<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-3970
HARSCO CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 23-1483991
(State of incorporation) (I.R.S. Employer Identification No.)
Camp Hill, Pennsylvania 17001-8888
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number (717) 763-7064
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 / /
<TABLE>
<CAPTION>
Title of Each Class Outstanding Shares at June 30, 1996
- ------------------- -----------------------------------
<S> <C>
Common Stock Par Value $1.25 24,988,354
Preferred Stock Purchase Rights 24,988,354
</TABLE>
-1-
<PAGE> 2
HARSCO CORPORATION AND SUBSIDIARY COMPANIES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
(In thousands, except per share amounts) 1996 1995 1996 1995
==============================================================================================================================
<S> <C> <C> <C> <C>
REVENUES:
Net sales .............................................. $ 387,733 $ 377,282 $ 754,419 $ 734,161
Equity in income of unconsolidated entities ............ 9,946 9,206 32,847 27,743
Other .................................................. 178 225 413 751
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUES ................................ 397,857 386,713 787,679 762,655
- ------------------------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES:
Cost of sales .......................................... 291,397 291,281 571,925 568,178
Selling, general and administrative expenses ........... 50,883 48,783 102,270 98,408
Research and development expenses ...................... 868 1,200 1,609 2,343
Facilities discontinuance and reorganization costs ..... 767 1,182 1,535 2,495
Other .................................................. (88) (1,796) (646) (4,380)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL COSTS AND EXPENSES ...................... 343,827 340,650 676,693 667,044
- ------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INTEREST, TAXES,
AND MINORITY INTEREST ................ 54,030 46,063 110,986 95,611
Interest income ................................................. 1,764 1,876 3,792 3,373
Interest expense ................................................ (5,980) (7,510) (12,067) (15,020)
- ------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE TAXES AND MINORITY INTEREST ..... 49,814 40,429 102,711 83,964
Provision for income taxes ...................................... 19,427 15,332 40,057 32,746
- ------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE MINORITY INTEREST ............... 30,387 25,097 62,654 51,218
Minority interest in net income ................................. 1,127 538 2,284 1,199
- ------------------------------------------------------------------------------------------------------------------------------
NET INCOME .................................... $ 29,260 $ 24,559 $ 60,370 $ 50,019
==============================================================================================================================
Average shares of common stock outstanding ...................... 25,032 25,270 25,059 25,236
==============================================================================================================================
NET INCOME PER SHARE .......................... $ 1.17 $ 0.97 $ 2.41 $ 1.98
==============================================================================================================================
CASH DIVIDENDS DECLARED PER SHARE ............. $ 0.38 $ 0.37 $ 0.76 $ 0.74
==============================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
-2-
<PAGE> 3
HARSCO CORPORATION AND SUBSIDIARY COMPANIES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (Continued)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
(In thousands) 1996 1995
=====================================================================================================
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................ $ 43,249 $ 76,669
Receivables.............................................. 283,815 272,858
Inventories:
Finished goods.................................... 29,628 25,996
Work in process................................... 31,003 24,640
Raw material and purchased parts.................. 55,188 54,151
Stores and supplies............................... 18,771 18,498
- -----------------------------------------------------------------------------------------------------
Total inventories........................ 134,590 123,285
Other current assets..................................... 59,555 60,954
- -----------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS.............................. 521,209 533,766
- -----------------------------------------------------------------------------------------------------
Property, plant and equipment, at cost.......................... 1,126,010 1,080,267
Allowance for depreciation...................................... (644,029) (620,458)
- -----------------------------------------------------------------------------------------------------
481,981 459,809
- -----------------------------------------------------------------------------------------------------
Cost in excess of net assets of companies acquired, net......... 199,313 205,801
Investments in unconsolidated entities.......................... 62,725 45,604
Other assets.................................................... 58,491 65,682
=====================================================================================================
TOTAL ASSETS...................................... $ 1,323,719 $ 1,310,662
=====================================================================================================
LIABILITIES
CURRENT LIABILITIES:
Notes payable and current maturities..................... $ 24,151 $ 108,747
Accounts payable......................................... 100,647 112,736
Accrued compensation..................................... 39,014 41,304
Other current liabilities................................ 112,219 125,725
=====================================================================================================
TOTAL CURRENT LIABILITIES......................... 276,031 388,512
=====================================================================================================
Long-term debt.................................................. 277,278 179,926
Deferred income taxes........................................... 31,868 36,061
Other liabilities............................................... 86,486 80,172
=====================================================================================================
TOTAL LIABILITIES................................. 671,663 684,671
=====================================================================================================
SHAREHOLDERS' EQUITY
Common stock and additional paid-in capital..................... 148,248 141,855
Cumulative adjustments for translation & pension liability...... (28,528) (20,265)
Retained earnings............................................... 755,142 713,774
Treasury stock.................................................. (222,806) (209,373)
=====================================================================================================
TOTAL SHAREHOLDERS' EQUITY........................ 652,056 625,991
=====================================================================================================
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........ $ 1,323,719 $ 1,310,662
=====================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements
-3-
<PAGE> 4
HARSCO CORPORATION AND SUBSIDIARY COMPANIES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (Continued)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
(In thousands) 1996 1995 1996 1995
===================================================================================================================================
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ........................................................ $ 29,260 $ 24,559 $ 60,370 $ 50,019
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation ............................................. 25,321 24,119 49,131 47,229
Amortization ............................................. 2,492 2,435 4,820 4,973
Equity in earnings of unconsolidated entities ............ (9,946) (9,206) (32,847) (27,743)
Dividends or distributions from unconsolidated entities .. 12,592 19,224 15,917 22,549
Deferred income taxes .................................... (1,541) 8,744 388 6,554
Other, net ............................................... 2,081 507 3,740 (3,182)
Changes in assets and liabilities, net of acquisitions and
dispositions of businesses:
Notes and accounts receivable ................... (9,964) (68) (14,467) 25,645
Inventories ..................................... (514) 1,016 (6,290) (13,961)
Accounts payable ................................ 878 (5,146) (6,914) (9,965)
Other assets and liabilities .................... (12,681) (26,389) (13,663) (15,745)
- -----------------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES ................ 37,978 39,795 60,185 86,373
- -----------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property, plant and equipment .................... (38,907) (32,531) (69,611) (57,427)
Purchase of business, net of cash acquired ........................ (18,141) (154) (18,141) (3,362)
Investments held-to-maturity, net of purchases .................... 8,685 (3,067) 9,685 (2,067)
Proceeds from sale of a business .................................. 1,793 213 1,793 213
Other investing activities ........................................ 475 3,034 1,671 5,312
- -----------------------------------------------------------------------------------------------------------------------------------
NET CASH (USED) BY INVESTING ACTIVITIES .................. (46,095) (32,505) (74,603) (57,331)
- -----------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net ........................................ 11,437 (87) 10,036 (3,429)
Current maturities and long-term debt
Additions ................................................ 100,610 27,585 101,372 42,695
Reductions ............................................... (93,887) (33,770) (98,085) (69,223)
Cash dividends paid on common stock ............................... (9,516) (9,340) (19,037) (18,659)
Common stock issued-options ....................................... 715 2,344 3,753 3,930
Common stock acquired for treasury ................................ (7,026) -- (15,999) --
Other financing activities ........................................ 4 (19) 500 (240)
- -----------------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES ......... 2,337 (13,287) (17,460) (44,926)
- -----------------------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash ................................ (934) 58 (1,542) 103
- -----------------------------------------------------------------------------------------------------------------------------------
Net (decrease) in cash and cash equivalents ............................ (6,714) (5,939) (33,420) (15,781)
Cash and cash equivalents at beginning of period ....................... 49,963 33,708 76,669 43,550
- -----------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ............................. $ 43,249 $ 27,769 $ 43,249 $ 27,769
===================================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements
-4-
<PAGE> 5
HARSCO CORPORATION AND SUBSIDIARY COMPANIES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
REVIEW OF OPERATIONS BY GROUP
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
(In millions) 1996 1995 1996 1995
======================================================================================================================
<S> <C> <C> <C> <C>
SALES
Metal Reclamation and Mill Services ................... $ 151.4 $ 151.2 $ 302.2 $ 292.9
Infrastructure and Construction (a) ................... 107.0 109.1 199.6 202.1
Process Industry Products ............................. 129.3 117.0 252.6 239.2
- ----------------------------------------------------------------------------------------------------------------------
TOTAL ................................... $ 387.7 $ 377.3 $ 754.4 $ 734.2
======================================================================================================================
INCOME BEFORE TAX AND MINORITY INTEREST
Metal Reclamation and Mill Services (b) ............... $ 22.6 $ 23.2 $ 43.0 $ 37.3
Infrastructure and Construction (a) ................... 14.3 9.6 22.0 13.2
Process Industry Products ............................. 11.8 8.6 23.0 21.1
- ----------------------------------------------------------------------------------------------------------------------
48.7 41.4 88.0 71.6
Facilities discontinuance and reorganization costs .... (.3) (.5) (.7) (1.7)
- ----------------------------------------------------------------------------------------------------------------------
Total group operating profit ............. 48.4 40.9 87.3 69.9
Equity in income of unconsolidated entities ........... 9.9 9.2 32.8 27.7
Interest expense ...................................... (6.0) (7.5) (12.1) (15.0)
General corporate expenses (c) ........................ (2.5) (2.1) (5.3) 1.4
- ----------------------------------------------------------------------------------------------------------------------
TOTAL PRE-TAX INCOME ..................... $ 49.8 $ 40.5 $ 102.7 $ 84.0
======================================================================================================================
</TABLE>
(a) The Company ceased all bus operations in June 1995. For the second
quarter of 1995, the school bus operations had $7.2 million in sales
and an operating loss of $3.0 million within the Infrastructure and
Construction Group. For the six months of 1995, the school bus
operation had $15.7 million in sales and an operating loss of $6.2
million.
(b) For the second quarter of 1995, Group income before income taxes
included a $1.1 million foreign currency translation exchange gain. For
the first six months of 1995, Group income before income taxes included
a $3.1 million foreign currency translation exchange loss. Included in
the $3.1 million loss, is a $3.5 million foreign currency translation
exchange loss due to the devaluation of the Mexican peso. For the 1996
comparable periods, foreign currency translation exchange losses were
immaterial.
(c) General Corporate expenses for the second quarter and six months of
1995, respectively, included $0.4 million and $6.2 million foreign
currency translation exchange gains. For the 1996 comparable periods,
foreign currency translation exchange losses were immaterial.
-5-
<PAGE> 6
HARSCO CORPORATION AND SUBSIDIARY COMPANIES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (Cont'd.)
Cash payments for interest on all debt, net of amounts capitalized were
$11,114,000 for the six months of 1996 and $14,708,000 for the six months of
1995. Cash payments for income taxes were $43,501,000 for the six months of 1996
and $31,057,000 for the six months of 1995.
Notes to Consolidated Financial Statements
Commitments and Contingencies
Federal Excise Tax and Other Matters Related to the Five-ton Truck Contract
In the third quarter of 1995, the Company, the United States Army, and the
United States Department of Justice concluded a settlement of Harsco's
previously reported claims against the Army relating to Federal Excise Tax
arising under a completed 1986 contract for the sale of five-ton trucks to the
Army. On September 27, 1995, the Army paid Harsco $49 million in accordance with
the settlement terms. Harsco released the Army from any further liability for
those claims, and the Department of Justice released Harsco from a threatened
action for damages and civil penalties based on an investigation conducted by
the Department's Commercial Litigation Branch that had been pending for several
years. During the performance of the five-ton truck contract, the Company
recorded an account receivable of $62.5 million for its claims against the Army
relating to Federal Excise Tax. As a result of accepting the $49 million in
settlement, Harsco recorded a non-recurring, pre-tax, non-cash charge of $13.5
million (after-tax charge of $8.2 million, $.32 per share), in the third quarter
of 1995.
The settlement preserves the rights of the parties to assert claims and defenses
under the Internal Revenue Code, and rights of the Army and Harsco to claim
certain amounts that may be owed by either party to reconcile possible
underpayments or overpayments on the truck contract as part of the formal
contract close out process.
The settlement does not resolve the potential for a claim from the Internal
Revenue Service that, contrary to the Company's position, certain cargo truck
models have gross vehicle weights in excess of the 33,000 pound threshold under
the Federal Excise Tax law, and therefore are taxable. As previously reported,
the Internal Revenue Service is reviewing Harsco's position and has tentatively
concluded that those cargo truck models appear to be taxable. If the Internal
Revenue Service asserts that tax is due on these vehicles, the total claim could
be $42 million plus interest and penalty, if any. The Company plans to
vigorously contest any such tax deficiency. Although there is risk of an adverse
outcome, the Company believes that these trucks are not taxable. The settlement
agreement preserves the Company's right to seek reimbursement of after-imposed
tax from the Army in the event that the cargo trucks are determined to be
taxable, but the agreement limits the reimbursement to a maximum of $21 million.
Additionally, in an earlier contract modification, the Army accepted
responsibility for $3.6 million of the potential tax, bringing its total
potential responsibility up to $24.6 million.
Under the settlement, the Army agreed that if the cargo trucks are determined to
be taxable, the 1993 decision of the Armed Services Board of Contract Appeals
(which ruled that the Company is entitled to a price adjustment to the contract
for reimbursement of FET paid on vehicles that were
-6-
<PAGE> 7
HARSCO CORPORATION AND SUBSIDIARY COMPANIES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (Cont'd.)
to be delivered after October 1, 1988) will apply to the question of Harsco's
right to reimbursement from the Army for after-imposed taxes on the cargo
trucks. In Harsco's view, application of the 1993 decision will favorably
resolve the principal issues regarding any such future claim by Harsco.
Therefore, the Company believes that even if the cargo trucks are held to be
taxable, the Army would be obligated to reimburse the Company for a majority of
the tax, (but not interest or penalty, if any), resulting in a net maximum
liability for Harsco of approximately $18 million plus interest and penalty, if
any. The Company believes it is unlikely that resolution of this matter will
have a material adverse effect on the Company's financial position, however, it
could have a material effect on quarterly or annual results of operations.
The Company has advised the Internal Revenue Service that it is in the process
of preparing tax refund claims which will challenge the applicability of the
Federal Excise Tax to any of the five-ton trucks based on a provision of the law
which exempts certain vehicles specially designed for the primary function of
off-highway transportation. An alternative claim for partial refund of the tax
is also being prepared based on the exemption of certain of the truck components
from tax. The Company has paid a total of $52 million of Federal Excise Tax on
the five-ton trucks. Any such refund of tax and payment of interest by the
Internal Revenue Service would be shared by the Army and the Company in amounts
to be determined.
M9 Armored Combat Earthmover Claim
The Company and its legal counsel are of the opinion that the U.S. Government
did not exercise option three under the M9 Armored Combat Earthmover (ACE)
contract in a timely manner, with the result that the unit prices for options
three, four and five are subject to renegotiation. Claims reflecting the
Company's position have been filed with respect to all options purported to be
exercised, totaling in excess of $60 million plus interest. No recognition has
been given in the accompanying financial statements for any recovery on these
claims. In July 1995, the Armed Services Board of Contract Appeals denied the
motions for summary judgment which had been filed by both the Company and the
Government. The Company is continuing to pursue its claim before the Armed
Services Board of Contract Appeals.
Other Litigation
On March 13, 1992, the U.S. Government filed a counterclaim against the Company
in a civil suit alleging violations of the False Claims Act and breach of a
contract to supply M109A2 Self-Propelled Howitzers. The counterclaim was filed
in the United States Claims Court in response to the Company's claim of
approximately $5 million against the Government for costs incurred on this
contract relating to the same issue. In October 1995, Government counsel
informed the Company's counsel that at trial it would claim breach of contract
damages of $4.8 million plus damages and civil penalties under the False Claims
Act totaling $6.8 million. This is a reduction from the previously asserted
Government claim of $7.3 million in damages, trebled plus False Claims Act
penalties. The trial commenced in July 1996 and a decision is expected in 1997.
The Company and its counsel believe it is unlikely that resolution of these
claims will have a material adverse effect on the Company's financial position,
however, it could have a material effect on quarterly or annual results of
operations.
-7-
<PAGE> 8
HARSCO CORPORATION AND SUBSIDIARY COMPANIES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (Cont'd.)
Iran's Ministry of Defense initiated arbitration procedures against the Company
in 1991 under the rules of the International Chamber of Commerce for damages
allegedly resulting from breach of various contracts executed by the Company and
the Ministry of Defense between 1970 and 1978. The contracts were terminated in
1978 and 1979 during the period of civil unrest in Iran that preceded the
Iranian revolution. Iran asserted a claim under one contract for repayment of a
$7.5 million advance payment it made to the Company, plus interest at 12%
through June 27, 1991 in the amount of $25.3 million. Iran also asserted a claim
for damages under other contracts for $76.3 million. The Company has asserted
various defenses and also has filed counterclaims against Iran for damages in
excess of $7.5 million which it sustained as a result of Iran's breach of
contract, plus interest. The arbitration hearing was held in January 1996. At
the hearing, Iran reduced the $76.3 million portion of its claim to
approximately $34.4 million. The arbitration panel took the case under
advisement and management expects that it will issue a decision in 1996. The
Company's management and its counsel believe it is unlikely that resolution of
these claims will have a material adverse effect on the Company's financial
position or results of operations.
In 1992, the United States Government through its Defense Contract Audit Agency
commenced an audit of certain contracts for sale of tracked vehicles by the
Company to foreign governments, which were financed by the United States
Government through the Defense Security Assistance Agency. The Company
cooperated with the audit and responded to a number of issues raised by the
audit. In September 1994, the Company received a subpoena issued by the
Department of Defense Inspector General seeking various documents relating to
sale contracts between the Company and foreign governments which were funded by
the Defense Security Assistance Agency. The Company is continuing to cooperate
and is responding to the subpoena. Based on discussions with the agent in charge
and the Government auditors, it appears that the investigation focuses on
whether the Company made improper certifications to the Defense Security
Assistance Agency. The Government has not asserted any claims at this time and
it is too early to know whether a claim will be asserted or what the nature of
any such claim would be, however, the Company's management and its counsel
believe it is unlikely that this issue will have a material adverse effect on
the Company's financial position.
In June 1994, the shareholder of the Ferrari Group, a Belgium holding company
involved in steel mill services and other activities, filed a legal action in
Belgium against Heckett MultiServ, S.A. and S.E.A.E., subsidiaries of MultiServ
International N.V. (a subsidiary of the Company). The action alleges that these
two subsidiaries breached contracts arising from letters of intent signed in
1992 and 1993 concerning the possible acquisition of the Ferrari Group, claiming
that the subsidiaries were obligated to proceed with the acquisition and failed
to do so. The action seeks damages of 504 million Belgian francs (approximately
U.S. $16 million). The Company intends to vigorously defend against the action
and believes that based on conditions contained in the letters of intent and
other defenses it will prevail. The Company and its counsel believe that is
unlikely that these claims will have a material adverse effect on the Company's
financial position or results of operations.
-8-
<PAGE> 9
HARSCO CORPORATION AND SUBSIDIARY COMPANIES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (Cont'd.)
On August 29, 1994, the Company filed a legal action in the United States
District Court for the Southern District of New York against certain former
shareholders of MultiServ International, N.V. seeking recovery of damages
arising from misrepresentations which the Company claims were made to it in
connection with its purchase of the MultiServ International, N.V. stock on
August 31, 1993. The Complaint seeks damages in an amount to be determined. On
April 4, 1995, the Court dismissed various elements of the Company's claims and
allowed the Company to amend its complaint with respect to other elements. At
the Company's request, the Court dismissed the remaining claims which then
allowed the Company to file an appeal in the United States Court of Appeals for
the Second Circuit. The Company has settled its claims with certain defendants,
and continued to pursue its appeal with respect to claims against the other
defendants. In August 1996, the Court of Appeals affirmed the lower court
decision dismissing the Company's complaint. The Company is evaluating the
decision.
Environmental
The Company is involved in a number of environmental remediation investigations
and clean-ups and, along with other companies, has been identified as a
"potentially responsible party" for certain waste disposal sites. While each of
these matters is subject to various uncertainties, it is probable that the
Company will agree to make payments toward funding certain of these activities
and it is possible that some of these matters will be decided unfavorably to the
Company. The Company has evaluated its potential liability, and its financial
exposure is dependent upon such factors as the continuing evolution of
environmental laws and regulatory requirements, the availability and application
of technology, the allocation of cost among potentially responsible parties, the
years of remedial activity required and the remediation methods selected. The
Consolidated Balance Sheets at June 30, 1996 and December 31, 1995, include an
accrual of $4.9 million and $5.3 million respectively for environmental matters.
The amounts charged to earnings on a pre-tax basis related to environmental
matters totaled $62,000 and $330,000 for the six months of 1996 and 1995,
respectively.
The liability for future remediation costs is evaluated on a quarterly basis.
Actual costs to be incurred at identified sites in future periods may vary from
the estimates, given inherent uncertainties in evaluating environmental
exposures. Subject to the imprecision in estimating future environmental costs,
the Company does not expect that any sum it may have to pay in connection with
environmental matters in excess of the amounts recorded or disclosed above would
have a material adverse effect on its financial position or results of
operations.
Other
The Company is subject to various other claims, legal proceedings and
investigations covering a wide range of matters that arose in the ordinary
course of business. In the opinion of management, all such matters are
adequately covered by insurance or by accruals, and if not so covered, are
without merit or are of such kind, or involve such amounts, as would not have a
material adverse effect on the financial position or results of operations of
the Company.
-9-
<PAGE> 10
HARSCO CORPORATION AND SUBSIDIARY COMPANIES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (Cont'd.)
Opinion of Management:
Financial information furnished herein, which is unaudited, reflects in the
opinion of management all adjustments (all of which are of a recurring nature)
that are necessary to present a fair statement of the interim period.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
FINANCIAL CONDITION
Net cash provided by operating activities was $60.2 million in the six months of
1996 compared to $86.4 million in 1995, the latter of which included receipt of
$20.4 million in payment of a claim settlement. Operating cash flows at June 30
for both years were unfavorably affected by working capital components, due to
the seasonal requirements of the business. During the six months of 1996,
distributions of $15.9 million were received from unconsolidated entities,
compared with $22.5 million during the same period last year.
Capital expenditures for the six months of 1996 were $69.6 million compared with
$57.4 million in 1995, reflecting the Company's program to achieve business
growth and to improve productivity and product quality. Proceeds from the sale
of property, plant and equipment in the six months of 1996 provided $1.8 million
in cash compared to $3.4 million in 1995.
Cash used by investing activities included $18.1 million for the acquisition of
substantially all of the assets and the assumption of certain liabilities of the
Coyne Cylinder Business (Coyne). Total consideration for Coyne was $22.4 million
with the assumption of certain liabilities. Cash used for financing activities
included $19 million of cash dividends paid on common stock and $16 million in
stock acquired for treasury. These uses were partially offset by a $10 million
increase in short term debt and an increase of $3.3 million in long term debt.
Cash and cash equivalents decreased $33.4 million to $43.2 million at June 30,
1996.
The Company has maintained a policy of reacquiring its common stock in
unsolicited open market or privately-negotiated transactions at prevailing
market prices for several years. In January 1996, the Board of Directors
authorized the purchase, over a one-year period, of up to 1,000,000 shares of
the Company's common stock. The total number of shares purchased under this
program for the six months ended June 30, 1996 was 204,700 shares of common
stock at an average cost of $66.24 per share. Financing activities included
$13.5 million in cash used to repurchase these shares, plus approximately $2.5
million which was payable at year end for shares purchased in 1995.
Other matters which could affect cash flows in the future are discussed under
Part 1, Item 1 and in the 1995 Annual Report on Form 10-K under Note 10,
"Commitments and Contingencies."
-10-
<PAGE> 11
HARSCO CORPORATION AND SUBSIDIARY COMPANIES
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Cont'd.)
Harsco continues to maintain a good financial position, with net working capital
of $245.2 million, up from the $145.3 million at December 31, 1995. The
improvement is primarily due to the payment of the $89,500,000 of 8.75% 10-year
notes that matured in May 1996 through the issuance of commercial paper, in
conjunction with the Company's five year syndicated borrowing facility. Such
borrowings are classified as long term debt due to the Company's intent and
ability to refinance. Current assets amounted to $521.2 million, and current
liabilities were $276.0 million, resulting in a current ratio of 1.9 to 1, up
from 1.4 at December 31, 1995. With total debt at $301.4 million and equity at
$652.1 million at June 30, 1996, the total debt as a percent of capital was
31.6%, which is the same as December 31, 1995.
The stock price range during the first six months was $69 7/8 - 58. Harsco's
book value per share at June 30, 1996, was $26.09, compared with $24.99 at
year-end 1995. The Company's annualized return on average equity for the first
six months of 1996 was 17.5%, compared with 16.3% for the year 1995. The
annualized return on average assets was 16.4%, compared with the 14.6% for the
year 1995. The annualized return on capital for the first six months was 13.6%,
compared with 12.1% for year 1995.
The Company in July 1996 renegotiated and increased to $400 million from $300
million, its October 1993 credit facility with a syndicate of 18 banks led by
Chase Manhattan Bank. The five-year facility, as amended, extends maturity to
July 2001, provides for greater financial flexibility and reflects current
favorable syndicated credit pricing. This renegotiated credit facility will
serve as backup to Harsco's $300 million commercial paper program, an increase
from $150 million. The Company limits the aggregate commercial paper and credit
facility borrowings at any one time to a maximum of $400 million. The credit
facility has been increased to provide financing for general corporate needs and
future growth opportunities. At June 30, 1996, the Company had $100.6 million in
borrowing under the commercial paper program.
Harsco's outstanding long-term notes are rated A by Standard & Poor's and Baa1
by Moody's. Harsco's commercial paper is rated A-1 by Standard & Poor's, F-1 by
Fitch Investors Service and P-2 by Moody's. The Company also has on file, with
the Securities and Exchange Commission, a Form S-3 shelf registration for the
possible issuance of up to an additional $200 million of new debt securities,
preferred stock or common stock.
As indicated by the above, the Company's financial position and debt capacity
should enable it to meet its current and future requirements. As additional
resources are needed, the Company should be able to obtain funds readily and at
competitive costs.
-11-
<PAGE> 12
HARSCO CORPORATION AND SUBSIDIARY COMPANIES
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Cont'd.)
RESULTS OF OPERATIONS
SECOND QUARTER OF 1996 COMPARED
WITH SECOND QUARTER OF 1995
Second quarter revenues of $397.9 million were 3% higher than last year's
comparable period. The increase was due principally to higher sales for gas
control and containment equipment, which included an acquisition made in April
1996. Other product classes with increases included scaffolding, shoring and
forming equipment, process equipment and roofing granules. Sales for Metal
Reclamation and Mill Services, which included the consolidation of a subsidiary
in South Africa that had previously been reflected as an equity investment,
increased slightly. The Company acquired a majority ownership of the subsidiary
in the fourth quarter of 1995. The South African revenues were more than offset
by the divesting of certain non-core European businesses in the Metal
Reclamation and Mill Services Group during the second half of 1995 and in April
1996. Higher revenues also included increased earnings from the Company's equity
investment in United Defense, L. P. These increases were partially offset by the
effect of ceasing school bus operations in June 1995.
Selling, general and administrative expenses increased due principally to
increased compensation.
Income before taxes and minority interest increased 23% due in part to the
absence of operating losses related to the school bus operation which ceased in
June 1995. Higher earnings were recorded for scaffolding, shoring and forming
equipment, pipe fittings, railroad equipment and process equipment product line.
Interest expense decreased as a result of the continued reduction of the
Company's average outstanding debt.
Net income of $29.3 million, a record second quarter, was up 19% from the
comparable period in 1995. The effective income tax rate for the second quarter
increased from 37.9% in 1995 to 39.0% in 1996, principally due to a decrease in
export sales and the related tax benefit.
Sales of the Metal Reclamation and Mill Services Group, at $151.4 million, were
slightly above 1995's second quarter, as divestitures during the second half of
1995 and April 1996 amounting to $12.7 million more than offset $7.8 million of
sales from consolidating a subsidiary in South Africa, previously reflected as
an equity investment. Sales for the Infrastructure and Construction Group, at
$107.0 million were down 2% from last year's similar period, which included $7.2
million for the school bus business which ceased operation in June 1995. Higher
sales were recorded for scaffolding, shoring and forming equipment and roofing
granules. Sales for the Process Industry Products Group, at $129.3 million, were
up $12.3 million principally due to an acquisition made in April of 1996 and
higher demand for process equipment.
-12-
<PAGE> 13
HARSCO CORPORATION AND SUBSIDIARY COMPANIES
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Cont'd.)
RESULTS OF OPERATIONS
SECOND QUARTER OF 1996 COMPARED
WITH SECOND QUARTER OF 1995 (continued)
Operating profit for the Metal Reclamation and Mill Services Group was just
below 1995's comparable period, which included a $1.1 million foreign currency
translation exchange gain. Second quarter 1996 operating income was favorably
affected by the consolidation of a subsidiary in South Africa. The
Infrastructure and Construction Group posted an operating profit of $14.3
million; 49% more than 1995's second quarter, which included losses arising from
the shutdown of the school bus operation. Additionally, improved results were
contributed primarily by scaffolding, shoring and forming equipment and railway
maintenance equipment. Operating profit for the Process Industry Products Group,
at $11.8 million, was up 37% from the prior year's second quarter, reflecting
profit improvement mainly for pipe fittings and process equipment, along with
the impact of an acquisition made in April 1996.
In addition to the Group reporting noted above, the Company views itself as a
diversified industrial services and manufacturing company. Total industrial
services sales, which include Metal Reclamation and Mill Services Group and
Infrastructure and Construction Group service businesses, principally
scaffolding services and railway maintenance of way services, were $193.7
million in the second quarter of 1996 and $187.5 million in 1995, or
approximately 50% of net sales in each period. The total manufacturing sales for
1996 were $194.0 million or approximately 50% of net sales, which includes sales
from the Infrastructure and Construction Group and the Process Industry Products
Group. The total manufacturing sales for the second quarter of 1995 were $189.8
million or approximately 50% of net sales.
The operating profit for industrial services for 1996 was $29.1 million compared
with $27.6 million in 1995, or approximately 60% and 67%, respectively, of total
Group operating profit. The operating profit from manufacturing for 1996 was
$19.6 million compared with $13.8 million in 1995, which is approximately 40%
and 33%, respectively, of total Group operating profit.
-13-
<PAGE> 14
HARSCO CORPORATION AND SUBSIDIARY COMPANIES
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Cont'd.)
RESULTS OF OPERATIONS
FIRST SIX MONTHS OF 1996 COMPARED
WITH FIRST SIX MONTHS OF 1995
Revenues for the first six months of $787.7 million were 3% above last year's
comparable period. The increase was due principally to higher sales for metal
reclamation and mill services, which included the consolidation of a subsidiary
in South Africa that had previously been reflected as an equity investment. The
Company acquired a majority ownership of the subsidiary in the fourth quarter of
1995. Fully offsetting the South Africa consolidation was the divesting of
certain non-core European businesses in the Metal Reclamation and Mill Services
Group, during the second half of 1995 and April 1996. In addition, higher sales
were recorded for scaffolding, shoring and forming equipment, process equipment,
grating, and to a lesser extent, roofing granules and slag abrasives. Increased
sales were also due in part to an acquisition made in 1996. Higher revenues
included better than expected income from the Company's equity investment in
United Defense, L.P. These increases were partially offset by the effect of
ceasing school bus operations in June 1995.
Cost of sales increased primarily due to higher volume. Selling, general and
administrative expenses increased, principally as a result of higher
compensation costs and professional fees associated with certain previously
disclosed legal matters.
Income before income taxes and minority interest was up 22% from the comparable
period last year. The effective income tax rate for 1996 and 1995 was 39%.
Higher earnings in the six months of 1996 were due principally to higher
operating results for metal reclamation and mill services, pipe fittings, and
scaffolding, shoring and forming equipment. Also contributing to the improvement
in earnings, was the Company's share of income in its equity investment in
United Defense, L. P. The Partnership's earnings include substantial dividend
income from its equity investment in Turkey, which was more than twice the
amount of dividend income that was received during the same period in 1995.
Lower earnings were recorded for gas control and containment equipment in 1996.
On a comparative basis, unfavorably affecting 1995's six months results were
losses arising from ceasing the school bus business. Income benefited in 1995
from the effect of a pre-tax $6.6 million net foreign currency translation
exchange gain arising from the decline in the U.S. Dollar against certain
European currencies, which more than offset a pre-tax $3.5 million foreign
currency translation exchange loss due to the devaluation of the Mexican peso.
Interest expense decreased as a result of the continued reduction of the
Company's outstanding debt.
Net income of $60.4 million, was up 21% from the comparable period in 1995. This
net income was the highest first six months performance in the history of the
Company.
-14-
<PAGE> 15
HARSCO CORPORATION AND SUBSIDIARY COMPANIES
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Cont'd.)
Sales of the Metal Reclamation and Mill Services Group, at $302.2 million, were
3% above 1995's six months. Sales for the Infrastructure and Construction Group,
at $199.6 million, approximated last year's similar period, which included $15.7
million for the school bus business that ceased operation in June 1995. Higher
sales were recorded for all other product classes, particularly scaffolding in
1996. Sales for the Process Industry Products Group, at $252.6 million, were
higher than the prior year's comparable period and were led by process equipment
and pipe fittings. The increased Process Industry Products Group's sales in 1996
included the effect of an acquisition made in 1996.
Operating profit for the Metal Reclamation and Mill Services Group was ahead of
1995's six months, which included $3.5 million of foreign currency translation
exchange losses due to the devaluation of the Mexican peso. The increase also
includes higher income in 1996 due to the consolidation of a subsidiary in South
Africa. The Infrastructure and Construction Group posted an operating profit of
$22.0 million. This was significantly more than 1995's first six months, which
included losses arising from the shutdown of the school bus operation.
Additionally, improved results for scaffolding equipment contributed to the
higher operating profit of the Group. Operating profit for the Process Industry
Products Group, at $23.0 million, was up 9% from the prior year's six months,
and reflected higher earning for pipe fittings and process equipment which more
than offset lower results for gas control and containment equipment.
In addition to the Group reporting noted above, the Company views itself as a
diversified industrial services and manufacturing company. Total industrial
service sales, which include Metal Reclamation and Mill Services Group and
Infrastructure and Construction Group service businesses, principally
scaffolding services and railway maintenance of way services, were $377.7
million in 1996 and $357.8 million in 1995, or approximately 50% and 49% of net
sales, respectively. The total manufacturing sales for 1996 were $376.7 million
or approximately 50% of net sales, which includes sales from the Infrastructure
and Construction Group and the Process Industry Products Group. The total
manufacturing sales for 1995 were $376.4 million or approximately 51% of net
sales.
The operating profit for industrial services for 1996 was $51.4 million compared
with $43.5 million in 1995, or approximately 58% and 61%, respectively, of total
Group operating profit. The operating profit from manufacturing for 1996 was
$36.6 million compared with $28.1 million in 1995, which is approximately 42%
and 39%, respectively, of total Group operating profit.
-15-
<PAGE> 16
HARSCO CORPORATION AND SUBSIDIARY COMPANIES
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Information on legal proceedings is included under Part I, Item 1., the section
labeled "Commitments and Contingencies."
In June, 1996, Harsco received a draft Civil Complaint for Penalties and
Injunctive Relief and a draft Consent Order related to air emissions violations
at the former Marysville, Ohio operation alleged to have occurred from
approximately 1988 through 1992. If Harsco, the Attorney General of Ohio and the
Ohio EPA are able to negotiate a mutually agreeable Consent Order, the draft
Complaint for Civil Penalties and Injunctive Relief will not be filed. The entry
of a final Consent Order will necessarily include an assessment of civil
penalties which have not as yet been set. The Company does not expect that any
sum it may have to pay in connection with the matter would have a material
adverse effect on its financial position or results of operations.
ITEM 5. OTHER INFORMATION
GENERAL:
On May 28, 1996, Harsco Corporation announced that it completed the sale of two
non-core business units operated by its Heckett MultiServ Division in London, to
Creyf's Interim, a company located in Antwerp, Belgium, for approximately $2
million. The sale involves the disposal of the French company Societe Francais
d'Interim S.A. (SFI) and the Belgian Company, Somafer Benelux Interim S.A.
(SBI). Both units provide temporary labor services to heavy industry and public
authorities, SFI and SBI reported 1995 combined revenues of approximately $22
million.
On June 27, 1996, Harsco Corporation announced that it will merge the company's
Sherwood Division into its Camp Hill, PA based Taylor-Wharton Gas Equipment
Division. Sherwood, headquartered in Lockport, New York, will become an
operating unit of Taylor-Wharton, but its products, which include the popular
scuba diving line and brass valves, will continue to be sold under the Sherwood
brand name.
On July 17, 1996, Harsco Corporation announced that it had renegotiated and
increased to $400 million from $300 million, its October 1993 credit facility
with a syndicate of 18 banks led by Chase Manhattan Bank. The five-year
facility, as amended, extends maturity to July 2001, provides for greater
financial flexibility and reflects current favorable syndicated credit pricing.
The renegotiated credit facility will serve as backup to Harsco's $300 million
commercial paper program (increased from $150 million), which has been rated A-1
by Standard & Poors and F-1 by Fitch Investor Services. The Company limits the
aggregate commercial paper and credit facility borrowings at any one time to a
maximum of $400 million. The credit facility has been increased to provide
financing for general corporate needs and future growth opportunities.
-16-
<PAGE> 17
HARSCO CORPORATION AND SUBSIDIARY COMPANIES
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION (Cont'd.)
DIVIDEND ACTION:
On June 25, 1996, Harsco Corporation announced that the Board of Directors
declared a quarterly cash dividend of 38 cents per share, payable August 15,
1996, to shareholders of record on July 15, 1996.
ITEM 6(a). EXHIBITS
The following exhibits are attached:
a.) Exhibit No. 10 Material Contracts - Credit Facility
(i) Amendment Agreement dated July 16, 1996 to the amended and
restated Credit Agreement dated as of August 24, 1993, as
amended and restated as of June 21, 1994, and as amended by
an Amendment Agreement dated as of June 20, 1995 and a
second Amendment Agreement dated as of February 29, 1996
among Harsco Corporation, the lenders named therein and
Chase Manhattan Bank.
b.) Exhibit No. 11 Computation of Fully Diluted Net Income Per Common Share.
c.) Exhibit No. 12 Computation of Ratios of Earnings to Fixed Charges.
d.) Exhibit No. 27 Financial Data Schedule
ITEM 6(b) REPORTS ON FORM 8-K
a.) There were no reports filed on Form 8-K during the second quarter ending
June 30, 1996.
-17-
<PAGE> 18
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.
HARSCO CORPORATION
------------------------
(Registrant)
DATE 8/6/96 /S/ Leonard A. Campanaro
-------------------- ------------------------------
Leonard A. Campanaro
Senior Vice President and
Chief Financial Officer
DATE 8/6/96 /S/ Salvatore D. Fazzolari
-------------------- ------------------------------
Salvatore D. Fazzolari
Vice President and Controller
-18-
<PAGE> 19
EXHIBIT INDEX
-------------
Exhibit No. Description
----------- -----------
Exhibit 10 Material Contracts - Credit Facility
(i) Amendment Agreement dated July 16, 1996 to the amended and
restated Credit Agreement dated as of August 24, 1993, as
amended and restated as of June 21, 1994, and as amended by
an Amendment Agreement dated as of June 20, 1995 and a
second Amendment Agreement dated as of February 29, 1996
among Harsco Corporation, the lenders named therein and
Chase Manhattan Bank.
Exhibit 11 Computation of Fully Diluted Net Income Per Common Share.
Exhibit 12 Computation of Ratios of Earnings to Fixed Charges.
Exhibit 27 Financial Data Schedule
<PAGE> 1
Exhibit 10
Material Contracts - Credit Facility
Reference is made to the Amendment Agreement dated as of July 16, 1996
(the "Amendment Agreement"), relating to the Amended and Restated Credit
Agreement (Five-Year Competitive Advance and Revolving Credit Facility) dated as
of August 24, 1993, as amended and restated as of June 21, 1994, and as amended
by an Amendment Agreement dated as of June 20, 1995, and a Second Amendment
Agreement dated as of February 29, 1996 (the "Credit Agreement"), among HARSCO
CORPORATION (the "Company"), the lenders party thereto and THE CHASE MANHATTAN
BANK, as administrative agent (in such capacity, the "Administrative Agent").
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to such terms in the Amendment Agreement.
On the Restatement Effective Date, upon payment in full of all amounts
owed to the undersigned Lender under the Credit Agreement, the undersigned
Lender will be deemed without further action to have consented to the amendments
provided for in the Amendment Agreement, will cease to be a party to the Credit
Agreement and will have no further rights or obligations hereunder or
thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this document to be
duly executed by their duly authorized officers, all as of the date first above
written.
HARSCO CORPORATION,
by /s/ Leonard A. Campanaro
--------------------------------
Name: Leonard A. Campanaro
Title: Senior Vice President
& Chief Financial Officer
by /s/ Barry M. Sullivan
--------------------------------
Name: Barry M. Sullivan
Title: Vice President & Treasurer
<PAGE> 2
2
BAYERISCHE VEREINSBANK AG
NEW YORK BRANCH,
by /s/ Marianne Weinzinger
--------------------------
Name: Marianne Weinzinger
Title: Vice President
by /s/ Walter H. Eckmeier
--------------------------
Name: Walter H. Eckmeier
Title: Vice President
THE CHASE MANHATTAN BANK, as
Administrative Agent,
by /s/ D. Davey
--------------------------
Name: D. Davey
Title: Vice President
<PAGE> 3
Reference is made to the Amendment Agreement dated as of July 16, 1996
(the "Amendment Agreement"), relating to the Amended and Restated Credit
Agreement (Five-Year Competitive Advance and Revolving Credit Facility) dated as
of August 24, 1993, as amended and restated as of June 21, 1994, and as amended
by an Amendment Agreement dated as of June 20, 1995, and a Second Amendment
Agreement dated as of February 29, 1996 (the "Credit Agreement"), among HARSCO
CORPORATION (the "Company"), the lenders party thereto and THE CHASE MANHATTAN
BANK, as administrative agent (in such capacity, the "Administrative Agent").
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to such terms in the Amendment Agreement.
On the Restatement Effective Date, upon payment in full of all amounts
owed to the undersigned Lender under the Credit Agreement, the undersigned
Lender will be deemed without further action to have consented to the amendments
provided for in the Amendment Agreement, will cease to be a party to the Credit
Agreement and will have no further rights or obligations hereunder or
thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this document to be
duly executed by their duly authorized officers, all as of the date first above
written.
HARSCO CORPORATION,
by /s/ Leonard A. Campanaro
---------------------------
Name: Leonard A. Campanaro
Title: Senior Vice President
& Chief Financial Officer
by /s/ Barry M. Sullivan
---------------------------
Name: Barry M. Sullivan
Title: Vice President & Treasurer
<PAGE> 4
2
NATIONAL WESTMINSTER BANK, PLC,
by /s/ Anne Marie Torre
--------------------------
Name: Anne Marie Torre
Title: Vice President
THE CHASE MANHATTAN BANK, as
Administrative Agent,
by /s/ D. Davey
--------------------------
Name: D. Davey
Title: Vice President
<PAGE> 5
Reference is made to the Amendment Agreement dated as of July 16, 1996
(the "Amendment Agreement"), relating to the Amended and Restated Credit
Agreement (Five-Year Competitive Advance and Revolving Credit Facility) dated as
of August 24, 1993, as amended and restated as of June 21, 1994, and as amended
by an Amendment Agreement dated as of June 20, 1995, and a Second Amendment
Agreement dated as of February 29, 1996 (the "Credit Agreement"), among HARSCO
CORPORATION (the "Company"), the lenders party thereto and THE CHASE MANHATTAN
BANK, as administrative agent (in such capacity, the "Administrative Agent").
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to such terms in the Amendment Agreement.
On the Restatement Effective Date, upon payment in full of all amounts
owed to the undersigned Lender under the Credit Agreement, the undersigned
Lender will be deemed without further action to have consented to the amendments
provided for in the Amendment Agreement, will cease to be a party to the Credit
Agreement and will have no further rights or obligations hereunder or
thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this document to be
duly executed by their duly authorized officers, all as of the date first above
written.
HARSCO CORPORATION,
by /s/ Leonard A. Campanaro
---------------------------
Name: Leonard A. Campanaro
Title: Senior Vice President
& Chief Financial Officer
by /s/ Barry M. Sullivan
---------------------------
Name: Barry M. Sullivan
Title: Vice President & Treasurer
<PAGE> 6
2
CREDIT SUISSE,
by /s/ CHRISTOPHER J. ELDIN
--------------------------
Name: CHRISTOPHER J. ELDIN
Title: MEMBER OF SENIOR MANAGEMENT
by /s/ THOMAS G. MUOIO
--------------------------
Name: THOMAS G. MUOIO
Title: ASSOCIATE
THE CHASE MANHATTAN BANK, as
Administrative Agent,
by /s/ D. DAVEY
--------------------------
Name: D. DAVEY
Title: VICE PRESIDENT
<PAGE> 7
CONFORMED COPY
AMENDMENT AGREEMENT dated as of July 16,
1996, to the Amended and Restated Credit Agreement
(Five-Year Competitive Advance and Revolving Credit
Facility) dated as of August 24, 1993, as amended and
restated as of June 21, 1994 and as amended by an
Amendment Agreement dated as of June 20, 1995, and a
Second Amendment Agreement dated as of February 29,
1996 (the "Credit Agreement"), among HARSCO
CORPORATION (the "Company"), the undersigned lenders
and THE CHASE MANHATTAN BANK, as administrative agent
(in such capacity, the "Administrative Agent").
A. The parties hereto have agreed, subject to the terms and
conditions hereof, to amend and restate the Credit Agreement in the form of the
credit agreement attached hereto as Exhibit A (the "Amended Credit Agreement").
B. Capitalized terms used and not otherwise defined herein
shall have the meanings assigned to such terms in the Amended Credit Agreement.
Accordingly, the parties hereto hereby agree as follows:
SECTION 1. Amendment of Credit Agreement. (a) The Credit
Agreement (including all Exhibits and Schedules thereto) is hereby amended and
restated, effective as of the Restatement Effective Date (as hereinafter
defined), to read in its entirety as set forth in Exhibit A.
(b) As of the Restatement Effective Date, The Chase Manhattan
Bank, shall replace Chemical Bank as the Administrative Agent under the Amended
Credit Agreement.
SECTION 2. Representations and Warranties. The Company hereby
represents and warrants to each Lender, on and as of the date hereof and as of
the Restatement Closing Date, as follows:
(a) The representations and warranties set forth in Article
III of the Amended Credit Agreement are true and correct in all
material respects with the same effect as if made on and as of such
date, except to the
<PAGE> 8
2
extent such representations and warranties expressly relate solely to
an earlier date.
(b) The Company is in compliance with all the terms and
conditions of the Amended Credit Agreement on its part to be observed
or performed and no Default or Event of Default has occurred and is
continuing.
(c) The execution, delivery and performance by the Company of
this Amendment Agreement and the Amended Credit Agreement
(collectively, the "Amendment Documents") (i) has been duly authorized
by each such person party thereto, and constitutes the legal, valid and
binding obligation of the Company, enforceable against it in accordance
with its terms, (ii) does not conflict with or violate (A) any
provision of law, statute, rule or regulation, or of the constitutive
documents or by-laws of the Company, (B) any order of any Governmental
Authority or (C) any provision of any indenture, material agreement or
other material instrument to which the Company is a party or by which
it or any of its property may be bound and (iii) does not require any
consents under, result in a breach of or constitute (with notice or
lapse of time or both) a default under any such indenture, agreement or
instrument.
The representations and warranties contained in Section 2(c) shall survive the
termination of this Amendment Agreement and the Amended Credit Agreement.
SECTION 3. Effectiveness. This Amendment Agreement shall
become effective on the date on which each of the following conditions shall
have been satisfied (the "Restatement Effective Date").
(a) The Administrative Agent shall have received a favorable
written opinion of Graham & James, counsel for the Company, dated the
Restatement Effective Date and addressed to the Lenders, to the effect
set forth in Exhibit B hereto.
(b) All legal matters incident to this Agreement and the
borrowings hereunder shall be satisfactory to the Lenders and to
Cravath, Swaine & Moore, counsel for the Administrative Agent.
<PAGE> 9
3
(c) The Administrative Agent shall have received (i) a
certificate as to the good standing of the Company as of a recent date
from the Secretary of State of the State of Delaware; (ii) a
certificate of the Secretary or Assistant Secretary of the Company
dated the Restatement Effective Date and certifying (A) that attached
thereto is a true and complete copy of the by-laws of the Company as in
effect on the Restatement Effective Date and at all times since a date
prior to the date of the resolutions described in clause (B) below, (B)
that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of the Company authorizing the
execution, delivery and performance of the Loan Documents and the
borrowings under the Amended Credit Agreement, and that such
resolutions have not been modified, rescinded or amended and are in
full force and effect, (C) that attached thereto is a true and complete
copy of the certificate of incorporation, including all amendments
thereto, of the Company and that such certificate of incorporation of
the Company has not been amended since the date of the last amendment
thereto shown on the certificate of good standing furnished pursuant to
clause (i) above, and (D) as to the incumbency and specimen signature
of each officer executing any Loan Document or any other document
delivered in connection herewith on behalf of the Company; (iii) a
certificate of another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (ii) above; and (iv) such other documents as
the Lenders or Cravath, Swaine & Moore, counsel for the Administrative
Agent, may reasonably request.
(d) The Administrative Agent shall have received a certificate
of the Company, dated the Restatement Effective Date and signed by a
Financial Officer of the Company, confirming compliance with the
conditions precedent set forth in paragraphs (b) and (c) of Section
4.01 of the Amended Credit Agreement.
(e) The Administrative Agent shall have received all Fees and
other amounts due and payable on or prior to the Restatement Effective
Date under the Credit Agreement, this Amendment Agreement, the Amended
Credit Agreement, the Fee Letter or otherwise.
<PAGE> 10
4
(f) No Loans shall be outstanding under the Credit Agreement
as of the Restatement Effective Date.
SECTION 4. APPLICABLE LAW. THIS AMENDMENT AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 5. Expenses. The Company shall pay all reasonable
out-of-pocket expenses incurred by the Administrative Agent in connection with
the preparation, negotiation, execution, delivery and enforcement of this
Amendment Agreement, including, but not limited to, the reasonable fees and
disbursements of Cravath, Swaine & Moore. The agreement set forth in this
Section 5 shall survive the termination of this Amendment Agreement and the
Amended Credit Agreement.
SECTION 6. Counterparts. This Amendment Agreement may be
executed in any number of counterparts, each of which shall constitute an
original but all of which when taken together shall constitute but one
agreement.
<PAGE> 11
5
Delivery of an executed counterpart of a signature page by facsimile
transmission shall be effective as delivery of a manually executed counterpart
of this Amendment Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment Agreement to be duly executed by their duly authorized officers, all
as of the date first above written.
HARSCO CORPORATION,
by /s/ Leonard A. Campanaro
-----------------------------------
Name: Leonard A. Campanaro
Title: Senior Vice President
& Chief Financial Officer
by /s/ Barry M. Sullivan
-----------------------------------
Name: Barry M. Sullivan
Title: Vice President & Treasurer
THE CHASE MANHATTAN BANK,
by /s/ D. Davey
-----------------------------------
Name: D. Davey
Title: Vice President
CHEMICAL BANK,
by /s/ D. Davey
-----------------------------------
Name: D. Davey
Title: Vice President
<PAGE> 12
6
BANK BRUSSELS LAMBERT, NEW YORK
BRANCH,
by /s/ John Kippax
-----------------------------------
Name: John Kippax
Title: Vice President
by /s/ Dominick H.J. Vanagaever
-----------------------------------
Name:Dominick H.J. Vanagaever
Title: Vice President
Credit Department
CIBC INC.,
by /s/ Cheryl L. Root
-----------------------------------
Name: Cheryl L. Root
Title: Authorized
Signatory
CORESTATES BANK, N.A.,
by /s/ Joseph M. Finley
-----------------------------------
Name: Joseph M. Finley
Title: Vice President
DAUPHIN DEPOSIT BANK AND TRUST
COMPANY,
by /s/ Susan L. Davies
-----------------------------------
Name: Susan L. Davies
Title: Vice President
FIRST UNION NATIONAL BANK,
by /s/ Patrick A. McGovern
-----------------------------------
Name: Patrick A. McGovern
Title: Senior Vice President
<PAGE> 13
7
GULF INTERNATIONAL BANK
B.S.C.,
by /s/ Thomas E. Fitzherbert
-----------------------------------
Name:Thomas E. Fitzherbert
Title: Vice President
by /s/ Abdel-Fattah Tahoun
-----------------------------------
Name: Abdel-Fattah Tahoun
Title: Senior Vice
President
ISTITUTO BANCARIO SAN PAOLO DI
TORINO SPA,
by /s/ Gerard M. McKenna
-----------------------------------
Name: Gerard M. McKenna
Title: Vice President
by /s/ Wendell Jones
-----------------------------------
Name: Wendell Jones
Title: Vice President
MELLON BANK, N.A.,
by /s/ Gilbert B. Mateer
-----------------------------------
Name: Gilbert B. Mateer
Title: Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
by /s/ Laura E. Reim
-----------------------------------
Name: Laura E. Reim
Title: Vice President
<PAGE> 14
8
NATIONSBANK OF NORTH CAROLINA,
N.A.,
by /s/ Michael D. Monte
-----------------------------------
Name: Michael D. Monte
Title: Senior Vice
President
PNC BANK, NATIONAL
ASSOCIATION,
by /s/ Robert Q. Reilly
-----------------------------------
Name: Robert Q. Reilly
Title: Vice President -
Senior Relationship
Manager
SOCIETE GENERALE,
by /s/ Gordon Saint-Denis
-----------------------------------
Name: Gordon Saint-Denis
Title: Vice President
THE BANK OF NEW YORK,
by /s/ Walter C. Parelli
-----------------------------------
Name: Walter C. Parelli
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF
CHICAGO,
by /s/ Lynn R. Dillon
-----------------------------------
Name: Lynn R. Dillon
Title: As Agent
<PAGE> 15
9
THE FIRST NATIONAL BANK OF
MARYLAND,
by /s/ Theodore K. Oswald
-----------------------------------
Name: Theodore K. Oswald
Title: Vice President
THE FUJI BANK, LIMITED,
by /s/ Gina M. Kearns
-----------------------------------
Name: Gina M. Kearns
Title: Vice President & Manager
UNION BANK OF SWITZERLAND,
by /s/ James P. Kelleher
-----------------------------------
Name: James P. Kelleher
Title: Assistant Vice President
by /s/ Peter B. Yearley
-----------------------------------
Name: Peter B. Yearley
Title: Managing Director
<PAGE> 16
EXHIBIT A
TO THE AMENDMENT AGREEMENT
================================================================================
Amended and Restated Credit Agreement
(Five-Year Competitive Advance and Revolving Credit Facility)
Dated As of July 16, 1996,
Among
HARSCO CORPORATION,
THE LENDERS NAMED HEREIN
and
THE CHASE MANHATTAN BANK
as Administrative Agent
================================================================================
<PAGE> 17
TABLE OF CONTENTS
Article Section Page
- ------- ------- ----
I. DEFINITIONS
1.01 Defined Terms . . . . . . . . . . . . . . . . . . . . 1
1.02 Terms Generally . . . . . . . . . . . . . . . . . . . . 21
II. THE CREDITS
2.01 Commitments . . . . . . . . . . . . . . . . . . . . . 22
2.02 Loans . . . . . . . . . . . . . . . . . . . . . . . . 23
2.03 Competitive Bid Procedure . . . . . . . . . . . . . . 25
2.04 Standby Borrowing Procedure . . . . . . . . . . . . . 29
2.05 Refinancings . . . . . . . . . . . . . . . . . . . . . 30
2.06 Fees . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.07 Repayment of Loans; . . . . . . . . . . . . . . . . . 32
2.08 Interest on Loans . . . . . . . . . . . . . . . . . . 32
2.09 Default Interest . . . . . . . . . . . . . . . . . . . 33
2.10 Alternate Rate of Interest . . . . . . . . . . . . . . 34
2.11 Termination and Reduction and
Increase of Commitments . . . . . . . . . . . . . 34
2.12 Prepayment . . . . . . . . . . . . . . . . . . . . . . 36
2.13 Reserve Requirements; Change in
Circumstances . . . . . . . . . . . . . . . . . 37
2.14 Change in Legality . . . . . . . . . . . . . . . . . . 39
2.15 Indemnity . . . . . . . . . . . . . . . . . . . . . . 40
2.16 Pro Rata Treatment . . . . . . . . . . . . . . . . . . 41
2.17 Sharing of Setoffs . . . . . . . . . . . . . . . . . . 42
2.18 Payments . . . . . . . . . . . . . . . . . . . . . . . 43
2.19 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 43
2.20 Assignment of Commitments and
Swingline Commitments Under
Certain Circumstances . . . . . . . . . . . . . 47
2.21 Swingline Loans . . . . . . . . . . . . . . . . . . . . 48
2.22 Borrowings by Approved Borrowers . . . . . . . . . . . 51
III. REPRESENTATIONS AND WARRANTIES
3.01 Corporate Existence . . . . . . . . . . . . . . . . . 52
3.02 Financial Condition . . . . . . . . . . . . . . . . . . 52
3.03 Litigation . . . . . . . . . . . . . . . . . . . . . . 53
3.04 No Breach . . . . . . . . . . . . . . . . . . . . . . . 53
3.05 Action . . . . . . . . . . . . . . . . . . . . . . . . 53
<PAGE> 18
2
Article Section Page
- ------- ------- ----
3.06 Approvals . . . . . . . . . . . . . . . . . . . . . . 54
3.07 Use of Credit . . . . . . . . . . . . . . . . . . . . . 54
3.08 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . 54
3.09 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 54
3.10 Investment Company Act . . . . . . . . . . . . . . . . 55
3.11 Public Utility Holding Company . . . . . . . . . . . . 55
3.12 Material Agreements and Liens . . . . . . . . . . . . . 55
3.13 Environmental Matters . . . . . . . . . . . . . . . . . 55
3.14 Subsidiaries, etc. . . . . . . . . . . . . . . . . . . 56
3.15 True and Complete Disclosure . . . . . . . . . . . . . 56
3.16 Corporate Existence of Approved
Borrower . . . . . . . . . . . . . . . . . . . . 57
3.17 No Breach . . . . . . . . . . . . . . . . . . . . . . . 57
3.18 Action . . . . . . . . . . . . . . . . . . . . . . . . 57
3.19 Approvals . . . . . . . . . . . . . . . . . . . . . . . 58
3.20 Taxes on Payments of Approved
Borrowers . . . . . . . . . . . . . . . . . . . . 58
IV. CONDITIONS OF LENDING
4.01 All Borrowings . . . . . . . . . . . . . . . . . . . . 58
4.02 First Borrowing by Each Approved
Borrower . . . . . . . . . . . . . . . . . . . . 59
V. AFFIRMATIVE COVENANTS
5.01 Existence; Business and
Properties . . . . . . . . . . . . . . . . . . . . 61
5.02 Insurance . . . . . . . . . . . . . . . . . . . . . . . 62
5.03 Obligations and Taxes . . . . . . . . . . . . . . . . . 62
5.04 Financial Statements, Reports,
etc. . . . . . . . . . . . . . . . . . . . . . . . 62
5.05 Litigation and Other Notices . . . . . . . . . . . . . 64
5.06 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.07 Maintaining Records . . . . . . . . . . . . . . . . . . 65
5.08 Use of Proceeds . . . . . . . . . . . . . . . . . . . . 65
VI. NEGATIVE COVENANTS
6.01 Liens . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.02 Sale and Lease-Back
Transactions . . . . . . . . . . . . . . . . . . 67
6.03 Mergers, Sales of Assets, etc. . . . . . . . . . . . . 67
6.04 Lines of Business; Fiscal Year . . . . . . . . . . . . 68
6.05 Transactions with Affiliates . . . . . . . . . . . . . 68
<PAGE> 19
3
Article Section Page
- ------- ------- ----
6.06 Net Worth . . . . . . . . . . . . . . . . . . . . . . . 69
6.07 Total Debt to Total Capital
Ratio . . . . . . . . . . . . . . . . . . . . . . 69
VII. EVENTS OF DEFAULT 69
VIII. THE ADMINISTRATIVE AGENT 73
IX. GUARANTEE
9.01 Guarantee . . . . . . . . . . . . . . . . . . . . . . . 76
9.02 Obligations Unconditional . . . . . . . . . . . . . . . 76
9.03 Reinstatement . . . . . . . . . . . . . . . . . . . . . 77
9.04 Subrogation . . . . . . . . . . . . . . . . . . . . . . 78
9.05 Remedies . . . . . . . . . . . . . . . . . . . . . . . 78
9.06 Continuing Guarantee . . . . . . . . . . . . . . . . . 78
X. MISCELLANEOUS
10.01 Notices . . . . . . . . . . . . . . . . . . . . . . . 78
10.02 Survival of Agreement. . . . . . . . . . . . . . . . . 79
10.03 Binding Effect . . . . . . . . . . . . . . . . . . . 79
10.04 Successors and Assigns . . . . . . . . . . . . . . . . 80
10.05 Expenses; Indemnity . . . . . . . . . . . . . . . . . 84
10.06 Right of Setoff . . . . . . . . . . . . . . . . . . . 85
10.07 Applicable Law . . . . . . . . . . . . . . . . . . . . 85
10.08 Waivers; Amendment . . . . . . . . . . . . . . . . . . 85
10.09 Interest Rate Limitation . . . . . . . . . . . . . . . 86
10.10 Entire Agreement . . . . . . . . . . . . . . . . . . . 87
10.11 Waiver of Jury Trial . . . . . . . . . . . . . . . . . 87
10.12 Severability . . . . . . . . . . . . . . . . . . . . . 87
10.13 Judgment Currency . . . . . . . . . . . . . . . . . . 87
10.14 Counterparts . . . . . . . . . . . . . . . . . . . . . 88
10.15 Headings . . . . . . . . . . . . . . . . . . . . . . . 88
10.16 Jurisdiction; Consent to Service
of Process . . . . . . . . . . . . . . . . . . . . 89
Exhibits
Exhibit A-1 Form of Competitive Bid Request
Exhibit A-2 Form of Notice of Competitive Bid Request
Exhibit A-3 Form of Competitive Bid
Exhibit A-4 Form of Competitive Bid Accept/Reject Letter
Exhibit A-5 Form of Standby Borrowing Request
Exhibit B Form of Administrative Questionnaire
Exhibit C Form of Assignment and Acceptance
<PAGE> 20
4
Article Section Page
- ------- ------- ----
Exhibit D-1 Form of Opinion of Counsel for General
Counsel for Approved Borrowers
Exhibit E-1 Form of Designation Letter
Exhibit E-2 Form of Termination Letter
Schedules
- ---------
Schedule 2.01 Lenders and Commitments
Schedule 2.21 Swingline Lenders and Commitments
Schedule 2.22 Approved Borrowers
Schedule 3.03 Litigation
Schedule 3.12 Material Agreements and Liens
Schedule 3.14 Subsidiaries of the Company
<PAGE> 21
AMENDED AND RESTATED CREDIT AGREEMENT
(FIVE-YEAR COMPETITIVE ADVANCE AND REVOLVING CREDIT
FACILITY) (the "Agreement") dated as of July 16,
1996, among HARSCO CORPORATION, a Delaware
corporation (the "Company"), the lenders listed in
Schedule 2.01 (the "Lenders"), and THE CHASE
MANHATTAN BANK, as administrative agent for the
Lenders (in such capacity, the "Administrative
Agent").
The Company has requested the Lenders to extend credit to the
Company in order to enable it to borrow on a standby revolving credit basis on
and after the date hereof and at any time and from time to time prior to the
Maturity Date (as herein defined) (i) Standby Loans in an aggregate principal
amount at any time outstanding not in excess of $400,000,000 at any time
outstanding and (ii) Swingline Loans in an aggregate principal amount at any
time outstanding not in excess of the lesser of (x) $150,000,000 and (y) the
excess of the Total Commitment over the aggregate principal amount of Loans
outstanding at such time. The Company has also requested the Lenders to provide
a procedure pursuant to which the Company may invite the Lenders to bid on an
uncommitted basis on short-term borrowings by the Company. The proceeds of all
such borrowings are to be used for general corporate purposes, including
commercial paper backup. The Lenders are willing to extend such credit to the
Company on the terms and subject to the conditions herein set forth.
Accordingly, the Company, the Lenders and the Administrative
Agent agree as follows:
ARTICLE I. DEFINITIONS
Section 1.01. Defined Terms. As used in this
Agreement, the following terms shall have the meanings
specified below:
"ABR Borrowing" shall mean a Borrowing comprised
of ABR Loans.
"ABR Loan" shall mean any Standby Loan or Swingline Loan
bearing interest at a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
<PAGE> 22
2
"Administrative Fees" shall have the meaning assigned to such
term in Section 2.06(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit B hereto.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with the
person specified.
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof, "Prime
Rate" shall mean the rate of interest per annum publicly announced from time to
time by the Administrative Agent as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective on the
date such change is publicly announced as effective. "Federal Funds Effective
Rate" shall mean, for any day, the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for the day of
such transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition until the circumstances
giving rise to such inability no longer exist.
"Alternative Currency" shall mean (a) Belgian Francs, Deutsche
Marks, French Francs and Sterling and (b) any other freely available currency
which is freely transferable and freely convertible into Dollars and in which
dealings in deposits are carried on in the London or
<PAGE> 23
3
other interbank market, which shall be requested by a Borrower in respect of an
Alternative Currency Borrowing and approved by each Lender making an Alternative
Currency Loan comprising a part of such Borrowing.
"Alternative Currency Borrowing" shall mean a Borrowing
comprised of Alternative Currency Loans. All Alternative Currency Borrowings
shall be Eurocurrency Borrowings.
"Alternative Currency Equivalent" shall mean, with respect to
any amount of Dollars on any date in relation to any specified Alternative
Currency, the amount of such specified Alternative Currency that may be
purchased with such amount of Dollars at the Spot Exchange Rate with respect to
Dollars on such date. The term "Alternative Currency Equivalent" may be preceded
by a reference to an Alternative Currency (e.g., "DEM Alternative Currency
Equivalent"), in which case the Alternative Currency so referenced shall be the
"specified" Alternative Currency.
"Alternative Currency Loan" shall mean any Loan denominated in
an Alternative Currency.
"Applicable Margin" shall mean on any date, (A) with respect
to ABR Loans, 0% and (B) with respect to Eurocurrency Loans, the applicable
spreads set forth below
<PAGE> 24
4
based upon the ratings applicable on such date to senior, unsecured, non-credit
enhanced, long-term indebtedness of the Company for borrowed money ("Index
Debt"):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Eurocurrency
Loan Spread
- --------------------------------------------------------------------------------
<S> <C>
Category 1
A- or higher by S&P; .150%
A3 or higher by Moody's
- --------------------------------------------------------------------------------
Category 2
BBB+ by S&P; .175%
Baa1 by Moody's
- --------------------------------------------------------------------------------
Category 3
BBB by S&P; .225%
Baa2 by Moody's
- --------------------------------------------------------------------------------
Category 4
BBB- by S&P; .250%
Baa3 by Moody's
- --------------------------------------------------------------------------------
Category 5
BB+ or lower by S&P; .425%
Ba1 or lower by Moody's
- --------------------------------------------------------------------------------
</TABLE>
For purposes of determining the Applicable Margin for Eurocurrency Loans, (a) if
either Moody's or S&P shall not have in effect a rating for Index Debt (other
than because such rating agency shall no longer be in the business of rating
corporate debt obligations), then such rating agency will be deemed to have
established a rating for Index Debt in Category 5; (b) if the ratings
established or deemed to have been established by Moody's and S&P shall fall
within different Categories, the Applicable Margin shall be determined by
reference to the superior (or numerically lower) Category; and (c) if any rating
established or deemed to have been established by Moody's or S&P shall be
changed (other than as a result of a change in the rating system of either
Moody's or S&P), such change shall be effective as of the date on which such
change is first announced by the
<PAGE> 25
5
rating agency making such change. Each change in the Applicable Margin shall
apply to all Eurocurrency Loans and ABR Loans that are outstanding at any time
during the period commencing on the effective date of such change and ending on
the date immediately preceding the effective date of the next such change. If
the rating system of either Moody's or S&P shall change, or if either such
rating agency shall cease to be in the business of rating corporate debt
obligations, the Company and the Lenders shall negotiate in good faith to amend
the references to specific ratings in this definition to reflect such changed
rating system or the nonavailability of ratings from such rating agency.
"Applicable Percentage" shall mean, with respect to any Lender
at any time, the percentage of the Total Commitment represented by such Lender's
Commitment at such time.
"Approved Borrower" shall mean any wholly owned Subsidiary of
the Company as to which a Designation Letter shall have been delivered to the
Administrative Agent in accordance with Section 2.22 hereof and as to which a
Termination Letter shall not have been delivered to the Administrative Agent.
"Assigned Dollar Value" shall mean, in respect of any
Borrowing denominated in an Alternative Currency, the Dollar Equivalent thereof
determined based upon the applicable Spot Exchange Rate as of the Denomination
Date for such Borrowing.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the
Administrative Agent, in the form of Exhibit C or such other form as shall be
approved by the Administrative Agent.
"Belgian Francs" or "BEF" shall mean lawful money of the
Kingdom of Belgium.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrowers" shall mean the Company and each Approved Borrower.
"Borrowing" shall mean a group of Loans of a single Type made
by the Lenders (or (a) in the case of a
<PAGE> 26
6
Competitive Borrowing, by the Lender or Lenders whose Competitive Bids have been
accepted pursuant to Section 2.03 or (b) in the case of a Swingline Borrowing,
by the Swingline Lenders) on a single date and as to which a single Interest
Period is in effect.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks are
open for business in New York City; provided, however, that, when used in
connection with a Eurocurrency Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in Dollar deposits in the
London interbank market and, if such reference relates to the date on which any
amount is to be paid or made available in an Alternative Currency, the term
"Business Day" shall also exclude any day on which commercial banks and foreign
exchange markets are not open for business in the principal financial center in
the country of such Alternative Currency.
"Capital Lease Obligations" of any person shall mean the
obligations of such person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
A "Change in Control" shall be deemed to have occurred if (a)
any person or group (within the meaning of Rule 13d-5 of the Securities and
Exchange Commission as in effect on the date hereof) shall own directly or
indirectly, beneficially or of record, shares representing more than 20% of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Company; (b) a majority of the seats (other than vacant
seats) on the board of directors of the Company shall at any time have been
occupied by persons who were neither (i) nominated by the board of directors of
the Company, nor (ii) appointed by directors so nominated; or (c) any person or
group shall otherwise directly or indirectly Control the Company.
"Code" shall mean the Internal Revenue Code of 1986, as the
same may be amended from time to time.
<PAGE> 27
7
"Committed Credit Exposure" shall mean, with respect to any
Lender at any time, the sum of (a) the aggregate amount of such Lender's Standby
Loan Exposure at such time, plus (b) the aggregate amount of such Lender's
Swingline Loan Exposure at such time.
"Commitment" shall mean, with respect to each Lender, the
commitment of such Lender hereunder as set forth in Schedule 2.01 hereto, as
such Lender's Commitment may be permanently terminated, reduced or increased
from time to time pursuant to Section 2.11.
"Competitive Bid" shall mean an offer by a Lender to make a
Competitive Loan pursuant to Section 2.03.
"Competitive Bid Accept/Reject Letter" shall mean a
notification made by a Borrower pursuant to Section 2.03(d) in the form of
Exhibit A-4.
"Competitive Bid Rate" shall mean, as to any Competitive Bid
made by a Lender pursuant to Section 2.03(b), (i) in the case of a Eurocurrency
Loan, the Competitive Margin, and (ii) in the case of a Fixed Rate Loan, the
fixed rate of interest offered by the Lender making such Competitive Bid.
"Competitive Bid Request" shall mean a request made pursuant
to Section 2.03 in the form of Exhibit A-1.
"Competitive Borrowing" shall mean a borrowing consisting of a
Competitive Loan or concurrent Competitive Loans from the Lender or Lenders
whose Competitive Bids for such Borrowing have been accepted by a Borrower under
the bidding procedure described in Section 2.03.
"Competitive Loan" shall mean a loan from a Lender to a
Borrower pursuant to the bidding procedure described in Section 2.03. Each
Competitive Loan shall be a Eurocurrency Competitive Loan or a Fixed Rate Loan.
"Competitive Margin" shall mean, as to any Eurocurrency
Competitive Loan, the margin (expressed as a percentage rate per annum in the
form of a decimal to no more than four decimal places) to be added to or
subtracted from the LIBO Rate in order to determine the interest rate applicable
to such Loan, as specified in the Competitive Bid relating to such Loan.
<PAGE> 28
8
"Control" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Default" shall mean any event or condition which upon notice,
lapse of time or both would constitute an Event of Default.
"Denomination Date" shall mean, in relation to any Alternative
Currency Borrowing, the date that is three Business days before the date such
Borrowing is made.
"Deutsche Marks" or "DEM" shall mean lawful money of the
Federal Republic of Germany.
"Dollar Equivalent" shall mean, with respect to an amount of
any Alternative Currency on any date, the amount of Dollars that may be
purchased with such amount of such Alternative Currency at the Spot Exchange
Rate with respect to such Alternative Currency on such date.
"Dollars" or "$" shall mean lawful money of the United States
of America.
"Domestic Subsidiaries" shall mean any Subsidiary organized or
incorporated under the laws of one of the States of the United States of
America, the laws of the District of Columbia or the Federal laws of the United
States of America.
"Effective Date" shall mean the date of this Amended and
Restated Credit Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) that is a member of a group which the Company is a member and
which is treated as a single employer under Section 414 of the Code.
"Eurocurrency Borrowing" shall mean a Borrowing comprised of
Eurocurrency Loans.
<PAGE> 29
9
"Eurocurrency Competitive Borrowing" shall mean a Competitive
Borrowing comprised of Eurocurrency Competitive Loans.
"Eurocurrency Competitive Loan" shall mean any Competitive
Loan bearing interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"Eurocurrency Loan" shall mean any Eurocurrency Competitive
Loan or Eurocurrency Standby Loan.
"Eurocurrency Standby Borrowing" shall mean a Standby
Borrowing comprised of Eurocurrency Standby Loans.
"Eurocurrency Standby Loan" shall mean any Standby Loan
bearing interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned to such
term in Article VII.
"Facility Fee" shall have the meaning assigned to such term in
Section 2.06(a).
<PAGE> 30
10
"Facility Fee Percentage" shall mean on any date, the
applicable percentage set forth below based upon the ratings applicable on such
date to the Company's Index Debt:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Facility
Fee
Percentage
- --------------------------------------------------------------------------------
<S> <C>
Category 1
A- or higher by S&P; .080%
A3 or higher by Moody's
- --------------------------------------------------------------------------------
Category 2
BBB+ by S&P; .100%
Baa1 by Moody's
- --------------------------------------------------------------------------------
Category 3
BBB by S&P; .125%
Baa2 by Moody's
- --------------------------------------------------------------------------------
Category 4
BBB- by S&P; .150%
Baa3 by Moody's
- --------------------------------------------------------------------------------
Category 5
BB+ or lower by S&P; .200%
Ba1 or lower by Moody's
- --------------------------------------------------------------------------------
</TABLE>
For purposes of the foregoing, (a) if either Moody's or S&P shall not have in
effect a rating for Index Debt (other than because such rating agency shall no
longer be in the business of rating corporate debt obligations), then such
rating agency will be deemed to have established a rating for Index Debt in
Category 5; (b) if the ratings established or deemed to have been established by
Moody's and S&P shall fall within different Categories, the Facility Fee
Percentage shall be determined by reference to the superior (or numerically
lower) Category; and (c) if any rating established or deemed to have been
established by Moody's or S&P shall be changed (other than as a result of a
change in the rating system of either Moody's or S&P), such change shall be
effective as of the date on which such change is
<PAGE> 31
11
first announced by the rating agency making such change. Each change in the
Facility Fee Percentage shall apply during the period commencing on the
effective date of such change and ending on the date immediately preceding the
effective date of the next such change. If the rating system of either Moody's
or S&P shall change, or if either such rating agency shall cease to be in the
business of rating corporate debt obligations, the Company and the Lenders shall
negotiate in good faith to amend the references to specific ratings in this
definition to reflect such changed rating system or the non-availability of
ratings from such rating agency.
"Fees" shall mean the Administrative Fees, the Facility Fee
and the Utilization Fee.
"Financial Officer" of any corporation shall mean the Chief
Financial Officer, principal accounting officer, Treasurer or Controller of such
corporation.
"Fixed Rate Borrowing" shall mean a Borrowing comprised of
Fixed Rate Loans.
"Fixed Rate Loan" shall mean any Competitive Loan bearing
interest at a fixed percentage rate per annum (expressed in the form of a
decimal to no more than four decimal places) specified by the Lender making such
Loan in its Competitive Bid.
"French Francs" or "FRF" shall mean lawful money of the
Republic of France.
"GAAP" shall mean United States generally accepted accounting
principles, applied on a basis consistent with the financial statements referred
to in Section 3.02.
"Governmental Authority" shall mean any Federal, state, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantee" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to
<PAGE> 32
12
advance or supply funds for the purchase of) any security for the payment of
such Indebtedness, (b) to purchase property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (c) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that the
term Guarantee shall not include endorsements for collection or deposit, in
either case in the ordinary course of business.
"Guarantor" shall mean the Company in its capacity as the
guarantor under Section 9.01.
"Indebtedness" of any person shall mean, without duplication,
(a) all obligations of such person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such person evidenced
by bonds, debentures, notes or similar instruments, (c) all obligations of such
person upon which interest charges are customarily paid, (d) all obligations of
such person under conditional sale or other title retention agreements relating
to property or assets purchased by such person, (e) all obligations of such
person issued or assumed as the deferred purchase price of property or services,
(f) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed, (g) all Guarantees by such person
of Indebtedness of others, (h) all Capital Lease Obligations of such person, (i)
all obligations of such person in respect of interest rate protection
agreements, foreign currency exchange agreements or other interest or exchange
rate hedging arrangements and (j) all obligations of such person as an account
party in respect of letters of credit and bankers' acceptances; provided,
however, that Indebtedness shall not include trade accounts payable in the
ordinary course of business. The Indebtedness of any person shall include the
Indebtedness of any partnership in which such person is a general partner.
"Index Debt" shall have the meaning given such term under
Applicable Margin.
"Interest Payment Date" shall mean, with respect to any Loan,
the last day of each Interest Period applicable thereto and, in the case of a
Eurocurrency Loan with an
<PAGE> 33
13
Interest Period of more than three months' duration or a Fixed Rate Loan with an
Interest Period of more than 90 days' duration, each day that would have been an
Interest Payment Date for such Loan had successive Interest Periods of three
months' duration or 90 days duration, as the case may be, been applicable to
such Loan and, in addition, the date of any refinancing of such Loan with a Loan
of a different Type.
"Interest Period" shall mean (a) as to any Eurocurrency
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day (or, if there is no numerically corresponding day,
on the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter,
as the applicable Borrower may elect, (b) as to any ABR Borrowing, the period
commencing on the date of such Borrowing and ending on the earlier of (i) the
next succeeding day which shall be the last day of any March, June, September or
December and (ii) the Maturity Date, (c) as to any Swingline Borrowing, the
period commencing on the date of such Borrowing and ending seven Business days
following such Borrowing and (d) as to any Fixed Rate Borrowing, the period
commencing on the date of such Borrowing and ending on the date specified in the
Competitive Bids in which the offer to make the Fixed Rate Loans comprising such
Borrowing were extended, which shall not be earlier than seven days after the
date of such Borrowing or later than 360 days after the date of such Borrowing;
provided, however, that if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of Eurocurrency Loans only, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day. Interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.
"LIBO Rate" shall mean, with respect to any Eurocurrency
Borrowing for any Interest Period, (i) the interest rate per annum for deposits
for a maturity most nearly comparable to such Interest Period in the currency in
which such Borrowing is denominated which appears on page 3740 or 3750, as
applicable, of the Dow Jones Telerate Screen as of 11:00 a.m., London time, on
the date that is two Business days prior to the first day of such Interest
Period or, if such a rate does not appear on page 3740 or 3750, as applicable,
of the Dow Jones Telerate Screen,
<PAGE> 34
14
(ii) an interest rate per annum (rounded upwards, if necessary, to the next 1/16
of 1%) equal to the rate at which deposits in the currency in which such
Borrowing is denominated approximately equal in principal amount to the Loan of
the Administrative Agent, in its capacity as a Lender (or, if the Administrative
Agent is not a Lender in respect of such Borrowing, then the Loan of the Lender
in respect of such Borrowing with the greatest Loan amount), included in such
Eurocurrency Borrowing and for a maturity comparable to such Interest Period are
offered to the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, on the relevant date of determination.
"Lien" shall mean with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, encumbrance, charge or security interest in or on
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
"Loan" shall mean any Competitive Loan, Standby Loan or
Swingline Loan.
"Loan Documents" shall mean this Agreement and the Fee Letter
dated June 11, 1996, among the Administrative Agent, Chase Securities Inc. and
the Company.
"Margin Stock" shall have the meaning given such term under
Regulation U.
"Material Adverse Change" or "Material Adverse Effect" shall
mean (a) a materially adverse change in, or a materially adverse effect on, the
business, assets, operations, prospects or condition, financial or otherwise, of
the Company and its Subsidiaries taken as a whole or (b) a material impairment
of the ability of the Company or any Approved Borrower to perform any of its
respective obligations under any Loan Document to which it is or becomes a
party.
"Maturity Date" shall mean July 16, 2001.
"Moody's" shall mean Moody's Investors Service, Inc.
<PAGE> 35
15
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Company or any ERISA
Affiliate (other than one considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Code Section 414) is making or accruing an obligation
to make contributions, or has within any of the preceding five plan years made
or accrued an obligation to make contributions.
"Net Income" shall mean, for any period for the Company and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), net income for such period.
"Net Worth" shall mean, as at any date, the sum for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP) of the following:
(a) the amount of common stock; plus
(b) the amount of any preferred stock that does not have any
requirement for the Company to purchase, redeem, retire or otherwise
acquire the same; plus
(c) the amount of additional paid-in capital and retained
earnings (or, in the case of an additional paid-in capital or retained
earnings deficit, minus the amount of such deficit); plus
(d) cumulative translation adjustments (or, in the case of
negative adjustments, minus the amount of such adjustments); plus
(e) cumulative pension liability adjustments (or, in the case
of negative adjustments, minus the amount of such adjustments); minus
(f) the cost of treasury stock.
"Obligation Currency" shall have the meaning assigned to such
term in Section 10.13.
"Other Taxes" shall have the meaning assigned to such term in
Section 2.19(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
<PAGE> 36
16
"person" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership or government, or any
agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code which is maintained for current or former employees, or
any beneficiary thereof, of the Company or any ERISA Affiliate.
"Register" shall have the meaning given such term in Section
10.04(d).
"Regulation D" shall mean Regulation D of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation G" shall mean Regulation G of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation U" shall mean Regulation U of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Reportable Event" shall mean any reportable event as defined
in Section 4043(b) of ERISA or the regulations issued thereunder with respect to
a Plan (other than a Plan maintained by an ERISA Affiliate that is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Code Section 414).
"Required Lenders" shall mean, at any time, Lenders having
Commitments representing a majority of the Total Commitment or, for purposes of
acceleration pursuant to clause (ii) of Article VII, Lenders holding Loans
representing a majority of the aggregate principal amount of the Loans
outstanding. For purposes of determining the Required Lenders, any Loans
denominated in an Alternative Currency shall be translated into Dollars at the
Spot Exchange Rate in effect on the applicable Denomination Date.
<PAGE> 37
17
"Responsible Officer" of any corporation shall mean any
executive officer or Financial Officer of such corporation and any other officer
or similar official thereof responsible for the administration of the
obligations of such corporation in respect of this Agreement.
"S&P" shall mean Standard & Poor's Ratings Services, a
Division of the McGraw-Hill Companies Inc.
"Spot Exchange Rate" shall mean, on any day, (a) with respect
to any Alternative Currency, the spot rate at which Dollars are offered on such
day by The Chase Manhattan Bank in London for such Alternative Currency at
approximately 11:00 a.m. (London time), and (b) with respect to Dollars in
relation to any specified Alternative Currency, the spot rate at which such
specified Alternative Currency is offered on such day by The Chase Manhattan
Bank in London for Dollars at approximately 11:00 a.m. (London time). For
purposes of determining the Spot Exchange Rate in connection with an Alternative
Currency Borrowing, such Spot Exchange Rate shall be determined as of the
Denomination Date for such Borrowing with respect to transactions in the
applicable Alternative Currency that will settle on the date of such Borrowing.
"Standby Borrowing" shall mean a borrowing consisting of
simultaneous Standby Loans from each of the Lenders.
"Standby Borrowing Request" shall mean a request made pursuant
to Section 2.04 in the form of Exhibit A-5.
"Standby Loan" shall mean a revolving loan made by a Lender
pursuant to Section 2.04. Each Standby Loan shall be a Eurocurrency Standby Loan
or an ABR Loan.
"Standby Loan Exposure" shall mean, with respect to any Lender
at any time, the sum of (a) the aggregate principal amount at such time of all
outstanding Standby Loans of such Lender denominated in Dollars, plus (b) the
Assigned Dollar Value at such time of the aggregate principal amount at such
time of all outstanding Standby Loans of such Lender that are Alternative
Currency Loans.
"Sterling" or "GBP" shall mean lawful money of the United
Kingdom.
<PAGE> 38
18
"subsidiary" shall mean, with respect to any person (herein
referred to as the "parent"), any corporation, partnership, association or other
business entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or more than 50% of the general partnership interests are, at the time any
determination is being made, owned, Controlled or held, or (b) which is, at the
time any determination is made, otherwise Controlled by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.
"Subsidiary" shall mean any subsidiary of the Company.
"Swingline Borrowing" shall mean a borrowing consisting of
simultaneous Swingline Loans from each of the Swingline Lenders.
"Swingline Commitment" shall mean, with respect to any Lender,
the commitment of such Lender to make Swingline Loans hereunder as set forth in
Schedule 2.21, as such Lender's Swingline Commitment may be permanently
terminated or reduced from time to time pursuant to Section 2.21(d).
"Swingline Commitment Percentage" shall mean, with respect to
any Swingline Lender at any time, the percentage that the Swingline Commitment
of such Swingline Lender represents of the Total Swingline Commitment at such
time.
"Swingline Lender" shall mean any Lender with a Swingline
Commitment.
"Swingline Loan" shall mean any loan made by a Lender pursuant
to Section 2.21. Each Swingline Loan shall be denominated in Dollars and shall
be an ABR Loan.
"Swingline Loan Exposure" shall mean, at any time, the
aggregate principal amount at such time of all Swingline Loans. The Swingline
Loan Exposure of any Lender at any time shall mean its Applicable Percentage of
the aggregate Swingline Loan Exposure at such time.
"Taxes" shall have the meaning assigned to such term in
Section 2.19(a).
"Total Capital" shall mean, at any time, Net Worth plus Total
Debt.
<PAGE> 39
19
"Total Commitment" shall mean, at any time, the aggregate
amount of the Commitments, as in effect at such time.
"Total Debt" shall mean, at any time, the aggregate
outstanding principal amount of all Indebtedness of the Company and its
Subsidiaries at such time (other than Indebtedness described in clause (i) or
(j) of the definition of the term "Indebtedness") determined on a consolidated
basis (without duplication) in accordance with GAAP; provided that the term
"Total Debt" shall include any preferred stock that provides for the mandatory
purchase, retirement, redemption or other acquisition of the same by the Company
or any Subsidiary (other than preferred stock held by the Company or any
Subsidiary).
"Total Swingline Commitment" shall mean, at any time, the
aggregate amount of the Swingline Commitments, as in effect at such time.
"Transferee" shall have the meaning assigned to such term in
Section 2.19(a).
"Type", when used in respect of any Loan or Borrowing, shall
refer to the rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined and the currency in which such Loan or
the Loans comprising such Borrowings are denominated. For purposes hereof,
"rate" shall include the LIBO Rate, the Alternate Base Rate and the Fixed Rate,
and "currency" shall include Dollars and any Alternative Currency permitted
hereunder.
"Utilization Fee" shall have the meaning assigned to such term
in Section 2.06(c).
"Utilization Fee Percentage" shall mean on any date the
applicable percentage set forth below for the
<PAGE> 40
20
Utilization Fee based upon the ratings applicable on such date to the Company's
Index Debt:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Utilization
Fee
Percentage
- --------------------------------------------------------------------------------
<S> <C>
Category 1
A- or higher by S&P; .050%
A3 or higher by Moody's
- --------------------------------------------------------------------------------
Category 2
BBB+ by S&P; .075%
Baa1 by Moody's
- --------------------------------------------------------------------------------
Category 3
BBB by S&P; .075%
Baa2 by Moody's
- --------------------------------------------------------------------------------
Category 4
BBB- by S&P; .075%
Baa3 by Moody's
- --------------------------------------------------------------------------------
Category 5
BB+ or lower by S&P; .075%
Ba1 or lower by Moody's
- --------------------------------------------------------------------------------
</TABLE>
For purposes of the foregoing, (a) if either Moody's or S&P shall not have in
effect a rating for Index Debt (other than because such rating agency shall no
longer be in the business of rating corporate debt obligations), then such
rating agency will be deemed to have established a rating for Index Debt in
Category 5; (b) if the ratings established or deemed to have been established by
Moody's and S&P shall fall within different Categories, the Utilization Fee
Percentage shall be determined by reference to the superior (or numerically
lower) Category; and (c) if any rating established or deemed to have been
established by Moody's or S&P shall be changed (other than as a result of a
change in the rating system of either Moody's or S&P), such change shall be
effective as of the date on which such change is first announced by the rating
agency making such change. Each change in the Utilization Fee Percentage shall
apply
<PAGE> 41
21
during the period commencing on the effective date of such change and ending on
the date immediately preceding the effective date of the next such change. If
the rating system of either Moody's or S&P shall change, or if either such
rating agency shall cease to be in the business of rating corporate debt
obligations, the Company and the Lenders shall negotiate in good faith to amend
the references to specific ratings in this definition to reflect such changed
rating system or the non-availability of ratings from such rating agency.
"Withdrawal Liability" shall mean liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
Section 1.02. Terms Generally. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided,
however, that if the Company notifies the Administrative Agent that the Company
wishes to amend any covenant in Article VI or any related definition to
eliminate the effect of any change in GAAP occurring after the date of this
Agreement on the operation of such covenant (or if the Administrative Agent
notifies the Company that the Required Lenders wish to amend Article VI or any
related definition for such purpose), then the Company's compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Company
and the Required Lenders.
<PAGE> 42
22
ARTICLE II. THE CREDITS
Section 2.01. Commitments. (a) Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
each Lender agrees, severally and not jointly, to make Standby Loans to the
Borrowers, at any time and from time to time on and after the date hereof and
until the earlier of the Maturity Date and the termination of the Commitment of
such Lender, in Dollars or one or more Alternative Currencies (as specified in
the Borrowing Requests with respect thereto), in an aggregate principal amount
at any time outstanding that will not result in such Lender's Committed Credit
Exposure exceeding such Lender's Commitment, subject, however, to the conditions
that (i) at no time shall (A) the sum of (I) the aggregate Standby Loan Exposure
of all the Lenders, plus (II) the outstanding aggregate principal amount or
Assigned Dollar Value of all Competitive Loans made by all Lenders, plus (III)
the amount of the Swingline Loan Exposure, exceed (B) the Total Commitment and
(ii) at all times the outstanding aggregate principal amount of all Standby
Loans made by each Lender shall equal such Lender's Applicable Percentage of the
outstanding aggregate principal amount of all Standby Loans made pursuant to
Section 2.04. Each Lender's Commitment is set forth opposite its name in
Schedule 2.01. Such Commitments may be terminated, reduced or increased from
time to time pursuant to Section 2.11. Within the foregoing limits, the
Borrowers may borrow, pay or prepay and reborrow hereunder, on and after the
date hereof and prior to the Maturity Date, subject to the terms, conditions and
limitations set forth herein.
(b) For purposes of paragraph (a) above, if the Dollar
Equivalent of an outstanding Borrowing denominated in an Alternative Currency,
determined by the Administrative Agent based upon the applicable Spot Exchange
Rate as of the date that is three Business days before the end of the Interest
Period with respect to such Borrowing, does not exceed by more than 5% the
Assigned Dollar Value of such Borrowing, and if the entire amount of such
Borrowing is to be refinanced with a new Borrowing of equivalent amount in the
same currency and by the same Borrower, then such Borrowing shall continue to
have the same Assigned Dollar Value as in effect prior to such refinancing. The
Administrative Agent shall determine the applicable Spot Exchange Rate as of the
date three Business days before the end of an Interest Period with respect to a
Borrowing denominated in an Alternative Currency and shall promptly
<PAGE> 43
23
notify the Company and the Lenders whether the Dollar Equivalent of such
Borrowing exceeds by more than 5% the Assigned Dollar Value thereof.
(c) Notwithstanding anything in this Agreement to the
contrary, Dauphin Deposit Bank and Trust Company shall not make Loans as part of
any non-U.S. Dollar Borrowing. The amount of any such requested Borrowing shall,
subject in all cases to the limitations contained in paragraph (a) above, be
divided among other Lenders pro rata in accordance with their respective shares
of the Total Commitment.
Section 2.02. Loans. (a) Each Standby Loan shall be made as
part of a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their applicable Commitments; provided, however, that the
failure of any Lender to make any Standby Loan shall not in itself relieve any
other Lender of its obligation to lend hereunder (it being understood, however,
that no Lender shall be responsible for the failure of any other Lender to make
any Loan required to be made by such other Lender). Each Competitive Loan shall
be made in accordance with the procedures set forth in Section 2.03. The
Competitive Loans and Standby Loans comprising any Borrowing shall be in (i) an
aggregate principal amount or Assigned Dollar Value which is not less than
$10,000,000 and, except in the case of Alternative Currency Borrowings, an
integral multiple of $1,000,000 or (ii) an aggregate principal amount equal to
the remaining balance of the available applicable Commitments. The Loans
comprising each Alternative Currency Borrowing shall be made in the Alternative
Currency specified in the applicable Standby Borrowing Request in an amount
equal to the Alternative Currency amount specified in such Standby Borrowing
Request; provided, however, that for purposes of clause (i) above, each
Alternative Currency Borrowing shall be deemed to be in an aggregate principal
amount equal to the Dollar Equivalent of such Alternative Currency Borrowing,
which Dollar Equivalent shall be determined by the Administrative Agent as of
the Denomination Date for such Borrowing (which determination shall be
conclusive absent manifest error).
(b) Each Competitive Borrowing shall be comprised entirely of
Eurocurrency Competitive Loans or Fixed Rate Loans, and each Standby Borrowing
shall be comprised entirely of Eurocurrency Standby Loans or ABR Loans, as the
Borrowers may request pursuant to Section 2.03 or 2.04, as applicable. Each
Lender may at its option make any
<PAGE> 44
24
Eurocurrency Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the applicable Borrower to repay such Loan in
accordance with the terms of this Agreement. Borrowings of more than one Type
may be outstanding at the same time; provided, however, that none of the
Borrowers shall be entitled to request any Borrowing which, if made, would
result in an aggregate of more than ten separate Standby Loans of any Lender
being outstanding hereunder at any one time. For purposes of the foregoing,
Borrowings having different Interest Periods or denominated in different
currencies, regardless of whether they commence on the same date, shall be
considered separate Borrowings.
(c) Subject to Section 2.05, each Lender shall make each Loan
to be made by it hereunder on the proposed date thereof by wire transfer to such
account as the Administrative Agent may designate in federal funds (in the case
of any Loan denominated in Dollars) or such other immediately available funds as
may then be customary for the settlement of international transactions in the
relevant currency not later than 11:00 a.m., New York City time, in the case of
fundings to an account in New York City, or 11:00 a.m., local time, in the case
of fundings to an account(s) in another jurisdiction, and the Administrative
Agent shall by 12:00 (noon), New York City time, in the case of fundings to (an)
account(s) in New York City, or 12:00 (noon), local time, in the case of
fundings to an account(s) in another jurisdiction, credit the amounts so
received to an account(s) designated by the applicable Borrower in the
applicable Borrowing Request, which account(s) must be in the country of the
currency of the Loan (it being understood that the funding may be for the credit
of an account outside such country) or, if a Borrowing shall not occur on such
date because any condition precedent herein specified shall not have been met,
return the amounts so received to the respective Lenders. Competitive Loans
shall be made by the Lender or Lenders whose Competitive Bids therefor are
accepted pursuant to Section 2.03 in the amounts so accepted and Standby Loans
shall be made by the Lenders pro rata in accordance with Section 2.16. Unless
the Administrative Agent shall have received notice from a Lender prior to the
date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender's portion of such Borrowing, the Administrative
Agent may assume that such Lender has made such portion available to the
Administrative Agent on the date of such Borrowing in
<PAGE> 45
25
accordance with this paragraph (c) and the Administrative Agent may, in reliance
upon such assumption, make available to the applicable Borrower on such date a
corresponding amount in the required currency. If the Administrative Agent shall
have so made funds available then to the extent that such Lender shall not have
made such portion available to the Administrative Agent, such Lender and the
applicable Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon in
such currency, for each day from the date such amount is made available to the
applicable Borrower until the date such amount is repaid to the Administrative
Agent at (i) in the case of the Borrower, the interest rate applicable at the
time to the Loans comprising such Borrowing and (ii) in the case of such Lender,
a rate determined by the Administrative Agent to represent its cost of overnight
or short-term funds in the relevant currency (which determination shall be
conclusive absent manifest error). If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.
(d) Notwithstanding any other provision of this Agreement,
none of the Borrowers shall be entitled to request any Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date.
Section 2.03. Competitive Bid Procedure. (a) In order to
request Competitive Bids, a Borrower shall hand deliver or telecopy to the
Administrative Agent a duly completed Competitive Bid Request in the form of
Exhibit A-1 hereto, to be received by the Administrative Agent (i) in the case
of a Eurocurrency Competitive Borrowing, not later than 11:00 a.m., New York
City time (or, if the Bid Request is delivered or telecopied to the
Administrative Agent in London, 10:00 a.m., London time), four Business days
before a proposed Competitive Borrowing and (ii) in the case of a Fixed Rate
Borrowing, not later than 11:00 a.m., New York City time, one Business Day
before a proposed Competitive Borrowing. No ABR Loan shall be requested in, or
made pursuant to, a Competitive Bid Request. A Competitive Bid Request that does
not conform substantially to the format of Exhibit A-1 may be rejected in the
Administrative Agent's sole discretion, and the Administrative Agent shall
promptly notify the applicable Borrower of such rejection by telecopier. Such
request shall in each case refer to this Agreement and specify (A) whether the
Borrowing then being
<PAGE> 46
26
requested is to be a Eurocurrency Borrowing or a Fixed Rate Borrowing, (B) the
date of such Borrowing (which shall be a Business Day), (C) the aggregate
principal amount of such Borrowing, (D) the currency of such Borrowing and (E)
the Interest Period with respect thereto (which may not end after the Maturity
Date). If no election as to the currency of Borrowing is specified in any
Competitive Bid Request, then the applicable Borrower shall be deemed to have
requested Borrowings in Dollars. Promptly after its receipt of a Competitive Bid
Request that is not rejected as aforesaid, the Administrative Agent shall invite
by telecopier (in the form set forth in Exhibit A-2 hereto) the Lenders to bid,
on the terms and conditions of this Agreement, to make Competitive Loans
pursuant to the Competitive Bid Request.
(b) Each Lender may, in its sole discretion, make one or more
Competitive Bids to a Borrower responsive to a Competitive Bid Request. Each
Competitive Bid by a Lender must be received by the Administrative Agent via
telecopier, in the form of Exhibit A-3 hereto, (i) in the case of Eurocurrency
Competitive Borrowing not later than 11:00 a.m., New York City time (or, if the
Competitive Bid is delivered or telecopied to the Administrative Agent in
London, 10:00 a.m., London time), three Business days before a proposed
Competitive Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later
than 11:00 a.m., New York City time, on the day of a proposed Competitive
Borrowing. Multiple bids will be accepted by the Administrative Agent.
Competitive Bids that do not conform substantially to the format of Exhibit A-3
may be rejected by the Administrative Agent after conferring with, and upon the
instruction of, the applicable Borrower, and the Administrative Agent shall
notify the Lender making such nonconforming bid of such rejection as soon as
practicable. Each Competitive Bid shall refer to this Agreement and specify (A)
the principal amount (which (x) shall be in a minimum principal amount or
Assigned Dollar Value of $5,000,000 and (except in the case of Alternative
Currency Borrowings) in an integral multiple of $1,000,000, (y) shall be
expressed in Dollars or, in the case of an Alternative Currency Borrowing, in
both the Alternative Currency and the Assigned Dollar Value thereof and (z) may
equal the entire principal amount of the Competitive Borrowing requested by the
Borrower) of the Competitive Loan or Loans that the Lender is willing to make to
the applicable Borrower, (B) the Competitive Bid Rate or Rates at which the
Lender is prepared to make the Competitive Loan or Loans and (C) the Interest
Period and
<PAGE> 47
27
the last day thereof. If any Lender shall elect not to make a Competitive Bid,
such Lender shall so notify the Administrative Agent by telecopier (I) in the
case of Eurocurrency Competitive Loans, not later than 11:00 a.m., New York City
time (or, if the notice is delivered or telecopied to the Administrative Agent
in London, 10:00 a.m., London time), three Business days before a proposed
Competitive Borrowing, and (II) in the case of Fixed Rate Loans, not later than
11:00 a.m., New York City time, on the day of a proposed Competitive Borrowing;
provided, however, that failure by any Lender to give such notice shall not
cause such Lender to be obligated to make any Competitive Loan as part of such
Competitive Borrowing. A Competitive Bid submitted by a Lender pursuant to this
paragraph (b) shall be irrevocable.
(c) The Administrative Agent shall promptly notify the
applicable Borrower by telecopier of all the Competitive Bids made, the
Competitive Bid Rate and the principal amount of each Competitive Loan in
respect of which a Competitive Bid was made and the identity of the Lender that
made each bid. The Administrative Agent shall send a copy of all Competitive
Bids to the applicable Borrower for its records as soon as practicable after
completion of the bidding process set forth in this Section 2.03.
(d) The applicable Borrower may in its sole and absolute
discretion, subject only to the provisions of this paragraph (d), accept or
reject any Competitive Bid referred to in paragraph (c) above. The Borrower
shall notify the Administrative Agent by telephone, confirmed by telecopier in
the form of a Competitive Bid Accept/Reject Letter, whether and to what extent
it has decided to accept or reject any of or all the bids referred to in
paragraph (c) above, (x) in the case of a Eurocurrency Competitive Borrowing,
not later than 11:30 a.m., New York City time (or, if the notice is delivered or
telecopied to the Administrative Agent in London, 10:30 a.m., London time),
three Business days before a proposed Competitive Borrowing, and (y) in the case
of a Fixed Rate Borrowing, not later than 11:30 a.m., New York City time, on the
day of a proposed Competitive Borrowing; provided, however, that (i) the failure
by the applicable Borrower to give such notice shall be deemed to be a rejection
of all the bids referred to in paragraph (c) above, (ii) such Borrower shall not
accept a bid made at a particular Competitive Bid Rate if the Borrower has
decided to reject a bid made at a lower Competitive Bid Rate,
<PAGE> 48
28
(iii) the aggregate amount of the Competitive Bids accepted by such Borrower
shall not exceed the principal amount specified in the Competitive Bid Request,
(iv) if such Borrower shall accept a bid or bids made at a particular
Competitive Bid Rate but the amount of such bid or bids shall cause the total
amount of bids to be accepted by the Borrower to exceed the amount specified in
the Competitive Bid Request, then such Borrower shall accept a portion of such
bid or bids in an amount equal to the amount specified in the Competitive Bid
Request less the amount of all other Competitive Bids accepted with respect to
such Competitive Bid Request, which acceptance, in the case of multiple bids at
such Competitive Bid Rate, shall be made pro rata in accordance with the amount
of each such bid at such Competitive Bid Rate, and (v) except pursuant to clause
(iv) above, no bid shall be accepted for a Competitive Loan unless such
Competitive Loan is in (x) a minimum principal amount or Assigned Dollar Value
of $5,000,000 and (except in the case of Alternative Currency Borrowings) an
integral multiple of $1,000,000 or (y) an aggregate principal amount equal to
the remaining balance of the available applicable Commitments; provided further,
however, that if a Competitive Loan must be in an amount less than $5,000,000
because of the provisions of clause (iv) above, such Competitive Loan may be for
a minimum of $1,000,000 or any integral multiple thereof, and in calculating the
pro rata allocation of acceptances of portions of multiple bids at a particular
Competitive Bid Rate pursuant to clause (iv) the amounts shall be rounded to
integral multiples of $1,000,000 in a manner which shall be in the discretion of
the applicable Borrower. A notice given by the applicable Borrower pursuant to
this paragraph (d) shall be irrevocable.
(e) The Administrative Agent shall promptly notify each
bidding Lender whether or not its Competitive Bid has been accepted (and if so,
in what amount and at what Competitive Bid Rate) by telecopy sent by the
Administrative Agent, and each successful bidder will thereupon become bound,
subject to the other applicable conditions hereof, to make the Competitive Loan
in respect of which its bid has been accepted.
(f) A Competitive Bid Request shall not be made within five
Business days after the date of any previous Competitive Bid Request.
<PAGE> 49
29
(g) If the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Lender, it shall submit such bid directly
to the applicable Borrower one quarter of an hour earlier than the latest time
at which the other Lenders are required to submit their bids to the
Administrative Agent pursuant to paragraph (b) above.
(h) In the event that any Borrower wishes to make a Borrowing
in any Alternative Currency other than Belgian Francs, Deutsche Marks, French
Francs or Sterling, such Borrowing shall be made as a Competitive Borrowing.
(i) All notices required by this Section 2.03 shall be given
in accordance with Section 10.01.
Section 2.04. Standby Borrowing Procedure. In order to request
a Standby Borrowing, a Borrower shall hand deliver or telecopy to the
Administrative Agent a duly completed Standby Borrowing Request in the form of
Exhibit A-5 hereto, to be received by the Administrative Agent (a) in the case
of a Eurocurrency Standby Borrowing, not later than 11:00 a.m., New York City
time (or, if the Borrowing Request is delivered or telecopied to the
Administrative Agent in London, 10:00 a.m., London time), three Business days
before a proposed borrowing and (b) in the case of an ABR Borrowing, not later
than 11:00 a.m., New York City time, one Business Day before a proposed
borrowing; provided, however, that Borrowing Requests with respect to Borrowings
to be made on the Closing Date may, at the discretion of the Administrative
Agent, be delivered later than the times specified above (but in no event later
than the time necessary to effect the funding of the Loan). No Fixed Rate Loan
shall be requested or made pursuant to a Standby Borrowing Request. Such notice
shall be irrevocable and shall in each case specify (i) whether the Borrowing
then being requested is to be a Eurocurrency Borrowing or an ABR Borrowing; (ii)
the date of such Borrowing (which shall be a Business Day), (iii) the aggregate
principal amount of the Borrowing, (iv) the currency of such Borrowing (which,
in the case of an ABR Borrowing, shall be Dollars) and (v) if such Borrowing is
to be a Eurocurrency Borrowing, the Interest Period with respect thereto. If no
election as to the currency of Borrowing is specified in any Standby Borrowing
Request, then the applicable Borrower shall be deemed to have requested
Borrowings in Dollars. If no election as to the Type of Borrowing is specified,
then the requested Borrowing shall be an ABR Borrowing if denominated in Dollars
or a Eurocurrency Borrowing if denominated in an
<PAGE> 50
30
Alternative Currency. If no Interest Period with respect to any Eurocurrency
Borrowing is specified, then the applicable Borrower shall be deemed to have
selected an Interest Period of one month's duration. If the applicable Borrower
shall not have given notice in accordance with this Section 2.04 of its election
to refinance a Standby Borrowing prior to the end of the Interest Period in
effect for such Borrowing, then such Borrower shall (unless such Borrowing is
repaid at the end of such Interest Period) be deemed to have given notice of an
election to refinance such Borrowing with an ABR Borrowing if denominated in
Dollars or a Eurocurrency Borrowing in the same currency and with an Interest
Period of one month if denominated in an Alternative Currency. The
Administrative Agent shall promptly advise the Lenders of any notice given
pursuant to this Section 2.04 (and the contents thereof), of each Lender's
portion of the requested Borrowing and, in the case of an Alternative Currency
Borrowing, of the Dollar Equivalent of the Alternative Currency amount specified
in the applicable Standby Borrowing Request and the Spot Exchange Rate utilized
to determine such Dollar Equivalent. Subject to Section 2.01(b), if the Dollar
Equivalent of a Lender's portion of any such Borrowing would exceed such
Lender's remaining available applicable Commitment, then such Lender's portion
of such Borrowing shall be reduced to the Alternative Currency Equivalent of
such Lender's remaining available Commitment.
Section 2.05. Refinancings. A Borrower may refinance all or
any part of any Competitive Borrowing or Standby Borrowing with a Competitive
Borrowing or a Standby Borrowing of the same or a different Type made pursuant
to Section 2.03 or Section 2.04, subject to the conditions and limitations set
forth herein and elsewhere in this Agreement, including refinancings of
Competitive Borrowings with Standby Borrowings and Standby Borrowings with
Competitive Borrowings. Any Borrowing or part thereof so refinanced shall be
deemed to be repaid in accordance with Section 2.07 with the proceeds of a new
Borrowing hereunder and the proceeds of the new Borrowing, to the extent they do
not exceed the principal amount of the Borrowing being refinanced, shall not be
paid by the Lenders to the Administrative Agent or by the Administrative Agent
to the applicable Borrower pursuant to Section 2.02(c); provided, however, that
in the case of any refinancing of a Borrowing with another Borrowing in the same
currency, (i) if the principal amount extended by a Lender in a refinancing is
greater than the principal amount extended by such Lender in
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31
the Borrowing being refinanced, then such Lender shall pay such difference to
the Administrative Agent for distribution to the Lenders described in (ii)
below, (ii) if the principal amount extended by a Lender in the Borrowing being
refinanced is greater than the principal amount being extended by such Lender in
the refinancing, the Administrative Agent shall return the difference to such
Lender out of amounts received pursuant to (i) above, and (iii) to the extent
any Lender fails to pay the Administrative Agent amounts due from it pursuant to
(i) above, any Loan or portion thereof being refinanced with such amounts shall
not be deemed repaid in accordance with Section 2.07 and shall be payable by the
applicable Borrower.
Section 2.06. Fees. (a) The Company agrees to pay to each
Lender, through the Administrative Agent, on each March 31, June 30, September
30 and December 31 and on the Maturity Date, a facility fee (a "Facility Fee")
equal to the Facility Fee Percentage of the daily average amount of the
Commitment of such Lender, whether used or unused (and whether or not the
conditions set forth in Section 4.01 shall have been satisfied), during the
preceding quarter (or shorter period commencing with the date hereof or ending
with the Maturity Date or any date on which the Commitment of such Lender shall
be terminated and all outstanding Loans of such Lender repaid). All Facility
Fees shall be computed on the basis of the actual number of days elapsed in a
year of 365 days. The Facility Fee due to each Lender shall commence to accrue
on the date of this Agreement and shall cease to accrue on the earlier of the
Maturity Date and the date on which the Commitment of such Lender shall have
been terminated and the Loans of such Lender shall have been repaid.
(b) The Company agrees to pay the Administrative Agent, for
its own account, the fees set forth in the letter agreements dated June 11,
1996, among the Administrative Agent, Chase Securities Inc. and the Company (the
"Administrative Fees") at the times and in the amounts set forth therein.
(c) The Company agrees to pay to each Lender, through the
Administrative Agent, on each March 31, June 30, September 30 and December 31
and on each date on which the Commitment of such Lender shall be terminated or
reduced as provided herein, a utilization fee (a "Utilization Fee") equal to the
Utilization Fee Percentage of the sum of (i) the Committed Credit Exposure of
such Lender plus
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32
(ii) the outstanding principal amount (or Assigned Dollar Value, in the case of
Loans denominated in an Alternative Currency) of the Competitive Loans of such
Lender for each day on which the outstanding aggregate principal amount (or
Assigned Dollar Value) of Loans exceeds 50% of the Total Commitment. All
Utilization Fees shall be computed on the basis of the actual number of days
elapsed in a year of 360 days.
(d) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders. Once paid, none of the Fees shall be refundable
under any circumstances.
Section 2.07. Repayment of Loans. (a) Each Borrower agrees to
pay the outstanding principal balance of each Loan on the last day of the
Interest Period applicable to such Loan and on the Maturity Date. Each Loan
shall bear interest from the date of the Borrowing of which such Loan is a part
on the outstanding principal balance thereof as set forth in Section 2.08.
(b) Each Lender shall, and is hereby authorized by the
Borrowers to, maintain, in accordance with its usual practice, records
evidencing the indebtedness of each Borrower to such Lender hereunder from time
to time, including the date, amount, currency and Type of and the Interest
Period applicable to each Loan made by such Lender from time to time and the
amounts of principal and interest paid to such Lender from time to time in
respect of each such Loan.
(c) The entries made in the records maintained pursuant to
paragraph (b) of this Section 2.07 and in the Register maintained by the
Administrative Agent pursuant to Section 10.04(d) shall be prima facie evidence
of the existence and amounts of the obligations of each Borrower to which such
entries relate; provided, however, that the failure of any Lender or the
Administrative Agent to maintain or to make any entry in such records or the
Register, as applicable, or any error therein shall not in any manner affect the
obligation of any Borrower to repay any Loans in accordance with the terms of
this Agreement.
Section 2.08. Interest on Loans. (a) Subject to the provisions
of Section 2.09, the Loans comprising each Eurocurrency Borrowing shall bear
interest (computed on the
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33
basis of the actual number of days elapsed over a year of 360 days (or, in the
case of Loans denominated in (A) Belgian Francs or Sterling, over a year of 365
or 366 days, or (B) any Alternative Currency other than Belgian Francs, Deutsche
Marks, French Francs or Sterling, on the basis customarily used for borrowings
between banks in the principal market for such Alternative Currency)), at a rate
per annum equal to (i) in the case of each Eurocurrency Standby Loan, the LIBO
Rate for the Interest Period in effect for the Borrowing of which such Loan is
part plus the Applicable Margin from time to time in effect and (ii) in the case
of each Eurocurrency Competitive Loan, the LIBO Rate for the Interest Period in
effect for the Borrowing of which such Loan is a part plus the Competitive
Margin offered by the Lender making such Loan and accepted by the Borrower
pursuant to Section 2.03.
(b) Subject to the provisions of Section 2.09, the Loans
comprising each ABR Borrowing (including each Swingline Borrowing) shall bear
interest (computed on the basis of the actual number of days elapsed over a year
of 365 or 366 days, as appropriate, when determined by reference to the Prime
Rate and over a year of 360 days at all other times) at a rate per annum equal
to the Alternate Base Rate.
(c) Subject to the provisions of Section 2.09, each Fixed Rate
Loan shall bear interest at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to the fixed rate
of interest offered by the Lender making such Loan and accepted by the Borrower
pursuant to Section 2.03.
(d) Interest on each Loan shall be payable in arrears on each
Interest Payment Date applicable to such Loan except as otherwise provided in
this Agreement. The applicable LIBO Rate or Alternate Base Rate for each
Interest Period or day within an Interest Period, as the case may be, shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
Section 2.09. Default Interest. If any Borrower shall default
in the payment of the principal of or interest on any Loan or any other amount
becoming due hereunder, whether by scheduled maturity, notice of prepayment,
acceleration or otherwise, such Borrower shall on demand from time to time from
the Administrative Agent pay
<PAGE> 54
34
interest, to the extent permitted by law, on such defaulted amount up to (but
not including) the date of actual payment (after as well as before judgment) at
a rate per annum (computed on the basis of the actual number of days elapsed
over a year of 360 days) equal to the Alternate Base Rate plus 2% per annum (or,
in the case of the principal of any Loan, if higher, the rate of interest
otherwise applicable, or most recently applicable, to such Loan hereunder plus
2% per annum).
Section 2.10. Alternate Rate of Interest. In the event, and on
each occasion, that on the day two Business days prior to the commencement of
any Interest Period for a Eurocurrency Borrowing of any Type the Administrative
Agent shall have determined that Dollar deposits or deposits in the Alternative
Currency in which such Borrowing is to be denominated in the principal amounts
of the Loans comprising such Borrowing are not generally available in the London
interbank market, or that the rates at which such deposits are being offered
will not adequately and fairly reflect the cost to any Lender of making or
maintaining its Eurocurrency Loan during such Interest Period, or that
reasonable means do not exist for ascertaining the LIBO Rate, the Administrative
Agent shall, as soon as practicable thereafter, give written or telecopy notice
of such determination to the applicable Borrower and the Lenders. In the event
of any such determination, until the Administrative Agent shall have advised the
applicable Borrower and the Lenders that the circumstances giving rise to such
notice no longer exist, (i) any request by a Borrower for a Eurocurrency
Competitive Borrowing pursuant to Section 2.03 shall be of no force or effect
and shall be denied by the Administrative Agent and (ii) any request by a
Borrower for a Eurocurrency Standby Borrowing of the affected Type or in the
affected currency shall be deemed to be a request for an ABR Borrowing
denominated in Dollars. Each determination by the Administrative Agent hereunder
shall be conclusive absent manifest error.
Section 2.11. Termination, Reduction and Increase of
Commitments. (a) The Commitments shall be automatically terminated at the
Administrative Agent's close of business in New York City on the Maturity Date.
(b) Upon at least two Business days' prior irrevocable written
or telecopy notice to the Administrative Agent, the Company (on behalf of all
the Borrowers) may at any time in whole permanently terminate, or from time to
<PAGE> 55
35
time in part permanently reduce, the Total Commitment; provided, however, that
(i) each partial reduction of the Total Commitment shall be in an integral
multiple of $1,000,000 and in a minimum principal amount of $5,000,000 and (ii)
no such termination or reduction shall be made which would reduce the Total
Commitment to an amount less than the aggregate outstanding principal amount of
the Competitive Loans and Standby Loans and Swingline Loans.
(c) Each reduction in the Total Commitment hereunder shall be
made ratably among the Lenders in accordance with their respective Commitments.
The Company shall pay to the Administrative Agent for the account of the
Lenders, on the date of each termination or reduction, the Facility Fees on the
amount of the Commitments so terminated or reduced accrued to but not including
the date of such termination or reduction.
(d) The Company may from time to time, by notice to the
Administrative Agent (which shall promptly deliver a copy to each of the
Lenders), request that the Total Commitment be increased by an amount that is
not less than $25,000,000 and will not result in the Total Commitment under this
Agreement exceeding $500,000,000. Each such notice shall set forth the requested
amount of the increase in the Total Commitment and the date on which such
increase is to become effective (which shall be not fewer than 20 days after the
date of such notice), and shall offer each Lender the opportunity to increase
its Commitment by its ratable share, based on the amounts of the Lenders'
Commitments, of the requested increase in the Total Commitment. Each Lender
shall, by notice to the Company and the Administrative Agent given not more than
10 Business days after the date of the Company's notice, either agree to
increase its Commitment by all or a portion of the offered amount or decline to
increase its Commitment (and any Lender that does not deliver such a notice
within such period of 10 Business days shall be deemed to have declined to
increase its Commitment). In the event that, on the 10th Business Day after the
Company shall have delivered a notice pursuant to the first sentence of this
paragraph, the Lenders shall have agreed pursuant to the preceding sentence to
increase their Commitments by an aggregate amount less than the increase in the
Total Commitment requested by the Company, the Company shall have the right to
arrange for one or more banks or other financial institutions (any such bank or
other financial institution being called an "Augmenting Lender"), which may
include any Lender, to extend
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36
Commitments or increase their existing Commitments in an aggregate amount equal
to the unsubscribed amount, provided that each Augmenting Lender, if not already
a Lender hereunder, shall be subject to the approval of the Administrative Agent
(which approval shall not be unreasonably withheld) and shall execute all such
documentation as the Administrative Agent shall specify to evidence its status
as a Lender hereunder. If (and only if) Lenders (including Augmenting Lenders)
shall have agreed to increase their Commitments or to extend new Commitments in
an aggregate amount not less than $25,000,000, such increases and such new
Commitments shall become effective on the date specified in the notice delivered
by the Company pursuant to the first sentence of this paragraph. Notwithstanding
the foregoing, no increase in the Total Commitment (or in the Commitment of any
Lender) shall become effective under this paragraph unless, on the date of such
increase, the conditions set forth in paragraphs (b) and (c) of Section 4.01
shall be satisfied (with all references in such paragraphs to a Borrowing being
deemed to be references to such increase) and the Administrative Agent shall
have received a certificate to that effect dated such date and executed by a
Responsible Officer of the Company.
Section 2.12. Prepayment. (a) Each Borrower shall have the
right at any time and from time to time to prepay any Standby Borrowing, in
whole or in part, upon giving written or telecopy notice (or telephone notice
promptly confirmed by written or telecopy notice) to the Administrative Agent:
(i) in the case of Eurocurrency Loans before 11:00 a.m., New York City time (or,
if such notice is delivered or telecopied to the Administrative Agent in London,
10:00 a.m., London time), three Business days prior to prepayment and (ii) in
the case of ABR Loans, before 11:00 a.m., New York City time, one Business Day
prior to prepayment; provided, however, that each partial prepayment shall be in
an amount which is an integral multiple of $1,000,000 and not less than
$5,000,000. The Borrowers shall not have the right to prepay any Competitive
Borrowing.
(b) On the date of any termination or reduction of the
Commitments pursuant to Section 2.11, the Company shall (or shall cause each
responsible Borrower to) pay or prepay so much of the Swingline Borrowings and
Standby Borrowings, in accordance with the following sentence, as shall be
necessary in order that the aggregate outstanding principal amount of all Loans
will not exceed the Total
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37
Commitment after giving effect to such termination or reduction. Mandatory
prepayments under this paragraph (b) shall be applied (i) first, to prepay
outstanding Swingline Borrowings and (ii) second, to prepay outstanding Standby
Borrowings.
(c) Each notice of prepayment under this Section 2.12 shall
specify the prepayment date and the principal amount of each Borrowing (or
portion thereof) to be prepaid, shall be irrevocable and shall commit the
applicable Borrower to prepay such Borrowing (or portion thereof) by the amount
stated therein on the date stated therein. All prepayments under this Section
2.12 shall be subject to Section 2.15 but otherwise without premium or penalty.
Section 2.13. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender (or any
lending office of any Lender) of the principal of or interest on any
Eurocurrency Loan or Fixed Rate Loan made by such Lender or any Fees or other
amounts payable hereunder (other than changes in respect of taxes imposed on the
overall net income of such Lender by the jurisdiction in which such Lender has
its principal office or by any political subdivision or taxing authority
therein), or shall impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of or credit extended by such Lender (or any lending office of such
Lender), or shall impose on such Lender or the London interbank market any other
condition affecting this Agreement or any Eurocurrency Loan or Fixed Rate Loan
made by such Lender, and the result of any of the foregoing shall be to increase
the cost to such Lender of making or maintaining any Eurocurrency Loan or Fixed
Rate Loan or to reduce the amount of any sum received or receivable by such
Lender hereunder (whether of principal, interest or otherwise) by an amount
deemed by such Lender to be material, then the Company shall (or shall cause the
Borrowers to) pay to such Lender upon demand such additional amount or amounts
as will compensate such Lender for such additional costs incurred or reduction
suffered. Notwithstanding the foregoing, no Lender shall be entitled
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38
to request compensation under this paragraph with respect to any Competitive
Loan if it shall have been aware of the change giving rise to such request at
the time of submission of the Competitive Bid pursuant to which such Competitive
Loan shall have been made.
(b) If any Lender shall have determined that any change after
the date hereof in the applicability of any law, rule, regulation or guideline
adopted pursuant to or arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards", or the
adoption after the date hereof of any other law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any lending office of
such Lender) or any Lender's holding company with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender's capital or on the capital of such
Lender's holding company, if any, as a consequence of this Agreement or the
Loans made by such Lender pursuant hereto to a level below that which such
Lender or such Lender's holding company could have achieved but for such
applicability, adoption, change or compliance (taking into consideration such
Lender's policies and the policies of such Lender's holding company with respect
to capital adequacy) by an amount deemed by such Lender to be material, then
from time to time the Company shall (or shall cause the responsible Borrower to)
pay to such Lender such additional amount or amounts as will compensate such
Lender or such Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth such amount or
amounts as shall be necessary to compensate such Lender as specified in
paragraph (a) or (b) above, as the case may be, shall be delivered to the
Company and shall be conclusive absent manifest error. The Company shall (or
shall cause the responsible Borrower to) pay each Lender the amount shown as due
on any such certificate delivered by it within 10 days after the receipt of the
same.
(d) Except as provided below in this paragraph (d), failure on
the part of any Lender to demand
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39
compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital with respect to any period shall
not constitute a waiver of such Lender's right to demand compensation with
respect to such period or any other period. The protection of this Section shall
be available to each Lender regardless of any possible contention of the
invalidity or inapplicability of the law, rule, regulation, guideline or other
change or condition which shall have occurred or been imposed. No Lender shall
be entitled to compensation under this Section 2.13 for any costs incurred or
reductions suffered with respect to any date unless it shall have notified the
Company that it will demand compensation for such costs or reductions not more
than 60 days after the later of (i) such date and (ii) the date on which it
shall have, or should have, become aware of such costs or reductions.
Section 2.14. Change in Legality. (a) Notwithstanding any
other provision herein, if, after the date hereof, (i) any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurocurrency Loan or Alternative Currency
Loan or to give effect to its obligations as contemplated hereby with respect to
any Eurocurrency Loan or Alternative Currency Loan, or (ii) there shall have
occurred any change in national or international financial, political or
economic conditions (including the imposition of or any change in exchange
controls) or currency exchange rates which would make it impracticable for any
Lender to make Loans denominated in such Alternative Currency or to any
Borrower, then, by written notice to the Company and to the Administrative
Agent, such Lender may:
(i) declare that Eurocurrency Loans or Alternative Currency
Loans (in the affected currency or currencies or to the affected
Borrower), as the case may be, will not thereafter (for the duration of
such unlawfulness or impracticability) be made by such Lender
hereunder, whereupon such Lender shall not submit a Competitive Bid in
response to a request for such Alternative Currency Loans or
Eurocurrency Competitive Loans and any request by a Borrower for a
Eurocurrency Standby Borrowing or Alternative Currency Borrowing (in
the affected currency or currencies or to the affected Borrower), as
the case may be, shall, as to such Lender only, be deemed a request for
an ABR Loan or a Loan
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40
denominated in Dollars, as the case may be, unless such declaration
shall be subsequently withdrawn (or, if a Loan to the requesting
Borrower cannot be made for the reasons specified above, such request
shall be deemed to have been withdrawn); and
(ii) require that all outstanding Eurocurrency Loans or
Alternative Currency Loans (in the affected currency or currencies or
to the affected Borrower), as the case may be, made by it be converted
to ABR Loans or Loans denominated in Dollars, as the case may be, in
which event all such Eurocurrency Loans or Alternative Currency Loans
(in the affected currency or currencies or to the affected Borrower)
shall be automatically converted to ABR Loans or Loans denominated in
Dollars, as the case may be, as of the effective date of such notice as
provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurocurrency Loans or Alternative Currency Loans, as the case may be,
that would have been made by such Lender or the converted Eurocurrency Loans or
Alternative Currency Loans, as the case may be, of such Lender shall instead be
applied to repay the ABR Loans or Loans denominated in Dollars, as the case may
be, made by such Lender in lieu of, or resulting from the conversion of, such
Eurocurrency Loans or Loans denominated in Dollars, as the case may be.
(b) For purposes of this Section 2.14, a notice to the Company
by any Lender shall be effective as to each Eurocurrency Loan, if lawful, on the
last day of the Interest Period currently applicable to such Eurocurrency Loan;
in all other cases such notice shall be effective on the date of receipt by the
Company.
Section 2.15. Indemnity. Each Borrower shall indemnify each
Lender against any loss or expense which such Lender may sustain or incur as a
consequence of (a) any failure by such Borrower to fulfill on the date of any
borrowing hereunder the applicable conditions set forth in Article IV, (b) any
failure by such Borrower to borrow or to refinance or continue any Loan
hereunder after irrevocable notice of such borrowing, refinancing or
continuation has been given pursuant to Section 2.03 or 2.04, (c) any payment,
prepayment, conversion or transfer of a Eurocurrency Loan or Fixed Rate Loan
required by any other
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41
provision of this Agreement or otherwise made or deemed made on a date other
than the last day of the Interest Period applicable thereto, (d) any default in
payment or prepayment of the principal amount of any Loan or any part thereof or
interest accrued thereon, as and when due and payable (at the due date thereof,
whether by scheduled maturity, acceleration, irrevocable notice of prepayment or
otherwise) or (e) the occurrence of any other Event of Default, including, in
each such case, any loss or reasonable expense sustained or incurred or to be
sustained or incurred in liquidating or employing deposits from third parties
acquired to effect or maintain such Loan or any part thereof as a Eurocurrency
Loan or Fixed Rate Loan. Such loss or reasonable expense shall include an amount
equal to the excess, if any, as reasonably determined by such Lender, of (i) its
cost of obtaining the funds for the Loan being paid, prepaid, converted,
transferred or not borrowed (assumed to be the LIBO Rate or, in the case of a
Fixed Rate Loan, the fixed rate of interest applicable thereto) for the period
from the date of such payment, prepayment, conversion, transfer or failure to
borrow to the last day of the Interest Period for such Loan (or, in the case of
a failure to borrow, the Interest Period for such Loan which would have
commenced on the date of such failure) over (ii) the amount of interest (as
reasonably determined by such Lender) that would be realized by such Lender in
reemploying the funds so paid, prepaid, converted, transferred or not borrowed
for such period or Interest Period, as the case may be. A certificate of any
Lender setting forth any amount or amounts which such Lender is entitled to
receive pursuant to this Section shall be delivered to the Company and shall be
conclusive absent manifest error.
Section 2.16. Pro Rata Treatment. Except as required under
Section 2.14, each Standby Borrowing, each payment or prepayment of principal of
any Standby Borrowing, each payment of interest on the Standby Loans, each
payment of the Facility Fees and Utilization Fees, each reduction of the
Commitments and each refinancing of any Borrowing with a Standby Borrowing of
any Type, shall be allocated pro rata among the Lenders in accordance with their
respective Commitments (or, if such Commitments shall have expired or been
terminated, in accordance with the respective principal amounts of their
outstanding Standby Loans). Each payment of principal of any Competitive
Borrowing shall be allocated pro rata among the Lenders participating in such
Borrowing in accordance with the respective principal amounts of their
outstanding Competitive Loans comprising such Borrowing.
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42
Each payment of interest on any Competitive Borrowing shall be allocated pro
rata among the Lenders participating in such Borrowing in accordance with the
respective amounts of accrued and unpaid interest on their outstanding
Competitive Loans comprising such Borrowing. For purposes of determining (i) the
aggregate available Commitments of the Lenders at any time and (ii) the
available Commitment of each Lender, each outstanding Competitive Borrowing
shall be deemed to have utilized the Commitments of the Lenders (including those
Lenders which shall not have made Loans as part of such Competitive Borrowing)
pro rata in accordance with such respective Commitments. Each Lender agrees that
in computing such Lender's portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Lender's percentage of
such Borrowing to the next higher or lower whole Dollar (or comparable unit of
any applicable Alternative Currency) amount. Provided, however, that with
respect to Loans denominated in a currency other than U.S. Dollars in which
Dauphin Deposit Bank and Trust Company does not participate, each payment or
prepayment of principal and each payment of interest shall be allocated pro rata
among the other Lenders in accordance with their respective shares of the
outstanding principal amount of such Loans.
Section 2.17. Sharing of Setoffs. Each Lender agrees that if
it shall, through the exercise of a right of banker's lien, setoff or
counterclaim against any Borrower, or pursuant to a secured claim under Section
506 of Title 11 of the United States Code or other security or interest arising
from, or in lieu of, such secured claim, received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any
other means, obtain payment (voluntary or involuntary) in respect of any Standby
Loan or Standby Loans as a result of which the unpaid principal portion of its
Standby Loans shall be proportionately less than the unpaid principal portion of
the Standby Loans of any other Lender, it shall be deemed simultaneously to have
purchased from such other Lender at face value, and shall promptly pay to such
other Lender the purchase price for, a participation in the Standby Loans of
such other Lender, so that the aggregate unpaid principal amount of the Standby
Loans and participations in the Standby Loans held by each Lender shall be in
the same proportion to the aggregate unpaid principal amount of all Standby
Loans then outstanding as the principal
<PAGE> 63
43
amount of its Standby Loans prior to such exercise of banker's lien, setoff or
counterclaim or other event was to the principal amount of all Standby Loans
outstanding prior to such exercise of banker's lien, setoff or counterclaim or
other event; provided, however, that, if any such purchase or purchases or
adjustments shall be made pursuant to this Section 2.17 and the payment giving
rise thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustment restored without interest. Each Borrower expressly
consents to the foregoing arrangements and agrees that any Lender holding a
participation in a Standby Loan deemed to have been so purchased may exercise
any and all rights of banker's lien, setoff or counterclaim with respect to any
and all moneys owing by such Borrower to such Lender by reason thereof as fully
as if such Lender had made a Standby Loan directly to such Borrower in the
amount of such participation.
Section 2.18. Payments. (a) The Borrower shall make each
payment (including principal of or interest on any Borrowing or any Fees or
other amounts) hereunder and under each other Loan Document not later than 12:00
noon, local time at the place of payment, on the date when due in immediately
available funds. Each such payment (other than principal of and interest on
Swingline Loans, which shall be paid directly to the applicable Swingline Lender
except as otherwise provided in Section 2.21(c)) shall be made to the
Administrative Agent at its offices at 270 Park Avenue, New York, New York. Each
such payment (other than principal of and interest on Alternative Currency
Loans, which shall be made in the applicable Alternative Currency) shall be made
in Dollars.
(b) Whenever any payment (including principal of or interest
on any Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.
Section 2.19. Taxes. (a) Any and all payments by each Borrower
hereunder shall be made, in accordance with Section 2.18, free and clear of and
without deduction for any and all current or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding (i) income taxes imposed on
<PAGE> 64
44
the net income of the Administrative Agent or any Lender (or any transferee or
assignee thereof, including a participation holder (any such individual or
entity, a "Transferee")), and (ii) franchise taxes imposed on the net income of
the Administrative Agent or any Lender (or Transferee), in each case by the
jurisdiction under the laws of which the Administrative Agent or such Lender (or
Transferee) is organized, domiciled, resident or doing business or any political
subdivision thereof (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities, collectively or individually, "Taxes").
If any Borrower shall be required to deduct any Taxes from or in respect of any
sum payable hereunder to any Lender (or any Transferee) or the Administrative
Agent, (i) the sum payable shall be increased by the amount (an "additional
amount") necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.19) such
Lender (or Transferee) or the Administrative Agent (as the case may be) shall
receive an amount equal to the sum it would have received had no such deductions
been made, (ii) each Borrower shall make such deductions and (iii) each Borrower
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) In addition, each Borrower agrees to bear and to pay to
the relevant Governmental Authority in accordance with applicable law any
current or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or any other Loan Document ("Other Taxes").
(c) The Borrowers will indemnify each Lender (or Transferee)
and the Administrative Agent for the full amount of Taxes and Other Taxes paid
by such Lender (or Transferee) or the Administrative Agent, as the case may be,
and any liability (including penalties, interest and expenses (including
reasonable attorney's fees and expenses)) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability prepared by a Lender, or the Administrative Agent
on its behalf, absent manifest error, shall be final, conclusive and binding for
all purposes. Such indemnification shall be made within 30 days after the date
the Lender (or Transferee) or the
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45
Administrative Agent, as the case may be, makes written demand therefor.
(d) If a Lender (or Transferee) or the Administrative Agent
shall become aware that it is entitled to claim a refund from a Governmental
Authority in respect of Taxes or Other Taxes as to which it has been indemnified
by a Borrower, or with respect to which any Borrower has paid additional
amounts, pursuant to this Section 2.19, it shall promptly notify the Company of
the availability of such refund claim and shall, within 30 days after receipt of
a request by the Company, make a claim to such Governmental Authority for such
refund at the Company's expense. If a Lender (or Transferee) or the
Administrative Agent receives a refund (including pursuant to a claim for refund
made pursuant to the preceding sentence) in respect of any Taxes or Other Taxes
as to which it has been indemnified by a Borrower or with respect to which any
Borrower has paid additional amounts pursuant to this Section 2.19, it shall
within 30 days from the date of such receipt pay over such refund to the Company
(but only to the extent of indemnity payments made, or additional amounts paid,
by such Borrower under this Section 2.19 with respect to the Taxes or Other
Taxes giving rise to such refund), net of all out-of-pocket expenses of such
Lender (or Transferee) or the Administrative Agent and without interest (other
than interest paid by the relevant Governmental Authority with respect to such
refund); provided, however, that the Company, upon the request of such Lender
(or Transferee) or the Administrative Agent, agrees to (or to cause the
responsible Borrower to) repay the amount paid over to the Company (plus
penalties, interest or other charges) to such Lender (or Transferee) or the
Administrative Agent in the event such Lender (or Transferee) or the
Administrative Agent is required to repay such refund to such Governmental
Authority.
(e) As soon as practicable after the date of any payment of
Taxes or Other Taxes by any Borrower to the relevant Governmental Authority, the
Company will deliver to the Administrative Agent, at its address referred to in
Section 10.01, the original or a certified copy of a receipt issued by such
Governmental Authority evidencing payment thereof.
(f) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 2.19
shall survive the
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46
payment in full of the principal of and interest on all Loans made hereunder.
(g) Each Lender (or Transferee) that is organized under the
laws of a jurisdiction other than the United States, any State thereof or the
District of Columbia (a "Non-U.S. Lender") shall deliver to the Company and the
Administrative Agent two copies of either United States Internal Revenue Service
Form 1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of "portfolio interest", a Form W-8, or any subsequent
versions thereof or successors thereto (and, if such Non-U.S. Lender delivers a
Form W-8, a certificate representing that such Non-U.S. Lender is not a bank for
purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Code) of the Company and is not a
controlled foreign corporation related to the Company (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or reduced rate of, U.S.
Federal withholding tax on payments by the Borrowers under this Agreement and
the other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender
on or before the date it becomes a party to this Agreement (or, in the case of a
Transferee that is a participation holder, on or before the date such
participation holder becomes a Transferee hereunder) and on or before the date,
if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender.
Notwithstanding any other provision of this Section 2.19(g), a Non-U.S. Lender
shall not be required to deliver any form pursuant to this Section 2.19(g) that
such Non-U.S. Lender is not legally able to deliver.
(h) None of the Borrowers shall be required to indemnify any
Non-U.S. Lender, or to pay any additional amounts to any Non-U.S. Lender, in
respect of United States Federal withholding tax pursuant to paragraph (a) or
(c) above to the extent that (i) the obligation to withhold amounts with respect
to United States Federal withholding tax existed on the date such Non-U.S.
Lender became a party to this Agreement (or, in the case of a Transferee that is
a participation holder, on the date such participation holder
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47
became a Transferee hereunder) or, with respect to payments to a New Lending
Office, the date such Non-U.S. Lender designated such New Lending Office with
respect to a Loan; provided, however, that this clause (i) shall not apply to
any Transferee or New Lending Office that becomes a Transferee or New Lending
Office as a result of an assignment, participation, transfer or designation made
at the request of the Company; and provided further, however, that this clause
(i) shall not apply to the extent the indemnity payment or additional amounts
any Transferee, or Lender (or Transferee) through a New Lending Office, would be
entitled to receive (without regard to this clause (i)) do not exceed the
indemnity payment or additional amounts that the person making the assignment,
participation or transfer to such Transferee, or Lender (or Transferee) making
the designation of such New Lending Office, would have been entitled to receive
in the absence of such assignment, participation, transfer or designation or
(ii) the obligation to pay such additional amounts would not have arisen but for
a failure by such Non-U.S. Lender to comply with the provisions of paragraph (g)
above.
(i) Any Lender (or Transferee) claiming any indemnity payment
or additional amounts payable pursuant to this Section 2.19 shall use reasonable
efforts (consistent with legal and regulatory restrictions) to file any
certificate or document reasonably requested in writing by the Company or to
change the jurisdiction of its applicable lending office if the making of such a
filing or change would avoid the need for or reduce the amount of any such
indemnity payment or additional amounts that may thereafter accrue and would
not, in the sole determination of such Lender (or Transferee), be otherwise
disadvantageous to such Lender (or Transferee).
(j) Nothing contained in this Section 2.19 shall require any
Lender (or Transferee) or the Administrative Agent to make available any of its
tax returns (or any other information that it deems to be confidential or
proprietary).
Section 2.20. Assignment of Commitments and Swingline
Commitments Under Certain Circumstances. (a) Any Lender (or Transferee) claiming
any additional amounts payable pursuant to Section 2.13 or Section 2.19 shall
use reasonable efforts (consistent with legal and regulatory restrictions) to
file any certificate or document requested by the Company or to change the
jurisdiction of its
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48
applicable lending office if the making of such a filing or change would avoid
the need for or reduce the amount of any such additional amounts which may
thereafter accrue and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender (or Transferee).
(b) In the event that any Lender shall have delivered a notice
or certificate pursuant to Section 2.13 or 2.14, or the Borrowers shall be
required to make additional payments to any Lender under Section 2.19, the
Company shall have the right, at its own expense, upon notice to such Lender and
the Administrative Agent, to require such Lender to transfer and assign without
recourse (in accordance with and subject to the restrictions contained in
Section 10.04) all its interests, rights and obligations under this Agreement to
another financial institution acceptable to the Administrative Agent which shall
assume such obligations; provided that (i) no such assignment shall conflict
with any law, rule or regulation or order of any Governmental Authority and (ii)
the Company or the assignee, as the case may be, shall pay to the affected
Lender in immediately available funds on the date of such assignment the
principal of and interest accrued to the date of payment on the Loans made by it
hereunder and all other amounts accrued for its account or owed to it hereunder.
Section 2.21. Swingline Loans. (a) On the terms, subject to
the conditions and relying upon the representations and warranties herein set
forth, each Swingline Lender agrees, severally and not jointly, at any time and
from time to time on and after the date hereof and until the earlier of the
Business Day immediately preceding the Maturity Date and the termination of the
Swingline Commitment of such Swingline Lender, to make Swingline Loans to the
Borrowers in an aggregate principal amount at any time outstanding not to exceed
the lesser of (i) such Swingline Lender's Swingline Commitment Percentage of the
difference between (A) the Total Swingline Commitment and (B) the Swingline Loan
Exposure, and (ii) the difference between (A) the aggregate Commitment of such
Swingline Lender and (B) the outstanding aggregate principal amount or Assigned
Dollar Value, as the case may be, of all Loans made by such Swingline Lender.
Each Swingline Loan shall be made as part of a Borrowing consisting of Swingline
Loans made by the Swingline Lenders ratably in accordance with their respective
Swingline Commitment Percentages (it being understood that no Swingline Lender
shall be responsible for
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49
the failure of any other Swingline Lender to make any Swingline Loan required to
be made by such other Swingline Lender). The Swingline Loans comprising any
Swingline Borrowing shall be in an aggregate principal amount that is an
integral multiple of $1,000,000 and not less than $5,000,000 (or an aggregate
principal amount equal to the remaining balance of the available Swingline
Commitments). Each Swingline Lender shall make its portion of each Swingline
Borrowing available to the applicable Borrower by means of a credit to the
general deposit account of such Borrower with the Administrative Agent by 3:00
p.m. on the date such Swingline Borrowing is requested to be made pursuant to
paragraph (b) below. Within the limits set forth in the first sentence of this
paragraph, the Borrowers may borrow, pay or prepay and reborrow Swingline Loans
on or after the Effective Date and prior to the Maturity Date on the terms and
subject to the conditions and limitations set forth herein. The Swingline
Commitments shall automatically and permanently terminate on the Maturity Date.
(b) The applicable Borrower shall give the Administrative
Agent telephonic, written or telecopy notice (in the case of telephonic notice,
such notice shall be promptly confirmed by telecopy) no later than 11:00 a.m.,
New York City time, on the day of a proposed Swingline Borrowing. Such notice
shall be delivered on a Business Day, shall be irrevocable and shall refer to
this Agreement and shall specify the requested date (which shall be a Business
Day) and amount of such Swingline Borrowing. The Administrative Agent shall
promptly advise the Swingline Lenders of any notice received from the Borrower
pursuant to this paragraph (b).
(c) If any Borrower does not fully repay a Swingline Borrowing
on or prior to the last day of the Interest Period with respect thereto, the
Administrative Agent shall promptly notify each Lender thereof (by telecopy or
by telephone, confirmed in writing) and of its Applicable Percentage of such
Swingline Borrowing. Upon such notice but without any further action, each
Swingline Lender hereby agrees to grant to each Lender, and each Lender hereby
agrees to acquire from each Swingline Lender, a participation in the Swingline
Loan made by such Swingline Lender as part of such Swingline Borrowing equal to
such Lender's Applicable Percentage of the principal amount of such Swingline
Loan. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided
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50
above, to pay to the Administrative Agent, for the account of the
applicable Swingline Lender, such Lender's Applicable Percentage of each
Swingline Borrowing (including the interest accrued thereon) that is not repaid
on the last day of the Interest Period with respect thereto. Each such payment
shall, for all purposes hereof, be deemed to be an ABR Standby Loan. Each Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or an Event of Default or the failure of any
condition precedent set forth in Article IV, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever. Each
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.02(c)
with respect to Loans made by such Lender, and the Administrative Agent shall
promptly pay to the Swingline Lenders their respective shares of the amounts so
received by it from the Lenders. The Administrative Agent shall notify the
applicable Borrower of any participations in any Swingline Loan acquired
pursuant to this paragraph and thereafter payments in respect of such Swingline
Loan shall be made to the Administrative Agent and not to the applicable
Swingline Lender. Any amounts received by a Swingline Lender from a Borrower (or
other party on behalf of a Borrower) in respect of a Swingline Loan after
receipt by such Swingline Lender of the proceeds of a sale of participations
therein shall be promptly remitted to the Administrative Agent; any such amounts
received by the Administrative Agent shall be promptly remitted by the
Administrative Agent to the Lenders that shall have made their payments pursuant
to this paragraph and to the applicable Swingline Lender, as their interests may
appear. Notwithstanding anything herein to the contrary, the purchase of
participations in a Swingline Borrowing pursuant to this paragraph shall not
relieve the Borrower of its obligation in respect of the payment thereof so long
as ABR Loans that resulted from any such default shall remain outstanding or any
accrued interest thereon shall remain unpaid.
(d) Upon written or telecopy notice to the Swingline Lenders
and to the Administrative Agent, the Company (on behalf of any Borrower or
Borrowers) may at any time permanently terminate, or from time to time in part
permanently reduce, the Swingline Commitment of the
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Swingline Lenders. Each reduction of the Swingline Commitments shall be
allocated pro rata among the Swingline Lenders in accordance with their
respective Swingline Commitment Percentages. On the date of any termination or
reduction of the Swingline Commitments pursuant to this paragraph (d), the
Borrower shall pay or prepay so much of the Swingline Borrowings as shall be
necessary in order that (i) the aggregate outstanding principal amount of
Swingline Loans will not exceed (ii) the Total Swingline Commitment after giving
effect to such termination or reduction.
(e) Any Borrower may prepay any Swingline Borrowing in whole
or in part at any time without premium or penalty; provided that such Borrower
shall have given the Administrative Agent written or telecopy notice (or
telephone notice promptly confirmed in writing or by telecopy) of such
prepayment not later than 11:00 a.m., New York City time, on the Business Day
designated by such Borrower for such prepayment; and provided further that each
partial payment shall be in an amount that is not less than $5,000,000 and in an
integral multiple of $1,000,000. Each notice of prepayment under this paragraph
(e) shall specify the prepayment date and the principal amount of each Swingline
Borrowing (or portion thereof) to be prepaid, shall be irrevocable and shall
commit such Borrower to prepay such Swingline Borrowing (or portion thereof) by
the amount stated therein on the date stated therein. Each payment of principal
of or interest on or any other amount in respect of Swingline Loans shall be
allocated, as between the Swingline Lenders, pro rata in accordance with their
respective Swingline Commitment Percentages.
Section 2.22. Borrowings by Approved Borrowers. The Company
may, at any time or from time to time, designate one or more wholly owned
Subsidiaries as Borrowers hereunder by furnishing to the Administrative Agent a
letter (a "Designation Letter") substantially in the form of Exhibit E-1 hereto,
duly completed and executed by the Company and such Subsidiary, whereupon each
Subsidiary so designated shall become an Approved Borrower. There may be no more
than ten Approved Borrowers at any one time. So long as all principal and
interest on all Loans of any Approved Borrower have been paid in full, the
Company may terminate an Approved Borrower's status as an Approved Borrower by
furnishing to the Administrative Agent a letter (a "Termination Letter"),
substantially in the form of Exhibit E-2 hereto, duly completed and executed by
the Company and such Approved Borrower. Any Termination Letter
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furnished in accordance with this Section 2.22 shall be effective upon receipt
by the Administrative Agent. Notwithstanding the foregoing, the delivery of a
Termination Letter with respect to any Approved Borrower shall not affect any
obligation of such Approved Borrower theretofore incurred. Each Subsidiary set
forth in Schedule 2.22 shall be deemed an Approved Borrower until delivery of a
Termination Letter with respect to such Subsidiary.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
Part A. Representations and Warranties of the Company. The
Company represents and warrants to each of the Lenders that:
Section 3.01. Corporate Existence. Each of the Company and its
Subsidiaries: (a) is a corporation, partnership or other entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization; (b) has all requisite corporate or other power, and has all
material governmental licenses, authorizations, consents and approvals necessary
to own its assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business and is in good standing in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify could (either
individually or in the aggregate) have a Material Adverse Effect.
Section 3.02. Financial Condition. The Company has heretofore
furnished to each of the Lenders a consolidated balance sheet of the Company and
its Subsidiaries as at December 31, 1995, and the related consolidated
statements of income, cash flows and changes in shareholders' equity of the
Company and its Subsidiaries for the fiscal year ended on such date, with the
opinion thereon of Coopers & Lybrand, and the unaudited consolidated balance
sheet of the Company and its Subsidiaries as at March 31, 1996, and the related
consolidated statements of income and cash flows of the Company and its
Subsidiaries for the three-month period ended on such date. All such financial
statements present fairly, in all material respects, the consolidated financial
condition of the Company and its Subsidiaries as at such dates and the
consolidated results of their operations for the fiscal year and three-month
period ended on such dates (subject, in the case of the
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financial statements as at March 31, 1996, to normal year-end audit
adjustments), all in accordance with generally accepted accounting principles
and practices applied on a consistent basis. None of the Company nor any of its
Subsidiaries has on the date hereof any material contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, except as referred to or
reflected or provided for in the balance sheets as at such dates (or the notes
thereto in the case of such year end financial statements). Since December 31,
1995, there has been no Material Adverse Change from that set forth in the
financial statements as at such date (or the notes thereto).
SECTION 3.03. Litigation. Except as disclosed in Schedule 3.03
hereto, there are no legal or arbitral proceedings, or any proceedings by or
before any Governmental Authority, now pending or (to the knowledge of the
Company) threatened against the Company or any of its Subsidiaries that, if
adversely determined could (either individually or in the aggregate) have a
Material Adverse Effect.
SECTION 3.04. No Breach. None of the execution and delivery of
this Agreement, the consummation of the transactions herein contemplated or
compliance with the terms and provisions hereof will conflict with or result in
a breach of, or require any consent under, the charter or by-laws of the
Company, or any applicable law or regulation, or any order, writ, injunction or
decree of any court or Governmental Authority, or any agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which any of them
or any of their assets or properties is bound or to which any of them is
subject, or constitute a default under any such agreement or instrument.
SECTION 3.05. Action. The Company has all necessary corporate
power, authority and legal right to execute, deliver and perform its obligations
under this Agreement; the execution, delivery and performance by the Company of
this Agreement has been duly authorized by all necessary corporate action on its
part (including, without limitation, any required shareholder approvals); and
this Agreement has been duly and validly executed and delivered by the Company
and constitutes its legal, valid and binding obligation, enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium or
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similar laws of general applicability affecting the enforcement of creditors'
rights and (b) the application of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
SECTION 3.06. Approvals. No authorizations, approvals or
consents of, and no filings or registrations with, any Governmental Authority,
or any securities exchange, are necessary for the execution, delivery or
performance by the Company of this Agreement or for the legality, validity or
enforceability hereof.
SECTION 3.07. Use of Credit. None of the Company nor any of
its Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose, whether immediate,
incidental or ultimate, of buying or carrying Margin Stock, and no part of the
proceeds of the Loans hereunder will be used to buy or carry any Margin Stock.
SECTION 3.08. ERISA. Each Plan, and, to the knowledge of the
Company, each Multiemployer Plan, is in compliance in all material respects
with, and has been administered in all material respects in compliance with, the
applicable provisions of ERISA, the Code and any other Federal or state law, and
no event or condition has occurred and is continuing as to which the Company
would be under an obligation to furnish a report to the Lenders under Section
5.06 hereof.
SECTION 3.09. Taxes. As of the date hereof, the Company and
its Domestic Subsidiaries are members of an affiliated group of corporations
filing consolidated returns for Federal income tax purposes, of which the
Company is the "common parent" (within the meaning of Section 1504 of the Code)
of such group. The Company and its Subsidiaries have filed all Federal income
tax returns and all other material tax returns that are required to be filed by
them and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by the Company or any of its Subsidiaries. The charges,
accruals and reserves on the books of the Company and its Subsidiaries in
respect of taxes and other governmental charges are, in the opinion of the
Company, adequate. The Company has not given or been requested to give a waiver
of the statute of limitations relating to the payment of Federal, state, local
and foreign taxes or other impositions.
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SECTION 3.10. Investment Company Act. Neither the Company nor
any of its Subsidiaries is an "investment company", or a company "controlled" by
an "investment company", within the meaning of the Investment Company Act of
1940, as amended.
SECTION 3.11. Public Utility Holding Company Act. Neither the
Company nor any of its Subsidiaries is a "holding company", or an "affiliate" of
a "holding company" or a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 3.12. Material Agreements and Liens. (a) Part A of
Schedule 3.12 hereto is a complete and correct list, as of the date hereof, of
each credit agreement, loan agreement, indenture, guarantee, letter of credit or
other arrangement providing for or otherwise relating to any Indebtedness or any
extension of credit (or commitment for any extension of credit) to, or guarantee
by, the Company or any of its Subsidiaries the aggregate principal or face
amount of which equals or exceeds (or may equal or exceed) $5,000,000, and the
aggregate principal or face amount outstanding or that may become outstanding
under each such arrangement is correctly described in Part A of such Schedule
3.12.
(b) Part B of Schedule 3.12 hereto is a complete and correct
list, as of the date hereof, of each Lien securing Indebtedness of any person
the aggregate principal or face amount of which equals or exceeds (or may equal
or exceed) $5,000,000 and covering any property of the Company or any of its
Subsidiaries, and the aggregate Indebtedness secured (or that may be secured) by
each such Lien and the property covered by each such Lien is correctly described
in Part B of such Schedule 3.12.
SECTION 3.13. Environmental Matters. Each of the Company and
its Subsidiaries has obtained all environmental, health and safety permits,
licenses and other authorizations required under all Environmental Laws to carry
on its business as now being or as proposed to be conducted, except to the
extent failure to have any such permit, license or authorization would not
(either individually or in the aggregate) have a Material Adverse Effect. Each
of such permits, licenses and authorizations is in full force and effect and
each of the Company and its Subsidiaries is in compliance with the terms and
conditions thereof, and is
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also in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in any applicable Environmental Law or in any regulation, code, plan,
order, decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, except to the extent failure to comply
therewith would not (either individually or in the aggregate) have a Material
Adverse Effect. There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by or that are in the
possession of the Company or any of its subsidiaries in relation to any site or
facility now or previously owned, operated or leased by the Company or any of
its Subsidiaries that have not been made available to the Lenders.
SECTION 3.14. Subsidiaries, etc. Set forth in Schedule 3.14
hereto is a complete and correct list, as of the date hereof, of all of the
Subsidiaries of the Company, together with, for each such Subsidiary, (i) the
jurisdiction of organization of such Subsidiary, (ii) each person holding
ownership interests in such Subsidiary and (iii) the nature of the ownership
interests held by each such person and the percentage of ownership of such
Subsidiary represented by such ownership interests.
SECTION 3.15. True and Complete Disclosure. The information,
reports, financial statements, exhibits and schedules furnished in writing by or
on behalf of the Company to the Agent or any Lender in connection with the
negotiation, preparation or delivery of this Agreement or included herein or
delivered pursuant hereto, when taken as a whole, do not contain any untrue
statement of material fact or omit to state any material fact necessary to make
the statements herein or therein, in light of the circumstances under which they
were made, not misleading. All written information furnished after the date
hereof by the Company and its Subsidiaries to the Administrative Agent and the
Lenders in connection with this Agreement and the transactions contemplated
hereby will be true, complete and accurate in every material respect, or (in the
case of projections) based on reasonable estimates, on the date as of which such
information is stated or certified. There is no fact known to the Company that
could have a Material Adverse Effect that has not been disclosed herein or in a
report, financial statement, exhibit, schedule, disclosure letter or other
writing furnished to the Lenders for use in connection with the transactions
contemplated hereby.
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Part B. Representations and Warranties of the Approved
Borrowers. Each Approved Borrower represents and warrants to each of the Lenders
that:
SECTION 3.16. Corporate Existence of Approved Borrower. It and
each of its Subsidiaries: (a) is a corporation, partnership or other entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (b) has all requisite corporate or other
power, and has all material governmental licenses, authorizations, consents and
approvals necessary to own its assets and carry on its business as now being or
as proposed to be conducted; and (c) is qualified to do business and is in good
standing in all jurisdictions in which the nature of the business conducted by
it makes such qualification necessary and where failure so to qualify would have
a Material Adverse Effect.
SECTION 3.17. No Breach. None of the execution and delivery of
its Designation Letter and this Agreement, the consummation of the transactions
therein and herein contemplated and compliance with the terms and provisions
thereof and hereof will conflict with or result in a breach of, or require any
consent under, the charter or by-laws or other organizational documents of such
Approved Borrower, or any applicable law or regulation, or any order, writ,
injunction or decree of any court or governmental authority or agency, or any
agreement or instrument to which such Approved Borrower or any of its
Subsidiaries is a party or by which any of them or their assets or properties is
bound or to which any of them is subject, or constitute a default under any such
agreement or instrument.
SECTION 3.18. Action. Such Approved Borrower has all necessary
corporate or other power and authority to execute, deliver and perform its
obligations under its Designation Letter and this Agreement, and to perform its
obligations hereunder and thereunder; the execution and delivery by such
Approved Borrower of its Designation Letter and the performance by such Approved
Borrower hereof and thereof have been duly authorized by all necessary corporate
or other action on its part (including, without limitation, any required
shareholder approvals); and its Designation Letter when executed and delivered
by such Approved Borrower, will constitute, the legal, valid and binding
obligation of such Approved Borrower, enforceable against such Approved Borrower
in accordance with its terms, except as such enforceability may be limited by
(a) bankruptcy,
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insolvency, reorganization, moratorium or similar laws of general applicability
affecting the enforcement of creditors' rights and (b) the application of
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
SECTION 3.19. Approvals. No authorizations, approvals or
consents of, and no filings or registrations with, any governmental Authority
are necessary for the execution, delivery or performance by such Approved
Borrower of its Designation Letter or this Agreement or for the validity or
enforceability thereof.
SECTION 3.20. Taxes on Payments of Approved Borrowers. Except
as disclosed to the Lenders in writing prior to the delivery of such Approved
Borrower's Designation Letter, there is no income, stamp or other tax of any
country, or of any taxing authority thereof or therein, imposed by or in the
nature of withholding or otherwise, which is imposed on any payment to be made
by such Approved Borrower pursuant hereto, or is imposed on or by virtue of the
execution, delivery or enforcement of its Designation Letter or this Agreement.
ARTICLE IV. CONDITIONS OF LENDING
The obligations of the Lenders to make Loans hereunder are
subject to the satisfaction of the following conditions:
SECTION 4.01. All Borrowings. On the date of each Borrowing,
including each Borrowing in which Loans are refinanced with new Loans as
contemplated by Section 2.05:
(a) The Administrative Agent shall have received a notice of
such Borrowing as required by Section 2.03, Section 2.04 or Section
2.21(b), as applicable.
(b) The representations and warranties set forth in Article
III hereof shall be true and correct in all material respects on and as
of the date of such Borrowing with the same effect as though made on
and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date; provided, however, that
no representation as to either (i) the absence of any Material Adverse
Change in the
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financial condition of the Company, as provided in the last two
sentences of Section 3.02, or (ii) the absence of any pending or
threatened legal or arbitral proceedings, or any proceedings by or
before any Governmental Authority, that could have a Material Adverse
Effect on the Company, as provided in Section 3.03, shall be required
as a condition to any Borrowing following the Effective Date.
(c) Each Borrower shall be in compliance with all the terms
and provisions set forth herein and in each other Loan Document on its
part to be observed or performed, and at the time of and immediately
after such Borrowing no Event of Default or Default shall have occurred
and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrowers on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. First Borrowing by Each Approved Borrower. On
the first date on which Loans are made to each Approved Borrower:
(a) The Administrative Agent shall have received a favorable
written opinion of the general counsel of the applicable Approved
Borrower dated as of a recent date and addressed to the Lenders, to the
effect set forth in Exhibit D-1 hereto, subject to necessary changes to
reflect local law.
(b) The Administrative Agent shall have received (i) a copy of
the certificate or articles of incorporation (or such other analogous
documents), including all amendments thereto, of such Approved
Borrower, certified as of a recent date by the Secretary of State (or
other appropriate Governmental Authority) of the state (or country) of
its organization or such other evidence as is reasonably satisfactory
to the Administrative Agent, and a certificate as to the good standing
(or other analogous certification to the extent available) of such
Approved Borrower as of a recent date, from such Secretary of State (or
other appropriate Governmental Authority) or such other evidence
reasonably acceptable to the Administrative Agent; (ii) a certificate
of the Secretary or Assistant Secretary of such Approved
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Borrower dated the date on which such Loans are to be made and
certifying (A) that attached thereto is a true and complete copy of the
by-laws (or such other analogous documents to the extent available) of
such Approved Borrower as in effect on the date of such certificate and
at all times since a date prior to the date of the resolution of such
Approved Borrower described in item (B) below, (B) that attached
thereto is a true and complete copy of resolutions adopted by the Board
of Directors of such Approved Borrower authorizing the execution,
delivery and performance of the Designation Letter delivered by such
Approved Borrower and the borrowings hereunder by such Approved
Borrower, and that such resolutions have not been modified, rescinded
or amended and are in full force and effect, (C) that the certificate
or articles of incorporation (or other analogous documents) of such
Approved Borrower have not been amended since the date of the last
amendment thereto shown on the certificate of good standing (or other
analogous certification or such other evidence reasonably acceptable to
the Agent) furnished pursuant to clause (i) above, and (D) as to the
incumbency and specimen signature of each officer of such Approved
Borrower executing the Designation Letter delivered by such Approved
Borrower or any other document delivered in connection herewith or
therewith; (iii) a certificate of another officer of such Approved
Borrower as to the incumbency and signature of the Secretary or such
Assistant Secretary of such Approved Borrower executing the certificate
pursuant to (ii) above; and (iv) such other documents as the Lenders or
Cravath, Swaine & Moore, counsel for the Agent, may reasonably request.
(c) The Administrative Agent shall have received (with
sufficient copies for each Lender) a Designation Letter, duly executed
by such Approved Borrower and the Company and acknowledged by the
Administrative Agent.
(d) The Administrative Agent shall have received a certificate
of each of the Borrowers, dated such date and signed, in the case of
the Company, by a Financial Officer of the Company, and in the case of
the Borrowers other than the Company, a Responsible Officer of such
Borrower, confirming compliance with the conditions precedent set forth
in paragraphs (b) and (c) of Section 4.01.
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(e) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to such date.
Upon the satisfaction of the conditions precedent set forth in
this Section 4.02, such Approved Borrower shall become a Borrower hereunder with
the same force and effect as if originally named as a Borrower hereunder. The
rights and obligations of each Borrower hereunder shall remain in full force and
effect notwithstanding the addition of any new Borrower as a party to this
Agreement.
ARTICLE V. AFFIRMATIVE COVENANTS
The Company covenants and agrees with each Lender and the
Administrative Agent that, so long as this Agreement shall remain in effect or
the principal of or interest on any Loan, any Fees or any other expenses or
amounts payable under any Loan Document shall be unpaid, unless the Required
Lenders shall otherwise consent in writing, the Company will, and will cause
each of its Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a)
Preserve and maintain its corporate existence, rights (charter and statute) and
material franchises, except as otherwise permitted by Section 6.03; provided,
however, that the Company shall not be required to preserve any such right or
franchise if (i) the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and (ii) the loss
of any such right or franchise is not disadvantageous in any material respect to
the Lenders.
(b) Comply in all material respects with all applicable laws
(including environmental laws), rules, regulations and orders (including,
without limitation, laws requiring payment of all taxes, assessments and
governmental charges imposed upon it or upon its property except to the extent
contested in good faith by appropriate proceedings) except where the failure to
so comply would not result in a Material Adverse Change.
(c) Maintain and preserve all of its properties which are used
in the conduct of its business in good working order and condition, ordinary
wear and tear excepted, to the extent that any failure to do so would
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result in a Material Adverse Change and except for dispositions thereof
permitted by Section 6.03.
SECTION 5.02. Insurance. Maintain insurance with financially
sound and reputable insurance companies (which insurance companies shall, in any
event, have an A.M. Best rating of "B+" or better), and with respect to property
and risks of a character usually maintained by corporations engaged in the same
or similar business similarly situated, against loss, damage and liability of
the kinds and in the amounts customarily maintained by such corporations.
SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and
other obligations promptly and in accordance with their terms and pay and
discharge promptly when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default, as well as all
lawful claims for labor, materials and supplies or otherwise which, if unpaid,
might give rise to a Lien upon such properties or any part thereof; provided,
however, that such payment and discharge shall not be required with respect to
any such tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings and
the Company shall have set aside on its books adequate reserves with respect
thereto.
SECTION 5.04. Financial Statements, Reports, etc. In the case
of the Borrower, furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year, its
consolidated balance sheets and related statements of income, changes
in stockholders' equity and cash flows, showing the financial condition
of the Company and its Subsidiaries as of the close of such fiscal year
and the results of its operations and the operations of its
Subsidiaries during such year, all audited by Coopers & Lybrand or
other independent public accountants of recognized national standing
acceptable to the Required Lenders and accompanied by an opinion of
such accountants (which shall not be qualified in any material respect)
to the effect that such consolidated financial statements fairly
present the financial condition and results of operations of the
Company on a consolidated basis in accordance with GAAP consistently
applied;
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(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year, its consolidated balance sheets
and related statements of income, changes in stockholders' equity and
cash flows, showing the financial condition of the Company and its
Subsidiaries as of the close of such fiscal quarter and the results of
its operations and the operations of its Subsidiaries during such
fiscal quarter and the then elapsed portion of such fiscal year, all
certified by one of its Financial Officers as fairly presenting the
financial condition and results of operations of the Company on a
consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments;
(c) concurrently with any delivery of financial statements
under (a) or (b) above, a certificate of the accounting firm or
Financial Officer opining on or certifying such statements (which
certificate, when furnished by an accounting firm, may be limited to
accounting matters and disclaim responsibility for legal
interpretations) (i) certifying that no Event of Default or Default has
occurred or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto and (ii) setting
forth computations in reasonable detail satisfactory to the
Administrative Agent demonstrating compliance with the covenants
contained in Sections 6.06 and 6.07;
(d) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by it with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of or all the functions of
such Commission, or with any national securities exchange, or
distributed to its shareholders, as the case may be; and
(e) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
the Company or any Subsidiary, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Lender may reasonably
request.
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SECTION 5.05. Litigation and Other Notices. Furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) proposed to be taken
with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
Governmental Authority, against the Company or any Affiliate thereof
which, if adversely determined, could result in a Material Adverse
Change; and
(c) any other development that has resulted in, or could
reasonably be anticipated to result in, a Material Adverse Change.
SECTION 5.06. ERISA. (a) Comply in all material respects with
the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent and each Lender (i) as soon as possible, and in any event
within 30 days after any Responsible Officer of the Company or any ERISA
Affiliate either knows or has reason to know that any Reportable Event has
occurred that alone or together with any other Reportable Event could reasonably
be expected to result in liability of the Company to the PBGC in an aggregate
amount exceeding $5,000,000, a statement of a Financial Officer setting forth
details as to such Reportable Event and the action proposed to be taken with
respect thereto, together with a copy of the notice, if any, of such Reportable
Event given to the PBGC, (ii) promptly after receipt thereof, a copy of any
notice the Company or any ERISA Affiliate may receive from the PBGC relating to
the intention of the PBGC to terminate any Plan or Plans (other than a Plan
maintained by an ERISA Affiliate which is considered an ERISA Affiliate only
pursuant to subsection (m) or (o) of Section 414 of the Code) or to appoint a
trustee to administer any Plan or Plans, and (iii) within 10 days after the due
date for filing with the PBGC pursuant to Section 412(n) of the Code of a notice
of failure to make a required installment or other payment with respect to a
Plan, a statement of a Financial Officer setting forth details as to such
failure and the action proposed to be taken with respect thereto, together with
a copy of such notice given to the PBGC.
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SECTION 5.07. Maintaining Records. Maintain all financial
records in accordance with GAAP and permit any representatives designated by any
Lender to discuss the affairs, finances and condition of the Company or any
Subsidiary with the officers thereof and independent accountants therefor.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans
only for the purposes set forth in the preamble to this Agreement.
ARTICLE VI. NEGATIVE COVENANTS
The Company covenants and agrees with each Lender and the
Administrative Agent that, so long as this Agreement shall remain in effect or
the principal of or interest on any Loan, any Fees or any other expenses or
amounts payable under any Loan Document shall be unpaid, unless the Required
Lenders shall otherwise consent in writing, the Company will not, and will not
cause or permit any of its Subsidiaries to:
SECTION 6.01. Liens. Create, incur, assume or suffer to exist
any Lien upon any of its property, whether now owned or hereafter acquired,
except:
(a) Liens in existence on the date hereof and listed in Part B
of Schedule 3.12 hereto;
(b) Liens imposed by any Governmental Authority for taxes,
assessments or charges not yet due or that are being contested in good
faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of the Company or the affected
Subsidiaries, as the case may be, in accordance with GAAP;
(c) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business that are not overdue for a period of more than 30 days or that
are being contested in good faith and by appropriate proceedings and
Liens securing judgments but only to the extent for an amount and for a
period not resulting in an Event of Default under Article VII clause
(i) hereof;
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(d) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a
like nature incurred in the ordinary course of business;
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of property or minor imperfections in title
thereto that, in the aggregate, are not material in amount, and that do
not in any case materially detract from the value of the property
subject thereto or interfere with the ordinary conduct of the business
of the Company or any of its Subsidiaries;
(g) Liens on property of any corporation that becomes a
Subsidiary of the Company after the date of this Agreement; provided
that such Liens are in existence at the time such corporation becomes a
Subsidiary of the Company and were not created in anticipation thereof;
(h) Liens upon real and/or tangible personal property acquired
after the date hereof (by purchase, construction or otherwise) by the
Company or any of its Subsidiaries, each of which Liens either (A)
existed on such property before the time of its acquisition and was not
created in anticipation thereof or (B) was created solely for the
purpose of securing Indebtedness representing, or incurred to finance,
refinance or refund, the cost (including the cost of construction) of
such property; provided that no such Lien shall extend to or cover any
property of the Company or such Subsidiary other than the property so
acquired and improvements thereon;
(i) additional Liens upon real and/or personal property
created after the date hereof; provided that the aggregate Indebtedness
secured thereby and incurred on and after the date hereof shall not
exceed $25,000,000 in the aggregate at any one time outstanding; and
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(j) any extension, renewal or replacement of the foregoing;
provided that the Liens permitted hereunder shall not be spread to
cover any additional Indebtedness or property (other than a
substitution of like property).
SECTION 6.02. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred (such an arrangement, a "Sale
and Lease-Back Transaction"), other than (i) Sale and Lease-Back Transactions
capitalized on the books of the Company in an aggregate capitalized amount not
in excess of $25,000,000 entered into in connection with the financing of
aircraft to be used in connection with the Company's business and (ii) Sale and
Lease-Back Transactions capitalized on the books of the Company (other than a
Sale and Lease-Back Transaction permitted by clause (i) above) if the
capitalized amount of all such Sale and Lease-Back Transactions shall not exceed
$20,000,000 in aggregate amount at any time outstanding.
SECTION 6.03. Mergers, Sales of Assets, etc. (a) In the case
of any Borrower, consolidate with or merge into any other corporation or convey,
transfer or lease its properties and assets substantially as an entirety to any
person, unless:
(i) the corporation formed by such consolidation or into which
such Borrower is merged or the person which acquires by conveyance or
transfer, or which leases, the properties and assets of such Borrower
substantially as an entirety shall be a corporation organized and
existing under the laws of the United States of America or any state or
the District of Columbia and shall expressly assume, by an agreement
supplemental hereto, executed and delivered to each other party hereto,
in form satisfactory to the Administrative Agent, the due and punctual
payment of the principal of and interest on the Loans and all other
obligations of such Borrower under the Loan Documents and the
performance or observance of every covenant of this Agreement on the
part of such Borrower to be performed or observed;
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(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing; and
(iii) the Company shall have delivered to the Administrative
Agent an officers' certificate and an opinion of counsel, each stating
that such consolidation, merger, conveyance, transfer or lease and such
supplemental agreement comply with this paragraph (a) and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
(b) Upon any consolidation by any Borrower with or merger by
any Borrower into any other corporation or any conveyance, transfer or lease of
the properties and assets of any Borrower substantially as an entirety in
accordance with paragraph (a) above, the successor corporation formed by such
consolidation or into which such Borrower is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the applicable Borrower under the Loan
Documents with the same effect as if such successor corporation had been named
as a Borrower herein, and thereafter, the predecessor corporation shall be
relieved of all obligations and covenants under the Loan Documents.
SECTION 6.04. Lines of Business; Fiscal Year. Engage or invest
in operations engaging to any substantial extent in any line or lines of
business activity other than the business of manufacturing, providing,
distributing and selling such diverse goods and industrial services, principally
for industrial, commercial, construction and defense applications, the same or
similar to those goods and services as are manufactured, provided, distributed
and sold by the Company on the date hereof. In the case of the Company, change
its fiscal year end from that in effect at December 31, 1995.
SECTION 6.05. Transactions with Affiliates. Sell or transfer
any property or assets to, or purchase or acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except that as long as no Default or Event of Default shall have occurred and be
continuing, the Company or any Subsidiary may engage in any of the foregoing
transactions in the ordinary course of business at prices and on terms and
conditions not less favorable to the Company or such
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Subsidiary than could be obtained on an arm's-length basis from unrelated third
parties.
SECTION 6.06. Net Worth. The Company will not permit its Net
Worth at any time to be less than $475,000,000.
SECTION 6.07. Total Debt to Total Capital Ratio. The Company
will not permit the ratio of Total Debt to Total Capital at any time on or after
the date hereof to exceed the ratio 0.55 to 1.
ARTICLE VII. EVENTS OF DEFAULT
In case of the happening of any of the following events
("Events of Default"):
(a) any representation or warranty made or deemed made in or
in connection with any Loan Document or the borrowings hereunder, or
any representation, warranty, statement or information contained in any
report, certificate, financial statement or other instrument furnished
in connection with or pursuant to any Loan Document, shall prove to
have been false or misleading in any material respect when so made,
deemed made or furnished;
(b) default shall be made in the payment of any principal of
any Loan when and as the same shall become due and payable, whether at
the due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on
any Loan or any Fee or any other amount (other than an amount referred
to in (b) above) due under any Loan Document, when and as the same
shall become due and payable, and such default shall continue
unremedied for a period of five days;
(d) default shall be made in the due observance or performance
by the Borrowers or any Subsidiary of any covenant, condition or
agreement contained in Section 5.01(a) or 5.05 or in Article VI;
(e) default shall be made in the due observance or performance
by the Borrowers or any Subsidiary of any
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covenant, condition or agreement contained in any Loan Document (other
than those specified in (b), (c) or (d) above) and such default shall
continue unremedied for a period of 30 days after notice thereof from
the Administrative Agent or any Lender to the Company;
(f) (i) the Company or any Subsidiary shall (A) fail to pay
any principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of (I) $20,000,000, in the
case of any single obligation, or (II) $20,000,000, in the case of all
obligations in the aggregate, in each case, when and as the same shall
become due and payable, or (B) fail to observe or perform any other
term, covenant, condition or agreement contained in any agreement or
instrument evidencing or governing any Indebtedness in an aggregate
principal amount in excess of $20,000,000 and such failure shall
continue beyond any applicable grace period; or (ii) Indebtedness of
the Company and its Subsidiaries, or any of them, in a principal amount
in excess of (A) $20,000,000, in the case of any single obligation, or
(B) $20,000,000, in the case of all obligations in the aggregate, shall
be declared due and payable or required to be prepaid prior to its
stated maturity;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of any Borrower or any
Subsidiary, or of a substantial part of the property or assets of any
Borrower or a Subsidiary, under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law (or similar statute
or law in any other jurisdiction), (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for
any Borrower or any Subsidiary or for a substantial part of the
property or assets of any Borrower or a Subsidiary or (iii) the
winding-up or liquidation of any Borrower or any Subsidiary; and such
proceeding or petition shall continue undismissed for 30 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(h) any Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title
11 of the United
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71
States Code, as now constituted or hereafter amended, or any other
Federal or state bankruptcy, insolvency, receivership or similar law
(or similar statute or law in any other jurisdiction), (ii) consent to
the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition described in (g)
above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for
any Borrower or any Subsidiary or for a substantial part of the
property or assets of any Borrower or any Subsidiary, (iv) file an
answer admitting the material allegations of a petition filed against
it in any such proceeding, (v) make a general assignment for the
benefit of creditors, (vi) become unable, admit in writing its
inability or fail generally to pay its debts as they become due or
(vii) take any action for the purpose of effecting any of the
foregoing;
(i) one or more judgments for the payment of money in an
aggregate amount in excess of $10,000,000 (exclusive of amounts fully
covered by insurance where the insurer has admitted liability in
respect of such judgment) or in excess of $20,000,000 (regardless of
insurance coverage) shall be rendered against any Borrower, any
Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 60 consecutive days during which 60 days
execution shall not be effectively stayed, or otherwise being
appropriately contested in good faith, or any action shall be legally
taken by a judgment creditor to levy upon assets or properties of any
Borrower or any Subsidiary to enforce any such judgment;
(j) a Reportable Event or Reportable Events, or a failure to
make a required installment or other payment (within the meaning of
Section 412(n)(l) of the Code), shall have occurred with respect to any
Plan or Plans that reasonably could be expected to result in liability
of any Borrower to the PBGC or to a Plan in an aggregate amount
exceeding $5,000,000 and, within 30 days after the reporting of any
such Reportable Event to the Administrative Agent or after the receipt
by the Administrative Agent of the statement required pursuant to
Section 5.06, the Administrative Agent shall have notified such
Borrower in writing that (i) the Required Lenders have made a
determination that, on the basis of such Reportable Event or Reportable
Events or the
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failure to make a required payment, there are reasonable grounds (A)
for the termination of such Plan or Plans by the PBGC, (B) for the
appointment by the appropriate United States District Court of a
trustee to administer such Plan or Plans or (C) for the imposition of a
lien in favor of a Plan and (ii) as a result thereof an Event of
Default exists hereunder; or a trustee shall be appointed by a United
States District Court to administer any such Plan or Plans; or the PBGC
shall institute proceedings to terminate any Plan or Plans; or
(k) there shall have occurred a Change in Control;
then, and in every such event (other than an event with respect to a Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent, with the consent of
Required Lenders, may, or at the request of the Required Lenders, shall, by
notice to the Borrowers, take either or both of the following actions, at the
same or different times: (i) terminate forthwith the Commitments and the
Swingline Commitments and (ii) declare the Loans then outstanding to be
forthwith due and payable in whole or in part, whereupon the principal of the
Loans so declared to be due and payable, together with accrued interest thereon
and any unpaid accrued Fees and all other liabilities of the Borrowers accrued
hereunder and under any other Loan Document, shall become forthwith due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by the Borrowers, anything contained
herein or in any other Loan Document to the contrary notwithstanding; and in any
event with respect to a Borrower described in paragraph (g) or (h) above, the
Commitments and the Swingline Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and any unpaid accrued Fees and all other liabilities of the Borrowers accrued
hereunder and under any other Loan Document, shall automatically become due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by the Borrowers, anything contained
herein or in any other Loan Document to the contrary notwithstanding.
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ARTICLE VIII. THE ADMINISTRATIVE AGENT
In order to expedite the transactions contemplated by this
Agreement, The Chase Manhattan Bank is hereby appointed to act as Administrative
Agent on behalf of the Lenders. Each of the Lenders hereby irrevocably
authorizes the Administrative Agent to take such actions on behalf of such
Lender or holder and to exercise such powers as are specifically delegated to
the Administrative Agent by the terms and provisions hereof and of the other
Loan Documents, together with such actions and powers as are reasonably
incidental thereto. The Administrative Agent is hereby expressly authorized by
the Lenders, without hereby limiting any implied authority, (a) to receive on
behalf of the Lenders all payments of principal of and interest on the Loans and
all other amounts due to the Lenders hereunder, and promptly to distribute to
each Lender its proper share of each payment so received; (b) as provided in
Article VII, to give notice on behalf of each of the Lenders to the Borrowers of
any Event of Default specified in this Agreement of which the Administrative
Agent has actual knowledge acquired in connection with its agency hereunder; and
(c) to distribute to each Lender copies of all notices, financial statements and
other materials delivered by any Borrower pursuant to this Agreement as received
by the Administrative Agent.
Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall be liable as such for any action taken or
omitted by any of them except for its or his own gross negligence or wilful
misconduct, or be responsible for any statement, warranty or representation
herein or the contents of any document delivered in connection herewith, or be
required to ascertain or to make any inquiry concerning the performance or
observance by the Borrowers of any of the terms, conditions, covenants or
agreements contained in any Loan Document. The Administrative Agent shall not be
responsible to the Lenders for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement, or any other Loan Documents
or other instruments or agreements. The Administrative Agent shall in all cases
be fully protected in acting, or refraining from acting, in accordance with
written instructions signed by the Required Lenders and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders. The Administrative Agent
shall, in the absence of knowledge to the contrary, be
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entitled to rely on any instrument or document believed by it in good faith to
be genuine and correct and to have been signed or sent by the proper person or
persons. Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall have any responsibility to the Borrowers on account of
the failure of or delay in performance or breach by any Lender of any of its
obligations hereunder or to any Lender on account of the failure of or delay in
performance or breach by any other Lender or the Borrowers of any of their
respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. The Administrative Agent may execute any and
all duties hereunder by or through agents or employees and shall be entitled to
rely upon the advice of legal counsel selected by it with respect to all matters
arising hereunder and shall not be liable for any action taken or suffered in
good faith by it in accordance with the advice of such counsel.
The Lenders hereby acknowledge that the Administrative Agent
shall be under no duty to take any discretionary action permitted to be taken by
it pursuant to the provisions of this Agreement unless it shall be requested in
writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may resign at
any time by notifying the Lenders and the Company. Upon any such resignation,
the Required Lenders shall have the right to appoint a successor. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent which shall be a
bank with an office in New York, New York, having a combined capital and surplus
of at least $500,000,000 or an Affiliate of any such bank. Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 10.05 shall continue in effect for its
benefit in
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respect of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.
With respect to the Loans made by it hereunder, the
Administrative Agent in its individual capacity and not as Administrative Agent
shall have the same rights and powers as any other Lender and may exercise the
same as though it were not the Administrative Agent, and the Administrative
Agent and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrowers or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent.
Each Lender agrees (i) to reimburse the Administrative Agent,
on demand, in the amount of its pro rata share (based on its Commitment
hereunder) of any expenses incurred for the benefit of the Lenders by the
Administrative Agent, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, which shall not
have been reimbursed by the Borrowers and (ii) to indemnify and hold harmless
the Administrative Agent and any of its directors, officers, employees or
agents, on demand, in the amount of such pro rata share, from and against any
and all liabilities, taxes, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against it in its
capacity as the Administrative Agent or any of them in any way relating to or
arising out of this Agreement or any other Loan Document or any action taken or
omitted by it or any of them under this Agreement or any other Loan Document, to
the extent the same shall not have been reimbursed by the Borrowers; provided
that no Lender shall be liable to the Administrative Agent for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross negligence or
wilful misconduct of the Administrative Agent or any of its directors, officers,
employees or agents.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently
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and without reliance upon the Administrative Agent or any other Lender and based
on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.
ARTICLE IX. GUARANTEE
SECTION 9.01. Guarantee. The Guarantor hereby guarantees to
each Lender and the Administrative Agent and their respective successors and
assigns the prompt payment in full when due (whether at stated maturity, by
acceleration, by optional prepayment or otherwise) of the principal of and
interest on the Loans made by the Lenders to any Approved Borrower and all other
amounts from time to time owing to the Lenders or the Administrative Agent by
any Approved Borrower under this Agreement pursuant to its Designation Letter,
strictly in accordance with the terms thereof (such obligations being herein
collectively called the "Guaranteed Obligations"). The Guarantor hereby further
agrees that if any Approved Borrower shall fail to pay in full when due (whether
at stated maturity, by acceleration, by optional prepayment or otherwise) any of
the Guaranteed Obligations, the Guarantor will promptly pay the same, without
any demand or notice whatsoever, and that in the case of any extension of time
of payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.
SECTION 9.02. Obligations Unconditional. The obligations of
the Guarantor under Section 9.01 hereof are absolute and unconditional
irrespective of the value, genuineness, validity, regularity or enforceability
of the obligations of any Approved Borrower under this Agreement or any other
agreement or instrument referred to herein or therein (including, without
limitation, any Designation Letter), or any substitution, release or exchange of
any other guarantee of or security for any of the Guaranteed Obligations, and,
to the fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 9.02 that the obligations
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of the Guarantor hereunder shall be absolute and unconditional under any and all
circumstances. Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following shall not affect the
liability of the Guarantor hereunder:
(i) at any time or from time to time, without notice to the
Guarantor, the time for any performance of or compliance with any of
the Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of
this Agreement or any other agreement or instrument referred to herein
or therein shall be done or omitted; or
(iii) the maturity of any of the Guaranteed Obligations shall
be accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this
Agreement or any other agreement or instrument referred to herein or
therein shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with.
The Guarantor hereby expressly waives diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agent or any Lender exhaust any right, power or remedy or proceed against any
Approved Borrower under this Agreement or any other agreement or instrument
referred to herein or therein, or against any other person under any other
guarantee of, or security for, any of the Guaranteed Obligations.
SECTION 9.03. Reinstatement. The obligations of the Guarantor
under this Article IX shall be automatically reinstated if and to the extent
that for any reason any payment by or on behalf of any Approved Borrower in
respect of the Guaranteed Obligations is rescinded or must be otherwise restored
by any holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise and the Guarantor
agrees that it will indemnify the Administrative Agent and each Lender on demand
for all reasonable costs and expenses (including, without limitation, fees of
counsel) incurred by
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the Administrative Agent or such Lender in connection with such rescission or
restoration.
SECTION 9.04. Subrogation. The Guarantor hereby irrevocably
waives all rights of subrogation or contribution, whether arising by operation
of law (including, without limitation, any such right arising under Title 11 of
the United States Code) or otherwise, by reason of any payment by it pursuant to
the provisions of this Article IX and further agrees that for the benefit of
each of its creditors (including, without limitation, each Lender and the
Administrative Agent) that any such payment by it of the Guaranteed Obligations
of any Approved Borrower shall constitute a contribution of capital by the
Guarantor to such Approved Borrower.
SECTION 9.05. Remedies. The Guarantor agrees that, as between
the Guarantor and the Lenders, the obligations of any Approved Borrower under
this Agreement may be declared to be forthwith due and payable as provided in
Article VII hereof (and shall be deemed to have become automatically due and
payable in the circumstances provided in said Article VII) for purposes of
Section 9.01 hereof notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming automatically due
and payable) as against any Approved Borrower and that, in the event of such
declaration (or such obligations being deemed to have become automatically due
and payable), such obligations (whether or not due and payable by such Approved
Borrower) shall forthwith become due and payable by the Guarantor for purposes
of such Section 9.01.
SECTION 9.06. Continuing Guarantee. The guarantee in this
Article IX is a continuing guarantee, and shall apply to all Guaranteed
Obligations whenever arising.
ARTICLE X. MISCELLANEOUS
SECTION 10.01. Notices. Notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:
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(a) if to the Company, to it at P.O. Box 8888, Camp Hill,
Pennsylvania 17001-8888, Attention of Barry M. Sullivan (Telecopy No.
717-763-6402);
(b) if to an Approved Borrower, to it at its address as set
forth in its Designation Letter;
(c) if to the Administrative Agent, to The Chase Manhattan
Bank Agency Services Corporation, Grand Central Tower, 140 East 45th
Street, New York, New York 10017, Attention of Sandra J. Miklave
(Telecopy No. 212-622-0002), with copies to The Chase Manhattan Bank,
270 Park Avenue, New York, New York 10017, Attention of Ann Kerns
(Telecopy No. 212-270-2112); and
(d) if to a Lender, to it at its address (or telecopy number)
set forth in Schedule 2.01 or in the Assignment and Acceptance pursuant
to which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy, or on the date five Business days after dispatch by certified or
registered mail, in each case delivered, sent or mailed (properly addressed) to
such party as provided in this Section 10.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section 10.01.
SECTION 10.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by the Borrowers herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the making by the Lenders
of the Loans, regardless of any investigation made by the Lenders or on their
behalf, and shall continue in full force and effect as long as the principal of
or any accrued interest on any Loan or any Fee or any other amount payable under
this Agreement or any other Loan Document is outstanding and unpaid and so long
as the Commitments and the Swingline Commitments have not been terminated.
SECTION 10.03. Binding Effect. This Agreement shall become
effective when it shall have been executed by
<PAGE> 100
80
the Company and the Administrative Agent and when the Administrative Agent shall
have received copies hereof which, when taken together, bear the signatures of
each Lender, and thereafter shall be binding upon and inure to the benefit of
the Borrowers, the Administrative Agent and each Lender and their respective
successors and assigns, except that the Borrowers shall not have the right to
assign rights hereunder or any interest herein without the prior consent of all
the Lenders.
SECTION 10.04. Successors and Assigns. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrowers, the Administrative
Agent or the Lenders that are contained in this Agreement shall bind and inure
to the benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment, Swingline Commitment, participations in
outstanding Swingline Loans and the Loans at the time owing to it); provided,
however, that (i) except in the case of an assignment to a Lender or an
Affiliate of such Lender, the Company and the Administrative Agent must give
their prior written consent to such assignment (which consent shall not be
unreasonably withheld), (ii) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Lender's rights and obligations
under this Agreement, (iii) the amount of the Commitment of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $10,000,000 (or, if smaller, such Lender's
remaining Commitment) and the amount of the Commitment of such Lender remaining
after such assignment shall not be less than $10,000,000 or shall be zero, (iv)
the parties to each such assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, and a processing and
recordation fee of $4,000 and (v) the assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire. Upon
acceptance and recording pursuant to paragraph (e) of this Section 10.04, from
and after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business days after the execution
<PAGE> 101
81
thereof, (A) the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and (B) the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto (but shall continue to be entitled to the
benefits of Sections 2.13, 2.15, 2.19 and 10.05, as well as to any Fees accrued
for its account hereunder and not yet paid)). Notwithstanding the foregoing, any
Lender assigning its rights and obligations under this Agreement may retain any
Competitive Loans made by it outstanding at such time, and in such case shall
retain its rights hereunder in respect of any Loans so retained until such Loans
have been repaid in full in accordance with this Agreement.
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitment and Swingline Commitment, if any, and the outstanding balances of
its Standby Loans, Competitive Loans and Swingline Loans, if any, in each case
without giving effect to assignments thereof which have not become effective,
are as set forth in such Assignment and Acceptance, (ii) except as set forth in
(i) above, such assigning Lender makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto or the financial condition of the Company or any Subsidiary or the
performance or observance by any Borrower of any of its obligations under this
Agreement, any other Loan Document or any other instrument or document furnished
pursuant hereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; (iv) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the most recent financial statements delivered pursuant to
<PAGE> 102
82
Section 5.04 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at one of its
offices in The City of New York a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and principal amount of the Loans owing to,
each Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive in the absence of manifest error and
the Borrower, the Administrative Agent and the Lenders may treat each person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Company and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above and, if required, the written consent of the Company and
the Administrative Agent to such assignment, the Administrative Agent shall (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Lenders.
(f) Upon giving written notice to the Company, each Lender may
without the consent of the Company or the Administrative Agent sell
participations to one or more
<PAGE> 103
83
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans owing
to it); provided, however, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participating banks or other entities shall be entitled to the benefit
of the cost protection provisions contained in Sections 2.13, 2.15 and 2.19 to
the same extent as if they were Lenders and (iv) the Borrowers, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrowers relating to the Loans and to approve
any amendment, modification or waiver of any provision of this Agreement (other
than amendments, modifications or waivers decreasing any fees payable hereunder
or the amount of principal of or the rate at which interest is payable on the
Loans, extending any scheduled principal payment date or date fixed for the
payment of interest on the Loans or changing or extending the Commitments).
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 10.04, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Borrowers furnished to such
Lender by or on behalf of the Borrowers; provided that, prior to any such
disclosure of information designated by the Company as confidential, each such
assignee or participant or proposed assignee or participant shall execute an
agreement whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information. It
is understood that confidential information relating to the Borrowers would not
ordinarily be provided in connection with assignments or participations of
Competitive Loans.
(h) Any Lender may at any time assign all or any portion of
its rights under this Agreement to a Federal Reserve Bank; provided that no such
assignment shall release a Lender from any of its obligations hereunder. In
order to facilitate such an assignment to a Federal Reserve Bank, the applicable
Borrower shall, at the request of the assigning Lender, duly execute and deliver
to the assigning Lender a
<PAGE> 104
84
promissory note or notes evidencing the Loans made to such Borrower by the
assigning Lender hereunder.
(i) The Borrowers shall not assign or delegate any of their
rights or duties hereunder, except as permitted by Section 6.03.
SECTION 10.05. Expenses; Indemnity. (a) Each Borrower agrees
to pay all out-of-pocket expenses incurred by the Administrative Agent in
connection with the preparation of this Agreement and the other Loan Documents
or in connection with any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions hereby contemplated shall be
consummated) or incurred by the Administrative Agent or any Lender in connection
with the enforcement or protection of their rights in connection with this
Agreement and the other Loan Documents or in connection with the Loans made
hereunder, including the reasonable fees, charges and disbursements of Cravath,
Swaine & Moore, counsel for the Administrative Agent, and, in connection with
any such amendment, modification or waiver or any such enforcement or
protection, the reasonable fees, charges and disbursements of any other counsel
for the Administrative Agent or any Lender. Each Borrower further agrees that it
shall indemnify the Lenders from and hold them harmless against any documentary
taxes, assessments or charges made by any Governmental Authority by reason of
the execution and delivery of this Agreement or any of the other Loan Documents.
(b) Each Borrower agrees to indemnify the Administrative
Agent, each Lender and each of their respective directors, officers, employees
and agents (each such person being called an "Indemnitee") against, and to hold
each Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses, including reasonable counsel fees, charges and
disbursements, incurred by or asserted against any Indemnitee arising out of, in
any way connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective obligations
thereunder or the consummation of the transactions contemplated thereby, (ii)
the actual or proposed use of the proceeds of the Loans or (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indem-
<PAGE> 105
85
nitee, be available to the extent that such losses, claims, damages, liabilities
or related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee.
(c) The provisions of this Section 10.05 shall remain
operative and in full force and effect regardless of the expiration of the term
of this Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent or any Lender. All amounts due
under this Section 10.05 shall be payable on written demand therefor.
SECTION 10.06. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of any Borrower against any of and all the
obligations of such Borrower now or hereafter existing under this Agreement and
other Loan Documents held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement or such other Loan
Document and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 10.07. Applicable Law. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK.
SECTION 10.08. Waivers; Amendment. (a) No failure or delay of
the Administrative Agent or any Lender in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent and the Lenders
<PAGE> 106
86
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies which they would otherwise have. No waiver
of any provision of this Agreement or any other Loan Document or consent to any
departure by any Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice or demand on any Borrower in any case shall entitle such
Borrower to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Company and the Required Lenders; provided, however,
that no such agreement shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on any Loan, or waive or excuse any such payment or any part
thereof, or decrease the rate of interest on any Loan, without the prior written
consent of each Lender affected thereby, (ii) change or extend the Commitment or
the Swingline Commitment or decrease the Utilization Fees or Facility Fees of
any Lender without the prior written consent of such Lender, or (iii) amend or
modify the provisions of Section 2.16, the provisions of Article IX, the
provisions of this Section or the definition of "Required Lenders", without the
prior written consent of each Lender; provided further that no such agreement
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written consent of the
Administrative Agent.
SECTION 10.09. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the applicable interest rate,
together with all fees and charges which are treated as interest under
applicable law (collectively the "Charges"), as provided for herein or in any
other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender, shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by such Lender in accordance with applicable law, the rate
of interest payable on the Loan of such Lender, together with all Charges
payable to such Lender, shall be limited to the Maximum Rate.
<PAGE> 107
87
SECTION 10.10. Entire Agreement. This Agreement and the other
Loan Documents constitute the entire contract between the parties relative to
the subject matter hereof. Any previous agreement among the parties with respect
to the subject matter hereof is superseded by this Agreement and the other Loan
Documents. Nothing in this Agreement or in the other Loan Documents, expressed
or implied, is intended to confer upon any party other than the parties hereto
and thereto any rights, remedies, obligations or liabilities under or by reason
of this Agreement or the other Loan Documents.
SECTION 10.11. Waiver of Jury Trial. Each party hereto hereby
waives, to the fullest extent permitted by applicable law, any right it may have
to a trial by jury in respect of any litigation directly or indirectly arising
out of, under or in connection with this Agreement or any of the other Loan
Documents. Each party hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (b) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement and the other Loan Documents, as
applicable, by, among other things, the mutual waivers and certifications in
this Section 10.11.
SECTION 10.12. Severability. In the event any one or more of
the provisions contained in this Agreement or in any other Loan Document should
be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 10.13. Judgment Currency. (a) The Borrowers'
obligations hereunder and under the other Loan Documents to make payments in
Dollars or in any Alternative Currency (the "Obligation Currency") shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery results in the effective
receipt by the Administrative Agent or a Lender of the full
<PAGE> 108
88
amount of the Obligation Currency expressed to be payable to the Administrative
Agent or such Lender under this Agreement or the other Loan Documents. If, for
the purpose of obtaining or enforcing judgment against any Borrower or in any
court or in any jurisdiction, it becomes necessary to convert into or from any
currency other than the Obligation Currency (such other currency being
hereinafter referred to as the "Judgment Currency") an amount due in the
Obligation Currency, the conversion shall be made at the Alternative Currency
Equivalent or Dollar Equivalent, in the case of any Alternative Currency or
Dollars, and, in the case of other currencies, the rate of exchange (as quoted
by the Administrative Agent or if the Administrative Agent does not quote a rate
of exchange on such currency, by a known dealer in such currency designated by
the Administrative Agent) determined, in each case, as of the date immediately
preceding the day on which the judgment is given (such Business Day being
hereinafter referred to as the "Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual payment of
the amount due, the Borrower covenants and agrees to pay, or cause to be paid,
as a separate obligation and notwithstanding any judgment, such additional
amounts, if any (but in any event not a lesser amount), as may be necessary to
ensure that the amount paid in the Judgment Currency, when converted at the rate
of exchange prevailing on the date of payment, will produce the amount of the
Obligation Currency which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial award at the rate of exchange
prevailing on the Judgment Currency Conversion Date.
(c) For purposes of determining the Alternative Currency
Equivalent or Dollar Equivalent or rate of exchange for this Section, such
amounts shall include any premium and costs payable in connection with the
purchase of the Obligation Currency.
SECTION 10.14. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract, and shall become
effective as provided in Section 10.03.
SECTION 10.15. Headings. Article and Section headings and the
Table of Contents used herein are for
<PAGE> 109
89
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 10.16. Jurisdiction; Consent to Service of Process.
(a) Each Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against any Borrower or its properties in
the courts of any jurisdiction.
(b) Each Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
<PAGE> 110
90
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 10.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers, all as of the
date first above written.
HARSCO CORPORATION,
by /s/ Leonard A. Campanaro
-----------------------------------
Name: Leonard A. Campanaro
Title: Senior Vice President &
Chief Financial Officer
by /s/ Barry M. Sullivan
-----------------------------------
Name: Barry M. Sullivan
Title: Vice President & Treasurer
THE CHASE MANHATTAN BANK,
by /s/ D. Davey
-----------------------------------
Name: D. Davey
Title: Vice President
<PAGE> 111
91
BANK BRUSSELS LAMBERT, NEW YORK BRANCH,
by /s/ John Kippax
-----------------------------------
Name: John Kippax
Title: Vice President
by /s/ Dominick H.J. Vangaever
-----------------------------------
Name: Dominick H.J. Vangaever
Title: Vice President
CIBC INC.,
by /s/ Cheryl L. Root
-----------------------------------
Name: Cheryl L. Root
Title: Authorized Signatory
CORESTATES BANK, N.A.,
by /s/ Joseph M. Finley
-----------------------------------
Name: Joseph M. Finley
Title: Vice President
DAUPHIN DEPOSIT BANK AND TRUST COMPANY,
by /s/ Susan L. Davies
-----------------------------------
Name: Susan L. Davies
Title: Vice President
FIRST UNION NATIONAL BANK,
by /s/ Patrick A. McGovern
-----------------------------------
Name: Patrick A. McGovern
Title: Senior Vice President
<PAGE> 112
92
GULF INTERNATIONAL BANK B.S.C.,
by /s/ Thomas E. Fitzherbert
-----------------------------------
Name: Thomas E. Fitzherbert
Title: Vice President
by /s/ Abdel-Fattah Tahoun
-----------------------------------
Name: Abdel-Fattah Tahoun
Title: Senior Vice President
ISTITUTO BANCARIO SAN PAOLO DI TORINO
SPA,
by /s/ Gerard M. McKenna
-----------------------------------
Name: Gerard M. McKenna
Title: Vice President
by /s/ Wendell Jones
-----------------------------------
Name: Wendell Jones
Title: Vice President
MELLON BANK, N.A.,
by /s/ Gilbert B. Mateer
-----------------------------------
Name: Gilbert B. Mateer
Title: Vice President
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK,
by /s/ Laura E. Reim
-----------------------------------
Name: Laura E. Reim
Title: Vice President
<PAGE> 113
93
NATIONSBANK OF NORTH CAROLINA, N.A.,
by /s/ Michael D. Monte
-----------------------------------
Name: Michael D. Monte
Title: Senior Vice President
PNC BANK, NATIONAL ASSOCIATION,
by /s/ Robert Q. Reilly
-----------------------------------
Name: Robert Q. Reilly
Title: Vice President - Senior
Relationship Manager
SOCIETE GENERALE,
by /s/ Gordon Saint-Denis
-----------------------------------
Name: Gordon Saint-Denis
Title: Vice President
THE BANK OF NEW YORK,
by /s/ Walter C. Parelli
-----------------------------------
Name: Walter C. Parelli
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
by /s/ Lynn R. Dillon
-----------------------------------
Name: Lynn R. Dillon
Title: As Agent
<PAGE> 114
94
THE FIRST NATIONAL BANK OF MARYLAND,
by /s/ Theodore K. Oswald
-----------------------------------
Name: Theodore K. Oswald
Title: Vice President
THE FUJI BANK, LIMITED,
by /s/ Gina Kearns
-----------------------------------
Name: Gina Kearns
Title: Vice President & Manager
UNION BANK OF SWITZERLAND,
by /s/ James P. Kelleher
-----------------------------------
Name: James P. Kelleher
Title: Assistant Vice President
by /s/ Peter B. Yearley
-----------------------------------
Name: Peter B. Yearley
Title: Managing Director
<PAGE> 1
Part I
Exhibit 11
HARSCO CORPORATION
COMPUTATION OF FULLY DILUTED NET INCOME PER COMMON SHARE
(dollars in thousands except per share)
---------------------------
<TABLE>
<CAPTION>
3 MONTHS ENDED JUNE 30 6 MONTHS ENDED JUNE 30
----------------------------- -----------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net income $ 29,260 $ 24,559 $ 60,370 $ 50,019
=========== =========== =========== ===========
Average shares of common stock
outstanding used to compute
earnings per common share 25,031,638 25,269,920 25,058,833 25,236,174
Additional common shares to be
issued assuming exercise of
stock options, net of shares
assumed reacquired 209,060 166,010 225,553 177,059
----------- ----------- ----------- -----------
Shares used to compute dilutive
effect of stock options 25,240,698 25,435,930 25,284,386 25,413,233
=========== =========== =========== ===========
Fully diluted net income per
common share $ 1.16 $ 0.96 $ 2.39 $ 1.97
=========== =========== =========== ===========
Net income per common share $ 1.17 $ 0.97 $ 2.41 $ 1.98
=========== =========== =========== ===========
</TABLE>
<PAGE> 1
HARSCO CORPORATION
Exhibit 12
Computation of Ratios of Earnings to Fixed Charges
(In Thousands of Dollars)
<TABLE>
<CAPTION>
Six Months YEARS ENDED DECEMBER 31
Ended ---------------------------------------------------------------------
6/30/96 1995 1994 1993 1992 1991
------- --------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Consolidated Earnings:
Pre-tax income from continuing
operations (1) $ 100,427 $ 161,231 $ 146,089 $ 137,151 $ 140,576 $ 119,647
Add fixed charges computed below 14,229 33,121 37,982 23,879 22,425 23,544
Net adjustments for equity companies (15,659) (4,320) (134) (363) (454) (439)
Net adjustments for capitalized
interest -- -- (274) (172) (134) (469)
--------- --------- --------- --------- --------- ---------
Consolidated Earnings Available for
Fixed Charges $ 98,997 $ 190,032 $ 183,663 $ 160,495 $ 162,413 $ 142,283
========= ========= ========= ========= ========= =========
Consolidated Fixed Charges:
Interest expense per financial
statements (2) $ 12,067 $ 28,921 $ 34,048 $ 19,974 $ 18,882 $ 18,925
Interest expense capitalized 66 134 338 332 355 574
Portion of rentals (1/3 ) representing
an interest factor 2,096 4,066 3,596 3,573 3,188 4,045
Interest expense for equity companies
whose debt is guaranteed (3) -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Consolidated Fixed Charges $ 14,229 $ 33,121 $ 37,982 $ 23,879 $ 22,425 $ 23,544
========= ========= ========= ========= ========= =========
Consolidated Ratio of Earnings to
Fixed Charges $ 6.96 5.74 4.84 6.72 7.24 6.04
========= ========= ========= ========= ========= =========
</TABLE>
(1) 1992 excludes the cumulative effect of change in accounting method for
postretirement benefits other than pensions.
(2) Includes amortization of debt discount and expense.
(3) No fixed charges were associated with debt of less than fifty percent
owned companies guaranteed by the Company during the five year period
1991 through 1995, and the six months ended June 30, 1996.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 43,249
<SECURITIES> 0
<RECEIVABLES> 292,074
<ALLOWANCES> (8,259)
<INVENTORY> 134,590
<CURRENT-ASSETS> 521,209
<PP&E> 1,126,010
<DEPRECIATION> (644,029)
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<CURRENT-LIABILITIES> 276,031
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0
0
<COMMON> 40,831
<OTHER-SE> 611,225
<TOTAL-LIABILITY-AND-EQUITY> 1,323,719
<SALES> 754,419
<TOTAL-REVENUES> 787,679
<CGS> 571,925
<TOTAL-COSTS> 676,693
<OTHER-EXPENSES> 0
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<INTEREST-EXPENSE> 12,067
<INCOME-PRETAX> 102,711
<INCOME-TAX> 40,057
<INCOME-CONTINUING> 60,370
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 60,370
<EPS-PRIMARY> 2.41
<EPS-DILUTED> 2.39
</TABLE>
