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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 31, 1999
- 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)
2455 Paces Ferry Road N.W. Atlanta, Georgia 30339
(Address of principal executive offices) (Zip Code)
(770) 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 1,534,909,250 Shares, as of December 1, 1999
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THE HOME DEPOT, INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
October 31, 1999
Page
Part I. Financial Information:
Item 1. Financial Statements
CONSOLIDATED STATEMENTS OF EARNINGS -
Three-Month and Nine-Month Periods
Ended October 31, 1999 and November 1, 1998....................3
CONSOLIDATED CONDENSED BALANCE SHEETS -
As of October 31, 1999 and January 31, 1999....................4
CONSOLIDATED STATEMENTS OF CASH FLOWS -
Nine-Month Periods
Ended October 31, 1999 and November 1, 1998....................5
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME -
Three-Month and Nine-Month Periods
Ended October 31, 1999 and November 1, 1998....................6
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS..............................................7
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition..................8-13
Item 3. Quantitative and Qualitative Disclosures about
Market Risk..............................................14
Part II. Other Information:
Item 4. Submission of Matters to a Vote of Security
Holders..................................................14
Item 5. Other Information ...........................................14
Item 6. Exhibits and Reports on Form 8-K.............................14
Signature Page........................................................15
Index to Exhibits.....................................................16
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In Millions, Except Per Share Data)
Three Months Ended Nine Months Ended
October 31, November 1, October 31, November 1,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net Sales $ 9,877 $ 7,699 $ 29,260 $ 22,961
Cost of Merchandise Sold 6,983 5,522 20,771 16,552
Gross Profit 2,894 2,177 8,489 6,409
Operating Expenses:
Selling and Store Operating 1,760 1,377 5,065 3,998
Pre-Opening 24 24 78 61
General and Administrative 171 131 480 375
Total Operating Expenses 1,955 1,532 5,623 4,434
Operating Income 939 645 2,866 1,975
Interest Income (Expense):
Interest and Investment Income 12 9 24 24
Interest Expense (8) (8) (25) (29)
Interest, Net 4 1 (1) (5)
Earnings Before Income Taxes 943 646 2,865 1,970
Income Taxes 370 254 1,123 774
Net Earnings $ 573 $ 392 $ 1,742 $ 1,196
Weighted Average Number of
Common Shares Outstanding 1,490 1,471 1,483 1,469
Basic Earnings Per Share $ 0.38 $ 0.27 $ 1.17 $ 0.81
Weighted Average Number of
Common Shares Outstanding
Assuming Dilution 1,561 1,547 1,559 1,544
Diluted Earnings Per Share $ 0.37 $ 0.26 $ 1.13 $ 0.79
Dividends Per Share $ 0.040 $ 0.030 $ 0.110 $ 0.085
</TABLE>
See accompanying notes to consolidated condensed financial statements.
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THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(In Millions, Except Share Data)
October 31, January 31,
ASSETS 1999 1999
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Current Assets:
Cash and Cash Equivalents $ 946 $ 62
Short-Term Investments 30 ---
Receivables, Net 648 469
Merchandise Inventories 5,274 4,293
Other Current Assets 160 109
Total Current Assets 7,058 4,933
Property and Equipment, at cost 11,113 9,422
Less: Accumulated Depreciation
and Amortization 1,538 1,262
Net Property and Equipment 9,575 8,160
Long-Term Investments 15 15
Notes Receivable 40 26
Cost in Excess of the Fair Value
of Net Assets Acquired 276 268
Other 73 63
$ 17,037 $ 13,465
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 2,603 $ 1,586
Accrued Salaries and Related Expenses 522 395
Sales Taxes Payable 255 176
Other Accrued Expenses 702 586
Income Taxes Payable 74 100
Current Installments of Long-Term Debt 8 14
Total Current Liabilities 4,164 2,857
Long-Term Debt,
excluding current installments 735 1,566
Other Long-Term Liabilities 275 208
Deferred Income Taxes 86 85
Minority Interest 11 9
Stockholders' Equity:
Common Stock, par value $0.05.
Authorized: 5,000,000,000 shares;
issued and outstanding
1,534,405,000 shares at 10/31/99
and 1,475,452,000 shares at 1/31/99 76 74
Paid-In Capital 4,285 2,854
Retained Earnings 7,455 5,876
Cumulative Translation Adjustments (44) (61)
11,772 8,743
Less Shares Purchased for Compensation 6 3
Total Stockholders' Equity 11,766 8,740
$ 17,037 $ 13,465
</TABLE>
See accompanying notes to consolidated condensed financial statements.
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<TABLE>
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THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Millions) Nine Months Ended
October 31, 1999 November 1,1998
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Cash Provided From Operations:
Net Earnings $ 1,742 $ 1,196
Reconciliation of Net Earnings to Net Cash
Provided by Operations:
Depreciation and Amortization 338 277
(Increase) Decrease in Receivables, Net (175) 95
Increase in Merchandise Inventories (963) (567)
Increase in Accounts Payable
and Accrued Expenses 1,395 981
Increase in Income Taxes Payable 62 29
Other (25) 26
Net Cash Provided by Operations 2,374 2,037
Cash Flows From Investing Activities:
Capital Expenditures (1,794) (1,486)
Proceeds from Sales of Property and Equipment 50 30
Purchase of Remaining Interest
in the Home Depot Canada --- (261)
Purchase of Business Acquired (28) ---
Purchases of Investments (32) (2)
Proceeds from Maturities of Investments 2 3
Repayments of Advances Secured
by Real Estate, Net (14) (1)
Net Cash Used in Investing Activities (1,816) (1,717)
Cash Flows From Financing Activities:
Repayments of Commercial Paper
Obligations, Net (246) ---
Proceeds from Long-Term Borrowings, Net 497 ---
Principal Repayments of Long-Term Debt (7) (5)
Proceeds from Sale of Common Stock, Net 239 150
Cash Dividends Paid to Stockholders (163) (125)
Minority Interest Contributions
to Partnership 7 7
Net Cash Provided by
Financing Activities 327 27
Effect of Exchange Rate Changes
on Cash and Cash Equivalents (1) (4)
Increase in Cash and Cash Equivalents 884 343
Cash and Cash Equivalents
at Beginning of Period 62 172
Cash and Cash Equivalents at End of Period $ 946 $ 515
</TABLE>
See accompanying notes to consolidated condensed financial statements.
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THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In Millions)
Three Months Ended Nine Months Ended
October 31, November 1, October 31, November 1,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net Earnings $ 573 $ 392 $ 1,742 $ 1,196
Other Comprehensive Income:
Foreign Currency Translation
Adjustments 17 (9) 17 (28)
Total Other Comprehensive
Income 17 (9) 17 (28)
Comprehensive Income $ 590 $ 383 $ 1,759 $ 1,168
</TABLE>
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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 recurring 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 31, 1999, as filed with the
Securities and Exchange Commission (File No. 1-8207).
2. Redemption of Convertible Notes:
On October 5, 1999, the Company announced its decision to redeem, on
November 1, 1999, all of its outstanding 3.25% Convertible Subordinated
Notes due October 1, 2001 (the "Notes") at a redemption price including
a premium of $1,008.13 per $1,000 principal amount of Notes. The Notes
were convertible into Common Stock at the rate of one share for each
$23.0417 principal amount of Notes owned. All but 215 of the $1,000 Notes
were converted to Common Stock. Since the third fiscal quarter of 1996,
the Company has reported earnings per share assuming the Notes had been
converted as of the beginning of the accounting period and accordingly,
the conversion of the Notes did not have a dilutive effect on earnings
per share.
3. Issuance of Senior Notes:
On September 27, 1999, the Company issued $500,000,000 of 6.50% Senior
Notes due September 15, 2004. The Company will pay interest semiannually
on March 15 and September 15 of each year commencing March 15, 2000. The
Company, at its option, may at any time redeem all or any portion of
the Senior Notes by notice to the holders. The Senior Notes are
redeemable at a premium plus accrued interest up to the redemption date.
The net proceeds from the issuance of the Senior Notes will be used to
finance a portion of the Company's capital expenditure programs,
including planned store expansions and renovations, and for general
corporate purposes. In the interim, the net proceeds are being invested
in cash equivalent and short-term interest-bearing investments.
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THE HOME DEPOT, INC. AND SUBSIDIARIES
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The data below reflects selected sales data, 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.
Percentage
Increase
Three Months Nine Months (Decrease) in
Ended Ended Dollar Amounts
Selected Consolidated Oct.31, Nov. 1, Oct.31, Nov. 1, Three Nine
Statements of Earnings Data 1999 1998 1999 1998 Months Months
<S> <C> <C> <C> <C> <C> <C>
Net Sales 100.0% 100.0% 100.0% 100.0% 28.3% 27.4%
Gross Profit 29.3 28.3 29.0 27.9 32.9 32.5
Operating Expenses:
Selling and Store Operating 17.8 17.9 17.3 17.4 27.8 26.7
Pre-Opening 0.3 0.3 0.3 0.3 0.0 27.9
General and Administrative 1.7 1.7 1.6 1.6 30.5 28.0
Total Operating Expenses 19.8 19.9 19.2 19.3 27.6 26.8
Operating Income 9.5 8.4 9.8 8.6 45.6 45.1
Interest Income (Expense):
Interest and Investment
Income 0.1 0.1 0.1 0.1 33.3 0.0
Interest Expense (0.1) (0.1) (0.1) (0.1) 0.0 (13.8)
Interest, Net 0.0 0.0 0.0 0.0 300.0 (80.0)
Earnings Before
Income Tax 9.5 8.4 9.8 8.6 46.0 45.4
Income Taxes 3.7 3.3 3.8 3.4 45.7 45.1
Net Earnings 5.8% 5.1% 6.0% 5.2% 46.2 45.7
Selected Consolidated
Sales Data
Number of Transactions
(000's) 201,483 167,308 602,151 503,089 20.4 19.7
Average Sale Per
Transaction $48.75 $45.62 $48.28 $45.26 6.9 6.7
Weighted Average Weekly
Sales Per Operating
Store (000's) $ 879 $ 847 $ 912 $ 878 3.8 3.9
Weighted Average Sales
Per Square Foot $ 425 $ 412 $ 441 $ 427 3.2 3.3
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<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(CONTINUED)
FORWARD-LOOKING STATEMENTS
Certain written and oral statements made by The Home Depot, Inc. and
subsidiaries (the "Company") or with the approval of an authorized
executive officer of the Company may constitute "forward-looking statements"
as defined under the Private Securities Litigation Reform Act of 1995.
Words or phrases such as "should result,""are expected to," "we anticipate,"
"we estimate," "we project" or similar expressions are intended to identify
forward-looking statements. These statements are subject to certain risks
and uncertainties that could cause actual results to differ materially from
the Company's historical experience and its present expectations or
projections. These risks and uncertainties include, but are not limited to,
unanticipated weather conditions, stability of costs and availability of
sourcing channels, our ability to attract, train and retain highly-qualified
associates, conditions affecting the availability, acquisition, development
and ownership of real estate, year 2000 problems, general economic conditions,
the impact of competition, and regulatory and litigation matters. Caution
should be taken not to place undue reliance on any such forward-looking
statements, since such statements speak only as of the date of the making
of such statements. Additional information concerning these risks and
uncertainties is contained in the Company's Annual Report on Form 10-K for
the year ended January 31, 1999, as filed with the Securities and Exchange
Commission.
RESULTS OF OPERATIONS
Sales for the third quarter of fiscal 1999 increased 28.3% to $9.877 billion
from $7.699 billion for the third quarter of fiscal 1998. For the first nine
months of fiscal 1999, sales increased 27.4% to $29.260 billion from $22.961
billion for the comparable period in fiscal 1998. The sales increase for both
periods was primarily attributable to new stores (878 stores open at the end
of the third quarter of fiscal 1999 compared with 717 at the end of the third
quarter of fiscal 1998) and a comparable store-for-store sales increase of
approximately 10% for both the third quarter and first nine months of fiscal
1999.
Gross profit as a percent of sales was 29.3% for the third quarter of fiscal
1999 compared with 28.3% for the third quarter of fiscal 1998. For the first
nine months of fiscal 1999, gross profit as a percent of sales was 29.0%
compared with 27.9% for the comparable period of fiscal 1998. The gross
profit rate increase for both periods was primarily attributable to the
ongoing benefits of product line reviews, which have resulted in lower costs
of merchandise and more effective product assortments, cost reductions
through direct sourcing of imports, additional tool rental centers in
certain stores and better shrink results.
Total operating expenses as a percent of sales decreased to 19.8% for the
third quarter of fiscal 1999 from 19.9% for the third quarter of fiscal 1998.
For the first nine months of fiscal 1999, operating expenses decreased as a
percent of sales to 19.2% from 19.3% for the comparable period in fiscal 1998.
Selling and store operating expenses as a percent of sales decreased to 17.8%
for the third quarter of fiscal 1999 from 17.9% for the comparable period in
fiscal 1998. Net advertising expenses decreased as a percent of sales due to
higher co-op support from vendors, increased national advertising and cost
leverage achieved from opening new stores in existing markets. Also
contributing to the decrease were store relocation costs, which were lower
than last year as the Company recorded expenses for one relocation during the
third quarter of fiscal 1999 compared to five relocations during the
comparable period in fiscal 1998. The Company also leveraged occupancy and
certain other operating expenses as the result of the high comparable store
sales. Partially offsetting these decreases were higher costs for store
selling payroll as some non-selling hours were shifted to the sales floor
combined with continued staffing tests and increased labor standards in
certain departments, and higher medical costs resulting from increased
<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(CONTINUED)
RESULTS OF OPERATIONS - (Continued)
participation in the Company's medical plan and higher costs related to
prescription drugs. In addition, credit card discounts for the first nine
months of fiscal 1999 were higher than the comparable period of fiscal 1998
as a percent of sales, due to a higher penetration of credit card sales and
non-private label discount rate increases. For the first nine months of fiscal
1999 selling and store operating expenses as a percent of sales decreased to
17.3% from 17.4% for the first nine months of fiscal 1998. This decrease was
due primarily to lower net advertising expenses, fewer store relocations and
leverage achieved from high comparable store sales, partially offset by higher
credit card discounts and medical plan expenses as described above.
Pre-opening expenses as a percent of sales were 0.3% for all comparable
periods in fiscal 1999 and fiscal 1998. The Company opened 30 new stores and
reopened two stores, that were closed in prior quarters, during the third
quarter of fiscal 1999 compared with 38 new stores and three store
relocations during the third quarter of fiscal 1998. General and
administrative expenses as a percent of sales were 1.7% for the third
quarter of both fiscal 1999 and fiscal 1998, and 1.6% for the first nine
months of both fiscal 1999 and fiscal 1998.
Net interest as a percent of sales was 0.0% for the third quarter and first
nine months of both fiscal 1999 and fiscal 1998. As a percent of sales,
interest and investment income was 0.1% for both the third quarter and
first nine months of fiscal 1999 and the comparable periods of fiscal 1998.
Interest expense as a percent of sales was 0.1% for all comparable periods.
The Company's combined federal and state effective income tax rate decreased
to 39.2% for the third quarter and first nine months of fiscal 1999 from
39.3% for the comparable periods of fiscal 1998, respectively. During the
fourth quarter of fiscal 1998, an adjustment was made to lower the annual
effective tax rate to 39.2%.
Net earnings as a percent of sales increased to 5.8% and 6.0% for the third
quarter and first nine months of fiscal 1999, respectively, from 5.1% and
5.2% for the third quarter and first nine months of fiscal 1998, respectively.
The increases for fiscal 1999 were primarily attributable to higher gross
margin rates and lower selling and store operating expenses, as a percent of
sales, as described above.
Diluted earnings per share were $0.37 and $1.13 for the third quarter and
first nine months of fiscal 1999, respectively, compared to $0.26 and $0.79
for the third quarter and first nine months of fiscal 1998, 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 1999, the Company opened 117 new stores,
reopened 1 store that was closed in fiscal 1998 and relocated 5 stores.
During the remainder of fiscal 1999, the Company plans to open approximately
52 new stores including 1 additional Villager's Hardware test store, and
relocate 1 store, for a 22% unit growth rate for the year. It is
anticipated that approximately 84% of the fourth quarter new locations will
be owned, and the remainder will be leased.
<PAGE>
The Company has two operating lease agreements totaling $882 million for the
purpose of financing construction costs of certain new stores. Under the
operating lease agreements, the lessor purchases the properties, pays for
the construction costs and subsequently leases the facilities to the Company.
The leases provide for substantial residual value guarantees and include
purchase options at original cost on each property.
The Company financed a portion of new stores opened in fiscal 1997, 1998 and
1999 as well as an office building in fiscal 1999 under the operating lease
agreements and anticipates utilizing these facilities to finance selected new
stores during the remainder of fiscal 1999 and in fiscal 2000. In addition,
some planned locations for fiscal 1999 and fiscal 2000 will be leased
individually, and it is expected that many locations may be obtained through
the acquisition of land parcels and construction or purchase of buildings.
While the cost of new stores to be constructed and owned by the Company
varies widely, principally due to land costs, new store costs are currently
estimated to average approximately $13.0 million per location. The cost to
remodel and/or fixture stores to be leased is expected to average
approximately $4.1 million per store. In addition, each new store will
require approximately $3.1 million to finance inventories, net of vendor
financing.
On October 5, 1999, the Company announced its decision to redeem, on
November 1, 1999, all of its outstanding 3.25% Convertible Subordinated Notes
due October 1, 2001 (the "Notes") at a redemption price including a premium of
$1,008.13 per $1,000 principal amount of Notes. The Notes were convertible
into Common Stock at the rate of one share for each $23.0417 principal amount
of Notes owned. All but 215 of the $1,000 Notes were converted to Common
Stock. Since the third fiscal quarter of 1996, the Notes had a dilutive
effect on earnings per share and accordingly, the Company has reported
earnings per share assuming the Notes had converted at the beginning of the
accounting period and accordingly, the conversion of the Notes did not have a
dilutive effect on earnings per share.
On September 27, 1999, the Company issued $500,000,000 of 6.50% Senior Notes
due on September 15, 2004. The Company will pay interest semiannually on
March 15 and September 15 of each year commencing March 15, 2000. The
Company, at its option, may at any time redeem all or any portion of the
Senior Notes by notice to the holders. The Senior Notes are redeemable at a
premium plus accrued interest up to the redemption date.
The net proceeds from the issuance of the Senior Notes will be used to
finance a portion of the Company's capital expenditure programs, including
planned store expansions and renovations, and for general corporate
purposes. In the interim, the net proceeds are being invested in cash
equivalent and short-term interest-bearing investments.
The Company has a commercial paper program that allows borrowings up to a
maximum of $800 million. As of October 31, 1999, there were no borrowings
outstanding under the program. In connection with the program, the Company
has a back-up credit facility with a consortium of banks for up to $800
million. The credit facility, which was refinanced during fiscal 1999 and
expires on September 2004, contains various restrictive covenants, none of
which is expected to materially impact the Company's liquidity or capital
resources.
<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)
As of October 31, 1999, the Company had $976 million in cash and cash
equivalents and short-term investments, as well as $15 million in long-term
investments. The increase in cash and cash equivalents from the prior quarter
is primarily attributable to the issuance of the Senior Notes. Management
believes that its current cash position, the proceeds from short-term and
long-term investments, internally generated funds, funds available from its
$800 million commercial paper program, funds available from the $882 million
operating lease agreements, and/or the ability to obtain alternate sources of
financing should enable the Company to complete its capital expenditure
programs, including store expansions and renovations, through the next several
fiscal years.
YEAR 2000
The Company is currently addressing a universal situation commonly referred
to as the "Year 2000 Problem." The Year 2000 Problem relates to the inability
of certain computer software programs to properly recognize and process
date-sensitive information relative to the year 2000 and beyond. During
fiscal 1997, the Company developed a plan to devote the necessary resources
to identify and modify internal systems impacted by the Year 2000 Problem, or
implement new systems to become year 2000 compliant, in a timely manner.
This compliance plan consists of four major areas of focus: systems,
desktops, facilities and supplier management. The revised estimated total
cost of executing this plan is approximately $11.5 million, and as of October
31, 1999, the Company had expended approximately $10.4 million to effect the
plan. All expenditures related to the Company's year 2000 readiness
initiative have been funded by cash flow from operations, have been expensed
as incurred and have not materially impacted its other operating or investment
plans.
The Company has completed the systems portion of the compliance plan and no
system replacements were necessary. The compliance plan for desktop
applications critical to the Company's overall business infrastructure
was complete at the end of the third quarter of fiscal 1999. Substantially
all critical facilities systems, including, but not limited to, security
systems, energy management, material handling, copiers and faxes, have been
inventoried and tested. The testing revealed that some of these systems
needed to be remediated to avoid year 2000 problems and the Company hired
third parties to complete this remediation. As of October 31, 1999, the
Company had substantially completed the facilities systems portion of its
compliance plan. The Company, to date, has experienced no material year
2000 system problems. In implementing the systems portion of the plan,
the Company completed an inventory of all software programs operating
on its systems, identified year 2000 problems, created an appropriate
testing environment, completed testing and installed year 2000 compliant
software in the production environment.
The Company is assessing the year 2000 compliance status of its suppliers,
many of which participate in electronic data interchange ("EDI") or similar
programs with the Company. Based on information provided by the suppliers and
carriers through surveys and telephone interviews, the Company has confirmed
that suppliers and carriers representing approximately 98% of its EDI
volume have completed their internal year 2000 testing of both EDI and
non-EDI systems. Additionally, the Company is conducting substantial
testing with EDI merchandise suppliers and transportation carriers including,
<PAGE>
with respect to merchandise suppliers participating in EDI programs, point-to-
point testing of EDI systems for year 2000 compliance. As of October 31, 1999,
the Company had completed testing with suppliers and carriers representing
approximately 50% of its EDI volume and had completed testing suppliers and
carriers representing approximately 70% of its EDI volume as of November 30,
1999. The Company has engaged in written or oral communications concerning
the year 2000 readiness of the remaining 30%. These communications have not
revealed to the Company any information that has caused the Company to
believe that the systems of its suppliers and carriers will fail to be year
2000 compliant in a timely manner.
The Company's risks involved with not solving the Year 2000 Problem include,
but are not limited to, the following:
- loss of local or regional electrical power;
- loss of telecommunication services;
- delays or cancellations of merchandise shipments;
- manufacturing shutdowns;
- delays in processing customer transactions; and
- bank errors and computer errors by suppliers.
Because the Company's year 2000 compliance is dependent upon certain third
parties (including infrastructure providers) also being year 2000 compliant
on a timely basis, there can be no assurance that the Company's efforts will
prevent a material adverse impact on its results of operations, financial
condition or business. However, the Company is taking steps to enable its
stores to operate in an independent mode in case of power or tele-
communications systems outages, which steps include building alternative
processes for stores to communicate with the store support center.
The Company has designed its year 2000 contingency plan as an extension of
its current business recovery plan, which prescribes the measures to be taken
upon the occurrence of a variety of contingencies. The contingency plan
focuses on the following priorities:
- ability to sell products to customers;
- order and distribute merchandise;
- pay employees; and
- meet other regulatory and administrative needs.
In addition to relying upon recovery actions contained in the Company's
existing business recovery plan, the Company's year 2000 contingency plan
is supported by its year 2000 command center. Key personnel (including
managerial, technical, maintenance, logistics and other personnel employed at
its stores and store support centers) will be available in the year 2000
command center 24 hours a day beginning on December 31, 1999, to identify and
seek to rectify as promptly as possible any business disruptions. Although the
Company has substantially completed its year 2000 contingency planning, it
will continue to modify and test implementation of these contingency plans
throughout the remainder of 1999. In addition, the Company has identified
critical activities that would normally be conducted during the first two
weeks of January 2000, which may be completed instead in December 1999.
<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(CONTINUED)
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.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company has not entered into any transactions using
derivative financial instruments or derivative commodity
instruments and believes that its exposure to market risk
associated with other financial instruments (such as
investments) is not material.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
During the third quarter of fiscal 1999, no matters
were submitted to a vote of security holders.
Item 5. Other Information
None
PART II. OTHER INFORMATION - Continued
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Credit Agreement dated September 17, 1999 by and among The
Home Depot, Inc., Bank of America, N.A., as Administrative
Agent, Wachovia Bank, N.A., as Syndication Agent, First Union
National Bank and The Bank of New York, as Co-Documentation
Agents, and the banks party thereto.
11.1 Computation of Basic and Diluted Earnings Per Share
27. Financial Data Schedule (only submitted to SEC in electronic
format)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
October 31, 1999.
<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 & CEO
/s/ Marshall L. Day
Marshall L. Day
Senior Vice President Finance
& Accounting
December 2, 1999
(Date)
<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit Description
10.1 Credit Agreement dated September 17, 1999 by and among The Home
Depot, Inc., Bank of America, N.A., as Administrative Agent,
Wachovia Bank, N.A., as Syndication Agent, First Union National
Bank and The Bank of New York, as Co-Documentation Agents, and
banks party thereto.
11.1 Computation of Basic and Diluted Earnings Per Share
27. Financial Data Schedule (only submitted to SEC in electronic
format)
EXHIBIT 10.1
CREDIT AGREEMENT
by and among
THE HOME DEPOT, INC.
as Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent and as a Lender,
WACHOVIA BANK, N.A.,
as Syndication Agent and as a Lender
FIRST UNION NATIONAL BANK
and
THE BANK OF NEW YORK,
as Co-Documentation Agents and as Lenders
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
September 17, 1999
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
<PAGE>
TABLE OF CONTENTS
<PAGE>
ARTICLE I DEFINITIONS
SECTION 1.01. Definitions ..........................................1
SECTION 1.02. Accounting Terms and Determinations..................18
SECTION 1.03. References...........................................18
SECTION 1.04. Use of Defined Terms.................................19
SECTION 1.05. Terminology .........................................19
SECTION 1.06. Alternate Currencies.................................19
SECTION 1.07. Time.................................................19
ARTICLE II THE CREDITS
SECTION 2.01. Commitments to Lend..................................19
SECTION 2.02. Method of Borrowing..................................20
SECTION 2.03. Money Market Loans...................................22
SECTION 2.04. Notes................................................25
SECTION 2.05. Maturity of Loans....................................26
SECTION 2.06. Interest Rates.......................................26
SECTION 2.07. Fees; Calculations...................................27
SECTION 2.08. Optional Termination or Reduction of Commitments.....28
SECTION 2.09. Termination of Commitments...........................29
SECTION 2.10. Optional Prepayments.................................29
SECTION 2.11. Mandatory Prepayment.................................29
SECTION 2.12. General Provisions as to Payments....................29
SECTION 2.13. Computation of Interest and Fees.....................31
SECTION 2.14. Swing Line...........................................31
SECTION 2.15. Utilization of Offshore Currencies...................32
SECTION 2.16. Increase in Total Revolving Credit Commitment........33
ARTICLE III CONDITIONS TO BORROWINGS
SECTION 3.01. Conditions to First Borrowing........................34
SECTION 3.02. Conditions to All Borrowings.........................35
ARTICLE IV-A REPRESENTATIONS AND WARRANTIES OF THE BORROWER
SECTION 4.01. Corporate Existence and Power........................36
SECTION 4.02. Corporate and Governmental Authorization;
No Contravention.....................................36
SECTION 4.03. Binding Effect.......................................36
SECTION 4.04. Financial Information................................37
SECTION 4.05. No Litigation........................................37
SECTION 4.06. Compliance with ERISA................................37
SECTION 4.07. Compliance with Laws; Payment of Taxes...............37
<PAGE>
SECTION 4.08. Significant Subsidiaries.............................37
SECTION 4.09. Investment Company Act...............................38
SECTION 4.10. Public Utility Holding Company Act...................38
SECTION 4.11. Ownership of Property; Liens.........................38
SECTION 4.12. No Default...........................................38
SECTION 4.13. Full Disclosure......................................38
SECTION 4.14. Environmental Matters................................38
SECTION 4.15. Capital Stock........................................39
SECTION 4.16. Margin Stock.........................................39
SECTION 4.17. Solvency.............................................39
SECTION 4.18. Year 2000 Compliance.................................39
ARTICLE IV-B REPRESENTATIONS AND WARRANTIES OF THE BANKS
AND THE AGENT
SECTION 4.19. Agent and Bank Corporate Existence and Power.........40
SECTION 4.20. Agent and Bank Binding Effect........................40
ARTICLE V COVENANTS
SECTION 5.01. Information..........................................40
SECTION 5.02. Inspection of Property, Books and Records............41
SECTION 5.03. Ratio of Consolidated Funded Debt to Consolidated Total
Tangible Capital.....................................42
SECTION 5.04. Negative Pledge......................................42
SECTION 5.05. Maintenance of Existence.............................43
SECTION 5.06. Dissolution..........................................43
SECTION 5.07. Consolidations, Mergers and Sales of Assets..........43
SECTION 5.08. Use of Proceeds......................................44
SECTION 5.09. Compliance with Laws; Payment of Taxes...............44
SECTION 5.10. Insurance............................................44
SECTION 5.11. Maintenance of Property..............................44
SECTION 5.12. Environmental Notices................................44
SECTION 5.13. Environmental Matters................................45
SECTION 5.14. Environmental Release................................45
SECTION 5.15. Debt of Subsidiaries.................................45
SECTION 5.16. Year 2000 Compliance.................................45
ARTICLE VI DEFAULTS
SECTION 6.01. Events of Default....................................45
SECTION 6.02. Notice of Default....................................47
<PAGE>
ARTICLE VII THE AGENT
SECTION 7.01. Appointment, Powers and Immunities...................48
SECTION 7.02. Reliance by Agent....................................48
SECTION 7.03. Defaults.............................................48
SECTION 7.04. Rights of Agent as a Bank............................49
SECTION 7.05. Indemnification......................................49
SECTION 7.06. CONSEQUENTIAL DAMAGES................................49
SECTION 7.07. Payee of Note Treated as Owner.......................50
SECTION 7.08. Nonreliance on Agent and Other Banks.................50
SECTION 7.09. Failure to Act.......................................50
SECTION 7.10. Resignation or Removal of Agent......................50
ARTICLE VIII CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. Basis for Determining Interest Rate Inadequate
or Unfair......................................51
SECTION 8.02. Illegality...........................................51
SECTION 8.03. Increased Cost and Reduced Return....................52
SECTION 8.04. Base Rate Loans Substituted for Euro-Dollar Loans....54
SECTION 8.05. Compensation.........................................54
ARTICLE IX MISCELLANEOUS
SECTION 9.01. Notices..............................................54
SECTION 9.02. No Waivers...........................................55
SECTION 9.03. Expenses; Documentary Taxes..........................55
SECTION 9.04. Indemnification; Limitation of Liability.............55
SECTION 9.05. Sharing of Setoffs...................................58
SECTION 9.06. Amendments and Waivers...............................59
SECTION 9.07. No Margin Stock Collateral...........................59
SECTION 9.08. Successors and Assigns...............................59
SECTION 9.09. Confidentiality......................................61
SECTION 9.10. Representation by Banks..............................62
SECTION 9.11. Obligations Several..................................62
SECTION 9.12. Georgia Law..........................................62
SECTION 9.13. Severability.........................................62
SECTION 9.14. Interest.............................................62
SECTION 9.15. Interpretation.......................................63
SECTION 9.16. Consent to Jurisdiction..............................63
SECTION 9.17. Counterparts.........................................64
<PAGE>
EXHIBITS AND SCHEDULES
EXHIBIT A-1 ...................FORM OF SYNDICATED LOAN NOTE A-1-1
EXHIBIT A-2 .................FORM OF MONEY MARKET LOAN NOTE A-2-1
EXHIBIT A-3 ...................FORM OF SWING LINE LOAN NOTE A-3-1
EXHIBIT B ......FORM OF OPINION OF COUNSEL FOR THE BORROWER B-1
EXHIBIT C ................FORM OF ASSIGNMENT AND ACCEPTANCE C-1
EXHIBIT D-1 ...FORM OF NOTICE OF BORROWING: SYNDICATED LOAN D-1-1
EXHIBIT D-2 ...FORM OF NOTICE OF BORROWING: SWING LINE LOAN D-2-1
EXHIBIT E ...................FORM OF COMPLIANCE CERTIFICATE E-1
EXHIBIT F ......................FORM OF CLOSING CERTIFICATE F-1
EXHIBIT G ...............FORM OF MONEY MARKET QUOTE REQUEST G-1
EXHIBIT H .......................FORM OF MONEY MARKET QUOTE H-1
EXHIBIT I ......................FORM OF AMENDMENT AGREEMENT I-1
EXHIBIT J ......................................COMMITMENTS J-1
Schedule 4.08......................Significant Subsidiaries S-1
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of September 17, 1999, is made by and
among:
THE HOME DEPOT, INC., a Delaware corporation, as the Borrower,
BANK OF AMERICA, N.A., a national banking association organized and
existing under the laws of the United States, in its capacity as a Bank and as
Administrative Agent for the Banks, and each other financial institution
executing and delivering a signature page hereto and each other financial
institution which may hereafter execute and deliver an instrument of
assignment with respect to this Agreement pursuant to Section 9.08,
WACHOVIA BANK, N.A., a national banking association organized and
existing under the laws of the United States, in its capacity as a Bank and as
Syndication Agent,
FIRST UNION NATIONAL BANK, a national banking association organized and
existing under the laws of the United States, in its capacity as a Bank and as
a Co-Documentation Agent, and
THE BANK OF NEW YORK, a state banking association organized and existing
under the laws of New York, in its capacity as a Bank and as a Co-
Documentation 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" means, for any Interest Period,
with respect to any Euro-Dollar Loan, the rate of interest per annum equal to
the quotient obtained (rounded upwards, if necessary, to the next higher
1/100th of 1%) by dividing (i) the applicable London Interbank Offered Rate
for such Interest Period by (ii) 1.00 minus the Reserve Requirement. The
Adjusted London Interbank Offered Rate shall be adjusted automatically on and
as of the effective date of any change in the Reserve Requirement.
<PAGE>
"Adjusted Offshore Interbank Offered Rate" means, for any Interest Period,
with respect to any Offshore Loans, the rate of interest per annum (rounded
upwards to the nearest 1/100th of 1%) as follows:
Offshore = London Interbank Offered Rate Mandatory
Rate ------------------------------ + Cost
1- Reserve Requirement
The Adjusted Offshore Interbank Rate shall be adjusted automatically as to all
Offshore Loans then outstanding as of the effective date of any change in the
Reserve Requirement.
"Advance Date Exchange Rate" means, with respect to a specified Loan in an
Alternate Currency, the Spot Rate of Exchange determined for the date such
Loan is originally made.
"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 a 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 Bank of America, 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.
"Agreed Rate" means for any Swing Line Loan the rate per annum quoted
to the Borrower by the Swing Line Lender on the day of, or prior to, any
Swing Line Borrowing and accepted by the Borrower with respect to such Swing
Line Borrowing.
"Agreement" means this Credit Agreement, together with all amendments and
supplements hereto.
"Alternate Currency" means, collectively or individually as the context
may indicate, the Offshore Currencies and the Alternate Offshore Currencies.
"Alternate Currency Equivalent Amount" means (a) with respect to a
specified Alternate Currency, the amount denominated in such Alternate
Currency and (b) with respect to a specified Dollar amount, the amount of
Alternate Currency into which such Dollar amount would be converted based on
the applicable Advance Date Exchange Rate.
"Alternate Currency Loan" means a Loan to be made in an Alternate Currency
as set forth in the applicable Notice of Borrowing or Money Market Quote,
respectively.
<PAGE>
"Alternate Offshore Currency" means any freely available currency other
than Dollars, Euros, British Pounds Sterling or Canadian Dollars, that in the
opinion of the bidding Bank in a Money Market Quote, in its sole discretion,
is at the time of determination thereof freely traded in the offshore
interbank foreign exchange markets and is freely transferable and convertible
into Dollars in the United States currency market.
"Applicable Margin" means (i) with respect to Base Rate Loans, 0%; and
(ii) with respect to Euro_Dollar Loans and Offshore 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, 0.095%, (x) if the Borrower's
ratio of Consolidated Funded Debt to Consolidated Total Tangible Capital is
greater than 0.25 to 1.0 but equal to or less than 0.35 to 1.0, 0.090%, (y) if
the Borrower's ratio of Consolidated Funded Debt to Consolidated Total
Tangible Capital is greater than 0.35 to 1.0 but equal to or less than 0.45 to
1.0, 0.15%, and (z) if the Borrower's ratio of Consolidated Funded Debt to
Consolidated Total Tangible Capital is greater than 0.45 to 1.0, 0.255%. 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 C.
"Authority" has the meaning set forth in Section 8.02.
"Bank" means Bank of America and each other financial institution
executing and delivering a signature page hereto and each other financial
institution which may hereafter become a Bank pursuant to Section 2.16 or
execute anddeliver an instrument of assignment with respect to this Agreement
pursuant to Section 9.08.
"Bank of America" means Bank of America, N.A., a national banking
association organized under the laws of the United States, and its successors.
"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 (0.50%) 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 Borrowing" shall have the meaning given to such term in the
definition of "Borrowing".
"Base Rate Loan" means a Loan to be made as a Base Rate Loan pursuant to
the applicable Notice of Borrowing, Section 2.02(g), or Article VIII, as
applicable.
"Borrower" means The Home Depot, Inc., a Delaware corporation, and its
successors and its permitted assigns.
<PAGE>
"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, a "Euro_Dollar
Borrowing" if such Loans are Euro_Dollar Loans, an "Offshore Borrowing" if
such Loans are Offshore Loans, and a "Swing Line Borrowing" if such Loans are
Swing Line Loans made pursuant to Section 2.14. A Borrowing is a "Syndicated
Borrowing" if it is made pursuant to Section 2.01, and a "Money Market
Borrowing" if it is made pursuant to Section 2.03.
"Business Day" means, (i) except as expressly provided in clauses (ii),
(iii) and (iv), any day which is not a Saturday, Sunday or a day on which
banks in the States of New York and North Carolina are authorized or obligated
by law, executive order or governmental decree to be closed, (ii) with respect
to the selection, funding, interest rate, payment, and Interest Period of any
Euro-Dollar Loan and any Money Market Loan denominated in Dollars, any day
which is a Business Day, as described above, and on which the relevant
international financial markets are open for the transaction of business
contemplated by this Agreement and foreign exchange transactions in London,
England, New York, New York and Charlotte, North Carolina, (iii) with respect
to the selection, funding, interest rate, payment and Interest Period for any
Offshore Loan or Money Market Loan denominated in Euros, any day which is a
Business Day as described in clause (ii) above, and on which TARGET (Trans-
European Automated Real-time Gross settlement Express Transfer system) or any
successor thereto is scheduled to be open for business, and (iv) with respect
to the selection, funding, interest rate, payment and Interest Period for any
Offshore Loan or Money Market Loan denominated in an Alternate Currency other
than Euros, any day which is a Business Day as described in clause (ii) above,
and on which the relevant Funding Bank is open for the transaction of business
contemplated by this Agreement and on which dealings in the relevant Alternate
Currency are carried on in the applicable offshore foreign exchange interbank
market in which disbursement of or payment in such Alternate Currency will be
made or received hereunder.
"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. section 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
<PAGE>
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(d).
"Closing Date" means September 17, 1999.
"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 in Dollars set
forth on Exhibit J hereto, as such amount may be increased or decreased from
time to time (a) pursuant to Sections 2.08 and 2.09, (b) to reflect any
assignments to or by such Bank effected in accordance with Section 9.08, or
(c) to reflect any increase in the Total Revolving Credit Commitment pursuant
to Section 2.16.
"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 (a) the types of Debt described
in clauses (i), (ii), (iii) and (iv) of the definition of Debt contained in
this Agreement, (b) 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 (c)
Guaranties of Debt of other Persons of the types described in clauses (a) and
(b) above, determined on a consolidated basis as of such date.
"Consolidated Net Worth" means at any time, Stockholders' Equity, as set
forth or reflected on the most recent consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries, prepared in accordance with GAAP.
"Consolidated Operating Profits" means, for any period, the Operating
Profits of the Borrower and its Consolidated Subsidiaries.
<PAGE>
"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
February 1, 1998;
(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.
"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
<PAGE>
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).
"Dollar Equivalent Amount" means (a) the amount denominated in Dollars,
and (b) with respect to a specified Alternate Currency amount, the amount of
Dollars into which such Alternate Currency amount would be converted based on
the applicable Advance Date Exchange Rate.
"Dollars" or "$" means dollars in lawful currency of the United States of
America.
"EMU Legislation" means (a) a Treaty on European Union (the Treaty of Rome
of March 25, 1957, as amended by the Single European Act 1986 and the
Maastricht Treaty (which was signed at Maastricht on February 1, 1992 and came
into force on November 1, 1993)) and (b) legislative measures of the European
Council (including without limitation European Council regulations) for the
introduction of, changeover to or operation of the Euro, in each case as
amended or supplemented from time to time.
"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.
<PAGE>
"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 federal, state or local statute,
law, ordinance, code, rule, regulation, order, decree, permit or license
regulating, relating to, or imposing liability or standards of conduct
concerning, health, safety or any environmental matters or conditions,
environmental protection or conservation, including without limitation,
CERCLA; CERCLIS; the Superfund Amendments and Reauthorization Act of 1986, as
amended; the Resource Conservation and Recovery Act, as amended; the Toxic
Substances Control Act, as amended; the Clean Air Act, as amended; the Clean
Water Act, as amended; together with all regulations promulgated thereunder,
and any other "Superfund" or "Superlien" 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.
"Euro" and "e" each means the single official non-legacy currency
denominated as the euro and constituting legal tender for the payment of
public and private debts in the Participating Member States.
"Euro_Dollar Borrowing" shall have the meaning given to such term in the
definition of "Borrowing".
"Euro_Dollar Loan" means a Loan to be made as a Euro_Dollar Loan
pursuant to the applicable Notice of Borrowing.
"Event of Default" has the meaning set forth in Section 6.01.
<PAGE>
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate charged to
the Agent (in its individual capacity) 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.
"Funding Bank" means (a) in the case of Syndicated Loans, any banking
institution approved by the Agent located within a country whose currency is
an Offshore Currency and (b) in the case of Money Market Loans, any banking
institution approved by the applicable Bank making such Money Market Loan
located within a country whose currency has been approved by such Bank as an
Alternate Currency for a particular Money Market Loan; provided that in the
case of the Euro, the Funding Bank may be located in any Participating Member
State.
"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.
"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.
<PAGE>
"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. section 6901 et seq. and its implementing regulations and
amendments, or in any applicable state or local law or regulation, (b) "ha-
zardous 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, with respect to each Euro_Dollar Borrowing or
Offshore Borrowing, the period commencing on the date of such Borrowing and
ending on the numerically corresponding day in the first, second, third, sixth
or ninth 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 Business Day, as applicable, shall be
extended to the next succeeding Business Day unless such Business Day falls
in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day;
(b) any Interest Period which begins on the last 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 Business Day of the appropriate subsequent calendar
month;
(c) no Interest Period may be selected which begins before the Termination
Date and would otherwise end after the Termination Date; and
(d) no nine-month Interest Period shall be available unless at the time
the applicable Notice of Borrowing is delivered to the Agent every Bank can
obtain funds for such a period in the applicable money markets, and in the
event that any nine-month request cannot be satisfied as a result of this
clause, upon notice to the Borrower, such request shall be deemed to be a
request for a six-month Interest Period; provided that within one (1) hour
of receipt of such notice from the Agent, the Borrower may notify the Agent
that it elects not to make such Borrowing.
"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.
<PAGE>
"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 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, Offshore Loan, Swing Line
Loan, Syndicated Loan or Money Market Loan, and "Loans" means Base Rate
Loans, Euro_Dollar Loans, Offshore Loans, Swing Line 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" means, with respect to any Euro-Dollar
Loan or Offshore Loan, for the Interest Period applicable thereto, the rate per
annum (rounded upwards, if necessary), to the nearest 1/100th of 1%)
appearing on Dow Jones Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits (a) in Dollars, in the case of a
Euro_Dollar Loan, or (b) in the applicable Offshore Currency, in the case of
an Offshore Loan, at approximately 11:00 A.M. (London time) two (2) Business
Days prior to the first day of such Interest Period for a term comparable to
such Interest Period. If for any reason such rate is not available, the term
"London Interbank Offered Rate" shall mean, with respect to any Euro_Dollar
Loan or Offshore Loan for the Interest Period applicable thereto, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) appearing
on Reuters Screen LIBO Page as the London interbank offered rate for deposits
(a) in Dollars, in the case of a Euro-Dollar Loan or (b) in the applicable
Offshore Currency, in the case of an Offshore Loan, at approximately 11:00
A.M. (London time) two (2) Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates (rounded
upwards, if necessary, to the nearest 1/100th of 1%).
<PAGE>
"Mandatory Cost" means, with respect to Offshore Loans denominated in
British Pounds Sterling, a percentage rate per annum determined by the Agent
calculated in accordance with the following formula:
BY + S(Y-Z) + (F x 0.01)
Mandatory Cost per annum = ------------------------
100 _ (B+S)
where on the day of application of the formula:
B = The percentage of the Agent's Eligible Liabilities (in excess of any
stated minimum) by reference to which the Bank of England and/or the
Financial Services Authority requires the Agent to hold on a non-
interest bearing deposit account in accordance with its cash ratio
requirements;
Y = The percentage rate per annum at which sterling deposits are offered
by the Agent to leading banks in the London interbank market at or
about 11:00 A.M. (London, England time) on that day for the relevant
period;
F = The rate of charge payable by the Agent to the Financial Services
Authority under paragraph 2.02 or 2.03 (as appropriate) of the Fees
Regulations (but where for this purpose the figure at paragraph 2.02b
or 2.03b shall be deemed to be zero) and expressed in British Pounds
Sterling per 1,000,000 Pounds Sterling of the Fee Base of the Agent;
S = The percentage of the Agent's Eligible Liabilities which the Bank of
England (or other relevant United Kingdom governmental authority or
agency) requires the Agent to place as a Special Deposit; and
Z = The interest rate per annum payable by the Bank of England to the
Agent on Special Deposits.
(a) For the purposes of this definition:
(i) "Eligible Liabilities" and "Special Deposits" shall have the
meanings given to them at the time of application of the above
formula under or pursuant to the Bank of England Act 1998 or
by the Bank of England (as appropriate);
(ii) "Fee Base" has the meaning given to it in the Fees Regulations;
(iii) "Fees Regulations" means any regulations governing the
payment of fees for banking supervision;
<PAGE>
(b) In the application of the above formula, B, Y, S, and Z are included
in the formula as figures and not as percentages, e.g. if B = 0.5% and Y = 15%,
BY is calculated as 0.5 x 15 and not as 0.5% x 15%. A negative result
obtained from subtracting Z from Y is to be treated as zero.
(c) (i) The above formula is applied on the first day of each relevant
period comprised in the relevant Interest Period.
(ii) Each rate calculated in accordance with the above formula is,if
necessary, rounded upward to four decimal places.
(d) The Agent may, from time to time, after consultation with the Borrower
and the Banks, determine and notify to the Borrower and the Banks any
amendments or variations which are required to be made to the formula set out
above in order to comply with any requirements from time to time imposed by
any applicable regulatory authority in relation to Advances denominated in
British Pounds Sterling (including, without limitation, any requirements
relating to British Pounds Sterling primary liquidity) and any such
determination shall, in the absence of manifest error, be conclusive and
binding on the Borrower, the Banks and the Agent.
"Margin Stock" means "margin stock" as defined in Regulations 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 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 consequences
thereof, in and of itself, be deemed to constitute a Material Adverse Effect.
"Money Market Borrowing" shall have the meaning given to such term in the
definition of "Borrowing".
"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.
<PAGE>
"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.
"New Banks" has the meaning specified in Section 2.16(a).
"Notes" means, individually and collectively, as the context shall
require, each of the Syndicated Loan Notes, the Money Market Loan Notes and the
Swing Line Loan Note.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Offshore Borrowing" shall have the meaning given to such term in the
definition of "Borrowing".
"Offshore Currency" means Euros, British Pounds Sterling and Canadian
Dollars.
"Offshore Loan" means a Syndicated Loan to be made in an Offshore Currency
as set forth in the applicable Notice of Borrowing. "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.
"Participant" has the meaning set forth in Section 9.08(b).
"Participating Member State" means each country which from time to time
becomes a Participating Member State as described in EMU Legislation.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Performance Pricing Determination Date" has the meaning set forth in
Section 2.07(c).
<PAGE>
"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" means the per annum rate of interest established from time to
time by Bank of America as its prime rate, which rate may not be the lowest
rate of interest charged by Bank of America to its customers.
"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, the conversion of a Base Rate Borrowing to a Euro-Dollar
Borrowing, or the conversion of a Euro_Dollar Borrowing to a Base 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(d) or Section 2.14
or remitted to the Agent as provided in Section 2.12, in each case as con-
templated in Section 2.02(e).
"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 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.
<PAGE>
"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 aggregate Commitments
equal in amount to more than 50% of the Total Revolving Credit Commitment or,
if the Commitments are no longer in effect, Banks holding more than 50% of the
aggregate outstanding principal amount of the sum of (i) Syndicated Loans and
(ii) Money Market Loans.
"Reserve Requirement" means, at any time, the maximum rate (expressed as
a percentage) at which reserves (including, without limitation, any marginal,
special, supplemental, or emergency reserves) are required to be maintained
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) by member banks of the Federal
Reserve System against "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by such
member banks with respect to (i) any category of liabilities which includes
deposits by reference to which the Adjusted London Interbank Offered Rate or
the Adjusted Offshore Interbank Offered Rate (as the case may be) is to be
determined, or (ii) any category of extensions of credit or other assets which
include Euro_Dollar Loans or Offshore Loans.
"Significant Subsidiary" means any Subsidiary of the Borrower with respect
to which, as of the most recently completed Fiscal Quarter, either (i) the
Borrower and its other Subsidiaries' investments in and advances to the Sub-
sidiary exceed 10% of Total Assets, or (ii) 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 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.
"Spot Rate of Exchange" means (i) in determining the Dollar Equivalent
Amount of a specified Alternate Currency amount as of any date, the spot
exchange rate determined by the Agent in accordance with its usual procedures
for the purchase by the Agent of Dollars with such Alternate Currency at
approximately 10:00 A.M. on the Business Day that is two (2) Business Days
<PAGE>
prior to such date, and (ii) in determining the Alternate Currency Equivalent
Amount of a specified Dollar amount on any date, the spot exchange rate
determined by the Agent in accordance with its usual procedures for the
purchase by the Agent of such Alternate Currency with Dollars at approximately
10:00 A.M. on the Business Day that is two (2) Business Days prior to such
date.
"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.
"Subsequent Participant" means each country that adopts the Euro as its
lawful currency after January 1, 1999.
"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.
"Swing Line" means the revolving line of credit established by the Swing
Line Lender in favor of the Borrower pursuant to Section 2.14.
"Swing Line Borrowing" shall have the meaning given to such term in the
definition of "Borrowing".
"Swing Line Commitment" means a principal amount equal to $50,000,000.
"Swing Line Lender" means initially Bank of America as the lender of Swing
Line Loans under Section 2.14 and thereafter any Bank which is successor to
Bank of America as the Lender of Swing Line Loans under Section 2.14.
"Swing Line Loans" means loans made by the Swing Line Lender to the
Borrower pursuant to Section 2.14 and shall be made at the Agreed Rate.
<PAGE>
"Swing Line Loan Note" means the promissory note of the Borrower
evidencing the Swing Line executed and delivered to the Swing Line Lender as
provided in Section 2.04 substantially in the form of Exhibit A_3.
"Swing Line Outstandings" means, as of any date of determination, the
aggregate principal amount of all Swing Line Loans then outstanding.
"Syndicated Borrowing" shall have the meaning given to such term in the
definition of "Borrowing".
"Syndicated Loans" means Base Rate Loans, Euro_Dollar Loans or Offshore
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 September 17, 2004.
"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.
"Total Alternate Currency Sublimit" means, with respect to the principal
amount of Offshore Loans, the Dollar Equivalent Amount of fifty percent (50%)
of the Total Revolving Credit Commitment then in effect.
"Total Revolving Credit Commitment" means a principal amount equal to
(a) $800,000,000 or (b) at such time as Exhibit J hereto is amended by the
entering into of one or more amendment agreements pursuant to Section 2.16
hereof, an amount equal to up to $1,200,000,000, as such amounts are reduced
from time to time in accordance with Section 2.08 or Section 2.09.
"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.
<PAGE>
"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 and its pro rata share of any Swing Line Outstandings.
"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.
"Year 2000 Compliant" means all computer applications (including those
affected by information received from its suppliers and vendors) that are
material to the Borrower's or any of its Subsidiaries' business and operations
will on a timely basis be able to perform properly date-sensitive functions
involving all dates on and after January 1, 2000;
"Year 2000 Problem" means the risk that computer applications used by the
Borrower or any of its Subsidiaries (including those affected by information
received from its suppliers and vendors) may be unable to recognize and
perform properly date-sensitive functions involving certain dates on and
after January 1, 2000.
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.
<PAGE>
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.
SECTION 1.06. Alternate Currencies . For all purposes of this
Agreement (but not for purposes of the preparation of any financial statements
delivered pursuant hereto), the equivalent in any Alternate Currency of an
amount in Dollars, and the equivalent in Dollars of an amount in any Alternate
Currency, shall be determined as set forth in the definitions of Dollar
Equivalent Amount and Alternate Currency Equivalent Amount, as applicable.
SECTION 1.07. Time . Except as otherwise expressly provided, all dates
and times of day specified herein shall refer to such dates and times at
Charlotte, North Carolina.
<PAGE>
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 in Dollars or
Offshore Currencies (as specified in the Notice of Borrowing) to the Borrower
from time to time before the Termination Date; provided that, immediately
after each such Syndicated Loan is made, (i) the Dollar Equivalent Amount of
the aggregate principal amount outstanding of all Syndicated Loans by such
Bank shall not exceed the amount of its Commitment, (ii) the Dollar Equivalent
Amount of the aggregate principal amount of all Syndicated Loans, Money Market
Loans and Swing Line Loans outstanding shall not exceed the Total Revolving
Credit Commitment, and (iii) the Dollar Equivalent Amount of the aggregate
principal amount of all Offshore Loans shall not exceed the Total Alternate
Currency Sublimit. In the event that, at any time, any of the limits set
forth in (i), (ii) or (iii) of the immediately preceding sentence are
exceeded, the Borrower agrees to immediately make such payments and
prepayments as shall be necessary to comply with each such provision. Each
Syndicated Borrowing under this Section 2.01 shall be in the Dollar Equivalent
Amount of an aggregate principal amount of (i) in the case of Base Rate Loans,
$1,000,000 or any larger multiple of $500,000, and (ii) in the case of
Euro_Dollar Loans and Offshore Loans, $5,000,000 (or the Dollar Equivalent
Amount thereof in any Offshore Currency) or any larger multiple of $500,000
(or the Dollar Equivalent Amount thereof in any Offshore Currency), except
that any such Syndicated Borrowing, whether a Base Rate Borrowing, a
Euro_Dollar Borrowing or an Offshore Borrowing, may be in the Dollar
Equivalent Amount of the aggregate principal amount of the Unused Commitments.
Each Syndicated Borrowing under this Section 2.01 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 D-1, prior to 12:00 P.M. (Noon) on the same day for a Base Rate
Borrowing, prior to 12:00 P.M. (Noon) at least two (2) Business Days prior to
each Euro_Dollar Borrowing, and prior to 10:30 A.M. at least three (3)
Business Days prior to each Offshore Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Business Day,
(ii) the Dollar Equivalent Amount of the aggregate principal amount
of such Borrowing,
(iii) whether the Syndicated Loans comprising such Borrowing are to
be Base Rate Loans, Euro_Dollar Loans or Offshore Loans,
<PAGE>
(iv) in the case of a Euro_Dollar Borrowing or an Offshore
Borrowing, the duration of the Interest Period applicable thereto, subject to
the provisions of the definition of Interest Period, and
(v) in the case of an Offshore Borrowing, the Offshore Currency
of such Borrowing.
(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) At approximately 11:00 A.M. two (2) Business Days preceding the date
specified for each Offshore Loan, the Agent shall determine the Advance Date
Exchange Rate and the applicable Adjusted Offshore Interbank Offered Rate.
Not later than 11:45 A.M. two (2) Business Days preceding the date specified
for each Offshore Loan, the Agent shall provide the Borrower and each Bank
notice by telefacsimile transmission of the Advance Date Exchange Rate
applicable to such Offshore Loan, and the applicable Alternate Currency
Equivalent Amount and Dollar Equivalent Amount of such Offshore Loan and the
applicable Adjusted Offshore Interbank Offered Rate.
(d) Not later than 2:00 P.M. 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 Dollars or the
Dollar Equivalent Amount (as of two (2) Business Days prior to the date of
such Loan) of the applicable Offshore Currency immediately available in
Charlotte, North Carolina, 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. 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 1:30 P.M. 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.
on the 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 such Bank
does not intend to make its ratable share of funds available in connection
<PAGE>
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.
(e) If any Bank makes a new Syndicated Loan hereunder (or if the
Swing Line Lender makes a Swing Line Loan under Section 2.14) 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 (or, in the case of the Swing Line Lender, Swing Line 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 (d) of this Section (or, in the case of a Swing Line Loan, by the
Swing Line Lender pursuant to Section 2.14), or remitted by the Borrower to
the Agent as provided in Section 2.12, as the case may be.
(f) Notwithstanding anything to the contrary contained in this Agreement,
including, without limitation Section 2.01 and Section 2.03, no 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.
(g) 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, Euro_Dollar Loans or Offshore Loans, such Syndicated Loans shall be
made as Base Rate Loans in Dollars. 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 Dollar
Equivalent Amount of the principal amount of the Syndicated Loans so maturing
and in the same currencies as the Syndicated Loans so maturing, and the
Syndicated Loans comprising such new Syndicated Borrowing shall be Base Rate
Loans.
(h) Notwithstanding anything to the contrary contained herein, including,
without limitation Section 2.01 and Section 2.03, there shall not be more
than ten (10) Euro_Dollar Loans, Offshore Loans and/or Money Market Loans
outstanding at any given time.
<PAGE>
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 in Dollars or any Alternate Currency. 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 ten (10) Euro_Dollar Loans, Offshore
Loans and/or Money Market Loans outstanding at any given time; and
(ii) the Dollar Equivalent Amount of the aggregate principal
amount of all Money Market Loans, together with the Dollar Equivalent Amount
of the aggregate principal amount of all Syndicated Loans and all Swing Line
Loans, at any one time outstanding shall not exceed the Total Revolving Credit
Commitment 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 G hereto (a "Money Market Quote Request")
so as to be received (x) in the case of Money Market Loans in Dollars, no
later than 12:00 P.M. (Noon) at least one (1) Business Day prior to the date
of the Money Market Borrowing proposed therein, or (y) in the case of Money
Market Loans in an Alternate Currency, no later than 10:30 A.M. at least three
(3) Business Days prior to the date of the Money Market Borrowing proposed
therein, or (z) in either case, 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 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 from one (1) day to 270 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);
(iii) the aggregate amount of principal to be received by
the Borrower as a result of such Money Market Borrowing, which shall be at
least $1,000,000 (or the Dollar Equivalent Amount thereof in any Alternate
Currency), and in larger integral multiples of $500,000 (or the Dollar
Equivalent Amount thereof in any Alternate Currency), but shall not cause
the limits specified in Section 2.03(a) to be violated; and
<PAGE>
(iv) the currency of such Money Market Borrowing.
The Borrower may request offers to make Money Market Loans having up to three
(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, and provided further, that each request in a different currency,
whether in Dollars or an Alternate Currency, shall be deemed to be a separate
Money Market Quote Request for a separate Money Market Borrowing.
(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 H 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 one (1) Stated Maturity Date and/or more than one
(1) currency, such Bank may, but shall have no obligation to, make a single
submission containing a separate offer for each such Stated Maturity Date
and/or each such currency, 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 (x) in the case of a proposed Money Market Borrowing
that is in an Alternate Currency, 10:30 A.M. on the day that is at least two
(2) Business Days prior to the Borrowing Date, and (y) in the case of a
proposed Money Market Loan that is in Dollars, 10:30 A.M. on the Borrowing
Date; provided that any Money Market Quote submitted by Bank of America may be
submitted, and may only be submitted, if Bank of America notifies the Borrower
of the terms of the offer contained therein not later than 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 Stated Maturity Date
therefor;
(B) the currency of such Money Market Loan;
(C) 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 the Dollar Equivalent Amount
thereof in any Alternate Currency) or a larger integral multiple of $500,000
(or the Dollar Equivalent Amount thereof in any Alternate Currency), and (z)
may not exceed the Dollar Equivalent Amount of the principal amount of the
Money Market Borrowing for which offers were requested;
<PAGE>
(D) 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
(E) 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 (x) in the case of Money
Market Loans in Dollars, 11:30 A.M. on the Borrowing Date and (y) in the case
of Money Market Loans in an Alternate Currency, 11:30 A.M. on the day that is
at least two (2) Business Days prior to 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 aggregate principal amounts of the Money Market
Borrowing for which Money Market Quotes 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 (i) in the case of Money Market Loans in Dollars,
12:30 P.M. on the Borrowing Date and (ii) in the case of Money Market Loans in
an Alternate Currency, 12:30 P.M. on the day that is at least two (2) Business
Days prior to the Borrowing Date, the Borrower shall notify the Agent of its
acceptance or nonacceptance of the Money Market Quotes so notified to it
pursuant to Section 2.03(d) (and the failure of the Borrower to give such
notice by such time shall constitute nonacceptance) and the Agent shall
promptly notify each affected Bank. In the case of acceptance, such notice
shall specify the aggregate principal amount of Money Market Quotes for each
Stated Maturity Date that are accepted. The Borrower may accept any Money
Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the related
Money Market Quote Request;
<PAGE>
(ii) the aggregate principal amount of each Money Market Loan
comprising a Money Market Borrowing shall be at least $1,000,000 (or the
Dollar Equivalent Amount thereof in any Offshore Currency) and in larger
multiples of $500,000 (or the Dollar Equivalent Amount thereof in any
Alternate Currency), but shall not cause the limits specified in Section
2.03(a) to be violated;
(iii) acceptance of Money Market Quotes may only be made in
ascending order of Money Market Rates, beginning with the lowest rate so
offered; and
(iv) the Borrower may not accept any Money Market Quote where the
Agent has advised the Borrower that such Money Market Quote 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 Money Market Quotes are made by two (2) or more Banks with the same Money
Market Rates for a greater aggregate principal amount than the amount in
respect of which Money Market Quotes are accepted for the related Stated
Maturity Date (after taking into account the acceptance of all Money Market
Quotes with lower Money Market Rates, if any, offered by any Bank for such
related Stated Maturity Date), then the principal amount of Money Market Loans
in respect of which such Money Market Quotes are accepted shall be allocated
by the Borrower among such Banks as nearly as possible in proportion to the
aggregate principal amount of such Money Market Quotes. Determinations by the
Borrower of the amounts of Money Market Loans shall be conclusive in the
absence of manifest error.
(f) Any Bank whose Money Market Quote has been accepted shall, not
later than 1:30 P.M. 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., in an account of the Borrower
maintained with Bank of America.
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.
(c) The Swing Line Loans shall be evidenced by a single Swing Line
Loan Note payable to the order of the Swing Line Lender for the account of its
Lending Office in an amount equal to the Swing Line Commitment.
<PAGE>
(d) 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 (if any) 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) Each Swing Line Loan included in any Swing Line Borrowing shall
mature, and the principal amount thereof shall be due and payable, on the date
that is fourteen (14) days after the date of such Swing Line Borrowing.
(d) 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 the Termination Date.
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 quarterly in arrears on the last business day of each March, June,
September and December, commencing on September 30, 1999, until the
Termination Date.
(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 three months, at intervals of
three months after the first day thereof.
<PAGE>
(c) Each Offshore 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 Offshore 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 three months, at intervals of
three months after the first day thereof.
(d) Each Swing Line 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 Agreed Rate. Such interest
shall be payable on the maturity date of such Swing Line Loan, but in no event
later than fourteen (14) days after the making of such Swing Line Loan
(e) 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 three months after the date of the relevant Money Market
Loan, at intervals of three months after the first day thereof.
(f) 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.
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 Total Revolving Credit Commitment 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, 0.055%, (ii) if the Borrower's ratio of Consolidated Funded Debt
to Consolidated Total Tangible Capital is greater than 0.25 to 1.0 but less
than or equal to 0.35 to 1.0, 0.060%, (iii) if the Borrower's ratio of
Consolidated Funded Debt to Consolidated Total Tangible Capital is greater
than 0.35 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 0.45 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) On any day on which the Dollar Equivalent Amount of the aggregate
outstanding principal amount of all Loans (including the Syndicated Loans,
Money Market Loans and Swing Line Loans), collectively, exceeds fifty percent
(50%) of the Total Revolving Credit Commitment, the Borrower shall pay to the
Agent for the ratable account of each Bank a utilization fee (the "Utilization
Fee") of 0.10% on the Dollar Equivalent Amount of the aggregate outstanding
<PAGE>
amount of the Syndicated Loans. The Utilization Fee shall accrue on each day
that the Dollar Equivalent Amount of the aggregate outstanding principal
amount of the Loans exceeds fifty percent (50%) of the Total Revolving Credit
Commitment from and including the Closing Date to and including the
Termination Date, and shall be payable, in arrears, on the last Business Day
of each March, June, September and December, and on the Termination Date,
commencing on September 30, 1999.
(c) In determining the amounts to be paid by the Borrower pursuant to
Sections 2.06(b), 2.06(c) 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 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 three (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), 2.06(c) and 2.07(a) until the Performance Pricing Determination Date
which occurs on or about December 15, 1999, the ratio of Consolidated Funded
Debt to Consolidated Total Tangible Capital shall conclusively be presumed to
be greater than 0.25 to 1.0 but less than 0.35 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 agreed by
the Agent and the Borrower, or either of them.
<PAGE>
SECTION 2.08. Optional Termination or Reduction of Commitments . The
Borrower may, upon at least three (3) 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 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 $500,000, 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.
(b) Subject to any and all payments required pursuant to the
provisions of Article VIII hereof, the Borrower may prepay all or any portion
of the principal amount of any Money Market Loan, Euro_Dollar Loan or Offshore
Loan prior to the end of the relevant Stated Maturity Date or Interest Period,
respectively, applicable to such Loan, in a minimum amount of at least
$500,000 (or the Dollar Equivalent Amount thereof in any Alternate Currency),
or any larger multiple of $500,000 (or the Dollar Equivalent Amount thereof in
any Alternate Currency).
(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 Prepayment . 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 Total
Revolving Credit Commitment, as then reduced.
<PAGE>
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. on the date when due, without offset,
in federal funds or other funds immediately available in Charlotte, North
Carolina, 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. 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.
(b) Whenever any payment of principal of, or interest on, the Base
Rate Loans, Swing Line Loans or Money Market Loans shall be due on a day which
is not a Business Day, the date for payment thereof shall be extended to the
next succeeding Business Day. Whenever any payment of principal of or
interest on, the Euro_Dollar Loans or Offshore Loans shall be due on a day
which is not a Business Day, the date for payment thereof shall be extended to
the next succeeding Business Day unless such Business Day falls in another
calendar month, in which case the date for payment thereof shall be the next
preceding Business Day.
(c) All payments of principal, interest and fees and all other amounts
to be made by the Borrower pursuant to this 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.
<PAGE>
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.
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 Swing Line Loans, and 360 days, as to Euro_Dollar Loans, Offshore
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).
SECTION 2.14. Swing Line . (a) Notwithstanding any other provision
of this Agreement to the contrary, in order to administer the facilities
provided for herein in an efficient manner and to minimize the transfer of
funds between the Agent and the Banks, the Swing Line Lender shall make
available Swing Line Loans in Dollars to the Borrower prior to the Termination
Date. The Swing Line Lender shall not be obligated to make any Swing Line
Loan pursuant hereto (i) if to the actual knowledge of the Swing Line Lender
the Borrower is not in compliance with all the conditions to the making of any
Loans set forth in this Agreement, (ii) if after giving effect to such Swing
Line Loan, the Swing Line Outstandings exceed the Swing Line Commitment, or
(iii) if after giving effect to such Swing Line Loan, the aggregate
outstanding principal amount of all Loans exceeds the Total Revolving Credit
Commitment. The Company may, subject to the conditions set forth in the
preceding sentence, borrow, repay and reborrow under this Section 2.14.
Unless notified to the contrary by the Swing Line Lender, Swing Line
Borrowings shall be made in the minimum amount of $1,000,000 or, if greater,
in amounts which are integral multiples of $500,000, or in the amount
necessary to effect a Refunding Loan, upon written request by telefacsimile
transmission, effective upon receipt, by the Borrower made to the Swing Line
<PAGE>
Lender not later than 12:00 P.M. (Noon) on the Business Day of the requested
Swing Line Borrowing. Each such Notice of Borrowing shall specify the amount
of the Swing Line Borrowing and the date of borrowing, and shall be in the
form of Exhibit D-2, with appropriate insertions. Upon receipt of a Notice of
Borrowing as set forth in this Section 2.14(a), the Swing Line Lender shall
make the funds of such Swing Line Loan available to the Borrower at the
address of the Agent not later than 4:30 P.M. on the day of such Swing Line
Borrowing. Unless notified to the contrary by the Swing Line Lender, each
repayment of a Swing Line Loan shall be in an amount which is an integral
multiple of $1,000,000 or the aggregate amount of all Swing Line Outstandings.
(b) The interest payable on Swing Line Loans is solely for the account
of the Swing Line Lender. Swing Line Loans shall bear interest solely at the
Agreed Rate. Sections 2.06(d) and (f), with respect to the payment of all
accrued and unpaid interest on Swing Line Loans and the accrual of interest at
the Default Rate, shall apply to all Swing Line Loans.
(c) Upon the making of a Swing Line Loan, each Bank shall be deemed to
have purchased from the Swing Line Lender a participation therein in an amount
equal to the pro rata portion of that Bank's Commitment. Upon demand made by
the Swing Line Lender, each Bank shall, according to its pro rata
participation of such Swing Line Loan, promptly provide to the Swing Line
Lender its purchase price therefor in an amount equal to its pro rata
participation therein. Any amount paid by a Bank pursuant to demand of the
Swing Line Lender of the purchase price of its participation in any such Swing
Line Loan shall when made be deemed to be (i) provided that the conditions to
making Syndicated Loans shall be satisfied, a Base Rate Loan, and (ii) in all
other cases, the funding by each Bank of the purchase price of its
participation in such Swing Line Loan. The obligation of each Bank so to
provide its purchase price to the Swing Line Lender shall be absolute and
unconditional and shall not be affected by the occurrence of an Event of
Default or any other occurrence or event.
The Borrower, at its option and subject to the terms hereof, may request
a Borrowing pursuant to Section 2.02 in an amount sufficient to repay Swing
Line Outstandings on any date and the Agent shall provide from the proceeds of
such Borrowing to the Swing Line Lender the amount necessary to repay such
Swing Line Outstandings (which the Swing Line Lender shall then apply to such
repayment) and credit any balance of the Borrowing in immediately available
funds in the manner directed by the Borrower pursuant to Section 2.02(d). The
proceeds of such Borrowings shall be paid to the Swing Line Lender for
application to the Swing Line Outstandings and the Banks shall then be deemed
to have made Loans in the amount of such Borrowings. The Swing Line shall
continue in effect until the Termination Date, at which time all Swing Line
Outstandings and accrued interest thereon shall be due and payable in full.
SECTION 2.15. Utilization of Offshore Currencies . (a) Syndicated Loans
shall be available only in Offshore Currencies and in Dollars.
<PAGE>
(b) Each request for a Syndicated Loan or a Money Market Loan in an
Alternate Currency under a Notice of Borrowing or a Money Market Quote Request
shall constitute the Borrower's request for a Loan of the Dollar Equivalent
Amount of the amount of the Alternate Currency specified in such Notice of
Borrowing or Money Market Quote Request, as the case may be, and for such Loan
to be made available by the Banks to the Borrower in the Alternate Currency
Equivalent Amount of such Dollar Equivalent Amount (determined based on the
Advance Date Exchange Rate applicable to such Loan). The principal amount
outstanding on any Loan in an Alternate Currency shall be recorded in the
Agent's records in Dollars as if the Loan had initially been made in Dollars,
based on the Dollar Equivalent Amount of the Loan in an Alternate Currency, as
reduced from time to time by the Dollar Equivalent Amount (based on the
Advance Date Exchange Rate applicable to such Loan) of any principal payments
with respect to such Loan. For the purposes of determining the maximum
principal amount outstanding hereunder, it is intended by the parties that all
Loans shall be the functional equivalent of Loans made and repaid (based on
the Advance Date Exchange Rate for each Loan) in Dollars. It is recognized
that one or more Banks may elect to record Loans in Alternate Currencies. The
Agent shall maintain records sufficient to identify at any time (i) the
Advance Date Exchange Rate with respect to each Loan in an Alternate Currency
and (ii) the portion of the aggregate principal amount of all Loans
outstanding attributable to each Loan.
(c) Without prejudice and in addition to any method of conversion or
rounding prescribed by any EMU Legislation and without prejudice to (i) the
liabilities for Debt of the Borrower to the Banks for Loans under or pursuant
to this Agreement or (ii) each Bank's Commitment, any reference in this
Agreement to a minimum amount (or an integral multiple thereof) in a national
currency of a Subsequent Participant to be paid to or by the Agent shall
immediately, upon it becoming a Subsequent Participant, be replaced by a
reference to such reasonably comparable amount (or an integral multiple
thereof) in the Euro unit as the Agent may determine based on the applicable
exchange rate of such national currency for the Euro.
(d) The Agent may from time to time further modify the terms of, and
practices contemplated by, this Agreement with respect to the Euro to the
extent the Agent determines, in its reasonable discretion, that such
modifications are necessary or convenient to reflect new laws, regulations,
customs or practices developed in connection with the Euro. The Agent may
effect such modifications, and this Agreement shall be deemed so amended,
without the consent of the Borrower or Banks to the extent such modifications
are not disadvantageous to the Borrower and the Banks, upon notice thereto.
SECTION 2.16. Increase in Total Revolving Credit Commitment . (a) The
Borrower, the Agent and any Bank or any other Person qualifying as an Assignee
but for the absence of an assignment, or any combination of such Banks and
such Persons (collectively, "New Banks"), may (in their sole discretion) enter
into one or more amendment agreements substantially in the form of Exhibit I
attached hereto and incorporated herein by reference without further approval
of the Banks (or any other New Bank) pursuant to which each New Bank agrees to
incur or increase, as the case may be, its Commitment so as to make available
to the Borrower, subject to all conditions herein set forth, Loans in the
maximum aggregate Dollar Equivalent Amount (for all New Banks) of up to
$400,000,000 thereby increasing the Total Revolving Credit Commitment to up to
the Dollar Equivalent Amount of $1,200,000,000; provided that
<PAGE>
(i) there shall not then have occurred and be continuing any
Event of Default;
(ii) each such increase shall be in an amount at least equal to
$50,000,000 or an integral multiple of $10,000,000 in excess thereof; and
(iii) the Borrower shall execute and deliver to the Agent (A) a
Syndicated Loan Note for each New Bank, (B) a Money Market Note for each
Bank, (C) board resolutions of the Borrower certified by its secretary or
assistant secretary approving and adopting such Syndicated Loan Notes and
Money Market Loan Notes and authorizing the execution and delivery thereof,
and (D) the legal opinion of either the general counsel of the Borrower or
special counsel to the Borrower as to the due authorization, execution and
delivery of the Syndicated Loan Notes and Money Market Loan Notes, the
enforceability thereof and no conflict thereof with the articles of
incorporation, bylaws and material agreements of the Borrower, all in form
and substance substantially similar to such opinions delivered on the Closing
Date in satisfaction of Section 3.01(d).
(b) Upon the execution, delivery and acceptance of the documents
required by this Section 2.16, each New Bank shall have all of the rights and
obligations of a Bank under this Agreement. The Agent shall provide the Banks
with notice of the revised Total Revolving Credit Commitment and the
Commitment of each Bank, including the New Banks.
ARTICLE III CONDITIONS TO BORROWINGS
SECTION 3.01. Conditions to First Borrowing . The obligation of each
Bank to make a Syndicated Loan, and of the Swing Line Lender to make a Swing
Line Loan, on the occasion of the first Syndicated Borrowing or Swing Line
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) a duly executed Swing Line Loan Note for the account of the Swing
Line Lender complying with the provisions of Section 2.04;
(d) an opinion letter (together with any opinions of local counsel
relied on therein) of Kelly R. Caffarelli, counsel to the Borrower,
substantially in the form of Exhibit B, dated as of the Closing Date, and
covering such additional matters relating to the transactions contemplated
hereby as the Agent or any Bank may reasonably request;
<PAGE>
(e) a certificate (the "Closing Certificate") substantially in the
form of Exhibit F, 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 the Borrower 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 or Money Market Quote Request, if applicable;
(h) evidence reasonably satisfactory to the Agent that the Borrower
has in force and effect insurance satisfying the requirements of Section 5.10;
(i) letter agreement whereby the Credit Agreement dated as of December
20, 1995 by and among The Home Depot, Inc. and certain of the Banks is
terminated and evidence of payment of all amounts outstanding thereunder; and
(j) 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
and of the Swing Line Lender to make a Swing Line Loan, other than a Borrowing
which consists solely of a Refunding Loan, is subject to the satisfaction of
the following conditions:
(a) receipt by the Agent (or, in the case of a Swing Line Loan, the
Swing Line Lender) of a Notice of Borrowing;
(b) the fact that, immediately before and after giving effect to such
Borrowing, no Default or Event of Default shall have occurred and be
continuing;
<PAGE>
(c) the fact that the representations and warranties of the Borrower
contained in Article IV-A of this Agreement (other than the representation and
warranty found in Section 4.04(b) and, after June 30, 2000, Section 4.18)
shall be true on and as of the date of such Borrowing;
(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;
(e) the fact that, immediately after such Borrowing, the Swing Line
Outstandings will not exceed the Swing Line Commitment;
(f) the fact that, immediately after such Borrowing, the sum of (i)
the Dollar Equivalent Amount of the aggregate outstanding principal amount of
the Syndicated Loans, and (ii) the Dollar Equivalent Amount of the aggregate
outstanding principal amount of the Money Market Loans, and (iii) the Dollar
Equivalent Amount of the aggregate outstanding principal amount of the Swing
Line Loans will not exceed the Total Revolving Credit Commitment; and
(g) the fact that, immediately after such Borrowing, the Dollar
Equivalent Amount of the aggregate principal amount of all Offshore Loans
shall not exceed the Total Alternate Currency Sublimit.
Each Borrowing (whether a Syndicated Borrowing, a Money Market Borrowing or a
Swing Line Borrowing) hereunder 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), (d), (e) and (f) of
this Section, except to the extent they relate to a particular date only.
ARTICLE IV_A REPRESENTATIONS AND WARRANTIES OF THE BORROWER
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 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.
<PAGE>
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 the 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 31, 1999
and the related consolidated statements of income, stockholders' equity and
cash flows for the Fiscal Year then ended, reported on by KPMG LLP, 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 August 1,
1999, 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 31, 1999, 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 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 the Borrower's knowledge
and belief, any member of the Controlled Group is or ever has been obligated
to contribute to any Multiemployer Plan.
<PAGE>
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 January 30, 1995.
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" 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
each of the Significant Subsidiaries of the Borrower 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 the
Consolidated Subsidiaries of the Borrower 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.
<PAGE>
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. section 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 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.
<PAGE>
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. Solvency . 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. section 18_2_22 or as defined in section 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.
SECTION 4.18. Year 2000 Compliance . The Borrower and its Subsidiaries
have (i) initiated a review and assessment of all areas within its and each of
its Subsidiaries' business and operations (including those affected by
information received from suppliers and vendors) that could reasonably be
expected to be materially and adversely affected by the Year 2000 Problem and
(ii) developed a plan and timeline for addressing the Year 2000 Problem on a
timely basis. The Borrower reasonably believes that all computer applications
(including those affected by information received from its suppliers and
vendors) that are material to its or any of its Subsidiaries' business and
operations will not later than September 30, 1999 be Year 2000 Compliant,
except to the extent that a failure to do so could not reasonably be expected
to have Material Adverse Effect.
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:
SECTION 4.19. Agent and Bank Corporate Existence and Power . It is,
respectively, a banking association or corporation 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 4.20. 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.
<PAGE>
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:
(a) to the Agent, 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 LLP 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) to the Agent, as soon as available and in any event within 45 days
after the end of each of the first three (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 consistency by the chief financial officer or the chief
accounting officer of the Borrower;
(c) to the Agent, 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 e (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 5.15 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) to the Agent, within five (5) 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;
<PAGE>
(e) to the Agent, promptly upon the mailing thereof to the
stockholders of the Borrower generally, copies of all financial statements,
reports and proxy statements so mailed;
(f) to the Agent, 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) to the Agent, 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
(h) to the Agent, as applicable, 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.
<PAGE>
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
$252,736,000;
(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;
(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 (other than Debt arising from
operating leases which become capital leases as required by GAAP) 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;
(j) Liens arising from any synthetic lease transaction pursuant to
which the Borrower or any of its Subsidiaries is a lessee; and
<PAGE>
(k) 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, however, that all Liens permitted by the foregoing paragraphs (a)
through (i) and (k) 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 an 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 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 Significant
Subsidiaries of the Borrower 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 the Borrower permit any of its Significant
Subsidiaries 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 (i) the Borrower may consolidate with or merge into another
Person if (A) such Person is a solvent corporation organized under the laws of
the United States of America or one of its states, (B) the Borrower is the
corporation surviving such merger or consolidation and (C) immediately after
giving effect to such merger or consolidation, no Event of Default shall have
occurred and be continuing, (ii) subsidiaries may consolidate with or merge
into one another or into any other Person if, in the case of a merger or
consolidation involving a Significant Subsidiary, (A) such other Person is a
solvent corporation organized under the laws of the United States of America
or one of its states, (B) the Person surviving such merger or consolidation is
a Wholly Owned Subsidiary and (C) immediately after giving effect to such
merger or consolidation no Event of Default shall have occurred and be
continuing, (iii) the Borrower and its Subsidiaries may sell, lease or
otherwise transfer assets among themselves, and (iv) 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 three (3) Fiscal Quarters, constituted more than 10%
of Consolidated Total Assets at the end of such Fiscal Quarter and the three
(3) Fiscal Quarters immediately preceding such Fiscal Quarter.
<PAGE>
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 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 of their Subsidiaries, 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 so to 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.
<PAGE>
SECTION 5.13. Environmental Matters . The Borrower and its
Subsidiaries will not use, produce, manufacture, process, treat, recycle,
generate, store, dispose of or 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 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.
SECTION 5.16. Year 2000 Compliance . At any time prior to June 30,
2000, the Borrower will promptly notify the Agent in the event the Borrower
discovers or determines that any computer application (including those
affected by information received from its suppliers and vendors) that is
material to its or any of its Subsidiaries' business and operations will not
be Year 2000 Compliant on a timely basis, except to the extent that such
failure could not reasonably be expected to have a Material Adverse Effect.
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 five (5) Business Days
after such interest shall become due, or shall fail to pay any fee or other
amount payable hereunder within five (5) 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
<PAGE>
(d) any representation, warranty, certification or statement made by
the Borrower in Article IV-A of this Agreement or in any certificate,
financial statement or other document delivered pursuant to this Agreement
shall 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 (exclusive of Debt owing between and among the
Borrower and its respective Subsidiaries) outstanding in an aggregate amount
in excess of $75,000,000 (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 $75,000,000 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
<PAGE>
(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; or
(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 and all outstanding principal amounts thereunder
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 and all outstanding principal amounts thereunder (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 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.
<PAGE>
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 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.
<PAGE>
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, Bank of America 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 Bank of America 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
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.
<PAGE>
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 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.
<PAGE>
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 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 or Offshore
Loans, as applicable, 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 or
Offshore Loans, as applicable, shall be suspended. After the Agent 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 or Offshore 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.
<PAGE>
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 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 or Offshore
Loans, as applicable, 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 or Offshore Loans, as applicable, 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 or Offshore Loans, as
applicable, to maturity and shall so specify in such notice, the Borrower
shall immediately prepay in full the Dollar Equivalent Amount of the then
outstanding principal amount of each Euro_Dollar Loan or Offshore Loan, as
applicable, of such Bank, together with accrued interest thereon.
Concurrently with prepaying each such Euro_Dollar Loan or Offshore Loan, as
applicable, the Borrower shall borrow a Base Rate Loan in an equal Dollar
Equivalent Amount of the then outstanding principal amount of each Euro_Dollar
Loan or Offshore Loan, as applicable, from such Bank (on which interest and
principal shall be payable contemporaneously with the related Euro_Dollar
Loans or Offshore Loans, as applicable, 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, Offshore Loans or
Money Market Loans, its Syndicated Loan Notes (insofar as they
evidence Euro_Dollar Loans or Offshore Loans) or Money Market Loan
Notes, or its obligation to make Euro_Dollar Loans, Offshore 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, Offshore 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,
Offshore 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
<PAGE>
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, 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 or Offshore Loan any such requirement included in
an applicable Reserve Requirement) 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 Loans, Offshore Loans or Money
Market Loans, Notes, or its obligation to make Euro_Dollar Loans,
Offshore Loans 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 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 the 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,
the 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 the Borrower and reasonably acceptable to
the Agent as an assignee which is willing to accept such assignment or (ii) it
surrender its Commitment and terminate its rights and obligations as a Bank
hereunder, concurrently with a reduction by the Borrower of the Total
Revolving Credit Commitment by an amount equal to the Commitment held by such
surrendering 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
Banks 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
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
<PAGE>
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 shall (i) 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) 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 or Off-
Shore Loans . If (i) the obligation of any Bank to make or maintain
Euro_Dollar Loans or Offshore 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 five (5) 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 or Offshore Loans, as applicable, shall be made instead as
Base Rate Loans (in all cases interest and principal on such Loans shall be
payable contemporaneously with the related Euro_Dollar Loans or Offshore
Loans, as applicable, of the other Banks), and
(b) after each of its Euro_Dollar Loans or Offshore Loans, as
applicable, has been repaid, all payments of principal which would otherwise
be applied to repay such Euro_Dollar Loans or Offshore Loans, as applicable,
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:
<PAGE>
(a) any payment or prepayment (pursuant to Section 8.02 or otherwise)
of a Euro_Dollar Loan, Offshore 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(d) notwithstanding
satisfaction of the conditions set forth in Section 3.02), a Euro_Dollar Loan
or Offshore Loan on the date for the Euro_Dollar Borrowing or Offshore
Borrowing of which such Euro_Dollar Loan or Offshore 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 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 Agent, in connection with (A) 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.
<PAGE>
SECTION 9.04. Indemnification; Limitation of Liability . (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 the
Borrower at a time when an Event of Default shall have occurred and then be
continuing,
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) actually and 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 (for which the Borrower is the indemnitor) of this Agreement, (ii)
the willful misconduct or gross negligence of such Indemnitee, (iii) any
breach by such Indemnitee of its representations or obligations under any Loan
Document, (iv) the violation by such 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) any costs, fees or
expenses arising out of the acquisition or transfer by such 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, (vi) 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 the Borrower believes is ultimately
responsible with respect to such Claims or to assert, to the extent reasonable
and practicable, any cross_claims the Borrower deems appropriate where it is
<PAGE>
not possible for the Borrower to assert such rights itself or (vii) 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, it shall give prompt written notice thereof
to the Borrower; provided, however, that the failure of an
Indemnitee to give such notice shall not relieve the 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 the 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, the
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 the 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
the 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
<PAGE>
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, re-
assume responsibility for and control of the relevant contest,
which, in such circumstances, such Indemnitee agrees to pursue
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 the 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 the 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 the 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, the 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 the 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 an 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 any Claim notice of which shall
not have been given to the 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.
<PAGE>
(d) The Borrower agrees that no Indemnitee shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to either of
them, any of their Subsidiaries, or any security holders or creditors thereof
arising out of, related to or in connection with the transactions contemplated
herein, except to the extent that such liability is found in a final non-
appealable judgment by a court of competent jurisdiction to have resulted from
such Indemnitee's gross negligence or willful misconduct. The Borrower agrees
not to assert any claim against the Agent, any Bank, any of their affiliates,
or any of their respective directors, officers, employees, attorneys, agents,
and advisers, on any theory of liability, for special, indirect,
consequential, or punitive damages arising out of or otherwise relating to the
Loan Documents, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Loans.
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 Notes 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 Notes 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.
<PAGE>
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, and if the rights, duties, privileges or
obligations of the Swing Line Lender as provider of Swing Line Loans are
affected thereby, by the Swing Line Lender); provided that, no such amendment
or waiver shall, unless signed by all Banks, (i) change (other than pursuant
to Section 8.03) the Commitment of any Bank or (other than pursuant to Section
2.16) increase the Total Revolving Credit Commitment or subject any Bank to
any additional obligation, (ii) change the principal of or reduce the rate of
interest on any Loan, or reduce the amount of any fees hereunder, (iii) change
the date fixed for any payment of principal of or interest on any Loan or any
fees hereunder, (iv) change the amount of principal, or reduce the amount of
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, consent or amendment 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.
<PAGE>
(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 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, or the
reduction of the amount of any 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 reduction 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 ten (10) 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 (except that any assignment by Bank of America shall
not include its rights, benefits or duties as the Swing Line Lender), 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 assignment occurring at a time no Event of
Default is in existence, to 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 or any lesser amount up to such Bank's Commitment), (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
<PAGE>
processing and recordation fee of $3,500 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 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.
(g)(i) Notwithstanding anything to the contrary contained herein,
but subject to subparagraph (ii) below, any Bank (a "Granting
Bank") may grant to a special purpose funding vehicle (a "SPC"),
identified as such in writing from time to time by the Granting
Bank to the Agent and the Borrower, the option to provide to the
Borrower all or part of any advance of a Loan that such Granting
Bank would otherwise be obligated to make to the Borrower (a
"Funding Obligation") pursuant to this Agreement; provided that
(A) nothing herein shall constitute a commitment by any SPC to
make any advance of a Loan; (B) if an SPC elects not to exercise
such option or otherwise fails to provide all or any part of such
advance of a Loan, the Granting Bank shall be obligated to make
<PAGE>
such advance pursuant to the terms hereof; and (C) the SPC shall
have debt obligations which have been assigned a rating by one or
more rating agencies which rating is at least equal to the rating
assigned to similar debt obligations of the Granting Bank. The
making of an advance of a Loan by an SPC hereunder shall utilize
the Commitment of the Granting Bank to the same extent, and as if,
such advance were made by such Granting Bank. Each party hereto
hereby agrees that no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement (all liability for
which shall remain with the Granting Bank). In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall
survive the termination of this Agreement) that, prior to the date
that is one year and one day after the payment in full of all
outstanding commercial paper or other senior indebtedness of any
SPC, it will not institute against, or join any other person in
instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency, or liquidation proceedings under the laws
of the United States or any State thereof, with respect to any
claims arising or related to this Agreement. In addition,
notwithstanding anything to the contrary contained in this Section
9.08(g)(i), any SPC may (I) with notice to, but without the prior
written consent of, the Borrower and the Administrative Agent and
without paying any processing fee therefor, assign all or a
portion of its interests in any advances of Loans to the Granting
Bank and (II) disclose on a confidential basis in compliance with
the terms of Section 9.09 hereof any non-public information
relating to its advances of Loans to any rating agency, commercial
paper dealer or provider of any surety, guaranty or credit or
liquidity enhancement to such SPC. This Section 9.08(g) may not
be amended without the written consent of the SPC.
(ii) The granting to, and exercise by any SPC of, the option to
satisfy a Funding Obligation of a Granting Bank as set forth in
subparagraph (i) above is subject to the following:
(A) such Granting Bank's obligations under this Agreement shall
remain unchanged, including without limitation the indemnification
obligations of the Granting Bank pursuant to Section 7.05 hereof;
(B) such Granting Bank shall remain solely responsible to the
other parties hereto for the performance of all Funding Obli-
gations;
(C) the Borrower and the Lenders shall continue to deal solely
and directly with such Granting Bank in connection with such
Granting Bank's rights and obligations under this Agreement; the
Agent shall continue to deal directly with the Granting Bank as
agent for the SPC with respect to distribution of payment of
principal, interest and fees, notices of conversion and con-
tinuation and all other matters;
<PAGE>
(D) such Granting Bank shall retain the sole right to enforce the
obligations of the Borrower relating to its Loans and its Notes
and to approve any amendment, modification, or waiver of any
provisions of this Agreement;
(e) the granting of such option shall not constitute an assignment
to or participation of such SPC of or in the Granting Bank's
Commitment and indebtedness and obligations owing thereto;
(F) such SPC shall not become a Bank nor acquire any rights
hereunder as a result of the granting of such option;
(G) such SPC shall not become obligated or committed to make Loans
as a result of the granting of such option; and
(H) if such SPC elects not to exercise such option or otherwise
fails to make all or any part of any Loan, the Granting Bank shall
retain its Funding Obligation and be obligated to make the entire
Loan or any portion of such Loan not made by such SPC.
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, independent auditors and to such Bank's Affiliates, 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 (v) of the
immediately preceding sentence, any relevant Bank shall (unless prohibited by
law) 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.
<PAGE>
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.
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 contracting for charging or receiving any Interest in
<PAGE>
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.
<PAGE>
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: /s/ Carol Tome
Name: Carol Tome
Title: Treasurer
The Home Depot, Inc.
2455 Paces Ferry Road, C22
Atlanta, Georgia 30339-4024
Attention: Dennis Carey, Chief Financial Officer
Telecopier number: (770) 384-2743
Confirmation number: (770) 384-2753
The Home Depot, Inc.
2455 Paces Ferry Road, B12
Atlanta, Georgia 30339-4024
Attention: Carol Tome, Treasurer
Telecopier number: (770) 384-5736
Confirmation number: (770) 384-2044
<PAGE>
BANK OF AMERICA, N.A., as Agent for the Banks
By: /s/ Kathryn W. Robinson
Name: Kathryn W. Robinson
Title: Managing Director
Address for Notices:
Bank of America, N.A.
600 Peachtree St., N.e., 21st Floor
Atlanta, Georgia 30308
Attention: Kathryn W. Robinson
Telephone: (404) 607-5887
Telecopier: (404) 607-6467
<PAGE>
BANK OF AMERICA, N.A.
By: /s/ Kathryn W. Robinson
Name: Kathryn W. Robinson
Title: Managing Director
Lending Office for Base Rate Loans:
Bank of America, N.A.
101 North Tryon Street, 15th Floor
NC1-001-15-05
Charlotte, North Carolina 28255
Attention: Ms. Grace Kim
Telephone: (704) 386-4550
Telefacsimile: (704) 409-0056
Wire Transfer Instructions:
Bank of America, N.A.
ABA#: 053000196
Account No.: 136621-2250600
Reference: Home Depot
Attention: Administrative Services
Lending Office for Euro-Dollar Loans and Offshore Loans:
Bank of America, N.A.
101 North Tryon Street, 15th Floor
NC1-001-15-05
Charlotte, North Carolina 28255
Attention: Ms. Grace Kim
Telephone: (704) 386-4550
Telefacsimile: (704) 409-0056
Wire Transfer Instructions:
Bank of America, N.A.
ABA# 053000196
Account No.: 136621-2250600
Reference: Home Depot
Attention: Administrative Services
<PAGE>
WACHOVIA BANK, N.A.
By: /s/ Anne Sayles
Name: Anne Sayles
Title: Vice President
Lending Office for Base Rate Loans:
Wachovia Bank, N.A.
191 Peachtree Street
Atlanta, Georgia 30303
Attention: Adrienne Durham
Telephone: (404) 332-6878
Telefacsimile: (404) 332-6408
Wire Transfer Instructions:
Wachovia Bank, N.A.
ABA#: 061000010
Account No.: 18-171-498
Account: Money Transfer Clearing
Reference: The Home Depot, Inc.
Attention: Adrienne Durham
Lending Office for Euro-Dollar Loans and Offshore Loans:
Wachovia Bank, N.A.
191 Peachtree Street
Atlanta, Georgia 30303
Attention: Adrienne Durham
Telephone: (404) 332-6878
Telefacsimile: (404) 332-6408
Wire Transfer Instructions:
Wachovia Bank, N.A.
ABA#: 061000010
Account No.: 18-171-498
Account: Money Transfer Clearing
Reference: The Home Depot, Inc.
Attention: Adrienne Durham
<PAGE>
FIRST UNION NATIONAL BANK
By: /s/ Jeff Fisher
Name: Jeff Fisher
Title: Assistant Vice President
Lending Office for Base Rate Loans:
214 N. Hogan Street
Jacksonville, FL 32202
Attention: Cindy Petry
Telephone: (904) 489-6095
Telefacsimile: (904) 489-1010
Wire Transfer Instructions:
First Union National Bank
Jacksonville, Florida
ABA#: 063000021
Account No.: 145916 2008
Reference: The Home Depot, Inc.
Attention: Cindy Petry
Lending Office for Euro-Dollar Loans and Offshore Loans:
London, UK
Attention: Claire Hatherley
Telephone: 44-171-621-1477
Telefacsimile:
Wire Transfer Instructions:
First Union National Bank
Jacksonville, Florida
ABA#: 063000021
Account No.: 145916 2008
Reference: The Home Depot, Inc.
Attention: Cindy Petry
<PAGE>
THE BANK OF NEW YORK
By: /s/ Michael V. Flannery
Name: Michael V. Flannery
Title: Vice President
Lending Office for Base Rate Loans:
The Bank of New York
One Wall Street, 8th floor
New York, New York 10286
Attention: Howard F. Bascom, Jr.
Telephone: (212) 635-7894
Telefacsimile: (212) 635-1481
Wire Transfer Instructions:
The Bank of New York
101 Barclay Street
ABA#: 021000018
GLA No.: 111556
Reference: The Home Depot, Inc.
Attention: Commercial Loan Servicing Department
Lending Office for Euro-Dollar Loans and Offshore Loans:
The Bank of New York
One Wall Street, 8th floor
New York, New York 10286
Attention: Howard F. Bascom, Jr.
Telephone: (212) 635-7894
Telefacsimile: (212) 635-1481
Wire Transfer Instructions:
The Bank of New York
101 Barclay Street
ABA#: 021000018
GLA No.: 111556
Reference: The Home Depot, Inc.
Attention: Commercial Loan Servicing Department
<PAGE>
CREDIT SUISSE FIRST BOSTON
By: /s/ Thomas G. Muoio
Name: Thomas G. Muoio
Title: Vice President
Lending Office for Base Rate Loans:
Credit Suisse First Boston
Eleven Madison Avenue
New York, New York 10010
Attention: Robert Finney
Telephone: (212) 325-9038
Telefacsimile: (212) 325-8319
Wire Transfer Instructions:
Credit Suisse First Boston
ABA#: 021 000 018
Account No.: 8900329262
Reference: Home Depot
Attention: Patricia Matos
Lending Office for Euro-Dollar Loans and Offshore Loans:
Credit Suisse First Boston
Eleven Madison Avenue
New York, New York 10010
Attention: Robert Finney
Telephone: (212) 325-9038
Telefacsimile: (212) 325-8319
Wire Transfer Instructions:
Credit Suisse First Boston
ABA#: 021 000 018
Account No.: 8900329262
Reference: Home Depot
Attention: Patricia Matos
<PAGE>
BANK ONE, NA (Main Office-Chicago)
By: /s/ Eva Drinis
Name: Eva Drinis
Title: Commercial Banking Officer
Lending Office for Base Rate Loans:
1 Bank One Plaza
Chicago, Illinois 60670
Attention: Maribel Lorenzo
Telephone: (312) 732-7271
Telefacsimile: (312) 732-2715
Wire Transfer Instructions:
Bank One, NA
Chicago, Illinois
ABA#: 071000013
Account No.: 4811-5286-0000
Reference: Home Depot
Attention: LS2 Incoming Account
Lending Office for Euro-Dollar Loans and Offshore Loans:
1 Bank One Plaza
Chicago, Illinois 60670
Attention: Maribel Lorenzo
Telephone: (312) 732-7271
Telefacsimile: (312) 732-2715
Wire Transfer Instructions:
Bank One, NA
Chicago, Illinois
ABA#: 071000013
Account No.: 4811-5286-0000
Reference: Home Depot
Attention: LS2 Incoming Account
<PAGE>
REVOLVING COMMITMENT VEHICLE
CORPORATION-Morgan Guaranty Trust Company
of New York as Attorney in Fact for The Revolving
Commitment Vehicle
By: /s/ David P. Weintrob
Name: David P. Weintrob
Title: Vice President
Lending Office for Base Rate Loans:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260-0060
Attention: Dennis Wilczek
Telephone: (212) 648-1265
Telefacsimile: (212)648-5018
Wire Transfer Instructions:
Morgan Guaranty Trust Company of New York
ABA#: 021000238
Loan Department
Account No.: 999 99 090
Reference: Home Depot
Lending Office for Euro-Dollar Loans and Offshore Loans:
Morgan Guaranty Trust Company of New York
Nassau Bahamas Office
c/o J.P. Morgan Services Inc.
Euro-Loan Servicing United
500 Stanton Christiana Road
Newark, Delaware 19713
Attention: Drew Lipsett
Telephone: (302) 634-8177
Telefacsimile: (302) 634-1872
Wire Transfer Instructions:
Morgan Guaranty Trust Company of New York
ABA#: 021000238
Loan Department
Account No.: 999 99 090
Reference: Home Depot
<PAGE>
TORONTO DOMINION (TEXAS), INC.
By: /s/ Jimmy Simien
Name: Jimmy Simien
Title: Vice President
Lending Office for Base Rate Loans:
Toronto Dominion (Texas), Inc.
909 Fannin Street
Suite 1700
Houston, TX 77010
Attention: Jimmy Simien
Telephone: (713) 653-8239
Telefacsimile: (713) 951-9921
Wire Transfer Instructions:
Bank of America, New York
ABA#: 026009593
Name of Account: Toronto Dominion Bank, Houston
Account No.: 6550652270
Reference: Home Depot
Lending Office for Euro-Dollar Loans and Offshore Loans:
Toronto Dominion (Texas), Inc.
909 Fannin Street
Suite 1700
Houston, TX 77010
Attention: Jimmy Simien
Telephone: (713) 653-8239
Telefacsimile: (713) 951-9921
Wire Transfer Instructions:
Bank of America New York
ABA#: 026009593
Name of Account: Toronto Dominion Bank, Houston
Account No.: 6550652270
Reference: Home Depot
<PAGE>
ABN AMRO BANK N.V. ABN AMRO BANK N.V.
By: /s/ Steven Hipsman By: /s/ Patrick Thom
Name: Steven Hipsman Name: Patrick Thom
Title: Vice President Title: Vice President
Lending Office for Base Rate Loans:
208 South LaSalle Street,Suite 150
Chicago, Illinois 60604-1003
Attention: Credit Administration
Telephone: (312) 992-5110
Telefacsimile: (312) 992-5111
Wire Transfer Instructions:
ABN AMRO Bank N.V.
New York, New York
ABA#: 026009580
F/O ABN AMRO Bank, N.V.
Chicago Branch CPU
Account No.: 650-001-1789-41
Reference: CPU 00431052 The Home Depot, Inc.
Attention: N/A
Lending Office for Euro-Dollar Loans and Offshore Loans:
208 South LaSalle Street,Suite 150
Chicago, Illinois 60604-1003
Attention: Credit Administration
Telephone: (312) 992-5110
Telefacsimile: (312) 992-5111
Wire Transfer Instructions:
ABN AMRO Bank N.V.
New York, New York
ABA#: 026009580
F/O ABN AMRO Bank, N.V.
Chicago Branch CPU
Account No.: 650-001-1789-41
Reference: CPU 00431052 The Home Depot, Inc.
Attention: N/A
<PAGE>
BANKBOSTON, N.A.
By: /s/ Peter L. Griswold
Name: Peter L. Griswold
Title: Managing Director
Lending Office for Base Rate Loans:
BankBoston, N.A.
100 Federal Street
Boston, Massachusetts 02110
Attention: Peter L. Griswold
Telephone: (617) 434-8312
Telefacsimile: (617) 434-6685
Wire Transfer Instructions:
BankBoston, N.A.
Boston, Massachusetts
ABA#: 011-000-390
Account No.: N/A
Reference: The Home Depot, Inc.
Attention: Commercial Ln. Svs., Admin. 57
Lending Office for Euro-Dollar Loans and Offshore Loans:
BankBoston, N.A.
100 Federal Street
Boston, Massachusetts 02110
Attention: Peter L. Griswold
Telephone: (617) 434-8312
Telefacsimile: (617) 434-6685
Wire Transfer Instructions:
BankBoston, N.A.
Boston, Massachusetts
ABA#: 011-000-390
Account No.: N/A
Reference: The Home Depot, Inc.
Attention: Commercial Ln. Svs., Admin. 57
<PAGE>
SUNTRUST BANK, ATLANTA
By: /s/ Shelley M. Browne
Name: Shelley M. Browne
Title: Vice President
Lending Office for Base Rate Loans:
SunTrust Bank, Atlanta
303 Peachtree Street, 3rd Floor, Mailcode 1928
Atlanta, Georgia 30308
Attention: Margaret A. Jaketic
Telephone: (404) 588-8682
Telefacsimile: (404) 588-8505
Wire Transfer Instructions:
SunTrust Bank, Atlanta
Atlanta, Georgia
ABA#: 061 000 104
Account No.: 9088000112
Account Name: Wire Clearing
Reference: Home Depot
Attention: Diane Grey
Lending Office for Euro-Dollar Loans and Offshore Loans:
SunTrust Bank, Atlanta
303 Peachtree Street, 3rd Floor, Mailcode 1928
Atlanta, Georgia 30308
Attention: Margaret A. Jaketic
Telephone: (404) 588-8682
Telefacsimile: (404) 588-8505
Wire Transfer Instructions:
SunTrust Bank, Atlanta
Atlanta, Georgia
ABA#: 061 000 104
Account No.: 9088000112
Account Name: Wire Clearing
Reference: Home Depot
Attention: Diane Grey
<PAGE>
THE CHASE MANHATTAN BANK
By: /s/ Margaret T. Lane
Name: Margaret T. Lane
Title: Vice President
Lending Office for Base Rate Loans:
1 Chase Manhattan Plaza
New York, New York 10081
Attention: Maggie Lane
Telephone: (212) 270-9803
Telefacsimile: (212) 270-5646
Wire Transfer Instructions:
The Chase Manhattan Bank
New York, New York
ABA#: 021000021
Account No.: N/A
Reference: Home Depot
Attention: Loan Department
Lending Office for Euro-Dollar Loans and Offshore Loans:
1 Chase Manhattan Plaza
New York, New York 10081
Attention: Maggie Lane
Telephone: (212) 270-9803
Telefacsimile: (212) 270-5646
Wire Transfer Instructions:
The Chase Manhattan Bank
New York, New York
ABA#: 021000021
Account No.: N/A
Reference: Home Depot
Attention: Loan Department
<PAGE>
DEUTSCHE BANK AG NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By: /s/ William W. McGinty /s/ Joel Makowsky
Name: William W. McGinty Joel Makowsky
Title: Director Vice Presiden
Lending Office for Base Rate Loans:
31West 52nd Street, 24th Floor
New York, New York 10019
Attention: Alexander Karow
Telephone: (212) 469-8532
Telefacsimile: (212) 469-8212
Wire Transfer Instructions:
Deutsche Bank AG New York Branch
ABA#: 026-00-3780
Account No.: N/A
Reference: The Home Depot, Inc.
Attention: Carmen L. Melendez
Lending Office for Euro-Dollar Loans and Offshore Loans:
31West 52nd Street, 24th Floor
New York, New York 10019
Attention: Alexander Karow
Telephone: (212) 469-8532
Telefacsimile: (212) 469-8212
Wire Transfer Instructions:
Deutsche Bank AG Cayman Islands Branch
c/o Deutsche Bank AG New York Branch
ABA#: 026-00-3780
Account No.: N/A
Reference: The Home Depot, Inc.
Attention: Carmen L. Melendez
<PAGE>
THE NORTHERN TRUST COMPANY
By: /s/ Mark e. Taylor
Name: Mark e. Taylor
Title: Second Vice President
Lending Office for Base Rate Loans:
50 S. LaSalle, 11th Floor
Chicago, Illinois 60675
Attention: Lisa Taylor
Telephone: (312) 444-4196
Telefacsimile: (312) 444-5055
Wire Transfer Instructions:
The Northern Trust Bank
ABA#: 071000152
Account No.: 5186401000
Reference: Home Depot
Attention: Linda Honda
Lending Office for Euro-Dollar Loans and Offshore Loans:
50 S. LaSalle, 11th Floor
Chicago, Illinois 60675
Attention: Lisa Taylor
Telephone: (312) 444-4196
Telefacsimile: (312) 444-5055
Wire Transfer Instructions:
The Northern Trust Bank
ABA#: 071000152
Account No.: 5186401000
Reference: Home Depot
Attention: Linda Honda
<TABLE>
<CAPTION>
Exhibit 11.1
THE HOME DEPOT, INC. AND SUBSIDIARIES
COMPUTATION OF BASIC AND DILUTED
EARNINGS PER SHARE
(In Millions, Except Per Share Data)
Three Months Ended Nine Months Ended
Oct. 31, Nov. 1, Oct. 31, Nov. 1,
1999 1998 1999 1998
BASIC
<S> <C> <C> <C> <C>
Net Earnings Available
to Common Shareholders $ 573 $ 392 $ 1,742 $ 1,196
Weighted Average Number of
Common Shares Outstanding 1,490 1,471 1,483 1,469
Basic Earnings Per Share $ 0.38 $ 0.27 $ 1.17 $ 0.81
DILUTED
Net Earnings Available
to Common Shareholders $ 573 $ 392 $ 1,742 $ 1,196
Tax-Effected Interest Expense
Attributable to 3.25% Convertible
Subordinated Notes 4 5 15 17
Net Earnings Available to Common
Shareholders Assuming Dilution $ 577 $ 397 $ 1,757 $ 1,213
Weighted Average Number of
Common Shares Outstanding 1,490 1,471 1,483 1,469
Effect of Potentially
Dilutive Securities:
3.25% Convertible
Subordinated Notes 42 48 46 48
Employee Stock Plans 29 28 30 27
Weighted Average Number of
Common Shares Outstanding
Assuming Dilution 1,561 1,547 1,559 1,544
Diluted Earnings Per Share $ 0.37 $ 0.26 $ 1.13 $ 0.79
Employee stock plans represent shares granted under the Company's employee
stock purchase plans and stock option plans, as well as shares issued for
deferred compensation stock plans. For fiscal years 1999 and 1998, shares
issuable upon conversion of the Company's 3.25% Notes, issued in October
1996, were included in weighted average shares assuming dilution for
purposes of calculating diluted earnings per share. To calculate diluted
earnings per share, net earnings are adjusted for tax-effected net interest
and issue costs on the 3.25% Notes (prior to conversion to equity in October
1999) and divided by weighted average shares assuming dilution.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Jan-30-2000
<PERIOD-END> Oct-31-1999
<CASH> 946
<SECURITIES> 30
<RECEIVABLES> 648
<ALLOWANCES> 0
<INVENTORY> 5,274
<CURRENT-ASSETS> 7,058
<PP&E> 11,113
<DEPRECIATION> 1,538
<TOTAL-ASSETS> 17,037
<CURRENT-LIABILITIES> 4,164
<BONDS> 0
0
0
<COMMON> 76
<OTHER-SE> 11,690
<TOTAL-LIABILITY-AND-EQUITY> 17,037
<SALES> 29,260
<TOTAL-REVENUES> 29,260
<CGS> 20,771
<TOTAL-COSTS> 20,771
<OTHER-EXPENSES> 5,623
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1
<INCOME-PRETAX> 2,865
<INCOME-TAX> 1,123
<INCOME-CONTINUING> 1,742
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,742
<EPS-BASIC> 1.17
<EPS-DILUTED> 1.13
</TABLE>
