachovia from time to time as an interest
rate basis for borrowings. The Prime Rate is but one of several
interest rate bases used by Wachovia. Wachovia lends at interest
rates above and below the Prime Rate.
"Properties" means all real property owned, leased or
otherwise used or occupied by the Borrower or any Subsidiary,
wherever located.
"Redeemable Preferred Stock" of any Person means any
preferred stock issued by such Person (i) required (by the terms
of the governing instruments or at the option of the holder) to
be mandatorily redeemed for cash at any time prior to the
Termination Date (by sinking fund or similar payments or
otherwise) or (ii) redeemable at the option of the holder thereof
at any time prior to the Termination Date.
"Refunding Loan" means a new Loan made on the day on
which an outstanding Loan is maturing or a Base Rate Borrowing is
being converted to a Fixed Rate Borrowing, if and to the extent
that the proceeds thereof are used for the purpose of paying such
maturing Loan or Loan being converted, excluding any difference
between the amount of such maturing Loan or Loan being converted
and any greater amount being borrowed on such day and actually
either being made available to the Borrower pursuant to Section
2.02(c) or remitted to the Agent as provided in Section 2.12, in
each case as contemplated in Section 2.02(d).
12
"Regulation D" means Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from time
to time, together with all official rulings and interpretations
issued thereunder.
"Regulation G" means Regulation G of the Board of
Governors of the Federal Reserve System, as in effect from time
to time, together with all official rulings and interpretations
issued thereunder.
"Regulation T" means Regulation T of the Board of
Governors of the Federal Reserve System, as in effect from time
to time, together with all official rulings and interpretations
issued thereunder.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from time
to time, together with all official rulings and interpretations
issued thereunder.
"Regulation X" means Regulation X of the Board of
Governors of the Federal Reserve System, as in effect from time
to time, together with all official rulings and interpretations
issued thereunder.
"Required Banks" means at any time Banks having at
least 66 2/3% of the aggregate amount of the Commitments or, if
the Commitments are no longer in effect, Banks holding at least
66 2/3% of the aggregate outstanding principal amount of the sum
of (i) Syndicated Loans and (ii) Money Market Loans.
"Significant Subsidiary" means any Subsidiary with
respect to which, as of the most recently completed Fiscal
Quarter, either (i) the Borrower's and its other Subsidiaries'
investments in and advances to the Subsidiary exceed 10% of Total
Assets, or (y) the Borrower's and its other Subsidiaries'
proportionate share of Total Assets (after intercompany
eliminations) of the Subsidiary exceeds 10% of Total Assets;
provided, however, that if there are two or more Subsidiaries
with respect to which, as of the most recently completed Fiscal
Quarter, either (i) the Borrower's and its other Subsidiaries
investments in and advances to each such Subsidiary exceed 5% and
are less than 10% of Total Assets, but the aggregate of such
investments in and advances to such Subsidiaries exceeds 15% of
Total Assets, or (ii) the Borrower's and its other Subsidiaries'
proportionate share of Total Assets (after intercompany
eliminations) of each such Subsidiary exceeds 5% and is less than
10% of Total Assets, but the aggregate proportionate share of
Total Assets of such Subsidiaries exceeds 15% of Total Assets,
then in either case, each such Subsidiary shall constitute a
Significant Subsidiary.
13
"Stated Maturity Date" means, with respect to any Money
Market Loan, the Stated Maturity Date therefor specified by the
Bank in the applicable Money Market Quote.
"Stockholders' Equity" means, at any time, the
stockholders' equity of the Borrower and its Consolidated
Subsidiaries, as set forth or reflected on the most recent
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries prepared in accordance with GAAP, but excluding any
Redeemable Preferred Stock of the Borrower or any of its
Consolidated Subsidiaries. Stockholders' equity generally would
include, but not be limited to (i) the par or stated value of all
outstanding Capital Stock, (ii) capital surplus, (iii) retained
earnings, and (iv) various deductions such as (A) purchases of
treasury stock, (B) valuation allowances, (C) receivables due
from an employee stock ownership plan, (D) employee stock
ownership plan debt guarantees, and (E) translation adjustments
for foreign currency transactions.
"Subsidiary" means any corporation or other entity of
which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time
directly or indirectly owned by the Borrower.
"Syndicated Loans" means Base Rate Loans or Euro-Dollar
Loans made pursuant to the terms and conditions set forth in
Section 2.01.
"Syndicated Loan Notes" means the promissory notes of
the Borrower, substantially in the form of Exhibit A-1,
evidencing the obligation of the Borrower to repay Syndicated
Loans, together with all amendments, consolidations,
modifications, renewals and supplements thereto.
"Termination Date" means November 3, 1997, or such
later date to which it may be extended at the option of the Banks
subject and pursuant to Section 205(c).
"Third Parties" means all lessees, sublessees,
licensees and other users of the Properties, excluding those
users of the Properties in the ordinary course of the Borrower's
business and on a temporary basis.
"Transferee" has the meaning set forth in Section
9.08(d).
"Total Assets" means the total assets of the Borrower
and its Consolidated Subsidiaries, determined as of the most
recently completed Fiscal Quarter in accordance with GAAP.
14
"Unfunded Vested Liabilities" means, with respect to
any Plan at any time, the amount (if any) by which (i) the
present value of all vested nonforfeitable benefits under such
Plan exceeds (ii) the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of a member of the
Controlled Group to the PBGC or the Plan under Title IV of ERISA.
"Unused Commitment" means at any date, with respect to
any Bank, an amount equal to its Commitment less the aggregate
outstanding principal amount of its Syndicated Loans.
"Wachovia" means Wachovia Bank of Georgia, N.A., a
national banking association, and its successors.
"Wholly Owned Subsidiary" means any Subsidiary all of
the shares of capital stock or other ownership interests of which
(except directors' qualifying shares) are at the time directly or
indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations.
Unless otherwise specified herein, all terms of an accounting
character used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared,
in accordance with GAAP, applied on a basis consistent (except
for changes concurred in by the Borrower's independent public
accountants or otherwise required by a change in GAAP) with the
most recent audited consolidated financial statements of the
Borrower and its Consolidated Subsidiaries delivered to the Banks
unless with respect to any such change concurred in by the
Borrower's independent public accountants or required by GAAP, in
determining compliance with any of the provisions of this
Agreement or any of the other Loan Documents: (i) the Borrower
shall have objected to determining such compliance on such basis
at the time of delivery of such financial statements, or (ii) the
Required Banks shall so object in writing within 30 days after
the delivery of such financial statements, in either of which
events such calculations shall be made on a basis consistent with
those used in the preparation of the latest financial statements
as to which such objection shall not have been made (which, if
objection is made in respect of the first financial statements
delivered under Section 5.01 hereof, shall mean the financial
statements referred to in Section 4.04).
SECTION 1.03. References. Unless otherwise indicated,
references in this Agreement to "Articles", "Exhibits",
"Schedules", "Sections" and other Subdivisions are references to
articles, exhibits, schedules, sections and other subdivisions
hereof.
15
SECTION 1.04. Use of Defined Terms. All terms defined
in this Agreement shall have the same defined meanings when used
in any of the other Loan Documents, unless otherwise defined
therein or unless the context shall require otherwise.
SECTION 1.05. Terminology. All personal pronouns used
in this Agreement, whether used in the masculine, feminine or
neuter gender, shall include all other genders; the singular
shall include the plural, and the plural shall include the
singular. Titles of Articles and Sections in this Agreement are
for convenience only, and neither limit nor amplify the
provisions of this Agreement.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. Each Bank severally
agrees, on the terms and conditions set forth herein, to make
Syndicated Loans to the Borrower from time to time before the
Termination Date; provided that, (i) immediately after each such
Syndicated Loan is made, the aggregate principal amount of
Syndicated Loans by such Bank shall not exceed the amount of its
Commitment, and (ii) the aggregate amount of all Syndicated Loans
and Money Market Loans outstanding shall not exceed the aggregate
of all of the Commitments. Each (A) Base Rate Borrowing under
this Section 2.01 shall be in an aggregate principal amount of
$5,000,000 or any larger multiple of $500,000 and (B) Euro-Dollar
Borrowing shall be in an aggregate principal amount of $5,000,000
or any larger multiple of $500,000 (except that any such
Syndicated Borrowings may be in the aggregate amount of the
Unused Commitments) and shall be made from the several Banks
ratably in proportion to their respective Commitments. Any
Bank's Money Market Loans shall not reduce such Bank's
Commitment, or be included in calculating its Unused Commitment,
for purposes of future Borrowings under this Section 2.01.
Within the foregoing limits, the Borrower may borrow under this
Section 2.01, repay or, to the extent permitted by Section 2.10,
prepay Syndicated Loans and reborrow under this Section 2.01 at
any time before the Termination Date.
SECTION 2.02. Method of Borrowing. (a) The Borrower
shall give the Agent notice (a "Notice of Borrowing"), which
shall be substantially in the form of Exhibit E, on the same day
(or prior thereto) for a Base Rate Borrowing, and at least 3
Euro-Dollar Business Days' prior to each Euro-Dollar Borrowing
(all notices being effective on the day delivered so long as the
Agent shall have received same prior to 12:00 P.M. (noon),
Atlanta, Georgia time) specifying:
16
(i) the date of such Borrowing, which shall
be a Domestic Business Day in the case of a Base Rate
Borrowing or a Euro-Dollar Business Day in the case of a
Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Syndicated Loans comprising
such Borrowing are to be Base Rate Loans or Euro-Dollar
Loans, and
(iv) in the case of a Euro-Dollar Borrowing,
the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest
Period.
(b) Upon receipt of a Notice of Borrowing, the
Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share of such Borrowing and such Notice of
Borrowing shall not thereafter be revocable by the Borrower.
(c) Not later than 2:00 P.M. (Atlanta, Georgia
time) on the date of each Syndicated Borrowing, each Bank shall
(except as provided in paragraph (d) of this Section) make
available its ratable share of such Syndicated Borrowing, in
Federal or other funds immediately available in Atlanta, Georgia,
to the Agent at its address referred to in Section 9.01. Unless
any applicable condition specified in Article III has not been
satisfied or waived, the Agent will make the funds so received
from the Banks available to the Borrower at the Agent's aforesaid
address not later than 4:30 P.M. (Atlanta, Georgia time) on the
date of any relevant Syndicated Borrowing. Unless the Agent
receives notice from a Bank, at the Agent's address referred to
in or specified pursuant to Section 9.01, (i) in the case of a
Base Rate Borrowing, no later than 2:30 P.M. (Atlanta, Georgia
time) on the same day as such Base Rate Borrowing and (ii) in the
case of any other type of Syndicated Borrowing, no later than
4:00 P.M. (Atlanta, Georgia time) on the Domestic Business Day
before the date of a Syndicated Borrowing stating that such Bank
will not make a Loan in connection with such Syndicated
Borrowing, the Agent shall, in relation to the Banks, be entitled
to assume that such Bank will make a Loan in connection with such
Syndicated Borrowing and, in reliance on such assumption, the
Agent may (but shall not be obligated to) make available such
Bank's ratable share of such Syndicated Borrowing to the Borrower
for the account of such Bank. If the Agent makes any such Bank's
ratable share of a Borrowing available to the Borrower, the Agent
shall promptly notify (which notice may be telephonic) the
Borrower of the identity of the Bank for whom such funds were
advanced and the amount of such advance. The Agent shall
promptly notify (which notice may be telephonic) the Borrower of
the details of any notice received from any Bank stating that any
17
such Bank does not intend to make its ratable share of funds
available in connection with any relevant Borrowing. If the
Agent makes such Bank's ratable share available to the Borrower
and such Bank does not in fact make its ratable share of such
Syndicated Borrowing available on such date, the Agent shall be
entitled to recover such Bank's ratable share from such Bank or
the Borrower (and for such purpose shall be entitled to charge
such amount to any account of the Borrower maintained with the
Agent upon prior notice to the Borrower), together with interest
thereon for each day during the period from the date of such
Syndicated Borrowing until such sum shall be paid in full at a
rate per annum equal to the rate at which the Agent reasonably
and in good faith determines that it obtained (or could have
obtained) overnight Federal funds to cover such amount for each
such day during such period, provided that any such payment by
the Borrower of such Bank's ratable share and interest thereon
shall be without prejudice to any rights that the Borrower may
have against such Bank. If the Agent does not exercise its
option to advance funds for the account of such Bank, it shall
forthwith notify the Borrower of such decision.
(d) If any Bank makes a new Syndicated Loan
hereunder on a day on which the Borrower is to repay all or any
part of an outstanding Syndicated Loan from such Bank, such Bank
shall apply the proceeds of its new Syndicated Loan to make such
repayment as a Refunding Loan and only an amount equal to the
difference (if any) between the amount being borrowed and the
amount of such Refunding Loan shall be made available by such
Bank to the Agent as provided in paragraph (c) of this Section,
or remitted by the Borrower to the Agent as provided in Section
2.12, as the case may be.
(e) Notwithstanding anything to the contrary
contained in this Agreement, including, without limitation
Section 2.01 and Section 2.03, no Euro-Dollar Borrowing or Money
Market Borrowing may be made if there shall have occurred a
Default or an Event of Default, which Default or Event of Default
shall not have been cured or waived.
(f) In the event that a Notice of Borrowing fails
to specify whether the Syndicated Loans comprising such
Syndicated Borrowing are to be Base Rate Loans or Euro-Dollar
Loans, such Syndicated Loans shall be made as Base Rate Loans.
If the Borrower is otherwise entitled under this Agreement to
repay any Syndicated Loans maturing at the end of an Interest
Period applicable thereto with the proceeds of a new Syndicated
Borrowing, and the Borrower fails to repay such Syndicated Loans
using its own moneys and fails to give a Notice of Borrowing in
connection with such new Syndicated Borrowing, a new Syndicated
Borrowing shall be deemed to be made on the date such Syndicated
Loans mature in an amount equal to the principal amount of the
18
Syndicated Loans so maturing, and the Syndicated Loans comprising
such new Syndicated Borrowing shall be Base Rate Loans.
(g) Notwithstanding anything to the contrary
contained herein, including, without limitation Section 2.01 and
Section 2.03, there shall not be more than 10 Euro-Dollar Loans
and/or Money Market Loans outstanding at any given time.
SECTION 2.03. Money Market Loans. (a) In addition to
making Syndicated Borrowings, the Borrower may, as set forth in
this Section 2.03, request the Banks to make offers to make Money
Market Borrowings available to the Borrower. The Banks may, but
shall have no obligation to, make such offers and the Borrower
may, but shall have no obligation to, accept any such offers in
the manner set forth in this Section 2.03, provided that:
(i) there may be no more than 10 Euro-Dollar Loans
and/or Money Market Loans outstanding at any given time; and
(ii) the aggregate principal amount of all Money
Market Loans, together with the aggregate principal amount
of all Syndicated Loans, at any one time outstanding shall
not exceed the aggregate amount of the Commitments of all of
the Banks at such time.
(b) When the Borrower wishes to request offers to
make Money Market Loans, it shall give the Agent (which shall
promptly notify the Banks) notice substantially in the form of
Exhibit H hereto (a "Money Market Quote Request") so as to be
received no later than 12:00 P.M. (noon) (Atlanta, Georgia time)
at least 2 Euro-Dollar Business Days prior to the date of the
Money Market Borrowing proposed therein (or such other time and
date as the Borrower and the Agent, with the consent of the
Required Banks, may agree), specifying:
(i) the proposed date of such Money Market
Borrowing, which shall be a Euro-Dollar Business Day (the
"Borrowing Date");
(ii) the maturity date (or dates) (each a "Stated
Maturity Date") for repayment of each Money Market Loan to
be made as part of such Money Market Borrowing (which Stated
Maturity Date shall be that date occurring either 7 days, 14
days, 30 days, or any other amount of days greater than 30
days but not greater than 180 days from the date of such
Money Market Borrowing); provided, that the Stated Maturity
Date for any Money Market Loan may not extend beyond the
Termination Date (as in effect on the date of such Money
Market Quote Request); and
(iii) the aggregate amount of principal to be
received by the Borrower as a result of such Money Market
19
Borrowing, which shall be at least $1,000,000 (and in larger
integral multiples of $500,000) but shall not cause the
limits specified in Section 2.03(a) to be violated.
The Borrower may request offers to make Money Market Loans having
up to 3 different Stated Maturity Dates in a single Money Market
Quote Request; provided, that the request for each separate
Stated Maturity Date shall be deemed to be a separate Money
Market Quote Request for a separate Money Market Borrowing.
Except as otherwise provided in the preceding sentence, after the
first Money Market Quote Request has been given hereunder, no
Money Market Quote Request shall be given until at least 5
Domestic Business Days after all prior Money Market Quote
Requests have been fully processed by the Agent, the Banks and
the Borrower pursuant to this Section 2.03.
(c) (i) Each Bank may, but shall have no obligation
to, submit a response containing an offer to make a Money
Market Loan substantially in the form of Exhibit I hereto (a
"Money Market Quote") in response to any Money Market Quote
Request; provided, that, if the Borrower's request under
Section 2.03(b) specified more than 1 Stated Maturity Date,
such Bank may, but shall have no obligation to, make a
single submission containing a separate offer for each such
Stated Maturity Date and each such separate offer shall be
deemed to be a separate Money Market Quote. Each Money
Market Quote must be submitted to the Agent not later than
10:30 A.M. (Atlanta, Georgia time) on the Borrowing Date;
provided that any Money Market Quote submitted by Wachovia
may be submitted, and may only be submitted, if Wachovia
notifies the Borrower of the terms of the offer contained
therein not later than 10:15 A.M. (Atlanta, Georgia time) on
the Borrowing Date (or 15 minutes prior to the time that the
other Banks must have submitted their respective Money
Market Quotes). Subject to Section 6.01, any Money Market
Quote so made shall be irrevocable except with the written
consent of the Agent given on the instructions of the
Borrower.
(ii) Each Money Market Quote shall specify:
(A) the proposed Borrowing Date and the
Stated Maturity Date therefor;
(B) the principal amounts of the Money Market
Loan which the quoting Bank is willing to make for
the applicable Money Market Quote, which principal
amounts (x) may be greater than or less than the
Commitment of the quoting Bank, (y) shall be at least
$1,000,000 or a larger integral multiple of $500,000,
and (z) may not exceed the principal amount of the
20
Money Market Borrowing for which offers were
requested;
(C) the rate of interest per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%)
offered for each such Money Market Loan, (such
amounts being hereinafter referred to as the "Money
Market Rate"); and
(D) the identity of the quoting Bank.
Unless otherwise agreed by the Agent and the Borrower, no
Money Market Quote shall contain qualifying, conditional or
similar language or propose terms other than or in addition
to those set forth in the applicable Money Market Quote
Request (other than setting forth the maximum principal
amounts of the Money Market Loan which the quoting Bank is
willing to make for the applicable Interest Period) and, in
particular, no Money Market Quote may be conditioned upon
acceptance by the Borrower of all (or some specified
minimum) of the principal amount of the Money Market Loan
for which such Money Market Quote is being made.
(d) The Agent shall as promptly as practicable
after the Money Market Quote is submitted (but in any event not
later than 11:30 A.M. (Atlanta, Georgia time)) on the Borrowing
Date, notify the Borrower of the terms (i) of any Money Market
Quote submitted by a Bank that is in accordance with Section
2.03(c) and (ii) of any Money Market Quote that amends, modifies
or is otherwise inconsistent with a previous Money Market Quote
submitted by such Bank with respect to the same Money Market
Quote Request. Any such subsequent Money Market Quote shall be
disregarded by the Agent unless such subsequent Money Market
Quote is submitted solely to correct a manifest error in such
former Money Market Quote. The Agent's notice to the Borrower
shall specify (A) the principal amounts of the Money Market
Borrowing for which offers have been received and (B) the
respective principal amounts and Money Market Rates so offered by
each Bank (identifying the Bank that made each Money Market
Quote).
(e) Not later than 12:30 P.M. (noon) (Atlanta,
Georgia time) on the Borrowing Date, the Borrower shall notify
the Agent of its acceptance or nonacceptance of the offers so
notified to it pursuant to Section 2.03(d) and the Agent shall
promptly notify each affected Bank. In the case of acceptance,
such notice shall specify the aggregate principal amount of
offers (for each Stated Maturity Date) that are accepted. The
Borrower may accept any Money Market Quote in whole or in part;
provided that:
21
(i) the aggregate principal amount of each Money
Market Borrowing may not exceed the applicable amount set
forth in the related Money Market Quote Request;
(ii) the aggregate principal amount of each Money
Market Loan comprising a Money Market Borrowing shall be at
least $1,000,000 (and in larger multiples of $500,000) but
shall not cause the limits specified in Section 2.03(a) to
be violated;
(iii) acceptance of offers may only be made in
ascending order of Money Market Rates; and
(iv) the Borrower may not accept any offer where
the Agent has advised the Borrower that such offer fails to
comply with Section 2.03(c)(ii) or otherwise fails to comply
with the requirements of this Agreement (including without
limitation, Section 2.03(a)).
If offers are made by 2 or more Banks with the same Money Market
Rates for a greater aggregate principal amount than the amount in
respect of which offers are accepted for the related Stated
Maturity Date, the principal amount of Money Market Loans in
respect of which such offers are accepted shall be allocated by
the Borrower among such Banks as nearly as possible in proportion
to the aggregate principal amount of such offers. Determinations
by the Borrower of the amounts of Money Market Loans shall be
conclusive in the absence of manifest error.
(f) Any Bank whose offer to make any Money Market
Loan has been accepted shall, not later than 1:30 P.M. (Atlanta,
Georgia time) on the Borrowing Date, make the appropriate amount
of such Money Market Loan available to the Agent at its address
referred to in Section 9.01 in immediately available funds. The
amount so received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Borrower
on such date by depositing the same, in immediately available
funds, not later than 4:30 P.M. (Atlanta, Georgia time), in an
account of such Borrower maintained with Wachovia.
SECTION 2.04. Notes. (a) The Syndicated Loans of
each Bank shall be evidenced by a single Syndicated Loan Note
payable to the order of such Bank for the account of its Lending
Office in an amount equal to the original principal amount of
such Bank's Commitment.
(b) The Money Market Loans made by any Bank to the
Borrower shall be evidenced by a single Money Market Loan Note
payable to the order of such Bank for the account of its Lending
Office in an amount equal to the original principal amount of the
aggregate Commitments.
22
(c) Upon receipt of each Bank's Notes pursuant to
Section 3.01, the Agent shall deliver such Notes to such Bank.
Each Bank shall record, and prior to any transfer of its Notes
shall endorse on the schedules forming a part thereof appropriate
notations to evidence, the date, amount and maturity of, and
effective interest rate for, each Loan made by it, the date and
amount of each payment of principal made by the Borrower with
respect thereto, and such schedules of each such Bank's Notes
shall constitute rebuttable presumptive evidence of the
respective principal amounts owing and unpaid on such Bank's
Notes; provided, that the failure of any Bank to make any such
recordation or endorsement shall not affect the obligation of the
Borrower hereunder or under the Notes or the ability of any Bank
to assign its Notes. Each Bank is hereby irrevocably authorized
by the Borrower so to endorse its Notes and to attach to and make
a part of any Note a continuation of any such schedule as and
when required. In order to verify the Loans outstanding from
time to time, at the request of the Borrower, the Agent shall
furnish the Borrower with its records of transactions under this
Agreement, in reasonable detail.
SECTION 2.05. Maturity of Loans. (a) Each Syndicated
Loan included in any Syndicated Borrowing shall mature, and the
principal amount thereof shall be due and payable, on the last
day of the Interest Period applicable to such Borrowing.
(b) Each Money Market Loan included in any Money
Market Borrowing shall mature, and the principal amount thereof
shall be due and payable upon the Stated Maturity Date therefor.
(c) Notwithstanding the foregoing, the outstanding
principal amount of the Loans, if any, together with all accrued
but unpaid interest thereon, if any, shall be due and payable on
November 3, 1997, unless the Termination Date is otherwise
extended by the Banks, in their sole and absolute discretion.
Upon the written request of the Borrower, which request shall be
delivered to the Agent at least 60 days prior to each Extension
Date (as such term is hereinafter defined), the Banks shall have
the option (without any obligation whatsoever so to do) of
extending the Termination Date for additional one-year periods on
each of November 1, 1995 and November 1, 1996 (each, an
"Extension Date"). In the event that a Bank chooses not to
extend the Termination Date for such an additional one-year
period, notice shall be given by such Bank to the Borrower and
the Agent at least 30 days prior to the relevant Extension Date;
provided, that the Termination Date shall not be extended with
respect to any of the Banks unless the Required Banks are willing
to extend the Termination Date and (x) the remaining Banks shall
purchase ratable assignments (without any obligation to do so)
from such terminating Bank (in the form of an Assignment and
Acceptance) in accordance with their respective percentage of the
remaining aggregate Commitments; provided, that, such Banks shall
23
be provided such opportunity (which opportunity shall allow such
Banks at least 15 Domestic Business Days in which to make a
decision) prior to the Borrower finding another bank pursuant to
the immediately succeeding clause (y); and, provided, further,
that, should any of the remaining Banks elect not to purchase
such an assignment, then, such other remaining Banks shall be
entitled to purchase an assignment from any Terminating Bank
which includes the ratable interest that was otherwise available
to such non-purchasing remaining Bank or Banks, as the case may
be, (y) the Borrower shall find another bank, reasonably
acceptable to the Agent, willing to accept an assignment from
such terminating Bank (in the form of an Assignment and
Acceptance) or (z) the Borrower shall reduce the aggregate
Commitments in an amount equal to the Commitment of any such
terminating Bank. In furtherance of the foregoing, if the
Termination Date is not extended for an additional one year
period on or before November 1, 1995, then the Borrower may
nevertheless request that the Termination Date be extended for an
additional one year period on November 1, 1996.
SECTION 2.06. Interest Rates. (a) Each Base Rate
Loan shall bear interest on the outstanding principal amount
thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to the Base Rate for such
date plus the Applicable Margin. Such interest shall be payable
for each Interest Period on the last day thereof.
(b) Each Euro-Dollar Loan shall bear interest on
the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the
Applicable Margin plus the applicable Adjusted London Interbank
Offered Rate for such Interest Period. Such interest shall be
payable for each Interest Period on the last day thereof and, if
such Interest Period is longer than 90 days, at intervals of 90
days after the first day thereof.
(c) Each Money Market Loan shall bear interest on
the outstanding principal amount thereof, for each day from the
date such Money Market Loan is made until it becomes due, at a
rate per annum equal to the applicable Money Market Rate set
forth in the relevant Money Market Quote. Such interest shall be
payable on the Stated Maturity Date thereof, and, if the Stated
Maturity Date occurs more than 90 days after the date of the
relevant Money Market Loan, at intervals of 90 days after the
first day thereof.
(d) In the event of default in payment of any
principal on the Loans, interest on the overdue principal amount
(and, to the extent permitted by applicable law, all accrued
interest thereon) shall automatically and without notice bear
interest at the Default Rate.
24
SECTION 2.07. Fees; Calculations. (a) The Borrower
shall pay to the Agent for the ratable account of each Bank a
facility fee (the "Facility Fee") on the maximum amount of the
aggregate Commitments in effect for any relevant period,
irrespective of usage, as follows: (i) if the Borrower's ratio of
Consolidated Funded Debt to Consolidated Total Tangible Capital
is equal to or less than 0.25 to 1.0, 0.060%, (ii) if the
Borrower's ratio of Consolidated Funded Debt to Consolidated
Total Tangible Capital is greater than or equal to 0.26 to 1.0
but less than or equal to 0.35 to 1.0, 0.065%, (iii) if the
Borrower's ratio of Consolidated Funded Debt to Consolidated
Total Tangible Capital is greater than or equal to 0.36 to 1.0
but less than or equal to 0.45 to 1.0, 0.075%, and (iv) if the
Borrower's ratio of Consolidated Funded Debt to Consolidated
Total Tangible Capital is greater than or equal to 0.46 to 1.0,
0.095%. The Facility Fee shall accrue at all times from and
including the Closing Date to but excluding the Termination Date
and shall be payable, in arrears, on each March 31, June 30,
September 30 and December 31 and on the Termination Date.
(b) In determining the amounts to be paid by the
Borrower pursuant to Sections 2.06(b)and 2.07(a), the Borrower
and the Banks shall refer to the Borrower's most recent financial
statements delivered to the Banks pursuant to Section 5.01(a)
(together with the Compliance Certificate delivered in connection
therewith, the "Audited Statements") and Section 5.01(b)
(together with the Compliance Certificate delivered in connection
therewith, the "Unaudited Statements"); provided, that, should
any relevant Audited Statements or Unaudited Statements be
delivered on a date later than a Performance Pricing
Determination Date, any necessary changes in the Applicable
Margin and fees to be paid shall not be effective, except to the
extent hereinafter provided to the contrary within this Section
2.07(b), until the next succeeding Performance Pricing
Determination Date (as such term is hereinafter defined);
provided, further, that, should the Audited Statements reflect a
ratio of Consolidated Funded Debt to Consolidated Total Tangible
Capital other than the ratio of Consolidated Funded Debt to
Consolidated Total Tangible Capital determined by the Unaudited
Statements for the third Fiscal Quarter, then (i) should the
Audited Statements reveal that the Borrower should have paid
interest and fees at a higher rate for the period from the last
Performance Pricing Determination Date to the next Performance
Pricing Determination Date then the Borrower shall immediately
pay to the Banks such amounts as are necessary to cause the Banks
to have received the appropriate return, and (ii) should the
Audited Statements reveal that the Borrower should have paid
interest and fees at a lower rate for the period from the last
Performance Pricing Determination Date to the next Performance
Pricing Determination Date, then, so long as no Default shall be
in existence, the Banks shall promptly pay to the Borrower such
amounts as are necessary to cause the Banks to have received the
25
appropriate return. For purposes hereof, "Performance Pricing
Determination Date" shall mean each date that occurs 45 days
after the end of each of the first 3 Fiscal Quarters, and 90 days
after the end of the last Fiscal Quarter, of the Borrower. All
determinations hereunder shall be made by the Agent unless the
Required Banks shall object to any such determination.
Notwithstanding the foregoing, for purposes of determining the
amounts to be paid by the Borrower pursuant to Sections 2.06(b)
and 2.07(a) until the Performance Pricing Determination Date
which occurs on or about November 2, 1994, the ratio of
Consolidated Funded Debt to Consolidated Total Tangible Capital
shall conclusively be presumed to be greater than 0.35 to 1.0 but
less than 0.45 to 1.0.
(d) The Borrower shall pay to the Agent, for the
account and sole benefit of the Agent, such fees and other
amounts at such times as set forth in the Agent's Letter
Agreement.
SECTION 2.08. Optional Termination or Reduction of
Commitments. The Borrower may, upon at least 3 Domestic
Business Days' notice to the Agent (which notice the Agent shall
promptly forward to the Banks), terminate at any time, or
proportionately reduce the Unused Commitments from time to time
by an aggregate amount of at least $5,000,000, or any larger
multiple of $1,000,000. If the Commitments are terminated in
their entirety, all accrued fees (as provided under Section 2.07)
shall be due and payable on the effective date of such
termination.
SECTION 2.09. Termination of Commitments. The
Commitments shall terminate on (i) the Termination Date or (ii)
upon any earlier date specified in any notice of termination sent
by the Agent (acting at the direction of the Required Banks) to
the Borrower following a Change in Control, and upon any such
termination, the Loans (together with accrued interest thereon
and fees payable with respect thereto) then outstanding shall be
due and payable on such date.
SECTION 2.10. Optional Prepayments. (a) The Borrower
may, upon at least 1 Domestic Business Day's notice to the Agent
(which notice the Agent shall promptly forward to the Banks) and
payment to the Agent, for the ratable benefit of the Banks, of
any amounts required by Section 8.05, prepay any Base Rate
Borrowing (to the extent not precluded by Section 2.10(b)) in
whole or in part at any time, in a minimum amount of at least
$5,000,000, or any larger multiple of $500,000, by paying the
principal amount to be prepaid together with accrued interest
thereon to the date of prepayment. Each such optional prepayment
shall be applied to prepay ratably the Loans of the several Banks
included in such relevant Borrowing.
26
(b) The Borrower may not prepay all or any portion
of the principal amount of any Money Market Loan or Euro-Dollar
Loan prior to the end of the relevant Stated Maturity Date or
Interest Period, respectively, applicable to such Loan.
(c) Upon receipt of a notice of prepayment
pursuant to this Section 2.10, the Agent shall promptly notify
each Bank of the contents thereof and of such Bank's ratable
share of such prepayment and such notice shall not thereafter be
revocable by the Borrower.
SECTION 2.11. Mandatory Prepayments. On each date on
which the Commitments are reduced pursuant to Section 2.08, the
Borrower shall repay or prepay such principal amount of the
outstanding Loans (together with interest accrued thereon), as
may be necessary so that after such payment the aggregate unpaid
principal amount of the Loans does not exceed the amount of the
aggregate Commitments as then reduced.
SECTION 2.12. General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of, and
interest on, the Loans and of fees hereunder, not later than 1:00
P.M. (Atlanta, Georgia time) on the date when due, without
offset, in Federal or other funds immediately available in
Atlanta, Georgia, to the Agent at its address referred to in
Section 9.01. The Agent will promptly distribute to each Bank
(and, following the occurrence and during the continuance of an
Event of Default, for application by such Bank against amounts
owing to such Bank by the Borrower in such order as such Bank
shall elect) its ratable share of each such payment received by
the Agent for the account of the Banks; provided, that, should
the Agent actually receive any relevant payment from the Borrower
prior to 1:00 P.M. (Atlanta, Georgia time) on the date when due,
the Agent shall initiate the distribution process (by wire or
otherwise) to such Bank of each such Bank's ratable portion of
any payment received by the Agent prior to 5:00 P.M. (Atlanta,
Georgia time).
(b) Whenever any payment of principal of, or
interest on, the Base Rate Loans or Money Market Loans shall be
due on a day which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next succeeding Domestic
Business Day. Whenever any payment of principal of or interest
on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day.
(c) All payments of principal, interest and fees
and all other amounts to be made by the Borrower pursuant to this
27
Agreement with respect to any Loan or fee relating thereto shall
be paid without deduction for, and free from, any tax, imposts,
levies, duties, deductions, or withholdings of any nature now or
at anytime hereafter imposed by any governmental authority or by
any taxing authority thereof or therein excluding in the case of
each Bank, taxes imposed on or measured by its net income, and
franchise taxes imposed on it, by the jurisdiction under the laws
of which such Bank (as the case may be) is organized or any
political subdivision thereof and, in the case of each Bank,
taxes imposed on its income, and franchise taxes imposed on it,
by the jurisdiction of such Bank's applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes,
imposts, levies, duties, deductions or withholdings of any nature
being "Taxes"). In the event that the Borrower is required by
applicable law to make any such withholding or deduction of Taxes
with respect to any Loan or fee or other amount, the Borrower
shall pay such deduction or withholding to the applicable taxing
authority, shall promptly furnish to any Bank in respect of which
such deduction or withholding is made all receipts and other
documents evidencing such payment and shall pay to such Bank
additional amounts as may be necessary in order that the amount
received by such Bank after the required withholding or other
payment shall equal the amount such Bank would have received had
no such withholding or other payment been made. If no
withholding or deduction of Taxes are payable in respect to any
Loan or fee relating thereto, the Borrower shall furnish any, at
such Bank's request, a certificate from each applicable taxing
authority or an opinion of counsel acceptable to such, in either
case stating that such payments are exempt from or not subject to
withholding or deduction of Taxes. If the Borrower fails to
provide such original or certified copy of a receipt evidencing
payment of Taxes or certificate(s) or opinion of counsel of
exemption, the Borrower hereby agrees to compensate such Bank
for, and indemnify them with respect to, the tax consequences of
the Borrower's failure to provide evidence of tax payments or tax
exemption.
Each Bank agrees, as soon as practicable after
request by it of a request by the Borrower to do so, to file all
appropriate forms and take other appropriate action to obtain a
certificate or other appropriate document from the appropriate
governmental authority in the jurisdiction imposing the relevant
taxes, establishing that it is entitled to receive payments of
principal and interest under this Agreement and the Notes without
deduction and free from withholding of any Taxes imposed by such
jurisdiction; provided, that, if it is unable, for any reason, to
establish such exemption, or to file such forms and, in any
event, during such period of time as such request for exemption
is pending, the Borrower shall nonetheless remain obligated under
the terms of the immediately preceding paragraph.
28
In the event any Bank receives a refund of any Taxes
paid by the Borrower pursuant to this Section 2.12(c), it will
pay to the Borrower the amount of such refund promptly upon
receipt thereof; provided, however, if at any time thereafter it
is required to return such refund, the Borrower shall promptly
repay to it the amount of such refund.
Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower and the Banks contained in this
Section 2.12(c) shall be applicable with respect to any
Participant, Assignee or other Transferee, and any calculations
required by such provisions (i) shall be made based upon the
circumstances of such Participant, Assignee or other Transferee,
and (ii) constitute a continuing agreement and shall survive the
termination of this Agreement and the payment in full or
cancellation of the Notes.
SECTION 2.13. Computation of Interest and Fees.
Interest on the Loans shall be computed on the basis of a year of
365/366 days, as to Base Rate Loans, and 360 days, as to Euro-
Dollar Loans and Money Market Loans, in each case for the actual
number of days elapsed, calculated as to each Interest Period or
Stated Maturity Date, as applicable, from and including the first
day thereof to but excluding the last day thereof. Facility Fees
and any other fees payable hereunder from time to time shall be
computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but
excluding the last day).
ARTICLE III
CONDITIONS TO BORROWINGS
SECTION 3.01. Conditions to First Borrowing. The
obligation of each Bank to make a Syndicated Loan on the occasion
of the first Syndicated Borrowing is subject to the satisfaction
of the conditions set forth in Section 3.02 and receipt by the
Agent of the following:
(a) from each of the parties hereto of a duly
executed counterpart of this Agreement signed by such party;
(b) a duly executed (i) Syndicated Loan Note and
(ii) Money Market Loan Note for the account of each Bank
complying with the provisions of Section 2.04;
(c) an opinion letter (together with any opinions
of local counsel relied on therein) of Smith, Gambrell &
Russell, special counsel to the Borrower, substantially in
the form of Exhibit B, dated as of the Closing Date, and
29
covering such additional matters relating to the
transactions contemplated hereby as the Agent or any Bank
may reasonably request;
(d) an opinion of Jones, Day, Reavis & Pogue,
special counsel for the Agent, dated as of the Closing Date,
substantially in the form of Exhibit C and covering such
additional matters relating to the transactions contemplated
hereby as the Agent may reasonably request;
(e) a certificate (the "Closing Certificate")
substantially in the form of Exhibit G), dated as of the
Closing Date, signed by a principal financial officer of the
Borrower, to the effect that (i) no Default has occurred and
is continuing on the date of the first Borrowing and (ii)
the representations and warranties of the Borrower contained
in Article IV are true on and as of the date of the first
Borrowing hereunder;
(f) all documents which the Agent or any Bank may
reasonably request relating to the existence of the
Borrower, the corporate authority for and the validity of
this Agreement, the Notes, and the other Loan Documents and
any other matters relevant hereto, or thereto, all in form
and substance reasonably satisfactory to the Agent,
including, without limitation, a certificate of incumbency
of the Borrower, signed by the Secretary or an Assistant
Secretary of the Borrower, certifying as to the names, true
signatures and incumbency of the officer or officers,
respectively, of the Borrower authorized to execute and
deliver the Loan Documents, and certified copies of the
following items, for the Borrower: (i) Certificate/Articles
of Incorporation, (ii) Bylaws, (iii) a certificate of the
Secretary of State of the state of incorporation as to the
good standing of each as a corporation in that state, and
(iv) the action taken by the Board of Directors authorizing
the execution, delivery and performance of this Agreement,
the Notes, and the other Loan Documents;
(g) a Notice of Borrowing;
(h) evidence reasonably satisfactory to the Agent
that the Borrower has in force and effect insurance satisfying
the requirements of Section 5.10; and
(i) such other certificates or documents as the
Agent or any Bank may reasonably request.
SECTION 3.02. Conditions to All Borrowings. The
obligation of each Bank to make a Syndicated Loan on the occasion
of each Syndicated Borrowing, other than a Borrowing which
30
consists solely of a Refunding Loan, is subject to the
satisfaction of the following conditions:
(a) receipt by the Agent of a Notice of Borrowing;
(b) the fact that, immediately before and after
giving effect to such Borrowing, no Default shall have
occurred and be continuing;
(c) the fact that the representations and
warranties of the Borrower contained in Article IV of this
Agreement shall be true on and as of the date of such
Borrowing; and
(d) the fact that, immediately after such
Borrowing, the aggregate outstanding principal amount of the
Syndicated Loans of each Bank will not exceed the amount of
its Commitment.
Each Borrowing (both Syndicated and Money Market) hereunder,
other than a Borrowing which consists solely of a Refunding Loan,
shall be deemed to be a representation and warranty by the
Borrower on the date of such Borrowing as to the truth and
accuracy of the facts specified in paragraphs (b), (c) and (d) of
this Section, except to the extent they relate to a particular
date only.
ARTICLE IV-A
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The
Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation, is duly qualified to transact business in every
jurisdiction where the failure to so qualify would reasonably be
expected to have or cause a Material Adverse Effect, and has all
corporate powers and all governmental licenses, authorizations,
consents and approvals required to carry on its business as now
conducted, except where the failure to possess any such licenses,
authorizations, consents, or approvals would not reasonably be
expected to have or cause a Material Adverse Effect.
SECTION 4.02. Corporate and Governmental
Authorization; No Contravention. The execution, delivery and
performance by the Borrower of this Agreement, the Notes and the
other Loan Documents (i) are within the Borrower's corporate
powers, (ii) have been duly authorized by all necessary corporate
action, (iii) require no action by or in respect of or filing
31
with, any governmental body, agency or official, (iv) do not
contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of
incorporation or by-laws of the Borrower or of any material
agreement, judgment, injunction, order, decree or other
instrument binding upon the Borrower or any of its Significant
Subsidiaries, and (v) do not result in the creation or imposition
of any Lien on any asset of the Borrower or any of its
Significant Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of the Borrower
enforceable in accordance with its terms, and the Notes and the
other Loan Documents, when executed and delivered in accordance
with this Agreement, will constitute valid and binding
obligations of the Borrower enforceable in accordance with their
respective terms, provided that the enforceability hereof and
thereof is subject in each case to general principles of equity
and to bankruptcy, insolvency and similar laws affecting the
enforcement of creditors' rights generally.
SECTION 4.04. Financial Information. (a) The
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of January 30, 1994 and the related consolidated
statements of income, stockholders' equity and cash flows for the
Fiscal Year then ended, reported on by KPMG Peat Marwick, copies
of which have been delivered to each of the Banks, and the
unaudited consolidated financial statements of the Borrower for
the interim period ended July 31, 1994, copies of which have been
delivered to each of the Banks, fairly present, in conformity
with GAAP, the consolidated financial position of the Borrower
and its Consolidated Subsidiaries as of such dates and their
consolidated results of operations and cash flows for such
periods stated, except, in the case of interim periods, as to the
absence of footnotes and to normal year-end audit adjustments.
(b) Since January 30, 1994, there has been no
event, act, condition or occurrence having a Material Adverse
Effect.
SECTION 4.05. No Litigation. There is no action,
suit or proceeding pending, or to the knowledge of the Borrower
threatened, against or affecting the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental
body, agency or official which would reasonably be expected to
have or cause a Material Adverse Effect.
SECTION 4.06. Compliance with ERISA. (a) The
Borrower and each member of the Controlled Group have fulfilled
their obligations under the minimum funding standards of ERISA
and the Code with respect to each Plan and are in compliance in
all material respects with the presently applicable provisions of
32
ERISA and the Code, and have not incurred any liability to the
PBGC or a Plan under Title IV of ERISA.
(b) Neither the Borrower nor to the best of
Borrower's knowledge and belief any member of the Controlled
Group is or ever has been obligated to contribute to any
Multiemployer Plan.
SECTION 4.07. Compliance with Laws; Payment of Taxes.
The Borrower and its Subsidiaries are in compliance with all
applicable laws, regulations and similar requirements of
governmental authorities, except where (i) such compliance is
being contested in good faith through appropriate proceedings or
(ii) the failure to be in compliance would not reasonably be
expected to have or cause a Material Adverse Effect. There have
been filed on behalf of the Borrower and its Subsidiaries all
Federal, state and local income, excise, property and other tax
returns which are required to be filed by them and all taxes
shown due and owing by such returns have been paid. The charges,
accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of taxes or other governmental charges
are, in the opinion of the Borrower, adequate. United States
federal income tax returns of the Borrower and its Subsidiaries
have been examined and closed through the Fiscal Year ended
February 3, 1991.
SECTION 4.08. Significant Subsidiaries. Each of the
Borrower's Significant Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, is duly qualified to
transact business in every jurisdiction where the failure to
qualify would reasonably be expected to have or cause a Material
Adverse Effect, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to
carry on its business substantially as now conducted, except
where the failure to possess any such licenses, authorizations,
consents or approvals would not reasonably be expected to have or
cause a Material Adverse Effect. The Borrower has no Significant
Subsidiaries except for those Significant Subsidiaries listed on
Schedule 4.08 (as supplemented in writing from time to time by
the Borrower), which accurately sets forth each such Subsidiary's
complete name and jurisdiction of incorporation.
SECTION 4.09. Investment Company Act. Neither the
Borrower nor any of its Subsidiaries is an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended.
SECTION 4.10. Public Utility Holding Company Act.
Neither the Borrower nor any of its Subsidiaries is a "holding
company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company"
33
of a "holding company", as such terms are defined in the Public
Utility Holding Company Act of 1935, as amended.
SECTION 4.11. Ownership of Property; Liens. Each of
the Borrower and its Significant Subsidiaries has title to its
properties sufficient for the conduct of its business, and none
of such property is subject to any Lien except as permitted in
Section 5.04.
SECTION 4.12. No Default. Neither the Borrower nor
any of its Consolidated Subsidiaries is in default under or with
respect to any agreement, instrument or undertaking to which it
is a party or by which it or any of its property is bound which
could reasonably be expected to have or cause a Material Adverse
Effect. No Default or Event of Default has occurred and is
continuing.
SECTION 4.13. Full Disclosure. All written
information heretofore furnished by the Borrower to the Agent or
any Bank for purposes of or in connection with this Agreement or
any transaction contemplated hereby is, and all such information
hereafter furnished by the Borrower to the Agent or any Bank will
be, true and correct in all material respects or based on what
the Borrower in good faith believes to be reasonable estimates on
the date as of which such information is stated or certified.
SECTION 4.14. Environmental Matters. (a) Neither the
Borrower nor any Subsidiary is subject to any Environmental
Liability which could have or cause a Material Adverse Effect and
neither the Borrower nor any Subsidiary has been designated as a
potentially responsible party under CERCLA or under any state
statute similar to CERCLA. None of the Properties has been
identified on any current or proposed (i) National Priorities
List under 40 C.F.R. 300, (ii) CERCLIS list or (iii) any list
arising from a state statute similar to CERCLA.
(b) No Hazardous Materials have been or are being
used, produced, manufactured, processed, treated, recycled,
generated, stored, disposed of, managed or otherwise handled at,
or shipped or transported to or from the Properties or are
otherwise present at, on, in or under the Properties, or, to the
best of the knowledge of the Borrower, at or from any adjacent
site or facility, except for Hazardous Materials, such as
cleaning solvents, pesticides and other materials used, produced,
manufactured, processed, treated, recycled, generated, stored,
disposed of, managed, or otherwise handled in minimal amounts in
the ordinary course of business in compliance with all applicable
Environmental Requirements.
(c) The Borrower, and each of its Subsidiaries and
Affiliates, (i) has procured all Environmental Authorizations
necessary for the conduct of its business, and (ii) is in
34
compliance with all Environmental Requirements in connection with
the operation of the Properties and the Borrower's, and each of
its Subsidiary's and Affiliate's, respective businesses, in each
case set forth in either of clause (i) or (ii) where the failure
to procure or non-compliance with which would reasonably be
expected to have or cause a Material Adverse Effect.
SECTION 4.15. Capital Stock. All Capital Stock,
debentures, bonds, notes and all other securities of the Borrower
and its Subsidiaries presently issued and outstanding are validly
and properly issued in accordance with all applicable laws,
including, but not limited to, the "Blue Sky" laws of all
applicable states and the federal securities laws, except where
the failure to have complied with such laws would not reasonably
be expected to have or cause a Material Adverse Effect. The
issued shares of Capital Stock of the Borrower's Wholly Owned
Subsidiaries which are Significant Subsidiaries are owned by the
Borrower free and clear of any Lien or adverse claim. At least a
majority of the issued shares of capital stock of each of the
Borrower's other Significant Subsidiaries (other than Wholly
Owned Subsidiaries which are Significant Subsidiaries) is owned
by the Borrower free and clear of any Lien or adverse claim.
SECTION 4.16. Margin Stock. Neither the Borrower nor
any of its Subsidiaries is engaged principally, or as one of its
important activities, in the business of purchasing or carrying
any Margin Stock, and no part of the proceeds of any Loan will be
used for any purpose, including, without limitation, to purchase
or carry any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock, which
violates, or which is inconsistent with, the provisions of
Regulation U or Regulation X.
SECTION 4.17. Insolvency. After giving effect to the
execution and delivery of the Loan Documents and the making of
the Loans under this Agreement, the Borrower will not be
"insolvent," within the meaning of such term as used in O.C.G.A.
18-2-22 or as defined in 101 of Title 11 of the United States
Code or Section 2 of the Uniform Fraudulent Transfer Act, or any
other applicable state law pertaining to fraudulent transfers, as
each may be amended from time to time, or be unable to pay its
debts generally as such debts become due, or have an unreasonably
small capital to engage in any business or transaction, whether
current or contemplated.
ARTICLE IV-B
REPRESENTATIONS AND WARRANTIES OF THE BANKS AND THE AGENT
The Agent and each Bank severally represents and
warrants on behalf of itself, but not on behalf of any other
Person, that:
35
SECTION 4.18. Agent and Bank Corporate Existence and
Power. It is a banking association duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its organization and has all corporate powers and all material
governmental licenses, authorizations and approvals required to
perform its obligations hereunder.
SECTION 4.19. Agent and Bank Binding Effect. This
Agreement constitutes a valid and binding agreement of it
enforceable against it in accordance with its terms, provided
that the enforceability hereof is subject in each case to general
principles of equity and to bankruptcy, insolvency and similar
laws affecting the enforcement of creditors' rights generally.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any
Commitment hereunder or any amount payable hereunder or under any
Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver
to the Agent:
(a) as soon as available and in any event within
90 days after the end of each Fiscal Year, a consolidated
balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such Fiscal Year and the
related consolidated statements of income, stockholders'
equity and cash flows for such Fiscal Year, setting forth in
each case in comparative form the figures for the previous
fiscal year, all certified by KPMG Peat Marwick or other
independent public accountants of nationally recognized
standing, with such certification to be free of material
exceptions and qualifications not reasonably acceptable to
the Required Banks, except as permitted by Section 1.02;
(b) as soon as available and in any event within
45 days after the end of each of the first 3 Fiscal Quarters
of each Fiscal Year, a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of
such Fiscal Quarter and the related statement of income and
statement of cash flows for such Fiscal Quarter and for the
portion of the Fiscal Year ended at the end of such Fiscal
Quarter, setting forth in each case in comparative form the
figures for the corresponding Fiscal Quarter (Fiscal Year
only in the case of balance sheets) and the corresponding
portion of the previous Fiscal Year, all certified (subject
to the absence of footnotes and to normal year-end audit
adjustments) as to fairness of presentation, GAAP and
36
consistency by the chief financial officer or the chief
accounting officer of the Borrower;
(c) simultaneously with the delivery of each set
of financial statements referred to in paragraphs (a) and
(b) above, a certificate, substantially in the form of
Exhibit F (a "Compliance Certificate"), of the chief
financial officer or the chief accounting officer of the
Borrower (i) setting forth in reasonable detail the
calculations required to establish whether the Borrower was
in compliance with the requirements of Sections 5.03 and
5.04 on the date of such financial statements and (ii)
stating whether any Default exists on the date of such
certificate and, if any Default then exists, setting forth
the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(d) within 5 Domestic Business Days after any of
the chief executive, chief financial, chief operating, chief
legal or chief accounting officer of the Borrower becomes
aware of the occurrence of any Default, a certificate of the
chief financial officer or the chief accounting officer of
the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take with
respect thereto;
(e) promptly upon the mailing thereof to the
stockholders of the Borrower generally, copies of all
financial statements, reports and proxy statements so
mailed;
(f) promptly upon the filing thereof, copies of
all registration statements (other than the exhibits thereto
and any registration statements on Form S-8 or its
equivalent) and annual, quarterly or monthly reports which
the Borrower shall have filed with the Securities and
Exchange Commission;
(g) if and when any member of the Controlled Group
(i) gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA)
with respect to any Plan which might constitute grounds for
a termination of such Plan under Title IV of ERISA, or knows
that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy
of the notice of such reportable event given or required to
be given to the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Title IV of ERISA, a copy
of such notice; or (iii) receives notice from the PBGC under
Title IV of ERISA of an intent to terminate or appoint a
trustee to administer any Plan, a copy of such notice; and
37
(h) from time to time such additional information
regarding the financial position or business of the Borrower
and its Subsidiaries as the Agent, at the request of any
Bank, may reasonably request.
SECTION 5.02. Inspection of Property, Books and
Records. The Borrower will (i) keep, and cause each Subsidiary
to keep, proper books of record and account in which full, true
and correct entries in conformity with GAAP shall be made of all
dealings and transactions in relation to its business and
activities; and (ii) permit, and cause each Subsidiary to permit,
representatives of the Agent at the Banks' expense prior to the
occurrence of a Default and at the Borrower's expense after the
occurrence of a Default to visit and inspect any of their
respective properties, to examine and make abstracts from any of
their respective books and records and to discuss their
respective affairs, finances and accounts with their respective
officers, employees and independent public accountants. The
Borrower agrees to cooperate and assist in such visits and
inspections, in each case at such reasonable times and as often
as may reasonably be requested.
SECTION 5.03. Ratio of Consolidated Funded Debt to
Consolidated Total Tangible Capital. The ratio of Consolidated
Funded Debt to Consolidated Total Tangible Capital will not
exceed 0.60 to 1.00, calculated at the end of each Fiscal
Quarter.
SECTION 5.04. Negative Pledge. Neither the
Borrower nor any Consolidated Subsidiary will create,
assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement
securing Debt outstanding on the date of this Agreement in
an aggregate principal amount with respect to Debt for
borrowed money and capital leases not exceeding $73,663,000;
(b) any Lien existing on any asset of any
(i)corporation or partnership at the time such corporation
or such partnership becomes a Consolidated Subsidiary, or
(ii) Subsidiary at the time it becomes a Significant
Subsidiary, and in either case not created in contemplation
of such event;
(c) any Lien on any asset securing Debt incurred
or assumed for the purpose of financing all or any part of
the cost of acquiring or constructing such asset, provided
that such Lien attaches to such asset concurrently with or
within 18 months after the acquisition or completion of
construction thereof;
38
(d) any Lien on any asset of any corporation
existing at the time such corporation is merged or
consolidated with or into the Borrower or a Consolidated
Subsidiary and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the
acquisition thereof by the Borrower or a Consolidated
Subsidiary and not created in contemplation of such
acquisition;
(f) Liens securing Debt owing by any Subsidiary to
the Borrower;
(g) any Lien arising out of the refinancing,
extension, renewal or refunding of any Debt secured by any
Lien permitted by any of the foregoing paragraphs of this
Section, provided that (i) such Debt is not secured by any
additional assets, and (ii) the amount of such Debt secured
by any such Lien is not increased;
(h) Liens incidental to the conduct of its
business or the ownership of its assets which (i) do not
secure Debt and (ii) do not in the aggregate materially
detract from the value of its assets or materially impair
the use thereof in the operation of its business;
(i) any Lien on Margin Stock; and
(j) Liens not otherwise permitted by the foregoing
paragraphs of this Section securing Debt (other than
indebtedness represented by the Notes) in an aggregate
principal amount at any time outstanding not to exceed 20%
of Consolidated Tangible Net Worth.
Provided Liens permitted by the foregoing paragraphs (a) through
(j) shall at no time secure Debt in an aggregate amount greater
than 25% of Consolidated Tangible Net Worth.
SECTION 5.05. Maintenance of Existence. The Borrower
shall, and shall cause each Subsidiary to, maintain its corporate
existence and carry on its business in substantially the same
manner and in substantially the same fields as such business is
now carried on and maintained, except as permitted by Section
5.07; provided, however, that (i) any Subsidiary may be
reincorporated under the laws of another state, and (ii) so long
as no Event of Default shall be in existence or be caused
thereby, nothing in this Agreement shall prevent the abandonment
or termination of the existence, rights and franchises, or the
change in the business of any Subsidiary which is not a
Significant Subsidiary, if, in the opinion of the Board of
Directors of the Borrower, such abandonment, termination or
39
change is in the best interest of the Borrower and not
disadvantageous in any material respect to the Banks.
SECTION 5.06. Dissolution. Neither the Borrower nor
any of its Significant Subsidiaries shall suffer or permit
dissolution or liquidation either in whole or in part (except as
permitted by Section 5.05) or redeem or retire any shares of its
own stock or that of any Significant Subsidiary, except through
corporate reorganization to the extent permitted by Section 5.07.
SECTION 5.07. Consolidations, Mergers and Sales of
Assets. The Borrower will not, nor will it permit any
Significant Subsidiary to, consolidate with or merge into, or
sell, lease or otherwise transfer all or any substantial part of
its assets to, any other Person, provided that (a) the Borrower
may consolidate with or merge into another Person if (i) such
Person is a solvent corporation organized under the laws of the
United States of America or one of its states, (ii) the Borrower
is the corporation surviving such merger and (iii) immediately
after giving effect to such merger, no Event of Default shall
have occurred and be continuing, (b) Subsidiaries of the Borrower
may consolidate with or merge into one another or into any other
Person who after such consolidation or merger is a Significant
Subsidiary of the Borrower, and (c) the foregoing limitation on
the sale, lease or other transfer of assets shall not prohibit,
during any Fiscal Quarter, a transfer of assets (in a single
transaction or in a series of related transactions) unless the
aggregate assets to be so transferred, when combined with all
other assets transferred during such Fiscal Quarter and the
immediately preceding 3 Fiscal Quarters, either (x) constituted
more than 10% of Consolidated Total Assets at the end of such
Fiscal Quarter, or (y) contributed more than 10% of Consolidated
Operating Profits during such Fiscal Quarter and the 3 Fiscal
Quarters immediately preceding such Fiscal Quarter.
SECTION 5.08. Use of Proceeds. No portion of the
proceeds of the Loans will be used by the Borrower or any
Subsidiary (i) to fund any tender offer for, or other acquisition
of, stock of any other Person with a view towards obtaining
control of such other Person at a time when the board of
directors thereof shall not have approved such acquisition of
control, (ii) for the purpose of purchasing or carrying any
Margin Stock, or (iii) for any purpose which would result in the
violation of any applicable law or regulation the effect of which
would reasonably be expected to have or cause a Material Adverse
Effect.
SECTION 5.09. Compliance with Laws; Payment of Taxes.
The Borrower will, and will cause each of its Subsidiaries and
each member of the Controlled Group to, comply with applicable
laws (including but not limited to ERISA), regulations and
similar requirements of governmental authorities (including but
40
not limited to PBGC), except where the necessity of such
compliance is being contested in good faith through appropriate
proceedings or where the failure to so comply would not
reasonably be expected to have or cause a Material Adverse
Effect. The Borrower will, and will cause each of its
Subsidiaries to, pay promptly when due all taxes, assessments,
governmental charges, claims for labor, supplies, rent and other
obligations which, if unpaid, would become a lien against the
property of the Borrower or any Subsidiary, except (i)
liabilities being contested in good faith and against which, if
requested by the Agent, the Borrower will set up reserves in
accordance with GAAP or (ii) where the failure to so pay would
not reasonably be expected to have or cause a Material Adverse
Effect.
SECTION 5.10. Insurance. The Borrower will maintain,
and will cause each of its Subsidiaries to maintain (either in
the name of the Borrower or in such Subsidiary's own name), with
financially sound and reputable insurance companies, insurance
on all its property in substantially such amounts and against
substantially such risks as are usually insured against in the
same general area by companies of established repute and of
similar size and financial strength engaged in the same or
similar business.
SECTION 5.11. Maintenance of Property. The Borrower
shall, and shall cause each Significant Subsidiary to, maintain
to the extent commercially reasonable all of its properties and
assets in good condition, repair and working order, ordinary wear
and tear excepted.
SECTION 5.12. Environmental Notices. The Borrower
shall furnish to the Banks and the Agent prompt written notice of
all Environmental Liabilities, pending, threatened or anticipated
Environmental Proceedings, Environmental Notices, Environmental
Judgments and Orders, and Environmental Releases at, on, in,
under or in any way affecting the Properties or any adjacent
property, and all facts, events, or conditions that could lead to
any of the foregoing; provided, that, no such notification will
be required, unless any of the foregoing facts, events or
conditions would reasonably be expected to have or cause a
Material Adverse Effect.
SECTION 5.13. Environmental Matters. The Borrower
and its Subsidiaries will not use, produce, manufacture, process,
treat, recycle, generate, store, dispose of, manage at, the
Properties, or otherwise handle, or ship or transport to or from
the Properties any Hazardous Materials except for Hazardous
Materials used, produced, manufactured, processed, treated,
recycled, generated, stored, disposed, managed, or otherwise
handled in the ordinary course of business in compliance in all
material respects with applicable Environmental Requirements, and
41
will take commercially reasonable steps to prohibit any Third
Party from doing any of the acts prohibited by the foregoing.
SECTION 5.14. Environmental Release. The Borrower
agrees that upon obtaining knowledge of the occurrence of an
Environmental Release at or on any of the Properties it will act
promptly to investigate the extent of, and to take appropriate
remedial action to eliminate, such Environmental Release, whether
or not ordered or otherwise directed to do so by any
Environmental Authority.
SECTION 5.15. Debt of Subsidiaries. The Borrower
shall not permit any Subsidiary to incur any Debt except for (i)
Debt owing to the Borrower or another Subsidiary and (ii) other
Debt which shall not exceed in the aggregate for all Subsidiaries
an amount in excess of 20% of Consolidated Net Worth.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of
the following events ("Events of Default") shall have occurred
and be continuing:
(a) the Borrower shall fail to pay when due any
principal of any Loan or shall fail to pay any interest on
any Loan within 5 Domestic Business Days after such interest
shall become due, or shall fail to pay any fee or other
amount payable hereunder within 5 Domestic Business Days
after such fee or other amount becomes due; or
(b) the Borrower shall fail to observe or perform
any covenant contained in Sections 5.02(ii), 5.03 to 5.08,
inclusive, or Section 5.15; or
(c) the Borrower shall fail to observe or perform
any covenant or agreement contained or incorporated by
reference in this Agreement (other than those covered by
paragraph (a) or (b) above) and such failure shall not have
been cured within 30 days after the earlier to occur of (i)
written notice thereof has been given to the Borrower by the
Agent at the request of any Bank or (ii) any of the chief
executive, chief financial, chief operating, chief legal or
chief accounting officer of the Borrower otherwise becomes
aware of any such failure; or
(d) any representation, warranty, certification or
statement made by the Borrower in Article IV of this
Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall
42
prove to have been incorrect or misleading in any material
respect when made (or deemed made); or
(e) the Borrower or any Significant Subsidiary
shall fail to make any payment in respect of Debt for money
borrowed (exclusive of Debt owing to the Borrower)
outstanding in an aggregate amount in excess of $25,000,000
(other than the Notes) when due or within any applicable
grace period; or
(f) any event or condition shall occur which results
in the acceleration of the maturity of Debt for money
borrowed outstanding in an aggregate amount in excess of
$25,000,000 of the Borrower or any Significant Subsidiary
(including, without limitation, any required mandatory
prepayment or "put" of such Debt to the Borrower or any
Significant Subsidiary) or enables the holders of such Debt
or commitment or any Person acting on such holders' behalf
to accelerate the maturity thereof or terminate any such
commitment (including, without limitation, any required
mandatory prepayment or "put" of such Debt to the Borrower
or any Significant Subsidiary); or
(g) the Borrower or any Significant Subsidiary
shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize
any of the foregoing; or
(h) an involuntary case or other proceeding shall
be commenced against the Borrower or any Significant
Subsidiary seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case
or other proceeding shall remain undismissed and unstayed
for a period of 90 days; or an order for relief shall be
entered against the Borrower or any Significant Subsidiary
under the federal bankruptcy laws as now or hereafter in
effect; or
43
(i) one or more judgments or orders for the
payment of money in an aggregate amount in excess of
$25,000,000 shall be rendered against the Borrower or any
Significant Subsidiary and such judgment or order shall
continue unsatisfied and unstayed for a period of 60 days;
or
(j) one or more federal tax liens securing an
aggregate amount in excess of $25,000,000 shall be filed
against the Borrower or any Significant Subsidiary under
Section 6323 of the Code or a lien of the PBGC shall be
filed against the Borrower or any Subsidiary under Section
4068 of ERISA and in either case such lien shall remain
undischarged for a period of 25 days after the date of
filing;
(k) the Borrower or any member of the Controlled
Group shall fail to pay when due any material amount which
it shall have become liable to pay to the PBGC or to a Plan
under Title IV of ERISA; or notice of intent to terminate a
Plan or Plans shall be filed under Title IV of ERISA by the
Borrower, any member of the Controlled Group, any plan
administrator or any combination of the foregoing; or the
PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to
administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans to
enforce Section 515 or 4219(c)(5) of ERISA and such
proceeding shall not have been dismissed within 30 days
thereafter; or a condition shall exist by reason of which
the PBGC would be entitled to obtain a decree adjudicating
that any such Plan or Plans must be terminated; then, and in
every such event, the Agent shall (i) if requested by the
Required Banks, by notice to the Borrower terminate the
Commitments and they shall thereupon terminate, and (ii) if
requested by the Required Banks, by notice to the Borrower
declare the Notes (together with accrued interest thereon)
to be, and the Notes shall thereupon become, immediately due
and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the
Borrower together with interest at the Default Rate accruing
on the principal amount thereof from and after the date of
such Event of Default; provided that if any Event of Default
specified in paragraph (g) or (h) above occurs with respect
to the Borrower, without any notice to the Borrower or any
other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued
interest thereon) shall become immediately due and payable
without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower
together with interest thereon at the Default Rate accruing
on the principal amount thereof from and after the date of
44
such Event of Default. Notwithstanding the foregoing, the
Agent shall have available to it all other remedies at law
or equity, and shall exercise any one or all of them at the
request of the Required Banks.
SECTION 6.02. Notice of Default. The Agent shall
give notice to the Borrower of any Default under Section 6.01(c)
promptly upon being requested to do so by any Bank and shall
thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment; Powers and Immunities.
Each Bank hereby irrevocably appoints and authorizes the Agent to
act as its agent hereunder and under the other Loan Documents
with such powers as are specifically delegated to the Agent by
the terms hereof and thereof, together with such other powers as
are reasonably incidental thereto. The Agent: (a) shall have no
duties or responsibilities except as expressly set forth in this
Agreement and the other Loan Documents, and shall not by reason
of this Agreement or any other Loan Document be a trustee for any
Bank; (b) shall not be responsible to the Banks for any recitals,
statements, representations or warranties contained in this
Agreement or any other Loan Document, or in any certificate or
other document referred to or provided for in, or received by any
Bank under, this Agreement or any other Loan Document, or for the
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or any
other document referred to or provided for herein or therein or
for any failure by the Borrower to perform any of its obligations
hereunder or thereunder; (c) shall not be required to initiate or
conduct any litigation or collection proceedings hereunder or
under any other Loan Document except to the extent requested by
the Required Banks, and then only on terms and conditions
satisfactory to the Agent, and (d) shall not be responsible for
any action taken or omitted to be taken by it hereunder or under
any other Loan Document or any other document or instrument
referred to or provided for herein or therein or in connection
herewith or therewith, except for its own gross negligence or
wilful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence
or misconduct of any such agents or attorneys-in-fact selected
by it with reasonable care. The provisions of this Article VII
are solely for the benefit of the Agent and the Banks, and the
Borrower shall not have any rights as a third party beneficiary
of any of the provisions hereof. In performing its functions and
duties under this Agreement and under the other Loan Documents,
the Agent shall act solely as agent of the Banks and does not
assume and shall not be deemed to have assumed any obligation
45
towards or relationship of agency or trust with or for the
Borrower. The duties of the Agent shall be ministerial and
administrative in nature, and the Agent shall not have by reason
of this Agreement or any other Loan Document a fiduciary
relationship in respect of any Bank.
SECTION 7.02. Reliance by Agent. The Agent shall be
entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telefax,
telegram or cable) believed by it to be genuine and correct and
to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel,
independent accountants or other experts selected by the Agent.
As to any matters not expressly provided for by this Agreement or
any other Loan Document, the Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder and
thereunder in accordance with instructions signed by the Required
Banks, and such instructions of the Required Banks in any action
taken or failure to act pursuant thereto shall be binding on all
of the Banks.
SECTION 7.03. Defaults. The Agent shall not be
deemed to have knowledge of the occurrence of a Default or an
Event of Default (other than the nonpayment of principal of or
interest on the Loans) unless the Agent has received notice from
a Bank or the Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of Default".
In the event that the Agent receives such a notice of the
occurrence of a Default or an Event of Default, the Agent shall
give prompt notice thereof to the Banks. The Agent shall give
each Bank prompt notice of each nonpayment of principal of or
interest on the Loans whether or not it has received any notice
of the occurrence of such nonpayment. The Agent shall (subject to
Section 9.06) take such action hereunder with respect to such
Default or Event of Default as shall be directed by the Required
Banks, provided that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Banks.
SECTION 7.04. Rights of Agent as a Bank. With
respect to the Loans made by it, Wachovia in its capacity as a
Bank hereunder shall have the same rights and powers hereunder as
any other Bank and may exercise the same as though it were not
acting as the Agent, and the term "Bank" or "Banks" shall, unless
the context otherwise indicates, include Wachovia in its
individual capacity. The Agent may (without having to account
therefor to any Bank) accept deposits from, lend money to and
generally engage in any kind of banking, trust or other business
with the Borrower (and any of its Affiliates) as if it were not
acting as the Agent, and the Agent may accept fees and other
46
consideration from the Borrower (in addition to any agency fees
and arrangement fees heretofore agreed to between the Borrower
and the Agent) for services in connection with this Agreement or
any other Loan Document or otherwise without having to account
for the same to the Banks.
SECTION 7.05. Indemnification. Each Bank severally
agrees to indemnify the Agent, to the extent the Agent shall not
have been reimbursed by the Borrower, ratably in accordance with
its Commitment, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses
(including, without limitation, counsel fees and disbursements)
or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement or any other Loan
Document or any other documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or
thereby (excluding legal fees, to the extent excluded from the
indemnification provisions of Section 9.04 pursuant to Section
9.04(b)(v) and, unless an Event of Default has occurred and is
continuing, the normal administrative costs and expenses incident
to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or any such
other documents; provided, however that no Bank shall be liable
for any of the foregoing to the extent they arise from the gross
negligence or wilful misconduct of the Agent. If any indemnity
furnished to the Agent for any purpose shall, in the opinion of
the Agent, be insufficient or become impaired, the Agent may call
for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is
furnished.
SECTION 7.06 CONSEQUENTIAL DAMAGES. THE AGENT SHALL
NOT BE RESPONSIBLE OR LIABLE TO ANY BANK, THE BORROWER OR ANY
OTHER PERSON OR ENTITY FOR ANY PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. THE BORROWER SHALL NOT BE
RESPONSIBLE OR LIABLE TO THE AGENT, ANY BANK OR ANY OTHER PERSON
OR ENTITY FOR ANY PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
WHICH MAY BE ALLEGED AS A RESULT OF THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
SECTION 7.07. Payee of Note Treated as Owner. The
Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof unless and until a written notice
of the assignment or transfer thereof shall have been filed with
the Agent and the provisions of Section 9.08(c) have been
satisfied. Any requests, authority or consent of any Person who
at the time of making such request or giving such authority or
consent is the holder of any Note shall be conclusive and
47
binding on any subsequent holder, transferee or assignee of that
Note or of any Note or Notes issued in exchange therefor or
replacement thereof.
SECTION 7.08. Nonreliance on Agent and Other Banks.
Each Bank agrees that it has, independently and without reliance
on the Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit
analysis of the Borrower and decision to enter into this
Agreement and that it will, independently and without reliance
upon the Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking
action under this Agreement or any of the other Loan Documents.
The Agent shall not be required to keep itself informed as to the
performance or observance by the Borrower of this Agreement or
any of the other Loan Documents or any other document referred to
or provided for herein or therein or to inspect the properties or
books of the Borrower or any other Person. Except for notices,
reports and other documents and information expressly required to
be furnished to the Banks by the Agent hereunder or under the
other Loan Documents, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or
business of the Borrower or any other Person (or any of their
Affiliates) which may come into the possession of the Agent.
SECTION 7.09. Failure to Act. Except for action
expressly required of the Agent hereunder or under the other Loan
Documents, the Agent shall in all cases be fully justified in
failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction by the Banks
of their indemnification obligations under Section 7.05 against
any and all liability and expense which may be incurred by the
Agent by reason of taking, continuing to take, or failing to take
any such action.
SECTION 7.10. Resignation or Removal of Agent.
Subject to the appointment and acceptance of a successor Agent as
provided below, the Agent may resign at any time by giving notice
thereof to the Banks and the Borrower and the Agent may be
removed at any time with or without cause by the Required Banks.
Upon any such resignation or removal, the Required Banks shall
have the right to appoint a successor Agent; provided, that, so
long as no Event of Default shall have occurred and then be
continuing, the Borrower shall have the right to consent to any
successor Agent (which consent (x) in the case of any Bank being
appointed successor Agent, shall not be unreasonably withheld,
and (y) in the case of the appointment of any other Person as
successor Agent, may be withheld in the discretion of the
Borrower). If no successor Agent shall have been so appointed by
the Required Banks and shall have accepted such appointment
48
within 30 days after the retiring Agent's notice of resignation
or the Required Banks' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Banks, appoint a successor
Agent. Any successor Agent shall be a bank which has a combined
capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this
Article VII 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 the Agent hereunder.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of any
Interest Period:
(a) the Agent reasonably and in good faith
determines that deposits in Dollars (in the applicable
amounts) are not being offered in the relevant market for
such Interest Period, or
(b) the Required Banks advise the Agent that the
London Interbank Offered Rate, as reasonably determined by
the Agent, will not adequately and fairly reflect the cost
to such Banks of funding Euro-Dollar Loans for such Interest
Period,
the Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist,
the obligations of the Banks to make Euro-Dollar Loans shall be
suspended. After any Bank has provided notice to the Borrower in
connection with this Section 8.01, unless the Borrower notifies
the Agent on or before the date of any such relevant Euro-Dollar
Borrowing for which a Notice of Borrowing has previously been
given that it elects not to borrow on such date, such Borrowing
shall instead be made as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, after the date hereof,
the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change
in the official interpretation or official administration thereof
by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof (any
49
such agency being referred to as an "Authority" and any such
event being referred to as a "Change of Law"), or compliance by
any Bank (or its Lending Office) with any request or directive
(whether or not having the force of law) of any Authority shall
make it unlawful or impossible for any Bank (or its Lending
Office) to make, maintain or fund its Euro-Dollar Loans and such
Bank shall so notify the Agent, the Agent shall forthwith give
notice thereof to the other Banks and the Borrower, whereupon
until such Bank notifies the Borrower and the Agent that the
circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans shall be
suspended. Before giving any notice to the Agent pursuant to
this Section, such Bank shall designate a different Lending
Office if such designation will avoid the need for giving such
notice and will not, in the reasonable judgment of such Bank, be
otherwise materially disadvantageous to such Bank. If by reason
of any such Change of Law any such Bank may not lawfully continue
to maintain and fund any of its outstanding Euro-Dollar Loans to
maturity and shall so specify in such notice, the Borrower shall
immediately prepay in full the then outstanding principal amount
of each Euro-Dollar Loan of such Bank, together with accrued
interest thereon. Concurrently with prepaying each such
Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in
an equal principal amount from such Bank (on which interest and
principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and such Bank shall make
such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a)
If after the date hereof, a Change of Law or compliance by any
Bank (or its Lending Office) with any official request or
directive (whether or not having the force of law) of any
Authority:
(i) shall subject any Bank (or its Lending Office)
to any tax, duty or other charge on its Euro-Dollar Loans or
Money Market Loans, its Syndicated Loan Notes (insofar as
they evidence Euro-Dollar Loans) or Money Market Loan Notes,
or its obligation to make Euro-Dollar Loans or Money Market
Loans, or shall change the basis of taxation of payments to
any Bank (or its Lending Office) of the principal of or
interest on its Euro-Dollar Loans or Money Market Loans or
any other amounts due under this Agreement in respect of its
Loans or its obligation to make Euro-Dollar Loans or Money
Market Loans (except for changes in the rate of tax on the
overall net income or gross receipts of such Bank or its
Lending Office imposed by the jurisdiction in which such
Bank's principal executive office or Lending Office is
located); or
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including,
50
without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but
excluding with respect to any Euro-Dollar Loan any such
requirement included in an applicable Euro-Dollar Reserve
Percentage) against assets of, deposits with or for the
account of, or credit extended by, any Bank (or its Lending
Office); or
(iii) shall impose on any Bank (or its Lending
Office) or on the United States market or the London
interbank market any other condition affecting its Euro-
Dollar or Money Market Loans, Notes, or its obligation to
make Euro-Dollar or Money Market Loans;
and the result of any of the foregoing is to increase the cost to
such Bank (or its Lending Office) of making or maintaining any
Loan, or to reduce the amount of any sum received or receivable
by such Bank (or its Lending Office) under this Agreement or
under its Notes with respect thereto, by an amount reasonably
determined by such Bank to be material, then, within 15 days
after demand by such Bank (with a copy to the Agent), the
Borrower shall pay to such Bank such additional amount or amounts
as will compensate such Bank for such increased cost or
reduction; provided that no such amount may be claimed by any
Bank which is attributable to periods prior to the date which is
sixty (60) days preceding the date on which the officer of the
Bank having primary responsibility for asset liability management
shall have obtained actual knowledge of such demand. At any time
within ninety (90) days after payment by Borrower of any material
amount to any Bank pursuant to paragraph (a) or (b) of this
Section, so long as no Event of Default shall be in existence,
Borrower may require by written notice to that Bank that (i) it
assign its pro rata share of the Commitment to another Bank or to
a bank or other financial institution selected by Borrower and
reasonably acceptable to the Agent which is willing to accept
such assignment or (ii) it surrender its pro rata share of the
Commitment and terminate its rights and obligations as a Bank
hereunder, concurrently with a reduction by Borrower of the
Commitment by an amount equal to the pro rata share of the
Commitment held by that Bank.
(b) If any Bank shall have determined that after the
date hereof the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or
any change in the official interpretation or official
administration thereof, or compliance by any Bank (or its Lending
Office) or any Person controlling such Bank with any request or
directive regarding capital adequacy (whether or not having the
force of law) of any Authority, has or would have the effect of
reducing the rate of return on such Bank's or such controlling
Person's capital as a consequence of its obligations hereunder to
a level below that which such Bank or such controlling Person
51
could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's or such controlling
Person's policies with respect to capital adequacy) by an amount
reasonably determined by such Bank or such controlling Person to
be material, then from time to time, within 15 days after demand
by such Bank or such controlling Person, the Borrower shall pay
to such Bank such additional amount or amounts as will compensate
such Bank or such controlling Person for such reduction; provided
that no such amount may be claimed by any Bank which is
attributable to periods prior to the date which is sixty (60)
days preceding the date on which the officer of the Bank having
primary responsibility for asset liability management shall have
obtained actual knowledge of such demand.
(c) Each Bank will promptly notify the Borrower
and the Agent of any event of which its officer having primary
responsibility for asset liability management has knowledge,
which occurs or is expected to occur after the date hereof, which
will entitle such Bank to compensation pursuant to this Section
and will designate a different Lending Office if such designation
will avoid the need for, or reduce the amount of, such
compensation and will not, in the reasonable judgment of such
Bank, be otherwise materially disadvantageous to such Bank. A
certificate of any Bank claiming compensation under this Section
and setting forth in reasonable detail the additional amount or
amounts to be paid to it hereunder shall constitute rebuttable
presumptive evidence of the amounts to be paid in the absence of
manifest error. In determining such amount, such Bank may use
any reasonable averaging and attribution methods.
(d) The provisions of this Section 8.03(i) shall
be applicable with respect to any Participant, Assignee or other
Transferee, and any calculations required by such provisions
shall be made based upon the circumstances of such Participant,
Assignee or other Transferee and (ii) shall constitute a
continuing agreement and shall survive the termination of this
Agreement and the payment in full or cancellation of the Notes.
SECTION 8.04. Base Rate Loans Substituted for
Euro-Dollar Loans. If (i) the obligation of any Bank to make or
maintain Euro-Dollar Loans has been suspended pursuant to Section
8.02 or (ii) any Bank has demanded compensation under Section
8.03, and the Borrower shall, by at least 5 Euro-Dollar Business
Days' prior notice to such Bank through the Agent, have elected
that the provisions of this Section shall apply to such Bank,
then, unless and until such Bank notifies the Borrower that the
circumstances giving rise to such suspension or demand for
compensation no longer apply:
(a) all Loans which would otherwise be made by
such Bank as Euro-Dollar Loans shall be made instead as Base
Rate Loans (in all cases interest and principal on such
52
Loans shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been
repaid, all payments of principal which would otherwise be
applied to repay such Euro-Dollar Loans shall be applied to
repay its Base Rate Loans instead.
SECTION 8.05. Compensation. Upon the request of any
Bank, delivered to the Borrower and the Agent, the Borrower shall
pay to such Bank such amount or amounts as shall compensate such
Bank for any loss, cost or expense incurred by such Bank as a
result of:
(a) any payment or prepayment (pursuant to Section
8.02 or otherwise) of a Euro-Dollar Loan or Money Market Loan on
a date other than the last day of an Interest Period for such
Loan; or
(b) any failure by the Borrower to borrow (other
than due to a refusal by the Agent or any of the Banks to fund
under Section 2.02(c) notwithstanding satisfaction of the
conditions set forth in Section 3.02, a Euro-Dollar Loan on the
date for the Euro-Dollar Borrowing of which such Euro-Dollar Loan
is a part specified in the applicable Notice of Borrowing
delivered pursuant to Section 2.02
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and
other communications to any party hereunder shall be in writing
(including bank wire, telecopier or similar writing) and shall be
given to such party at its address or telecopier number set forth
on the signature pages hereof or such other address or telecopier
number as such party may hereafter specify for the purpose by
notice to each other party. Each such notice, request or other
communication shall be effective (i) if given by telecopier, when
such telecopy is transmitted to the telecopier number specified
in this Section and the appropriate confirmation is received,
(ii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when
delivered at the address specified in this Section; provided that
notices to the Agent under Article II or Article VIII shall not
be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the
Agent or any Bank in exercising any right, power or privilege
hereunder or under any Note or other Loan Document shall operate
as a waiver thereof nor shall any single or partial exercise
53
thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
SECTION 9.03. Expenses; Documentary Taxes. The
Borrower shall pay (i) all reasonable out-of-pocket expenses of
the Agent, including fees and disbursements of special counsel
for the Banks and the Agent, in connection with (A) subject to
the provisions of the Agent's Letter Agreement, the preparation
of this Agreement and the other Loan Documents, and (B) any
waiver or consent hereunder or thereunder or any amendment hereof
or thereof or any Default or alleged Default hereunder or
thereunder and (ii) if a Default occurs, all reasonable
out-of-pocket expenses reasonably incurred by the Agent and the
Banks, including reasonable fees and disbursements of counsel, in
connection with such Default and collection and other
enforcement proceedings resulting therefrom, including
out-of-pocket expenses incurred in enforcing this Agreement and
the other Loan Documents. The Borrower shall indemnify the Agent
and each Bank against any transfer taxes, documentary taxes,
assessments or charges made by any Authority by reason of the
execution and delivery of this Agreement or the other Loan
Documents.
SECTION 9.04. Indemnification. (a) Subject to the
provisions of paragraph (c) below, the Borrower shall indemnify
the Agent, the Banks and each affiliate thereof and their
respective directors, officers, employees and agents (each an
"Indemnitee") from, and hold each of them harmless against, any
and all losses, liabilities or damages to which any of them may
become subject, insofar as such losses, liabilities or damages
arise out of or result from
(i) any actions, suits, proceedings (including any
investigations or inquiries, actual or
threatened) or claims by third parties against
or involving any Indemnitee related to the
actual or proposed use by the Borrower of the
proceeds of any extension of credit by any
Bank hereunder (collectively, "Claims" and
individually, a "Claim"), or
(ii) breach by the Borrower of this Agreement or
any other Loan Document, or
(iii) any actions taken by the Agent or any of the
Banks to enforce this Agreement or any of the
other Loan Documents against Borrower at a
time when an Event of Default shall have
occurred and then be continuing,
54
and the Borrower shall reimburse the Agent and each Bank, and
each Affiliate thereof and their respective directors, officers,
employees and agents, upon demand for the reasonable out-of-
pocket expenses (including, without limitation, reasonable legal
fees) reasonably incurred in connection with any such Claim,
breach or action.
(b) In no event shall the indemnity provided for in
Section 9.04(a) extend to any Claim or disbursement of any
Indemnitee resulting from, pertaining to or arising in any manner
out of, or in any manner relating to any Claim or disbursement
which (i) is the subject matter of another indemnity provision of
this Agreement, (ii) the willful misconduct or gross negligence
of any Indemnitee, (iii) any breach by any Indemnitee of its
representations or obligations under any Loan Document, (iv) the
violation by any Indemnitee of any law, rule or regulation
binding upon such Indemnitee (including without limitation any
law, rule or regulation governing the operation of national
banks), (v) legal fees of Jones, Day, Reavis & Pogue related to
the negotiation or preparation of the Loan Documents delivered on
or about the Closing Date to the extent in excess of those
amounts set forth in the Agent's Letter Agreement, (vi) any
costs, fees or expenses arising out of the acquisition or
transfer by any Indemnitee of any interest in the Notes or the
Loan Documents except any such transfer (x) in connection with
the exercise of remedies hereunder in accordance with the terms
of Section 6.01 hereof after the occurrence of an Event of
Default or (y) occurring at the direction of the Borrower,
(vii) is one with respect to which any Indemnitee has a right to
participate in a proceeding with respect to such Claim, if such
Indemnitee refuses to implead, to the extent reasonable and
practicable, any party whom Borrower believes is ultimately
responsible with respect to such Claims or to assert, to the
extent reasonable and practicable, any cross-claims Borrower
deems appropriate where it is not possible for Borrower to assert
such rights itself or (viii) the economic assumptions underlying
any Indemnitee's entry into the transactions contemplated by or
related to this Agreement proving to be incorrect, thereby
reducing the expected economic return to such Indemnitee, except
to the extent such assumptions were based on representations of
the Borrower herein or financial information provided by the
Borrower pursuant hereto or because the Borrower's exercise of
any of its rights hereunder in accordance with the terms of this
Agreement decreases the expected economic return to such
Indemnitee.
The following shall apply to all claims for indemnity under
this Section 9.04:
(A) If any Indemnitee has actual knowledge of any
Claim hereby indemnified against it shall give prompt
written notice thereof to the Borrower; provided,
55
however, that the failure of an Indemnitee to give
such notice shall not relieve Borrower of its
obligations hereunder, unless such failure prejudices
the Borrower's ability to contest such claim in any
material respect. Any payment made by Borrower to an
Indemnitee pursuant to this Section 9.04 shall not be
deemed to be a waiver or release of any right or
remedy (including any remedy of damages) the Borrower
may have against such Indemnitee if, as a result of
the failure by an Indemnitee to give the Borrower
notice in accordance with the preceding sentence,
Borrower is prejudiced in any material respect in the
exercise of its rights to contest the Claims
indemnified against pursuant to this Section 9.04.
(B) Each Claim against an Indemnitee by a third
party shall, if reasonably requested by the Borrower,
be contested by the Indemnitee in good faith by
appropriate proceedings, provided that Borrower shall
indemnify such Indemnitee in full in respect of any
reasonable out-of-pocket fees, costs or expenses
reasonably and actually incurred by such Indemnitee
in conducting such contest (such costs, if requested
by the Indemnitee, to be funded by the Borrower
concurrently with such contest) and the amount of any
interest or penalties which are required to be paid
as a direct result of contesting such Claim. The
Borrower shall be entitled to assume responsibility
for and control of the defense of any Claim in
respect of which any Indemnitee makes or intends to
make a claim against the Borrower for indemnity
pursuant to this Section 9.04, provided that (i) the
legal counsel retained by Borrower for such purpose
is reasonably acceptable to the Agent and (ii) the
Borrower pursues such contest diligently and in good
faith and, upon the reasonable request of the Agent,
provides the Agent with reasonable details of the
status of the contest and copies of legal briefs,
court filings and, subject to applicable
considerations of legal privilege, counsel's
memoranda relevant to such contest. In the event
that (1) an Event of Default shall have occurred and
be continuing or (2) the Borrower fails to comply
with the foregoing requirements in any material
respect, the applicable Indemnitee may, if such Event
of Default or failure, as the case may be, continues
after such Indemnitee has given the Borrower a
reasonable opportunity, taking into account existing
circumstances, to effect the applicable level of
compliance, reassume responsibility for and control
of the relevant contest, which, in such
circumstances, such Indemnitee agrees to pursue
56
diligently and in good faith. To the extent the
Borrower is entitled to defend any claim hereunder,
the Indemnitee shall cooperate in good faith with
Borrower and may participate in the defense thereof
at such Indemnitee's sole cost and expense.
(C) Each Indemnitee shall supply the Borrower with
such information as Borrower shall reasonably request
to defend or participate in any proceeding permitted
by this Section 9.04; provided, however, that any
such information which is proprietary or confidential
need be furnished only under such arrangements
designed to preserve to confidentiality or
proprietary nature of the information as shall be
reasonable under the circumstances.
(D) No Indemnitee shall enter into a settlement or
other compromise or consent to a judgment with
respect to any Claim without the prior written
consent of the Borrower (which consent shall not be
unreasonably withheld or delayed); unless such
Indemnitee waives its rights in writing with respect
to such Claims under this Section 9.04. The entering
into of any such settlement or compromise or consent
without the Borrower's prior written consent (unless
the withholding of such consent by Borrower requested
by such Indemnitee shall have been unreasonable)
shall constitute a waiver by such Indemnitee of its
rights of indemnification hereunder in respect of
such matter.
(E) In the event the Borrower shall be obligated
to indemnify any Indemnitee pursuant to this Section
9.04, Borrower shall be subrogated to the rights of
such Indemnitee in respect of the matter as to which
the indemnity was paid and may pursue the same at
Borrower's expense. If any Indemnitee shall obtain a
recovery of all or any part of any amount which the
Borrower shall have paid to such Indemnitee or for
which the Borrower shall have reimbursed such
Indemnitee pursuant to this Section 9.04, any
Indemnitee shall promptly pay or cause to be paid to
the Borrower an amount equal to such recovery
together with any interest (other than interest for
the period, if any, after such Claims were paid by
such Indemnitee until such Claims were paid or
reimbursed by the Borrower) received by such
Indemnitee on account of such payment or
reimbursement.
(c) The indemnities contained in this Section 9.04
shall expire and be of no further force or effect with respect to
57
any Claim notice of which shall not have been given to Borrower
in writing (referring expressly to this Section 9.04) on or prior
to the second anniversary of the repayment in full of the Loan
and the termination of the Commitment.
SECTION 9.05. Sharing of Setoffs. Each Bank agrees
that if it shall, by exercising any right of setoff or
counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest owing with respect to
the Note held by it which is greater than the proportion received
by any other Bank in respect of the aggregate amount of all
principal and interest owing with respect to the Note held by
such other Bank, the Bank receiving such proportionately greater
payment shall purchase such participations in the Notes held by
the other Banks owing to such other Banks, and such other
adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Notes held
by the Banks owing to such other Banks shall be shared by the
Banks pro rata; provided that (i) nothing in this Section shall
impair the right of any Bank to exercise any right of setoff or
counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other
than its indebtedness under the Notes, and (ii) if all or any
portion of such payment received by the purchasing Bank is
thereafter recovered from such purchasing Bank, such purchase
from each other Bank shall be rescinded and such other Bank shall
repay to the purchasing Bank the purchase price of such
participation to the extent of such recovery together with an
amount equal to such other Bank's ratable share (according to the
proportion of (x) the amount of such other Bank's required
repayment to (y) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable
by the purchasing Bank in respect of the total amount so
recovered. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a
participation in a Note, whether or not acquired pursuant to the
foregoing arrangements, may exercise rights of setoff or
counterclaim and other rights with respect to such participation
as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.
SECTION 9.06. Amendments and Waivers. (a) Any
provision of this Agreement, the Notes or any other Loan
Documents may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower
and the Required Banks (and, if the rights or duties of the Agent
are affected thereby, by the Agent); provided that, no such
amendment or waiver shall, unless signed by all Banks, (i) change
the Commitment of any Bank or subject any Bank to any additional
obligation, (ii) change the principal of or rate of interest on
any Loan or any fees hereunder, (iii) change the date fixed for
any payment of principal of or interest on any Loan or any fees
58
hereunder, (iv) change the amount of principal, interest or fees
due on any date fixed for the payment thereof, (v) change the
percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the percentage of Banks, which
shall be required for the Banks or any of them to take any action
under this Section or any other provision of this Agreement, (vi)
change the manner of application of any payments made under this
Agreement or the Notes, (vii) release or substitute all or any
substantial part of the collateral (if any) held as security for
the Loans, or (viii) release any Guarantee given to support
payment of the Loans.
(b) The Borrower will not solicit, request or
negotiate for or with respect to any proposed waiver or amendment
of any of the provisions of this Agreement unless each Bank shall
be informed thereof by the Borrower and shall be afforded an
opportunity of considering the same and shall be supplied by the
Borrower with sufficient information to enable it to make an
informed decision with respect thereto. Executed or true and
correct copies of any waiver or consent effected pursuant to the
provisions of this Agreement shall be delivered by the Borrower
to each Bank forthwith following the date on which the same shall
have been executed and delivered by the requisite percentage of
Banks. The Borrower will not, directly or indirectly, pay or
cause to be paid any remuneration, whether by way of supplemental
or additional interest, fee or otherwise, to any Bank (in its
capacity as such) as consideration for or as an inducement to the
entering into by such Bank of any waiver or amendment of any of
the terms and provisions of this Agreement unless such
remuneration is concurrently paid, on the same terms, ratably to
all such Banks.
SECTION 9.07. No Margin Stock Collateral. Each of
the Banks represents to the Agent and each of the other Banks
that it in good faith is not, directly or indirectly (by negative
pledge or otherwise), relying upon any Margin Stock as collateral
in the extension or maintenance of the credit provided for in
this Agreement.
SECTION 9.08. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and assigns; provided that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement, except
as permitted under Section 5.07.
(b) Any Bank may at any time sell to one or more
Persons (each a "Participant") participating interests in any
Loan owing to such Bank, any Note held by such Bank, any
Commitment hereunder or any other interest of such Bank
hereunder. In the event of any such sale by a Bank of a
participating interest to a Participant, such Bank's obligations
59
under this Agreement shall remain unchanged, such Bank shall
remain solely responsible for the performance thereof, such Bank
shall remain the holder of any such Note for all purposes under
this Agreement, and (x) the Borrower and the Agent shall continue
to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement, and (y)
such Participant shall have no right to contact the Borrower
directly, or to inspect its books and records or places of
business, or to receive any information (financial or otherwise)
directly from the Borrower. In no event shall a Bank that sells
a participation be obligated to the Participant to take or
refrain from taking any action hereunder except that such Bank
may agree that it will not (except as provided below), without
the consent of the Participant, agree to (i) the change of any
date fixed for the payment of principal of or interest on the
related loan or loans, (ii) the change of the amount of any
principal, interest or fees due on any date fixed for the payment
thereof with respect to the related loan or loans, (iii) the
change of the principal of the related loan or loans, (iv) any
change in the rate at which either interest is payable thereon or
(if the Participant is entitled to any part thereof) fee is
payable hereunder from the rate at which the Participant is
entitled to receive interest or fee (as the case may be) in
respect of such participation, (v) the release or substitution of
all or any substantial part of the collateral (if any) held as
security for the Loans, or (vi) the release of any Guarantee
given to support payment of the Loans. Each Bank selling a
participating interest in any Loan, Note, Commitment or other
interest under this Agreement (other than any Money Market Loan
or Note)shall, within 10 Domestic Business Days of such sale,
provide the Borrower and the Agent with written notification
stating that such sale has occurred and identifying the
Participant and the interest purchased by such Participant. The
Borrower agrees that each Participant shall be entitled to the
benefits of Article VIII with respect to its participation in
Loans outstanding from time to time.
(c) Any Bank may at any time assign to one or more
banks or financial institutions (each an "Assignee") all, or, in
the case of its Syndicated Loans and Commitments, a proportionate
part of all, of its Syndicated Loans and Commitments, of its
rights and obligations under this Agreement, the Notes and the
other Loan Documents, and such Assignee shall assume all such
rights and obligations, pursuant to an Assignment and Acceptance,
executed by such Assignee, such transferor Bank and the Agent
(and, in the case of an Assignee that is not then a Bank, by the
Borrower); provided that (i) no interest may be sold by a Bank
pursuant to this paragraph (c) unless the Assignee shall agree to
assume ratably equivalent portions of the transferor Bank's
Commitment, (ii) the amount of the Commitment being assigned
(determined as of the effective date of the assignment) shall be
equal to $15,000,000 (or any larger multiple of $5,000,000),
60
(iii) if no Event of Default is in existence, no interest may be
sold by a Bank pursuant to this paragraph (c) to any Assignee
that is not then a Bank or an Affiliate thereof without the
consent of the Borrower and the Agent, which consent shall not be
unreasonably withheld, and (iv) a Bank may not have more than two
Assignees that are not then Banks at any one time. Upon (A)
execution of the Assignment and Acceptance by such transferor
Bank, such Assignee, the Agent and (if applicable) the Borrower,
(B) delivery of an executed copy of the Assignment and Acceptance
to the Borrower and the Agent, (C) payment by such Assignee to
such transferor Bank of an amount equal to the purchase price
agreed between such transferor Bank and such Assignee, and (D)
payment of a processing and recordation fee of $2,000 to the
Agent, such Assignee shall for all purposes be a Bank party to
this Agreement and shall have all the rights and obligations of a
Bank under this Agreement to the same extent as if it were an
original party hereto with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding
extent, and no further consent or action by the Borrower, the
Banks or the Agent shall be required. Upon the consummation of
any transfer to an Assignee pursuant to this paragraph (c), the
transferor Bank, the Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is
issued to such Assignee.
(d) Subject to the provisions of Section 9.09, the
Borrower authorizes each Bank to disclose to any Participant,
Assignee or other transferee (each a "Transferee") and any
prospective Transferee any and all financial information in such
Bank's possession concerning the Borrower which has been
delivered to such Bank by the Borrower pursuant to this Agreement
or which has been delivered to such Bank by the Borrower in
connection with such Bank's credit evaluation prior to entering
into this Agreement.
(e) No Transferee shall be entitled to receive any
greater payment under Section 8.03 than the transferor Bank would
have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's
prior written consent or by reason of the provisions of Section
8.02 or 8.03 requiring such Bank to designate a different Lending
Office under certain circumstances or at a time when the
circumstances giving rise to such greater payment did not exist.
(f) Anything in this Section 9.08 to the contrary
notwithstanding, any Bank may assign and pledge all or any
portion of the Loans and/or obligations owing to it to any
Federal Reserve Bank or the United States Treasury as collateral
security pursuant to Regulation A of the Board of Governors of
the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank, provided that any payment in respect
61
of such assigned Loans and/or obligations made by the Borrower to
the assigning and/or pledging Bank in accordance with the terms
of this Agreement shall satisfy the Borrower's obligations
hereunder in respect of such assigned Loans and/or obligations to
the extent of such payment. No such assignment shall release the
assigning and/or pledging Bank from its obligations hereunder.
SECTION 9.09. Confidentiality. Each Bank agrees to
exercise commercially reasonable efforts to keep any information
delivered or made available by the Borrower to it which is
clearly indicated or stated to be confidential information (or
when the circumstances under which such information is delivered
or when the content thereof would cause a reasonable person to
believe that such information is confidential), confidential from
anyone other than persons employed or retained by such Bank who
are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans or the Loan Documents
(such Persons to likewise be under similar obligations of
confidentiality with respect to such information); provided,
however that nothing herein shall prevent any Bank from
disclosing such information (i) to any other Bank, (ii) upon the
order of any court or administrative agency, (iii) upon the
request or demand of any regulatory agency or authority having
jurisdiction over such Bank, (iv) which has been publicly
disclosed, (v) to the extent reasonably required in connection
with any litigation to which the Agent, any Bank or their
respective Affiliates may be a party, (vi) to the extent
reasonably required in connection with the exercise of any remedy
hereunder, (vii) to such Bank's legal counsel and independent
auditors and (viii) to any actual or proposed Participant,
Assignee or other Transferee of all or part of its rights
hereunder which has agreed in writing to be bound by the
provisions of this Section 9.09; provided, that, should
disclosure of any such confidential information be required by
virtue of clause (ii) or (iii) of the immediately preceding
sentence, any relevant Bank shall promptly notify the Borrower of
same so as to allow the Borrower to seek a protective order or to
take any other appropriate action; provided, further, that, no
Bank shall be required to delay compliance with any directive to
disclose beyond the last date such delay is legally permissible
any such information so as to allow the Borrower to effect any
such action.
SECTION 9.10. Representation by Banks. Each Bank
hereby represents that it is a commercial lender or financial
institution which makes Loans in the ordinary course of its
business and that it will make its Loans hereunder for its own
account in the ordinary course of such business; provided,
however that, subject to Section 9.08, the disposition of the
Note or Notes held by that Bank shall at all times be within its
exclusive control.
62
SECTION 9.11. Obligations Several. The obligations
of each Bank hereunder are several, and no Bank shall be
responsible for the obligations or commitment of any other Bank
hereunder. Nothing contained in this Agreement and no action
taken by the Banks pursuant hereto shall be deemed to constitute
the Banks to be a partnership, an association, a joint venture or
any other kind of entity. The amounts payable at any time
hereunder to each Bank shall be a separate and independent debt,
and each Bank shall be entitled to protect and enforce its rights
arising out of this Agreement or any other Loan Document and it
shall not be necessary for any other Bank to be joined as an
additional party in any proceeding for such purpose.
SECTION 9.12. Georgia Law. This Agreement and each
Note shall be construed in accordance with and governed by the
law of the State of Georgia.
SECTION 9.13. Severability. In case any one or more
of the provisions contained in this Agreement, the Notes or any
of the other Loan Documents should be 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 and
shall be enforced to the greatest extent permitted by law.
SECTION 9.14. Interest. In no event shall the amount
of interest, and all charges, amounts or fees contracted for,
charged or collected pursuant to this Agreement, the Notes or the
other Loan Documents and deemed to be interest under applicable
law (collectively, "Interest") exceed the highest rate of
interest allowed by applicable law (the "Maximum Rate"), and in
the event any such payment is inadvertently received by any Bank,
then the excess sum (the "Excess") shall be credited as a payment
of principal, unless the Borrower shall notify such Bank in
writing that it elects to have the Excess returned forthwith. It
is the express intent hereof that the Borrower not pay and the
Banks not receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may legally be paid
by the Borrower under applicable law. The right to accelerate
maturity of any of the Loans does not include the right to
accelerate any interest that has not otherwise accrued on the
date of such acceleration, and the Agent and the Banks do not
intend to collect any unearned interest in the event of any such
acceleration. All monies paid to the Agent or the Banks
hereunder or under any of the Notes or the other Loan Documents,
whether at maturity or by prepayment, shall be subject to rebate
of unearned interest as and to the extent required by applicable
law. By the execution of this Agreement, the Borrower covenants
that (i) the credit or return of any Excess shall constitute the
acceptance by the Borrower of such Excess, and (ii) the Borrower
shall not seek or pursue any other remedy, legal or equitable ,
against the Agent or any Bank, based in whole or in part upon
63
contracting for charging or receiving any Interest in excess of
the Maximum Rate. For the purpose of determining whether or not
any Excess has been contracted for, charged or received by the
Agent or any Bank, all interest at any time contracted for,
charged or received from the Borrower in connection with this
Agreement, the Notes or any of the other Loan Documents shall, to
the extent permitted by applicable law, be amortized, prorated,
allocated and spread in equal parts throughout the full term of
the Commitments. The Borrower, the Agent and each Bank shall, to
the maximum extent permitted under applicable law, (i)
characterize any non-principal payment as an expense, fee or
premium rather than as Interest and (ii) exclude voluntary
prepayments and the effects thereof. The provisions of this
Section shall be deemed to be incorporated into each Note and
each of the other Loan Documents (whether or not any provision of
this Section is referred to therein). All such Loan Documents
and communications relating to any Interest owed by the Borrower
and all figures set forth therein shall, for the sole purpose of
computing the extent of obligations hereunder and under the Notes
and the other Loan Documents be automatically recomputed by the
Borrower, and by any court considering the same, to give effect
to the adjustments or credits required by this Section.
SECTION 9.15. Interpretation. No provision of this
Agreement or any of the other Loan Documents shall be construed
against or interpreted to the disadvantage of any party hereto
by any court or other governmental or judicial authority by
reason of such party having or being deemed to have structured or
dictated such provision. The obligations of good faith and fair
dealing shall be imposed upon each party to this Agreement.
SECTION 9.16. Consent to Jurisdiction. The Borrower
(a) submits to the nonexclusive personal jurisdiction in the
State of Georgia, the courts thereof and the United States
District Courts sitting therein, for the enforcement of this
Agreement, the Notes and the other Loan Documents, (b) waives any
and all personal rights under the law of any jurisdiction to
object on any basis (including, without limitation, inconvenience
of forum) to jurisdiction or venue within the State of Georgia
for the purpose of litigation to enforce this Agreement, the
Notes or the other Loan Documents, and (c) agrees that service of
process may be made upon it in the manner prescribed in Section
9.01 for the giving of notice to the Borrower. Nothing herein
contained, however, shall prevent the Agent from bringing any
action or exercising any rights against any security and against
the Borrower personally, and against any assets of the Borrower,
within any other state or jurisdiction.
SECTION 9.17. Counterparts. This Agreement may be
signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
64
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed, under seal, by their
respective authorized officers as of the day and year first above
written.
THE HOME DEPOT, INC. (SEAL)
By:
Marshall L. Day
Senior Vice President
Finance
The Home Depot, Inc.
2727 Paces Ferry Road
Atlanta, Georgia 30339
Attention: Chief Financial Officer
Telecopier number: (404) 431-2714
Confirmation number: (404) 431-2700
65
COMMITMENTS WACHOVIA BANK OF GEORGIA, N.A.,
as Agent and as a Bank (SEAL)
$100,000,000.00
By:
Title:
Lending Office
Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Atlanta Corporate Group
Telecopier number: (404) 332-5016
Confirmation number: (404) 332-6558
66
$25,000,000.00 TRUST COMPANY BANK (SEAL)
By:
Title:
Lending Office
Trust Company Bank
25 Park Place - MC 127
Atlanta, Georgia 30302
Attention: Mr. J. Christopher
Deisley
Telecopier number: (404) 588-8833
Confirmation number: (404) 588-8684
67
$25,000,000.00 FIRST UNION NATIONAL BANK
OF GEORGIA (SEAL)
By:
Title:
Lending Office
First Union National Bank of Georgia
999 Peachtree Street, N.E.
Suite 11
Atlanta, Georgia 30309
Attention: Georgia Corporate
Division
Telecopier number: (404) 225-4255
Confirmation number: (404) 225-4258
68
$100,000,000.00 BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION (SEAL)
By:
Title: Vice President
Lending Office
Bank of America National
Trust & Savings Association
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
Attention: Mr. Glenn Edwards
Telecopier number: (404) 364-3303
Confirmation number: (404) 364-3300
69
$50,000,000.00 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK (SEAL)
By:
Title:
Lending Office
Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, NY 10260
Attention: Mr. David B. Common
Telecopier number: (212) 648-5336
Confirmation number: (212) 648-3319
TOTAL COMMITMENTS:
$300,000,000
70
Exhibit 11.1
THE HOME DEPOT, INC. AND SUBSIDIARIES
Computation of Earnings
Per Common and Common Equivalent Share
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
October 30, October 31, October 30, October 31,
1994 1993 1994 1993
Primary
Net earnings applicable
to common and common
<S> <C> <C> <C> <C>
equivalent shares $140,774 $103,417 $458,522 $344,721
Tax effected interest expense,
net of interest capitalized,
attributable to convertible
subordinated notes 5,606 --- 15,946 ---
$146,380 $103,417 $474,468 $344,721
Shares:
Weighted average number of
common and common equivalent
shares assuming average market
price 455,301 452,925 454,793 452,878
Additional shares from
conversion of notes 20,774 --- 20,774 ---
476,075 452,925 475,567 452,878
Primary earnings per common and
common equivalent share $ .307 $ .228 $ .998 $ .761
Fully Diluted
Net earnings applicable
to common and common
equivalent shares $140,774 $458,522
Tax effected interest expense,
net of interest capitalized,
attributable to convertible
subordinated notes 5,606 15,946
$146,380 $474,468
Shares:
Weighted average number
of common and common
equivalent shares
assuming ending market
price for period 455,575 455,131
Additional shares from
conversion of notes 20,774 20,774
476,349 475,905
Fully diluted earnings per common
and common
equivalent share $ .307 $ .997
</TABLE>
(1) Common equivalent shares represent shares granted under
three stock option plans and an employee stock purchase
plan.
(2) The Company's 4.5% Convertible Subordinated Notes, issued
in 1992, are common stock equivalents. For the three and
nine month periods ended October 31, 1993, shares issuable
upon their conversion were anti-dilutive and, therefore,
were excluded from the earnings per share calculation. For
the three and nine month periods ended October 30, 1994,
the Notes are dilutive and, accordingly, are assumed to be
converted as of the beginning of the accounting periods for
purposes of calculating earnings per share.
(3) For the three and nine month periods ended October 31,
1993, the ending market price was lower than the average
market price which would result in an anti-dilutive
calculation of earnings per share and therefore was
excluded from the fully dilutive calculation.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-29-1995
<PERIOD-END> OCT-30-1994
<CASH> 289148
<SECURITIES> 0
<RECEIVABLES> 271289
<ALLOWANCES> 0
<INVENTORY> 1717806
<CURRENT-ASSETS> 2379011
<PP&E> 3460262
<DEPRECIATION> 325194
<TOTAL-ASSETS> 5737691
<CURRENT-LIABILITIES> 1511972
<BONDS> 899009
<COMMON> 22609
0
0
<OTHER-SE> 3258641
<TOTAL-LIABILITY-AND-EQUITY> 5737691
<SALES> 9399215
<TOTAL-REVENUES> 9399215
<CGS> 6814073
<TOTAL-COSTS> 1834741
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3609
<INCOME-PRETAX> 746792
<INCOME-TAX> 288270
<INCOME-CONTINUING> 458522
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 458522
<EPS-PRIMARY> 1
<EPS-DILUTED> 1
</TABLE>
