SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
AMENDMENT NO. 6
TO
SCHEDULE 14D-1
Tender Offer Statement
Pursuant to Section 14(d)(1) of the Securities Exchange Act of
1934
__________________
Clark Equipment Company
(Name of Subject Company)
CEC Acquisition Corp.
Ingersoll-Rand Company
(Bidder)
Common Stock, $7.50 par value per share
(Title of Class of Securities)
18139610
(CUSIP Number of Class of Securities)
Patricia Nachtigal, Esq.
Vice President and General Counsel
Ingersoll-Rand Company
World Headquarters
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
Telephone: (201) 573-0123
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
Copy to:
Robert L. Friedman, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Telephone: (212) 455-2000
<PAGE>
This Amendment No. 6 amends and supplements the Tender
Offer Statement on Schedule 14D-1 filed on April 3, 1995 (as
amended and supplemented, the "Schedule 14D-1") relating to the
offer by CEC Acquisition Corp., a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of Ingersoll-Rand
Company, a New Jersey corporation (the "Parent"), to purchase all
of the outstanding shares of Common Stock, $7.50 par value per
share (the "Shares"), of Clark Equipment Company, a Delaware
corporation (the "Company"), and the associated Preferred Stock
Purchase Rights (the "Rights") issued pursuant to the Rights
Agreement dated as of March 10, 1987, as amended and restated as
of August 14, 1990, and as amended as of April 10, 1995 between
the Company and Harris Trust and Savings Bank, as Rights Agent,
at a purchase price of $86.00 per Share (and associated Right),
net to the seller in cash without interest thereon, upon the
terms and subject to the conditions set forth in the Offer to
Purchase dated April 3, 1995, as amended and supplemented on
April 12, 1995 (the "Offer to Purchase"), and in the related
Letter of Transmittal. Unless otherwise indicated, all
capitalized terms used but not defined herein shall have the
meanings assigned to them in the Schedule 14D-1.
Item 4. Source and Amount of Funds or Other Consideration.
Items 4(a) and 4(b) of the Schedule 14D-1 are hereby amended
and supplemented as follows:
On May 8, 1995, the Parent issued a press release announcing
that on May 5, 1995 the Parent entered into a Credit Agreement,
dated as of May 5, 1995 (the "Credit Agreement"), with a
syndicate of lenders led by The Chase Manhattan Bank (National
Association) ("Chase"), as administrative agent for such lenders,
relating to the Facility. The full text of the press release is
set forth in Exhibit 11(a)(21) and is incorporated herein by
reference. The Credit Agreement is filed as Exhibit 11(b)(3) and
is incorporated herein by reference and the following description
of such Credit Agreement is qualified in its entirety by such
reference.
The Credit Agreement provides for the Facility on
substantially the same terms as those described in the Commitment
Letter as supplemented by the Supplemental Commitment Letter,
including that the Facility be guaranteed by the Purchaser until
the consummation of the Merger and be secured, on an equal and
ratable basis, with the Existing Credit Agreement and any other
long-term notes or debentures that by their express terms so
require, by a pledge of all the capital stock of, and the Parent's
advances to, the Purchaser. Such security shall be released on
the date on which the Facility has been reduced to $1.0 billion.
The Credit Agreement includes customary conditions to borrowing
under the Facility substantially the same as those described in
the Commitment Letter as supplemented by the Supplemental
Commitment Letter.
As discussed in the Offer to Purchase, the Facility will be
required to be reduced to $1.0 billion on the Initial Facility
Reduction Date which repayment the Parent intends to make from
certain cash and cash equivalents that it has on hand and/or, if
the Merger has been consummated, that the Company will then have
on hand. If the Merger has not been consummated, or if it has but
the Company's cash and cash equivalents on hand are not
sufficient to fund the entire amount of such required repayment
not funded out of the Parent's cash and cash equivalents on hand,
the Parent intends to obtain the remaining funds necessary to
effect such repayment from the proceeds of private placements
under a commercial paper program of the Parent or other
borrowings by the Parent (other than drawdowns under the Existing
Credit Agreement).
Item 11. Material to be Filed as Exhibits.
Item 11 is hereby amended and supplemented to add the
following:
(a)(21) Press release issued by the Parent on May 8,
1995.
(b)(3) Credit Agreement, dated as of May 5, 1995,
among the Parent, the Purchaser, the several
banks and other financial institutions from
time to time parties thereto and The Chase
Manhattan Bank (National Association), as
administrative agent for the lenders
thereunder.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
Statement is true, complete and correct.
INGERSOLL-RAND COMPANY
By: /s/ James E. Perrella
---------------------------------
Name: James E. Perrella
Title: Chairman, President and
Chief Executive Officer
CEC ACQUISITION CORP.
By: /s/ Thomas F. McBride
---------------------------------
Name: Thomas F. McBride
Title: President
Date: May 8, 1995
<PAGE>
EXHIBIT INDEX
Exhibit Page
No. Description No.
------- ----------- ----
(a)(21) Press release issued by the Parent on May 8, 1995
(b)(3) Credit Agreement, dated as of May 5, 1995, among
the Parent, the Purchaser, the several banks and
other financial institutions from time to time
parties thereto and The Chase Manhattan Bank
(National Association), as administrative agent
for the lenders thereunder . . . . . . . . . . .
Exhibit (a)(21)
[I-R Logo]
NEWS
-------------------------
Corporate Communications
Woodcliff Lake, New Jersey
07675
CONTACT:
FOR RELEASE:
_______________________________________________________
Thomas F. McBride For Immediate Release
Senior Vice President
and Chief Financial Officer
(201) 573-3486
INGERSOLL-RAND EXECUTES DEFINITIVE
FINANCING AGREEMENT FOR $1.5 BILLION
Woodcliff Lake, New Jersey (May 8, 1995) -- Ingersoll-Rand
Company today announced that it has entered into a definitive
financing agreement with a syndicate of lenders led by The Chase
Manhattan Bank (National Association), as administrative agent,
providing for aggregate borrowings of up to $1.5 billion.
The proceeds of the credit facility may be used by
Ingersoll-Rand to provide financing for the tender offer for
shares of Clark Equipment Company common stock and subsequent
merger and to pay related fees, commissions and expenses.
####
Exhibit (b)(3)
[EXECUTION COUNTERPART]
$1,500,000,000
CREDIT AGREEMENT
dated as of
May 5, 1995
among
INGERSOLL-RAND COMPANY
The Banks Listed Herein
Morgan Guaranty Trust Company
of New York,
as Syndication Agent
and
The Chase Manhattan Bank (National Association),
as Administrative Agent
and as Collateral Agent
<PAGE>
TABLE OF CONTENTS1
Page
----
ARTICLE I
DEFINITIONS; ETC.
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Accounting Terms and Determinations . . . . . . . . 17
SECTION 1.03. Types of Borrowings . . . . . . . . . . . . . . . . 18
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend . . . . . . . . . . . . . . . . 19
SECTION 2.02. Notice of Committed Borrowings . . . . . . . . . . 19
SECTION 2.03. Money Market Borrowings . . . . . . . . . . . . . . 20
SECTION 2.04. Notice to Banks; Funding of Loans . . . . . . . . . 24
SECTION 2.05. Notes . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.06. Maturity of Loans . . . . . . . . . . . . . . . . . 25
SECTION 2.07. Interest Rates . . . . . . . . . . . . . . . . . . 25
SECTION 2.08. Facility Fee . . . . . . . . . . . . . . . . . . . 30
SECTION 2.09. Optional Termination or Reduction of
Commitments . . . . . . . . . . . . . . . . . . . 31
SECTION 2.10. Mandatory Reduction or Termination of
Commitments; Mandatory Prepayments . . . . . . . 31
SECTION 2.11. Optional Prepayments . . . . . . . . . . . . . . . 33
SECTION 2.12. General Provisions as to Payments . . . . . . . . . 33
SECTION 2.13. Funding Losses . . . . . . . . . . . . . . . . . . 34
SECTION 2.14. Computation of Interest and Fees . . . . . . . . . 34
SECTION 2.15. Withholding Tax Exemption . . . . . . . . . . . . . 35
ARTICLE III
CONDITIONS
SECTION 3.01. Conditions Precedent to Initial Loans . . . . . . . 35
SECTION 3.02. Borrowings . . . . . . . . . . . . . . . . . . . . 38
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power . . . . . . . . . . . 38
SECTION 4.02. Corporate and Governmental
Authorization; No Contravention . . . . . . . . . 39
SECTION 4.03. Binding Effect . . . . . . . . . . . . . . . . . . 39
- --------------------
1 The Table of Contents is not a part of this Agreement.
<PAGE>
- ii -
SECTION 4.04. Financial Information . . . . . . . . . . . . . . . 39
SECTION 4.05. Litigation . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.06. Compliance with ERISA . . . . . . . . . . . . . . . 40
SECTION 4.07. Environmental Matters . . . . . . . . . . . . . . . 40
SECTION 4.08. Taxes . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.09. Subsidiaries . . . . . . . . . . . . . . . . . . . 41
SECTION 4.10. Not an Investment Company . . . . . . . . . . . . . 41
SECTION 4.11. Full Disclosure . . . . . . . . . . . . . . . . . . 41
SECTION 4.12. Margin Stock . . . . . . . . . . . . . . . . . . . 41
SECTION 4.13. Offer to Purchase . . . . . . . . . . . . . . . . . 42
SECTION 4.14. Merger . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.15. Acquisition Intangibles . . . . . . . . . . . . . . 43
ARTICLE V
COVENANTS
SECTION 5.01. Information . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.02. Maintenance of Property; Insurance . . . . . . . . 45
SECTION 5.03. Conduct of Business and Maintenance of
Existence . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.04. Compliance with Laws . . . . . . . . . . . . . . . 46
SECTION 5.05. Debt . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.06. Minimum Consolidated Net Worth . . . . . . . . . . 46
SECTION 5.07. Negative Pledge . . . . . . . . . . . . . . . . . . 47
SECTION 5.08. Consolidations, Mergers and Sales of
Property; Etc. . . . . . . . . . . . . . . . . . 49
SECTION 5.09. Use of Proceeds . . . . . . . . . . . . . . . . . . 49
SECTION 5.10. Other Cross Defaults or Negative Pledges . . . . . 50
SECTION 5.11. Merger, Control, Etc. . . . . . . . . . . . . . . . 50
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . 51
SECTION 6.02. Notice of Default . . . . . . . . . . . . . . . . . 53
ARTICLE VII
THE AGENTS
SECTION 7.01. Appointment and Authorization . . . . . . . . . . . 53
SECTION 7.02. Agents and Affiliates . . . . . . . . . . . . . . . 54
SECTION 7.03. Action by Agents . . . . . . . . . . . . . . . . . 54
SECTION 7.04. Consultation with Experts . . . . . . . . . . . . . 54
SECTION 7.05. Liability of Agents . . . . . . . . . . . . . . . . 54
SECTION 7.06. Indemnification . . . . . . . . . . . . . . . . . . 54
SECTION 7.07. Credit Decision . . . . . . . . . . . . . . . . . . 55
SECTION 7.08. Successor Agents . . . . . . . . . . . . . . . . . 55
SECTION 7.09. Agents' Fees . . . . . . . . . . . . . . . . . . . 55
SECTION 7.10. Consents Under Other Credit Documents . . . . . . . 55
<PAGE>
- iii -
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair . . . . . . . . . . . . . . 56
SECTION 8.02. Illegality . . . . . . . . . . . . . . . . . . . . 57
SECTION 8.03. Increased Cost and Reduced Return . . . . . . . . . 57
SECTION 8.04. Base Rate Loans Substituted for Affected
Fixed Rate Loans . . . . . . . . . . . . . . . . 59
SECTION 8.05. Substitution of Bank . . . . . . . . . . . . . . . 60
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 9.02. No Waivers . . . . . . . . . . . . . . . . . . . . 61
SECTION 9.03. Expenses; Documentary Taxes;
Indemnification . . . . . . . . . . . . . . . . . 61
SECTION 9.04. Sharing of Set-Offs . . . . . . . . . . . . . . . . 62
SECTION 9.05. Amendments and Waivers . . . . . . . . . . . . . . 62
SECTION 9.06. Successors and Assigns . . . . . . . . . . . . . . 62
SECTION 9.07. Collateral . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.08. Governing Law; Submission to
Jurisdiction . . . . . . . . . . . . . . . . . . 64
SECTION 9.09. Counterparts; Integration . . . . . . . . . . . . . 64
SECTION 9.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . 65
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E-1 - Opinion of Special New York Counsel to the
Borrower and the Purchaser
Exhibit E-2 - Opinion of General Counsel for the Borrower
and the Purchaser
Exhibit F - Opinion of Special New York Counsel to the
Agents
Exhibit G - Assignment and Assumption Agreement
Exhibit H - Pledge and Security Agreement
Exhibit I - Purchaser Guarantee Agreement
<PAGE>
CREDIT AGREEMENT
AGREEMENT dated as of May 5, 1995 among INGERSOLL-RAND COMPANY,
the BANKS listed on the signature pages hereof and THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION) in its capacity as administrative agent for the
Banks and as collateral agent for the Banks and certain other parties.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS; ETC.
SECTION 1.01. Definitions. As used herein, the following terms
-----------
shall have the following meanings (all terms defined in this Section 1.01
or in other provisions of this Agreement in the singular to have the same
meanings when used in the plural and vice versa):
---- -----
"Absolute Rate Auction" means a solicitation of Money Market
Quotes setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Acquisition" means (a) the purchase by the Purchaser of Clark
Shares (at a price per share not to exceed $86.00) for cash pursuant to the
Tender Offer Documents and (b) the Merger.
"Acquisition Documents" means the Tender Offer Documents, the
Additional Tender Offer Documents and any other document or information
sent by the Borrower or any of its Subsidiaries to the stockholders of
Clark in connection with the Acquisition or filed by the Borrower or any of
its Subsidiaries with the Commission in connection with the Acquisition.
"Acquisition Intangibles" means assets arising out of the
Acquisition (not including assets on the books of Clark immediately prior
to the Tender Offer Closing Date) that should, in accordance with generally
accepted accounting principles as applied by the Borrower on the date
hereof, be classified as intangibles, including but not limited to
goodwill, patents, franchises, trade-marks, tradenames and copyrights.
"Additional Tender Offer Documents" means all amendments and
exhibits to, and documents related to, the Tender Offer Documents filed
directly or indirectly by the Borrower or any of its Subsidiaries with the
Commission, or distributed by the Borrower or any of its Subsidiaries to
the stockholders of Clark, in each case delivered to the Administrative
Agent and the Banks on or after the date of this Agreement, including any
<PAGE>
- 2 -
Merger Documents delivered to the Banks after the date of this Agreement.
"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.07(c).
"Administrative Agent" means Chase in its capacity as
administrative agent for the Banks hereunder, and its successors in such
capacity.
"Administrative Questionnaire" means, with respect to each Bank,
an administrative questionnaire in the form prepared by the Administrative
Agent and submitted to the Administrative Agent (with a copy to the
Borrower) duly completed by such Bank.
"Affiliate" means, with respect to any Person, any Person
directly or indirectly controlling, controlled by or under common control
with such other Person. As used herein, the term "control" means
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through
ownership of voting securities, by contract or otherwise.
"Agents" means the Administrative Agent and the Collateral Agent,
and "Agent" means any of the foregoing.
"Anniversary" means each anniversary of the Tender Offer Closing
Date; provided that, if any such anniversary shall not be a Euro-Dollar
Business Day, the relevant "Anniversary" shall be the next preceding Euro-
Dollar Business Day.
"Applicable Lending Office" means, with respect to any Bank, (i)
in the case of its Domestic Loans, its Domestic Lending Office, (ii) in the
case of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in
the case of its Money Market Loans, its Money Market Lending Office.
"Assessment Rate" has the meaning set forth in Section 2.07(b).
"Assignee" has the meaning set forth in Section 9.06(c).
"Attributable Debt" means, at any date, the total net amount of
rent required to be paid under a lease during the remaining term thereof
(excluding any renewal term unless such renewal is at the option of the
lessor), discounted from the respective due dates thereof to such date at 8
3/8% compounded semi-annually. The net amount of rent required to be paid
for
<PAGE>
- 3 -
any such period shall be the aggregate of the rent payable by the lessee
with respect to such period after excluding amounts required to be paid on
account of, or measured or determined by, any variable factor, including,
without limitation, the cost-of-living index and costs of maintenance and
repairs, insurance, taxes, assessments, water rates and similar charges and
after excluding any portion of rentals based on a percentage of sales made
by the lessee. In the case of any lease which is terminable by the lessee
upon the payment of a penalty, such net amount shall also include the
amount of such penalty, but no rent shall be considered so required to be
paid under such lease subsequent to the first date upon which it may be so
terminated.
"Bank" means each bank listed on the signature pages hereof or
Assignee which becomes a Bank pursuant to Section 9.06(c), and their
respective successors.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1%
plus the Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a Bank as a
Base Rate Loan in accordance with the applicable Notice of Committed
Borrowing or pursuant to Article VIII.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by
any member of the ERISA Group.
"Borrower" means Ingersoll-Rand Company, a New Jersey
corporation, and its successors.
"Borrower's 1994 Form 10-K" means the Borrower's annual report on
Form 10-K for 1994, as filed with the Commission pursuant to the Exchange
Act.
"Borrowing" has the meaning set forth in Section 1.03.
"Capital Lease Obligations" means, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of
(or other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP (including Statement of
Financial Accounting Standards No. 13 of the Financial Accounting Standards
Board), and, for purposes of this Agreement, the amount of such obligations
shall be the capitalized amount thereof, determined in accordance with GAAP
(including such Statement No. 13).
"CD Base Rate" has the meaning set forth in Section 2.07(b).
<PAGE>
- 4 -
"CD Loan" means a Committed Loan to be made by a Bank as a CD
Loan in accordance with the applicable Notice of Committed Borrowing.
"CD Margin" has the meaning set forth in Section 2.07(h).
"CD Reference Banks" means Chase, Morgan Guaranty Trust Company
of New York and Union Bank of Switzerland.
"Chase" means The Chase Manhattan Bank (National Association), a
national banking association, and its successors.
"Clark" means Clark Equipment Company, a Delaware corporation,
and its successors.
"Clark Shares" means the shares of common stock, $7.50 par value,
of Clark, together with the associated preferred stock purchase rights
issued pursuant to the Rights Agreement dated as of March 10, 1987, as
amended and restated as of August 14, 1990 between Clark and Harris Trust
and Savings Bank, as rights agent.
"Closing Date" means the date the initial Loans are made in
accordance with the terms hereof by the Banks to the Borrower hereunder.
"Collateral" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Collateral Agent" means Chase in its capacity as collateral
agent for the Secured Creditors (as defined in the Pledge Agreement) under
the Pledge Agreement, and its successors in such capacity.
"Commission" means the U.S. Securities and Exchange Commission,
and any successor thereto.
"Commitment" means, with respect to each Bank listed on the
signature pages hereof, the amount set forth opposite the name of such Bank
on the signature pages hereof, and with respect to any Bank which becomes a
party to this Agreement pursuant to Section 9.06(c), the amount of the
Commitment thereby assumed by such Bank, in each case as such amount may
from time to time be reduced pursuant to Sections 2.09, 2.10 and 9.06(c) or
increased pursuant to Section 9.06(c).
"Commitment Reduction Date" has the meaning set forth in Section
2.10(a).
"Committed Loan" means a loan made by a Bank pursuant to Section
2.01.
<PAGE>
- 5 -
"Consolidated Debt" means, at any date, the sum of (i) all
amounts which would be set forth opposite the captions "Loans payable" and
"Long-term debt" on a balance sheet of the Borrower and its Subsidiaries as
of such date prepared in accordance with GAAP, (ii) all Capital Lease
Obligations of the Borrower and its Subsidiaries and (iii) the higher of
the voluntary or involuntary liquidation value of any preferred stock
(other than auction-rate preferred stock the higher of the voluntary or
involuntary liquidation value of which does not in the aggregate exceed
$100,000,000) of a Subsidiary held on such date by a Person other than the
Borrower or a Wholly-Owned Subsidiary.
"Consolidated Net Worth" means at any date the consolidated
stockholders' equity of the Borrower and its Subsidiaries, exclusive of any
foreign currency equity adjustment as of such date.
"Credit Documents" means this Agreement, the Notes, the Pledge
Agreement and the Purchaser Guarantee.
"Credit Parties" means the Borrower and the Purchaser.
"Cross Default" means a provision governing Debt of the Borrower
to the effect that the holder of such Debt (or any representative of such
holder) shall have the right, upon the giving of any notice and the lapse
of any time specified in the instruments governing such Debt, to accelerate
the maturity of such Debt by reason of an event or condition which permits
acceleration of the maturity of any other Debt of the Borrower or of a
Subsidiary, whether or not upon the giving of notice and the lapse of any
time specified in the instruments governing such other Debt.
"Current Board" has the meaning set forth in Section 6.01(j).
"Debt" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person to pay the deferred
purchase price of Property (and not services), except trade accounts
payable arising in the ordinary course of business, (iv) all Capital Lease
Obligations of such Person, and (v) all Debt of others secured by a Lien on
any Property of such Person, whether or not such Debt is assumed by such
Person; provided that "Debt" shall include at any date only such
--------
obligations and such Debt of others to the extent such obligations and such
Debt of others is reflected as a liability in the consolidated balance
sheet of the Borrower and its Subsidiaries as of such date (or would be so
reflected if such a balance sheet were prepared as of such date).
<PAGE>
- 6 -
"Default" means any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Documents" means the Acquisition Documents and the Credit
Documents.
"Dollars" and "$" mean lawful money of the United States of
America.
"Domestic Business Day" means any day except a Saturday, Sunday
or other day on which commercial banks in New York City are authorized by
law to close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending
Office) or such other office as such Bank may hereafter designate as its
Domestic Lending Office by notice to the Borrower and the Administrative
Agent; provided that any Bank may so designate separate Domestic Lending
--------
Offices for its Base Rate Loans, on the one hand, and its CD Loans, on the
other hand, in which case all references herein to the Domestic Lending
Office of such Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in
Section 2.07(b).
"Environmental Laws" means any and all Federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or to
emissions, discharges or releases of pollutants, contaminants, petroleum or
petroleum products, chemicals or industrial, toxic or hazardous substances
or wastes into the environment including, without limitation, ambient air,
surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes
or the clean-up or other remediation thereof.
"Equity Issuance" means (a) any issuance or sale (including,
without limitation, issuance or sale as a result of a conversion or
exchange of debt securities) by the Borrower or any of the Subsidiaries of
(i) any capital stock or any warrants,
<PAGE>
- 7 -
options or rights exercisable in respect of capital stock, including any
capital stock issued upon the exercise of any such warrants, options or
rights (other than any capital stock, warrants, options or rights issued
to, or for the benefit of, directors, officers or employees of the Borrower
or any of the Subsidiaries pursuant to employee benefit plans, stock option
plans or long-term incentive plans established in the ordinary course of
business and any capital stock of the Borrower issued upon the exercise of
such warrants, options or rights) or (ii) any other security or instrument
representing an equity interest in the Borrower or any of the Subsidiaries
or (b) the receipt by the Borrower or any of the Subsidiaries of any
capital contribution (whether or not evidenced by any equity security
issued by the recipient of such contribution); provided that the term
--------
"Equity Issuance" shall not include (x) any such issuance or sale by any
Subsidiary to the Borrower or any Wholly-Owned Subsidiary or (y) any
capital contribution by the Borrower or any Wholly-Owned Subsidiary to any
Subsidiary.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.
"ERISA Group" means the Borrower and all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414 of the Internal Revenue
Code.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including
dealings in Dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar Lending Office
by notice to the Borrower and the Administrative Agent.
"Euro-Dollar Loan" means a Committed Loan to be made by a Bank as
a Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing.
"Euro-Dollar Margin" has the meaning set forth in Section
2.07(h).
"Euro-Dollar Reference Banks" means the principal London offices
of Chase, Morgan Guaranty Trust Company of New York and Union Bank of
Switzerland.
<PAGE>
- 8 -
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.07(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute, and including the rules and regulations
of the Commission thereunder.
"Facility Fee Rate" has the meaning set forth in Section 2.07(h).
"Facility Reduction Date" means the date on which the Commitments
and the outstanding Loans have been reduced to not more than
$1,000,000,000.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the
Domestic Business Day next succeeding such day, provided that (i) if such
--------
day is not a Domestic Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Domestic
Business Day as so published on the next succeeding Domestic Business Day,
and (ii) if no such rate is so published on such next succeeding Domestic
Business Day, the Federal Funds Rate for such day shall be the average rate
quoted to Chase on such day on such transactions as determined by the
Administrative Agent.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money
Market Loans (excluding Money Market LIBOR Loans bearing interest at the
Base Rate pursuant to Section 8.01(a)) or any combination of the foregoing.
"GAAP" means generally accepted accounting principles applied on
a basis consistent with those that, in accordance with the last sentence of
Section 1.02(a) hereof, are to be used in making the calculations for
purposes of determining compliance with this Agreement.
"Initial Commitment Reduction Date" means the date that is the
earlier of (i) the date 45 days after the Merger Effective Date and (ii)
the date 180 days after the Tender Offer Closing Date; provided that, if
--------
such date is not a Euro-Dollar Business Day, the "Initial Commitment
Reduction Date" shall be the next preceding Euro-Dollar Business Day.
<PAGE>
- 9 -
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending
one, two, three or six or, with the approval of all of the Banks, nine or
twelve months thereafter, or as provided in and subject to clause (e)
below, as the Borrower may elect in the applicable Notice of Borrowing;
provided that:
- --------
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) in this subsection (1),
end on the last Euro-Dollar Business Day of a calendar month;
(c) any Interest Period which would otherwise end after the
Termination Date shall not be available hereunder;
(d) no Interest Period may begin before and end after any
Commitment Reduction Date unless, after giving effect thereto, the
aggregate principal amount of Fixed Rate Loans having Interest Periods
that end after such Commitment Reduction Date shall be equal to or
less than the aggregate principal amount of Fixed Rate Loans scheduled
to be outstanding after giving effect to the payments of principal of
Fixed Rate Loans required to be made on such Commitment Reduction
Date; and
(e) with respect to any Borrowing on the Closing Date only, the
period commencing on the date of such Borrowing and ending seven days
thereafter; provided that any such Interest Period which would
--------
otherwise end on a day which is not a Euro-Dollar Business Day shall
be extended to the next succeeding Euro-Dollar Business Day.
(2) with respect to each CD Borrowing, the period commencing on the date
of such Borrowing and ending 30, 60, 90 or 180 or, with the approval of all
of the Banks, 270 or 360 days thereafter, as the Borrower may elect in the
applicable Notice of Borrowing; provided that:
--------
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day;
<PAGE>
- 10 -
(b) any Interest Period which would otherwise end after the
Termination Date shall not be available hereunder; and
(c) no Interest Period may begin before and end after any
Commitment Reduction Date unless, after giving effect thereto, the
aggregate principal amount of Fixed Rate Loans having Interest Periods
that end after such Commitment Reduction Date shall be equal to or
less than the aggregate principal amount of Fixed Rate Loans scheduled
to be outstanding after giving effect to the payments of principal of
Fixed Rate Loans required to be made on such Commitment Reduction
Date.
(3) with respect to each Base Rate Borrowing, the period commencing on the
date of such Borrowing and ending 90 days thereafter; provided that:
--------
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(4) with respect to each Money Market LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending seven days or one, two,
three, six, nine or twelve months thereafter, as the Borrower may elect in
accordance with Section 2.03; provided that:
--------
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless (except in the case of a
seven-day Interest Period) such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end
on the next preceding Euro-Dollar Business Day;
(b) except in the case of a seven-day Interest Period, any
Interest Period which begins on the last Euro-Dollar Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (c) in this subsection (4), end on
the last Euro-Dollar Business Day of a calendar month;
(c) any Interest Period which would otherwise end after the
Termination Date shall not be available hereunder; and
<PAGE>
- 11 -
(d) no Interest Period may begin before and end after any
Commitment Reduction Date unless, after giving effect thereto, the
aggregate principal amount of Fixed Rate Loans having Interest Periods
that end after such Commitment Reduction Date shall be equal to or
less than the aggregate principal amount of Fixed Rate Loans scheduled
to be outstanding after giving effect to the payments of principal of
Fixed Rate Loans required to be made on such Commitment Reduction
Date.
(5) with respect to each Money Market Absolute Rate Borrowing, the period
commencing on the date of such Borrowing and ending such number of days up
to 360 days thereafter as the Borrower may elect in accordance with Section
2.03; provided that:
--------
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day;
(b) any Interest Period which would otherwise end after the
Termination Date shall not be available hereunder; and
(c) no Interest Period may begin before and end after any
Commitment Reduction Date unless, after giving effect thereto, the
aggregate principal amount of Fixed Rate Loans having Interest Periods
that end after such Commitment Reduction Date shall be equal to or
less than the aggregate principal amount of Fixed Rate Loans scheduled
to be outstanding after giving effect to the payments of principal of
Fixed Rate Loans required to be made on such Commitment Reduction
Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended, or any successor statute.
"Level I Status" exists at any date if, at such date, the
Borrower's outstanding senior unsecured long-term debt securities are rated
A or higher by S&P and A3 or higher by Moody's or A2 or higher by Moody's
--
and A- or higher by S&P.
"Level II Status" exists at any date if (i) Level I Status does
not exist on such date and (ii) the Borrower's outstanding senior unsecured
long-term debt securities are rated A- or higher by S&P and A3 or higher by
---
Moody's.
"Level III Status" exists at any date if (i) neither Level I
Status nor Level II Status exists on such date and (ii) the Borrower's
outstanding senior unsecured long-term debt securities are rated BBB+ or
higher by S&P and Baa1 or higher by Moody's.
---
<PAGE>
- 12 -
"Level IV Status" exists at any date if (i) none of Level I
Status, Level II Status and Level III Status exists on such date and (ii)
the Borrower's outstanding senior unsecured long-term debt securities are
rated BBB or higher by S&P and Baa2 or higher by Moody's.
---
"Level V Status" exists at any date if (i) none of Level I Status
through Level IV Status exists on such date and (ii) the Borrower's
outstanding senior unsecured long-term debt securities are rated BBB- or
higher by S&P and Baa3 or higher by Moody's.
---
"Level VI Status" exists at any date if none of Level I Status
through Level V Status exists on such date.
"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank Offered
Rate pursuant to Section 2.03.
"Lien" means, with respect to any Property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such Property. For the purposes of any Credit Document, the Borrower or
any Subsidiary shall be deemed to own subject to a Lien any Property which
it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title
retention agreement relating to such Property.
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a Money
Market Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or Money
Market Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.07(c).
"Margin Stock" means "margin stock" within the meaning of
Regulations U and X.
"Material Debt" means (i) any Public Debt and (ii) any Debt of
the Borrower and/or one or more of its Subsidiaries, arising in one or more
related or unrelated transactions after the date hereof, in an aggregate
principal amount exceeding $25,000,000.
"Material Plan" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $80,000,000.
"Material Subsidiary" means (i) The Torrington Company, a
Delaware corporation, Schlage Lock Company, a California corporation, and
their respective successors and assigns and (ii) at any date, any other
Restricted Subsidiary which on such date is encompassed by the definition
of a "significant subsidiary"
<PAGE>
- 13 -
contained as of the date hereof in Regulation S-X of the Commission.
"Merger" means the merger of the Purchaser with and into Clark in
accordance with the terms of the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of Merger dated
as of April 9, 1995 between the Borrower, the Purchaser and Clark providing
for the Merger, together with such amendments, modifications and
supplements prior to the Merger Effective Date as are satisfactory in form
and substance to the Required Banks in their reasonable determination.
"Merger Documents" means all agreements and instruments,
including the Merger Agreement, the certificate of Merger and any other
document or information sent by the Borrower or any of its Subsidiaries to
Clark's stockholders generally or filed by the Borrower or any of its
Subsidiaries with the Commission under the Exchange Act in respect of the
Merger, effecting, evidencing or governing the Merger, in the form
delivered to the Banks pursuant to Section 3.01(a)(vi) and as the same may
be subsequently amended, modified or supplemented in accordance with the
provisions thereof and hereof.
"Merger Effective Date" means the date on which the Merger
becomes effective.
"Money Market Absolute Rate" has the meaning set forth in Section
2.03(d).
"Money Market Absolute Rate Loan" means a loan to be made by a
Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its
Domestic Lending Office or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Money Market Lending Office by
notice to the Borrower and the Administrative Agent; provided that any Bank
--------
may from time to time by notice to the Borrower and the Administrative
Agent designate separate Money Market Lending Offices for its Money Market
LIBOR Loans, on the one hand, and its Money Market Absolute Rate Loans, on
the other hand, in which case all references herein to the Money Market
Lending Office of such Bank shall be deemed to refer to either or both of
such offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made by a Bank
pursuant to a LIBOR Auction (including such a loan bearing interest at the
Base Rate pursuant to Section 8.01(a)).
"Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
<PAGE>
- 14 -
"Money Market Margin" has the meaning set forth in Section
2.03(d).
"Money Market Quote" means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.03.
"Moody's" means Moody's Investors Service, Inc., and its
successors.
"Mortgage" means, on any specified Property, any Lien of any kind
in respect of such Property.
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made
contributions, including for these purposes any Person which ceased to be a
member of the ERISA Group during such five year period.
"Net Cash Proceeds" means the aggregate amount of all cash
received by the Borrower and/or any of its Subsidiaries directly or
indirectly in respect of any Equity Issuance or any issuance of debt
securities, net of reasonable expenses (including legal fees and brokers'
and underwriters' commissions, lenders' fees or credit enhancement fees, in
any case, paid to third parties or, to the extent not in excess of what
would have been paid to third parties on an arm's length basis, Affiliates
of the Borrower) incurred by the Borrower and/or any of its Subsidiaries in
connection therewith.
"Notes" means promissory notes of the Borrower, substantially in
the form of Exhibit A hereto, evidencing the obligation of the Borrower to
repay the Loans, and "Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined
in Section 2.03(f)).
"Offer to Purchase" means the Offer to Purchase for Cash dated
April 3, 1995 issued by the Purchaser in connection with the Acquisition,
as amended and supplemented prior to the date of this Agreement and as
further amended, supplemented and otherwise modified as provided in Section
3.01(a)(vi) or otherwise with the consent of all of the Banks.
"Parent" means, with respect to any Bank, any Person controlling
such Bank.
"Participant" has the meaning set forth in Section 9.06(b).
<PAGE>
- 15 -
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"Plan" means at any time an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject
to the minimum funding standards under Section 412 of the Internal Revenue
Code and either (i) is maintained, or contributed to, by any member of the
ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed
to, by any Person which was at such time a member of the ERISA Group for
employees of any Person which was at such time a member of the ERISA Group.
"Pledge Agreement" means the Pledge and Security Agreement dated
as of the date hereof between the Borrower and the Collateral Agent,
substantially in the form of Exhibit H hereto, as the same may be amended,
supplemented or otherwise modified from time to time.
"Prime Rate" means that rate of interest from time to time
announced by Chase at its principal office, located at 1 Chase Manhattan
Plaza, New York, New York 10081, as its prime commercial lending rate.
"Principal Property" means any manufacturing plant or other
manufacturing facility of the Borrower or any Restricted Subsidiary, as the
case may be, which plant or facility is located within the United States of
America, except any such plant or facility which the Borrower's Board of
Directors by resolution declares is not of material importance to the total
business conducted by the Borrower and its Restricted Subsidiaries.
"Property" means any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Public Debt" means (i) the Borrower's 8 1/4% Notes due 1996,
(ii) the Borrower's 9.00% Debentures due 2021 and (iii) the Borrower's
6.875% Notes due 2003.
"Purchaser" means CEC Acquisition Corp., a Delaware corporation
and a Wholly-Owned Subsidiary of the Borrower, and its successors.
<PAGE>
- 16 -
"Purchaser Guarantee" means the Purchaser Guarantee Agreement
dated as of the date hereof between the Purchaser and the Administrative
Agent, substantially in the form of Exhibit I hereto, as the same may be
amended, supplemented or otherwise modified from time to time.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "Reference Bank" means any
one of such Reference Banks.
"Refunding Borrowing" means a Committed Borrowing which, after
application of the proceeds thereof, results in no net increase in the
outstanding principal amount of Committed Loans made by any Bank.
"Regulations G, T, U and X" mean, respectively, Regulations G, T,
U and X of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Required Banks" means, at any time, Banks having at least 66
2/3% of the aggregate amount of the Commitments at such time or, if the
Commitments shall have been terminated, holding at least 66 2/3% of the
aggregate unpaid principal amount of the Loans at such time.
"Restricted Subsidiary" means any Subsidiary, excluding any
Subsidiary the greater part of the operating assets of which are located or
the principal business of which is carried on outside of the United States
of America.
"Reuters Screen LIBO Page" has the meaning set forth in Section
2.07(c).
"Revolving Credit Period" means the period from and including the
Tender Offer Closing Date to but excluding the Termination Date.
"Sale and Leaseback Transaction" means an arrangement with any
Person for the leasing by the Borrower or a Restricted Subsidiary (except
for temporary leases for a term of not more than three years and, in the
case of a Restricted Subsidiary, a lease to the Borrower or another
Restricted Subsidiary) of any Principal Property (whether now owned or
hereafter acquired), which Principal Property has been or is to be sold or
transferred by the Borrower or such Restricted Subsidiary to such Person.
"S&P" means Standard & Poor's Ratings Group, and its successors.
"Subsidiary" means any corporation or other entity (a) of which
securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or
<PAGE>
- 17 -
other persons performing similar functions are at the time directly or
indirectly owned by the Borrower or (b) whose financial results are
consolidated with those of the Borrower in its consolidated financial
statements. "Wholly-Owned Subsidiary" means any such corporation or other
-----------------------
entity of which all of the equity securities or other ownership interests
(other than, in the case of a corporation, directors' qualifying shares)
are so owned or controlled.
"Tender Offer" means the offer by the Purchaser to purchase for
cash all of the outstanding Clark Shares pursuant to the Tender Offer
Documents.
"Tender Offer Closing Date" means the date of the initial
purchase by the Purchaser of Clark Shares tendered pursuant to the Tender
Offer.
"Tender Offer Documents" means the Offer to Purchase and the
Tender Offer Statement on Schedule 14D-1 filed by the Purchaser with the
Commission and all amendments, exhibits and schedules thereto and related
documents distributed by the Borrower or any of its Subsidiaries to the
shareholders of Clark or filed by the Borrower or any of its Subsidiaries
with the Commission in connection with the Acquisition, in each case prior
to the date of this Agreement, including any Merger Documents delivered to
the Banks prior to the date of this Agreement.
"Tender Offer Expiration Date" means May 5, 1995, unless and
until the Purchaser shall have extended the period of time for which the
Tender Offer is open, in which event "Tender Offer Expiration Date" shall
mean the latest date on which the Tender Offer, as so extended by the
Purchaser, shall expire.
"Termination Date" means the fifth Anniversary.
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all accrued
benefits under such Plan exceeds (ii) the fair market value of all Plan
assets allocable to such benefits (excluding any accrued but unpaid
contributions), all determined as of the then most recent valuation date
for such Plan, but only to the extent that such excess represents a
potential liability of a current member of the ERISA Group to the PBGC
under Title IV of ERISA.
"Wholly-Owned Subsidiary" has the meaning set forth in the
definition of the term "Subsidiary".
SECTION 1.02. Accounting Terms and Determinations. (a) Except
-----------------------------------
as otherwise expressly provided herein, all accounting terms used herein
shall be interpreted, and all financial statements and certificates and
reports as to financial
<PAGE>
- 18 -
matters required to be delivered to the Banks hereunder shall (unless
otherwise disclosed to the Banks in writing at the time of delivery thereof
in the manner described in subsection (b) of this Section 1.02) be
prepared, in accordance with generally accepted accounting principles
applied on a basis consistent with those used in the preparation of the
latest financial statements furnished to the Banks hereunder (which, prior
to the delivery of the first financial statements under Section 5.01, means
the audited financial statements as at December 31, 1994 referred to in
Section 4.04(a)). All calculations made for the purposes of determining
compliance with this Agreement shall (except as otherwise expressly
provided herein) be made by application of generally accepted accounting
principles applied on a basis consistent with those used in the preparation
of the latest annual or quarterly financial statements furnished to the
Banks pursuant to Section 5.01 (or, prior to the delivery of the first
financial statements under Section 4.04(a), used in the preparation of the
audited financial statements as at December 31, 1994 referred to in
Section 4.04(a)) unless (i) the Borrower shall have objected to determining
such compliance on such basis at the time of delivery of such financial
statements or (ii) the Required Banks shall so object in writing within 30
days after delivery of such financial statements, in either of which events
such calculations shall be made on a basis consistent with those used in
the preparation of the latest financial statements as to which such
objection shall not have been made (which, if objection is made in respect
of the first financial statements delivered under Section 5.01, means the
financial statements referred to in Section 4.04(a)).
(b) The Borrower shall deliver to the Banks at the same time as
the delivery of any annual or quarterly financial statement under
Section 5.01 hereof (i) to the extent not disclosed in the notes to such
statement, a description in reasonable detail of any material variation
between the application of accounting principles employed in the
preparation of such statement and the application of accounting principles
employed in the preparation of the next preceding annual or quarterly
financial statements as to which no objection has been made in accordance
with the last sentence of subsection (a) of this Section 1.02 and
(ii) reasonable estimates of the effect of such variation on the
calculations necessary to determine compliance with the provisions of
Sections 5.05 and 5.06 hereof.
SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes
-------------------
the aggregation of Loans of one or more Banks to be made to the Borrower
pursuant to Article II on a single date and for a single Interest Period.
Borrowings are classified for purposes of this Agreement either by
reference to the pricing of Loans comprising such Borrowing (e.q., a
"Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans) or
by reference to the provisions of Article II under which
<PAGE>
- 19 -
participation therein is determined (i.e., a "Committed Borrowing" is a
Borrowing under Section 2.01 in which all Banks participate in proportion
to their Commitments, while a "Money Market Borrowing" is a Borrowing under
Section 2.03 in which the Bank participants are determined on the basis of
their bids in accordance therewith).
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. During the Revolving Credit
-------------------
Period each Bank severally agrees, on the terms and conditions set forth in
this Agreement, to make loans to the Borrower pursuant to this Section from
time to time in amounts such that the aggregate principal amount of
Committed Loans by such Bank at any one time outstanding shall not exceed
the amount of its Commitment; provided that in no event shall the aggregate
--------
principal amount of all Committed Loans, together with the aggregate
principal amount of all Money Market Loans, at any one time outstanding
exceed the aggregate amount of the Commitments in effect at such time.
Each Borrowing under this Section shall be in an aggregate principal amount
of $10,000,000 or any larger multiple of $5,000,000 (or any larger multiple
of $1,000,000 in the case of a Base Rate Borrowing) (except that any such
Borrowing may be in the aggregate amount available in accordance with
Section 3.02(b)) and shall be made from the several Banks ratably in
proportion to their respective Commitments. Within the foregoing limits,
the Borrower may borrow under this Section, repay, or to the extent
permitted by Section 2.11, prepay Loans and reborrow at any time during the
Revolving Credit Period under this Section.
SECTION 2.02. Notice of Committed Borrowings. The Borrower shall
------------------------------
give the Administrative Agent notice (a "Notice of Committed Borrowing")
not later than 10:00 A.M. (New York City time) on (x) the date of each Base
Rate Borrowing, (y) the second Domestic Business Day before each CD
Borrowing and (z) the third Euro-Dollar Business Day before each
Euro-Dollar Borrowing (or, in the case of any Euro-Dollar Borrowing on the
Closing Date only, one Business Day before such Euro-Dollar Borrowing),
specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
<PAGE>
- 20 -
(c) whether the Loans comprising such Borrowing are to be CD
Loans, Base Rate Loans or Euro-Dollar Loans, and
(d) in the case of a Fixed Rate Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
SECTION 2.03. Money Market Borrowings.
-----------------------
(a) The Money Market Option. In addition to Committed
-----------------------
Borrowings pursuant to Section 2.01, the Borrower may, as set forth in this
Section, request the Banks during the Revolving Credit Period to make
offers to make Money Market Loans to the Borrower; provided that the
--------
aggregate principal amount of all Money Market Loans, together with the
aggregate principal amount of all Committed Loans, at any one time
outstanding shall not exceed the aggregate amount of the Commitments in
effect at such time. The Banks may, but shall have no obligation to, make
such offers and the Borrower may, but shall have no obligation to, accept
any such offers in the manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to
--------------------------
request offers to make Money Market Loans under this Section, it shall
transmit to the Administrative Agent by telex or facsimile transmission a
Money Market Quote Request substantially in the form of Exhibit B hereto so
as to be received no later than 10:00 A.M. (New York City time) on (x) the
fourth Euro-Dollar Business Day prior to the date of Borrowing proposed
therein, in the case of a LIBOR Auction or (y) the Domestic Business Day
next preceding the date of Borrowing proposed therein, in the case of an
Absolute Rate Auction (or, in either case, such other time or date as the
Borrower and the Administrative Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for
which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar
Business Day in the case of a LIBOR Auction or a Domestic Business Day
in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be
$10,000,000 or a larger multiple of $5,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth a
Money Market Margin or a Money Market Absolute Rate.
<PAGE>
- 21 -
The Borrower may request offers to make Money Market Loans for more than
one Interest Period in a single Money Market Quote Request. No Money
Market Quote Request shall be given within five Euro-Dollar Business Days
(or such other number of days as the Borrower and the Administrative Agent
may agree) of any other Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt
----------------------------------
of a Money Market Quote Request, the Administrative Agent shall send to the
Banks by telex or facsimile transmission an Invitation for Money Market
Quotes substantially in the form of Exhibit C hereto, which shall
constitute an invitation by the Borrower to each Bank to submit Money
Market Quotes offering to make the Money Market Loans to which such Money
Market Quote Request relates in accordance with this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each
----------------------------------------------
Bank may submit a Money Market Quote containing an offer or offers to make
Money Market Loans in response to any Invitation for Money Market Quotes.
Each Money Market Quote must comply with the requirements of this
subsection (d) and must be submitted to the Administrative Agent by telex
or facsimile transmission at its offices specified in or pursuant to
Section 9.01 not later than (x) 2:00 P.M. (New York City time) on the
fourth Euro-Dollar Business Day prior to the proposed date of Borrowing, in
the case of a LIBOR Auction or (y) 9:00 A.M. (New York City time) on the
proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Administrative
Agent shall have mutually agreed and shall have notified to the Banks not
later than the date of the Money Market Quote Request for the first LIBOR
Auction or Absolute Rate Auction for which such change is to be effective);
provided that Money Market Quotes submitted by the Administrative Agent (or
- --------
any affiliate of the Administrative Agent) in the capacity of a Bank may be
submitted, and may only be submitted, if the Administrative Agent or such
affiliate notifies the Borrower of the terms of the offer or offers
contained therein not later than 15 minutes prior to the deadline for the
other Banks. Subject to Articles III and VI, any Money Market Quote so
made shall be irrevocable except with the written consent of the
Administrative Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form
of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which each
such offer is being made, which principal amount (w) may be greater
than or less than the Commitment of the quoting Bank, (x) must be
$5,000,000 or a larger multiple of
<PAGE>
- 22 -
$1,000,000, (y) may not exceed the principal amount of Money Market
Loans for which offers were requested and (z) may be subject to an
aggregate limitation as to the principal amount of Money Market Loans
for which offers being made by such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above or below
the applicable London Interbank Offered Rate (the "Money Market
Margin") offered for each such Money Market Loan, expressed as a
percentage (specified to the nearest 1/10,000th of 1%) to be added to
or subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (specified to the nearest 1/10,000th of 1%) (the
"Money Market Absolute Rate") offered for each such Money Market Loan,
and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the
quoting Bank with respect to each Interest Period specified in the related
Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D hereto or
does not specify all of the information required by subsection
(d)(ii);
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set forth
in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Administrative Agent shall promptly
------------------
notify the Borrower of the terms (x) of any Money Market Quote submitted by
a Bank that is in accordance with subsection (d) and (y) of any Money
Market Quote that amends, modifies or is otherwise inconsistent with a
previous Money Market Quote submitted by such Bank with respect to the same
Money Market Quote Request. Any such subsequent Money Market Quote shall
be disregarded by the Administrative Agent unless such subsequent Money
Market Quote is submitted solely to correct a manifest error in such former
Money Market Quote. The Administrative Agent's notice to the Borrower
shall specify (A) the aggregate principal amount of Money Market Loans for
which
<PAGE>
- 23 -
offers have been received for each Interest Period specified in the related
Money Market Quote Request, (B) the respective principal amounts and Money
Market Margins or Money Market Absolute Rates, as the case may be, so
offered and (C) if applicable, limitations on the aggregate principal
amount of Money Market Loans for which offers in any single Money Market
Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:00
---------------------------------
A.M. (New York City time) on (x) the third Euro-Dollar Business Day prior
to the proposed date of Borrowing, in the case of a LIBOR Auction or (y)
the proposed date of Borrowing, in the case of an Absolute Rate Auction
(or, in either case, such other time or date as the Borrower and the
Administrative Agent shall have mutually agreed and shall have notified to
the Banks not later than the date of the Money Market Quote Request for the
first LIBOR Auction or Absolute Rate Auction for which such change is to be
effective), the Borrower shall notify the Administrative Agent of its
acceptance or non-acceptance of the offers so notified to it pursuant to
subsection (e). In the case of acceptance, such notice (a "Notice of Money
Market Borrowing") shall specify the aggregate principal amount of offers
for each Interest Period that are accepted. The Borrower may accept any
Money Market Quote in whole or in part; provided that:
--------
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the
related Money Market Quote Request,
(ii) the principal amount of each Money Market Borrowing must be
$10,000,000 or a larger multiple of $5,000,000,
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the
case may be, and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(g) Allocation by Administrative Agent. If offers are made by
----------------------------------
two or more Banks with the same Money Market Margins or Money Market
Absolute Rates, as the case may be, for a greater aggregate principal
amount than the amount in respect of which such offers are accepted for the
related Interest Period, the principal amount of Money Market Loans in
respect of which such offers are accepted shall be allocated by the
Administrative Agent among such Banks as nearly as possible (in multiples
of $1,000,000, as the Administrative Agent may deem appropriate) in
proportion to the aggregate principal amounts of such offers.
Determinations by the Administrative Agent of the amounts of
<PAGE>
- 24 -
Money Market Loans shall be conclusive in the absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans.
---------------------------------
(a) Upon receipt of a Notice of Borrowing, the Administrative
Agent shall promptly notify each Bank of the contents thereof and of such
Bank's share (if any) of such Borrowing and such Notice of Borrowing shall
not thereafter be revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date
of each Borrowing, each Bank participating therein shall (except as
provided in subsection (c) of this Section) make available its share of
such Borrowing, in Federal or other funds immediately available in New York
City, to the Administrative Agent at its address specified in or pursuant
to Section 9.01. Unless the Administrative Agent determines that any
applicable condition specified in Article III has not been satisfied, the
Administrative Agent will make the funds so received from the Banks
available in like funds to the Borrower at the Administrative Agent's
aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank,
such Bank shall apply the proceeds of its new Loan to make such repayment
and only an amount equal to the difference (if any) between the amount
being borrowed and the amount being repaid shall be made available by such
Bank to the Administrative Agent as provided in subsection (b), or remitted
by the Borrower to the Administrative Agent as provided in Section 2.12, as
the case may be.
(d) Unless the Administrative Agent shall have received notice
from a Bank prior to the date of any Borrowing that such Bank will not make
available to the Administrative Agent such Bank's share of such Borrowing,
the Administrative Agent may assume that such Bank has made such share
available to the Administrative Agent on the date of such Borrowing in
accordance with subsections (b) and (c) of this Section 2.04 and the
Administrative Agent may, in reliance upon such assumption, make available
to the Borrower on such date a corresponding amount. If and to the extent
that such Bank shall not have so made such share available to the
Administrative Agent, such Bank and the Borrower severally agree to repay
to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is repaid to the
Administrative Agent, at a rate per annum equal to the Federal Funds Rate.
If such Bank shall repay to the Administrative Agent such corresponding
amount, such amount so
<PAGE>
- 25 -
repaid shall constitute such Bank's Loan included in such Borrowing for
purposes of this Agreement.
SECTION 2.05. Notes. (a) The Loans of each Bank shall be
-----
evidenced by a single Note payable to the order of such Bank for the
account of its Applicable Lending Office in an amount equal to the
aggregate unpaid principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the
Administrative Agent, request that its Loans of a particular type be
evidenced by a separate Note in an amount equal to the aggregate unpaid
principal amount of such Loans. Each such Note shall be in substantially
the form of Exhibit A hereto with appropriate modifications to reflect the
fact that it evidences solely Loans of the relevant type. Each reference
in the Credit Documents to the "Note" of such Bank shall be deemed to refer
to and include any or all of such Notes, as the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section
3.01(b), the Administrative Agent shall forward such Note to such Bank.
Each Bank shall record the date, amount, type and maturity of each Loan
made by it and the date and amount of each payment of principal made by the
Borrower with respect thereto, and may, if such Bank so elects in
connection with any transfer or enforcement of its Note, endorse on the
schedule forming a part thereof appropriate notations to evidence the
foregoing information with respect to each such Loan then outstanding;
provided that the failure of any Bank to make any such recordation or
- --------
endorsement shall not affect the obligations of the Borrower hereunder or
under the Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its Note and to attach to and make a part of its
Note a continuation of any such schedule as and when required.
SECTION 2.06. Maturity of Loans. Each Loan included in any
-----------------
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable to such
Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall
--------------
bear interest on the outstanding principal amount thereof, for each day
from the date such Loan is made until it becomes due, at a rate per annum
equal to the Base Rate for such day. Such interest shall be payable for
each Interest Period on the last day thereof. Any overdue principal of or
interest on any Base Rate Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 2% plus the
rate otherwise applicable to Base Rate Loans for such day.
<PAGE>
- 26 -
(b) Each CD Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the sum of the CD Margin plus the applicable
Adjusted CD Rate; provided that if any CD Loan or any portion thereof
--------
shall, as a result of clause (2)(b) of the definition of Interest Period,
have an Interest Period of less than 30 days, such portion shall bear
interest during such Interest Period at the rate applicable to Base Rate
Loans during such period. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than
90 days, at intervals of 90 days after the first day thereof. Any overdue
principal of or interest on any CD Loan shall bear interest, payable on
demand, for each day from and including the date payment thereof was due to
but excluding the date of actual payment, at a rate per annum equal to the
sum of 2% plus the rate applicable to Base Rate Loans for such day
(provided that if the amount so overdue is principal of a CD Loan and the
--------
due date thereof is a day other than the last day of the Interest Period
therefor, the rate per annum shall be, for the period from and including
such due date to but excluding the last day of such Interest Period, the
sum of 2% plus the sum of the CD Margin plus the Adjusted CD Rate
applicable to such Loan).
The "Adjusted CD Rate" applicable to any Interest Period means a
rate per annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
____________
* The amount in brackets being rounded upward, if necessary, to the next
higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate
of interest determined by the Administrative Agent to be the rate on the
first day of such Interest Period set forth in H.15(519) published by the
Federal Reserve Board for that day opposite the period (the "Relevant
Period") approximately equal to such Interest Period under the caption "CDs
(Secondary Market)"; provided that if on any such day such rate is not yet
--------
published in H.15(519) or if H.15(519) does not show rates for the Relevant
Period, the "CD Base Rate" for such Interest period shall be the rate of
interest determined by the Administrative
<PAGE>
- 27 -
Agent to be the average (rounded upward, if necessary, to the next higher
1/100 of 1%) of the prevailing rates per annum bid at 10:00 A.M. (New York
City time) (or as soon thereafter as practicable) on the first day of such
Interest Period by two or more New York certificate of deposit dealers of
recognized standing for the purchase at face value from each CD Reference
Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of such CD Reference Bank to which such
Interest Period applies and having a maturity comparable to such Interest
Period; provided that if such bids from such dealers are not available to
--------
such CD Reference Bank, such Bank shall notify the Administrative Agent of
a reasonable equivalent rate determined on the basis of another source or
sources selected by it.
"Domestic Reserve Percentage" means, for any day, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation
any basic, supplemental or emergency reserves) for a member bank of the
Federal Reserve System in New York City with deposits exceeding five
billion Dollars in respect of new non-personal time deposits in Dollars in
New York City having a maturity comparable to the related Interest Period
and in an amount of $100,000 or more. The Adjusted CD Rate shall be
adjusted automatically on and as of the effective date of any change in the
Domestic Reserve Percentage. The Banks acknowledge and agree that the
Domestic Reserve Percentage on the date hereof is 0%.
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A"
(or a comparable successor assessment risk classification) within the
meaning of 12 C.F.R. 327.3(e) (or any successor provision) to the Federal
Deposit Insurance Corporation (or any successor) for such Corporation's (or
such successor's) insuring time deposits at offices of such institution in
the United States. The Adjusted CD Rate shall be adjusted automatically on
and as of the effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the sum of the Euro-Dollar Margin plus the
applicable Adjusted London Interbank Offered Rate. Such interest shall be
payable for each Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of three months
after the first day thereof.
<PAGE>
- 28 -
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained
(rounded upward, if necessary, to the next higher 1/100 of 1%) by dividing
(i) the applicable London Interbank Offered Rate by (ii) 1.00 minus the
Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest
Period means the arithmetic mean, as calculated by the Administrative
Agent, of the respective rates per annum (rounded upward, if necessary, to
the next higher 1/16 of 1%) of the offered rates (if there are at least two
such rates on the Reuters Screen LIBO Page) for deposits in Dollars for a
period (the "Relevant Period") approximately equal to such Interest Period
that appears on the Reuters Screen LIBO Page at approximately 11:00 A.M.,
London time, on the Euro-Dollar Business Day that is two Euro-Dollar
Business Days before the first day of such Interest Period; provided that
--------
if fewer than two such rates appear for the Relevant Period or if the
Reuters Screen LIBO Page is not publicly available, the "London Interbank
Offered Rate" applicable to such Interest Period shall be the arithmetic
mean, as calculated by the Administrative Agent, of the respective rates
per annum (rounded upward, if necessary, to the next higher 1/16 of 1%)
quoted at approximately 11:00 A.M. (London time) by the principal London
branch of each of the Euro-Dollar Reference Banks two Euro-Dollar Business
Days before the first day of such Interest Period for the offering to
leading banks in the London interbank market of Dollar deposits in
immediately available funds in an amount comparable to the principal amount
of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to which such
Interest Period is to apply and for a period of time comparable to such
Interest Period.
The "Reuters Screen LIBO Page" means the display designated as
Page "LIBO" on the Reuters Monitor Money Rates Service or such other page
as may replace the LIBO page on that service for the purpose of displaying
London interbank offered rates of major banks.
"Euro-Dollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member
bank of the Federal Reserve System in New York City with deposits exceeding
five billion Dollars in respect of "Eurocurrency liabilities" (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is determined or
any category of extensions of credit or other assets which includes loans
by a non-United States office of any Bank to United States residents). The
Adjusted London Interbank Offered Rate shall be adjusted automatically on
and as of the
<PAGE>
- 29 -
effective date of any change in the Euro-Dollar Reserve Percentage. The
Banks acknowledge and agree that the Euro-Dollar Reserve Percentage on the
date hereof is 0%.
(d) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day from and including the
date payment thereof was due to but excluding the date of actual payment,
at a rate per annum equal to the sum of 2% plus the rate applicable to Base
Rate Loans for such day (provided that if the amount so overdue is
--------
principal of a Euro-Dollar Loan and the due date thereof is a day other
than the last day of the Interest Period therefor, the rate per annum shall
be, for the period from and including such due date to but excluding the
last day of such Interest Period, the sum of 2% plus the sum of the Euro-
Dollar Margin plus the Adjusted London Interbank Offered Rate applicable to
such Loan).
(e) Subject to Section 8.01(a), each Money Market LIBOR Loan
shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the sum of
the London Interbank Offered Rate for such Interest Period (determined in
accordance with Section 2.07(c) as if the related Money Market LIBOR
Borrowing were a Committed Euro-Dollar Borrowing) plus (or minus) the Money
Market Margin quoted by the Bank making such Loan in accordance with
Section 2.03. Each Money Market Absolute Rate Loan shall bear interest on
the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the Money Market Absolute
Rate quoted by the Bank making such Loan in accordance with Section 2.03.
Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than three months, at
intervals of three months after the first day thereof. Any overdue
principal of or interest on any Money Market Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the
sum of 2% plus the Prime Rate for such day.
(f) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give
prompt notice to the Borrower and the participating Banks of each rate of
interest so determined, and its determination thereof shall be conclusive
in the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to
furnish quotations to the Administrative Agent as contemplated by this
Section. If any Reference Bank does not furnish a timely quotation, the
Administrative Agent shall determine the relevant interest rate on the
basis of the quotation or quotations furnished by the remaining Reference
Bank or Banks or, if none of such quotations is available on a timely
basis, the provisions of Section 8.01 shall apply.
<PAGE>
- 30 -
(h) Each of "CD Margin", "Euro-Dollar Margin" and "Facility Fee
Rate" means, for any day, the percentage set forth below in the row
opposite such term and in the column corresponding to the "Level" status in
existence on such day:
Level Level Level Level Level Level
I II III IV V VI
Status Status Status Status Status Status
CD Margin .295% .325% .365% .40% .45% .475%
Euro-Dollar .17% .20% .24% .275% .325% .35%
Margin
Facility .08% .10% .135% .17% .20% .275%
Fee Rate
provided that each of "CD Margin", "Euro-Dollar Margin" and "Facility Fee
- --------
Rate" shall be:
(i) at Level VI Status to but not including the Facility
Reduction Date; and
(ii) from and after the Facility Reduction Date, determined under
the foregoing pricing grid; provided that, if on the Facility
--------
Reduction Date either Moody's or S&P has not yet announced revised
senior unsecured long-term debt ratings of the Borrower from those in
effect, or reaffirmed senior unsecured long-term debt ratings of the
Borrower as in effect, prior to the Offer to Purchase, then pricing
will be at Level IV Status until both Moody's and S&P have first so
announced after the Facility Reduction Date, whereupon the pricing
grid will govern pricing; provided further that if the rating level as
first so announced by Moody's and S&P after the Facility Reduction
Date is lower than Level IV Status (for which purpose the term "lower"
shall be determined on the basis that the highest rating level is
Level I Status and the lowest rating level is Level VI Status), such
lower rating level will apply retroactively from the Facility
Reduction Date, and any shortfall as a result of such retroactive
rating level adjustment in interest and fees previously paid will be
paid by the Borrower to the Administrative Agent for account of the
Banks within five Euro-Dollar Business Days of such first
announcement.
SECTION 2.08. Facility Fee. The Borrower shall pay to the
------------
Administrative Agent for the account of the Banks ratably in proportion to
their Commitments a facility fee at the Facility Fee Rate. Such facility
fee shall accrue (i) from and including the date this Agreement is signed
and exchanged by all of the parties hereto to but excluding the Termination
Date (or earlier date of termination of the Commitments in their entirety),
on the daily aggregate amount of the Commitments (whether used or unused)
and (ii) from and including the Termination Date or such
<PAGE>
- 31 -
earlier date of termination to but excluding the date the Loans shall be
repaid in their entirety, on the daily aggregate outstanding principal
amount of the Loans. Accrued fees under this Section shall be payable
quarterly in arrears on each March 31, June 30, September 30 and December
31, and upon the date of termination of the Commitments in their entirety
(and, if later, the date the Loans shall be repaid in their entirety).
SECTION 2.09. Optional Termination or Reduction of Commitments.
------------------------------------------------
During the Revolving Credit Period, the Borrower may, upon at least three
Domestic Business Days' notice to the Administrative Agent, (i) terminate
the Commitments at any time, if no Loans are outstanding at such time or
(ii) ratably reduce from time to time by an aggregate amount of $25,000,000
or a larger multiple of $5,000,000, the aggregate amount of the Commitments
in excess of the aggregate outstanding principal amount of the Loans.
SECTION 2.10. Mandatory Reduction or Termination of Commitments;
--------------------------------------------------
Mandatory Prepayments. (a) Unless theretofore already so reduced, the
- ---------------------
Commitments shall reduce to $1,000,000,000 on the Initial Commitment
Reduction Date, and any Loans then outstanding in excess of such amount
(together with accrued interest thereon) shall be due and payable on such
date. Thereafter, the Commitments shall reduce annually on each
Anniversary starting with the second Anniversary as follows: by
$100,000,000 on the second Anniversary, by $200,000,000 on the third
Anniversary and by $300,000,000 on the fourth Anniversary, and any Loans
then outstanding in excess of the Commitments as so reduced (together with
accrued interest thereon) shall be due and payable on each such date (each
such date, together with the Initial Commitment Reduction Date, being
referred to herein as a "Commitment Reduction Date").
-------------------------
(b) The Commitments shall terminate on the Termination Date, and
any Loans then outstanding (together with accrued interest thereon) shall
be due and payable on such date.
(c) On the date of (1) any issuance by the Borrower or any
Subsidiary for cash of any Debt maturing on or after the Termination Date
(other than (i) Debt the proceeds of which refinance (w) Debt existing on
the date hereof of foreign Subsidiaries, (x) Debt of foreign Subsidiaries
owing to the Borrower or any of its Subsidiaries, (y) Capital Lease
Obligations of the Borrower or any of its Subsidiaries or (z) the
Borrower's $75,000,000 8 1/4% Notes due 1996, (ii) Debt the proceeds of which
finance up to $25,000,000 of domestic economic development financing,
(iii) Debt of the Borrower the proceeds of which are used to refinance Debt
of Clark existing on the Merger Effective Date and (iv) any such issuance
(A) by any Subsidiary to the Borrower or any Wholly-Owned Subsidiary or (B)
by the Borrower to any Wholly-Owned Subsidiary) or (2) any Equity
<PAGE>
- 32 -
Issuance, the Commitments shall be reduced on such date by an amount equal
to the Net Cash Proceeds thereof, and any Loans then outstanding in excess
of the Commitments as so reduced (together with accrued interest thereon)
shall be due and payable on such date.
(d) If the Merger Effective Date shall not have occurred on or
before the first Anniversary, then, unless theretofore already so reduced,
the Commitments shall, on the first Anniversary reduce to $500,000,000, and
any Loans then outstanding in excess of such amount (together with accrued
interest thereon) shall be due and payable on such date.
(e) Prepayments of Loans described in Section 2.10(c) or 2.10(d)
shall be effected first, to outstanding Base Rate Loans and Money Market
LIBOR Loans bearing interest at the Base Rate pursuant to Section 8.01(a);
second, if none of the foregoing Loans are then outstanding, to outstanding
Fixed Rate Loans (other than Money Market Loans) beginning with such Loans
having the shortest remaining Interest Period; and finally, if none of the
foregoing Loans are then outstanding, to outstanding Money Market Loans
beginning with such Loans having the shortest remaining Interest Period.
Notwithstanding the foregoing, in the event that any such prepayment of
Fixed Rate Loans would result in the Borrower becoming obligated to pay any
amounts to the Banks under Section 2.13 hereof, the Borrower may elect to
deposit such amounts to be prepaid in the Collateral Account (as defined in
the Pledge Agreement), or in a comparable collateral account in the event
that the Pledge Agreement has been terminated, to be held until the last
day(s) of the Interest Period(s) for such Fixed Rate Loans, whereupon such
amounts shall be applied to the repayment of such Fixed Rate Loans, with
any amounts so deposited remaining after such application being paid to the
Borrower.
(f) The Borrower shall not use the proceeds of Other Loans (as
defined in the Pledge Agreement) under the Other Credit Agreement (as
defined in the Pledge Agreement) to make any prepayment required by the
first sentence of paragraph (a), or by paragraph (d), of this Section 2.10.
(g) Until the Facility Reduction Date, all voluntary and
mandatory Commitment reductions will reduce the amount by which the
Commitments are scheduled to be reduced on the Initial Commitment Reduction
Date by the same amount. Thereafter, the amount of any voluntary or
mandatory Commitment reduction will reduce the remaining regularly
scheduled reductions in an aggregate amount equal to the amount of any such
Commitment reduction, such aggregate reduction to be applied ratably to
such remaining reductions.
<PAGE>
- 33 -
(h) Each mandatory reduction of the Commitments under this
Section 2.10 shall be applied to the respective Commitments of the Banks
pro rata according to the amounts of their respective Commitments.
SECTION 2.11. Optional Prepayments. (a) The Borrower may (i)
--------------------
upon at least one Domestic Business Day's notice to the Administrative
Agent, prepay any Base Rate Borrowing (or any Money Market Borrowing
bearing interest at the Base Rate pursuant to Section 8.01(a)) or, subject
to Section 2.13, any CD Borrowing and (ii) upon at least three Euro-Dollar
Business Days' notice to the Administrative Agent, subject to Section 2.13,
prepay any Euro-Dollar Borrowing, in whole at any time, or from time to
time in part in an aggregate amount of $25,000,000 or a larger multiple of
$5,000,000, by paying the principal amount to be prepaid together with
accrued interest thereon to the date of prepayment. Each such optional
prepayment shall be applied to prepay ratably the Loans of the several
Banks included in such Borrowing.
(b) Except as provided in clause (i) of Section 2.11(a), the
Borrower may not prepay all or any portion of the principal amount of any
Money Market Loan prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this
Section, the Administrative Agent shall promptly notify each Bank of the
contents thereof and of such Bank's ratable share (if any) of such
prepayment and such notice shall not thereafter be revocable by the
Borrower.
SECTION 2.12. General Provisions as to Payments. (a) The
---------------------------------
Borrower shall make each payment of principal of, and interest on, the
Loans and of fees and other amounts payable hereunder, not later than 12:00
Noon (New York City time) on the date when due, in Federal or other funds
immediately available in New York City, to the Administrative Agent at its
address referred to in Section 9.01. The Administrative Agent will
promptly distribute to each Bank its ratable share of each such payment
received by the Administrative Agent for the account of the Banks.
Whenever any payment of principal of, or interest on, the Domestic Loans,
of other amounts payable with respect thereto or of fees shall be due on a
day which is not a Domestic Business Day, the date for payment thereof
shall be extended to the next succeeding Domestic Business Day. Whenever
any payment of principal of, or interest on, the Euro-Dollar Loans or of
other amounts payable with respect thereto shall be due on a day which is
not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case the
date for payment thereof shall be the next preceding Euro-Dollar Business
Day. Whenever any payment of
<PAGE>
- 34 -
principal of, or interest on, the Money Market Loans or of other amounts
payable with respect thereto shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to
the next succeeding Euro-Dollar Business Day. If the date for any payment
of principal is extended by operation of law or otherwise, interest thereon
shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Banks hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each Bank
on such due date an amount equal to the amount then due such Bank. If and
to the extent that the Borrower shall not have so made such payment, each
Bank shall repay to the Administrative Agent forthwith on demand such
amount distributed to such Bank together with interest thereon, for each
day from the date such amount is distributed to such Bank until the date
such Bank repays such amount to the Administrative Agent, at the Federal
Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower makes any payment
--------------
of principal with respect to any Fixed Rate Loan (pursuant to Section 2.11,
Article VI or VIII or otherwise, but not pursuant to Section 8.02) on any
day other than the last day of the Interest Period applicable thereto, if
the Borrower fails to borrow any Fixed Rate Loans after notice has been
given to any Bank in accordance with Section 2.04(a) or if the Borrower
fails to prepay any Fixed Rate Loans after notice has been given to any
Bank in accordance with Section 2.11(c), the Borrower shall reimburse each
Bank within 30 days after demand for any resulting loss or expense incurred
by it (or by an existing or prospective Participant in the related Loan),
including (without limitation) any loss incurred in obtaining, liquidating
or employing deposits from third parties, but excluding loss of margin for
the period after any such payment or failure to borrow or prepay, provided
--------
that such Bank shall have delivered to the Borrower a certificate setting
forth the calculation of the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.
SECTION 2.14. Computation of Interest and Fees. Interest based
--------------------------------
on the Prime Rate hereunder shall be computed on the basis of a year of 365
days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day). All other
interest and fees shall be computed on the basis of a year of 360 days and
paid for the actual number of days elapsed (including the first day but
excluding the last day).
<PAGE>
- 35 -
SECTION 2.15. Withholding Tax Exemption. On or prior to the
-------------------------
Closing Date, each Bank that is not incorporated under the laws of the
United States of America or a state thereof agrees that it will deliver to
each of the Borrower and the Administrative Agent two duly completed copies
of United States Internal Revenue Service Form 1001 or 4224, certifying in
either case that such Bank is entitled to receive payments under the Credit
Documents without deduction or withholding of any United States Federal
income taxes. Each Bank which so delivers a Form 1001 or 4224 further
undertakes to deliver to each of the Borrower and the Administrative Agent
two additional copies of such form (or a successor form) on or before the
date that such form expires or becomes obsolete or after the occurrence of
any event requiring a change in the most recent form so delivered by it,
and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Borrower or the Administrative Agent, in each
case certifying that such Bank is entitled to receive payments under the
Credit Documents without deduction or withholding of any United States
Federal income taxes, unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which renders all such
forms inapplicable or which would prevent such Bank from duly completing
and delivering any such form with respect to it and such Bank advises the
Borrower and the Administrative Agent that it is not capable of receiving
payments without any deduction or withholding of United States Federal
income tax.
ARTICLE III
CONDITIONS
SECTION 3.01. Conditions Precedent to Initial Loans. The
-------------------------------------
obligation of any Bank to make its initial Loan hereunder is subject to:
(a) the receipt by the Administrative Agent of the following
documents, each of which shall be satisfactory to the Administrative
Agent in its reasonable determination (and to the extent specified
below, to each Bank in its reasonable determination) in form and
substance:
(i) counterparts hereof signed by each of the parties
hereto and counterparts of the Purchaser Guarantee and the Pledge
Agreement signed by each of the parties thereto (or, in the case
of any party as to which an executed counterpart shall not have
been received, receipt by the Administrative Agent in form
satisfactory to it in its reasonable determination of facsimile
or other written confirmation from such party of execution and
delivery of a counterpart hereof or
<PAGE>
- 36 -
thereof by such party), together with (x) certificates
representing all of the capital stock of the Purchaser
accompanied by an undated stock power duly executed by the
Borrower in blank and (y) Uniform Commercial Code financing
statements in the form of Annex I to Exhibit E-2 hereto duly
executed for filing in the office of the Secretary of State of
the State of New Jersey;
(ii) for account of each Bank, a duly executed Note dated on
or before the Closing Date complying with the provisions of
Section 2.05;
(iii) a certificate of the chief financial officer or the
treasurer of the Borrower stating that the representations and
warranties of the Borrower set forth in Article IV hereof (except
the representations and warranties of the Borrower set forth in
Section 4.04(b) and 4.11(b)) and Section 2 of the Pledge
Agreement and of the Purchaser set forth in Section 3 of the
Purchaser Guarantee, respectively, are true in all material
respects as of the date of such certificate, that the tendered
Clark Shares have been accepted for payment pursuant to the
Tender Offer in accordance with the terms of the Tender Offer and
that there have been accepted for payment pursuant to the Tender
Offer sufficient Clark Shares for the Purchaser to be able to
approve the consummation of the Merger without the affirmative
vote of any other shareholder(s) of Clark;
(iv) an opinion of Simpson Thacher & Bartlett, special New
York counsel to the Borrower and the Purchaser, substantially in
the form of Exhibit E-1 hereto, and an opinion of Patricia
Nachtigal, Esq., Vice President and General Counsel of the
Borrower, substantially in the form of Exhibit E-2 hereto, and in
each case covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may
reasonably request;
(v) an opinion of Milbank, Tweed, Hadley & McCloy, special
New York counsel to the Agents, substantially in the form of
Exhibit F hereto, and covering such additional matters relating
to the transactions contemplated hereby as the Required Banks may
reasonably request;
(vi) true and correct copies of the Tender Offer Documents
and any Additional Tender Offer Documents (which Additional
Tender Offer Documents, other than any Additional Tender Offer
Document consisting solely
<PAGE>
- 37 -
of an amendment extending the Tender Offer Expiration Date, shall
be satisfactory to the Administrative Agent in its reasonable
determination); provided that any Additional Tender Offer
--------
Document amending the terms or conditions of the Tender Offer in
any material respect, other than any amendment consisting solely
of an extension of the Tender Offer Expiration Date, shall be
satisfactory to each of the Banks in their reasonable
determination); and
(vii) all documents it may reasonably request relating to the
existence of the Borrower and the Purchaser, the corporate
authority for and the validity of the Credit Documents, and any
other matters relevant thereto, all in form and substance
satisfactory to the Administrative Agent in its reasonable
determination; and
(b) the conditions precedent that:
(i) such Loan is made on or before August 31, 1995;
(ii) the principal conditions to the consummation of the
Tender Offer shall have been satisfied and shall not have been
waived (for which purpose conditions that must be fulfilled to
the satisfaction of the Purchaser must also be fulfilled to the
satisfaction of the Banks in their reasonable determination);
(iii) the tendered Clark Shares shall have been accepted for
payment pursuant to the Tender Offer in accordance with the terms
of the Tender Offer;
(iv) there shall have been accepted for payment pursuant to
the Tender Offer sufficient Clark Shares for the Purchaser to be
able to approve the consummation of the Merger without the
affirmative vote of any other shareholder(s) of Clark;
(v) the Banks shall be satisfied in their reasonable
determination that all necessary licenses, permits and
governmental and third-party filings, consents and approvals for
the Acquisition shall have been obtained and remain in full force
and effect;
(vi) the Tender Offer and the financing thereof shall be in
compliance with all laws and regulations (including, without
limitation, Regulation U); and
(vii) all costs, fees and expenses, and all other
compensation contemplated by the Credit Documents due
<PAGE>
- 38 -
from the Borrower to the Agents or the Banks (including, without
limitation, legal fees and expenses of Milbank, Tweed, Hadley &
McCloy, special New York counsel to the Agents) shall have been
paid by the Borrower to the extent due.
SECTION 3.02. Borrowings. The obligation of any Bank to make a
----------
Loan on the occasion of any Borrowing (including the initial Borrowing) is
subject to the satisfaction of the following conditions:
(a) receipt by the Administrative Agent of a Notice of Borrowing
as required by Section 2.02 or 2.03, as the case may be;
(b) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed
the aggregate amount of the Commitments;
(c) the fact that, immediately before and after such Borrowing,
no Default shall have occurred and be continuing;
(d) the fact that, immediately before and after such Borrowing
(except in the case of a Refunding Borrowing), no event or condition
shall have occurred and be continuing which permits any holder of any
Material Debt or any Person acting on such holder's behalf to
accelerate the maturity thereof; and
(e) except to the extent any representation or warranty
expressly relates only to an earlier date, the fact that the
representations and warranties of the Borrower and the Purchaser
contained in the Credit Documents (except the representations and
warranties of the Borrower set forth in Sections 4.04(b), 4.11(b) and,
in the case of a Refunding Borrowing, 4.05) shall be true in all
material respects on and as of the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Borrowing as to the facts
specified in clauses (b), (c), (d) and (e) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
-----------------------------
corporation duly incorporated, validly existing and
<PAGE>
- 39 -
in good standing under the laws of New Jersey, and has all corporate powers
and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
-------------------------- -----------------
Contravention. The execution, delivery and performance by the Credit
- -------------
Parties of the Credit Documents to which they are party are within the
Credit Parties' corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or
filing with, any governmental body, agency or official (except for the
filing of Uniform Commercial Code financing statements as contemplated by
Section 3.01(a)(i) hereof) and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of the certificate
of incorporation or by-laws of either Credit Party or of any Document or of
any judgment, injunction, order or decree binding upon either Credit Party
or of any limitation on borrowing or the granting of Liens imposed by any
agreement or other instrument (including, without limitation, the Indenture
(as defined in the Pledge Agreement)) binding upon either Credit Party or,
except as contemplated by the Pledge Agreement, result in the creation or
imposition of any Lien upon any revenue or Property of either Credit Party
or any Material Subsidiary pursuant to the terms of any such agreement or
other instrument.
SECTION 4.03. Binding Effect. This Agreement constitutes a
--------------
valid and binding agreement of the Borrower and the other Credit Documents,
when executed and delivered in accordance with this Agreement, will
constitute valid and binding obligations of the Credit Party that is party
thereto, in each case enforceable in accordance with their respective terms
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing.
SECTION 4.04. Financial Information.
---------------------
(a) The consolidated balance sheet of the Borrower and its
Subsidiaries as of December 31, 1994 and the related consolidated
statements of income, shareowners' equity and cash flows for the fiscal
year then ended, reported on by Price Waterhouse LLP and set forth in the
Borrower's 1994 Form 10-K, a copy of which has been delivered to each of
the Banks, fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Borrower and its
Subsidiaries as of such date and their consolidated results of operations
and cash flows for such fiscal year.
<PAGE>
- 40 -
(b) Since December 31, 1994, there has been no material adverse
change in the business, financial position or results of operations of the
Borrower and its Subsidiaries, considered as a whole.
SECTION 4.05. Litigation. There is no action, suit or
----------
proceeding pending against, or to the knowledge of the Borrower threatened
against or affecting, the Borrower or any of its Subsidiaries before any
court or arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which would
materially adversely affect the business, consolidated financial position
or consolidated results of operations of the Borrower and its Subsidiaries
or which in any manner draws into question the validity of any Credit
Document.
SECTION 4.06. Compliance with ERISA. Each current member of the
---------------------
ERISA Group has fulfilled its obligations under the minimum funding
standards of ERISA and the Internal Revenue Code with respect to each Plan
and is in compliance in all material respects with the presently applicable
provisions of ERISA and the Internal Revenue Code with respect to each
Plan. No current member of the ERISA Group has (i) sought a waiver of the
minimum funding standard under Section 412 of the Internal Revenue Code in
respect of any Plan, (ii) failed to make any contribution or payment to any
Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or
made any amendment to any Plan or Benefit Arrangement, which has resulted
or could result in the imposition of a Lien or the posting of a bond or
other security under ERISA or the Internal Revenue Code, (iii) incurred any
liability to the PBGC under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA or (iv) incurred any
liability in excess of $80,000,000 under Section 4201 of ERISA.
SECTION 4.07. Environmental Matters. In the ordinary course of
---------------------
its business, the Borrower conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties of the
Borrower and its Subsidiaries, in the course of which it identifies and
evaluates associated liabilities and costs (including, without limitation,
any capital or operating expenditures required for clean-up or closure of
properties presently or previously owned, any capital or operating
expenditures required to achieve or maintain compliance with environmental
protection standards imposed by law or as a condition of any license,
permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction
in the level of or change in the nature of operations conducted thereat and
any actual or potential liabilities to third parties, including employees,
and any related costs and expenses). On the basis of this review, the
Borrower has reasonably concluded that Environmental Laws are unlikely to
have a material adverse effect
<PAGE>
- 41 -
on the business, financial condition or results of operations of the
Borrower and its Subsidiaries considered as a whole.
SECTION 4.08. Taxes. United States Federal income tax returns
-----
of the Borrower and its Subsidiaries have been examined and closed through
the fiscal year ended December 31, 1980. The Borrower and its Subsidiaries
have filed all United States Federal income tax returns and all other
material tax returns which are required to be filed by them and have paid
all taxes shown to be due pursuant to such returns or pursuant to any
assessment received by the Borrower or any Subsidiary, except for any such
tax, assessment, charge or levy the payment of which is being contested in
good faith by the Borrower or such Subsidiary as of the date this
representation is made. The charges, accruals and reserves on the books of
the Borrower and its Subsidiaries in respect of taxes or other governmental
charges are, in the opinion of the Borrower, adequate.
SECTION 4.09. Subsidiaries. Each of the Borrower's Material
------------
Subsidiaries is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and has
all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as
now conducted.
SECTION 4.10. Not an Investment Company. The Borrower is not
-------------------------
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
SECTION 4.11. Full Disclosure. (a) All information heretofore
---------------
furnished by or on behalf of either Credit Party to any Agent or any Bank
for purposes of or in connection with any Document or any transaction
contemplated thereby is, and any such information hereafter furnished by or
on behalf of either Credit Party to any Agent or any Bank will be, true and
accurate in all material respects, or (in the case of projections) based on
reasonable assumptions, on the date as of which such information is stated
or certified.
(b) The Borrower has disclosed to the Banks in writing any and
all facts which materially and adversely affect or may affect (to the
extent the Borrower can now reasonably foresee), the business, operations
or financial condition of the Borrower and its Subsidiaries, taken as a
whole, or the ability of either Credit Party to perform its obligations
under the Documents to which it is party.
SECTION 4.12. Margin Stock. Not more than 25% of the value (as
------------
determined by any reasonable method) of the Property of the Borrower that
is subject to any of the restrictions contained in Sections 5.07 or 5.08
hereof is represented by Margin Stock.
<PAGE>
- 42 -
SECTION 4.13. Offer to Purchase. (a) All necessary material
-----------------
governmental and third party approvals in connection with the purchase of
Clark Shares pursuant to the Offer to Purchase and the Merger, the
transactions contemplated thereby and otherwise referred to therein have
been or, prior to the time when required, will have been, obtained and
remain in effect, and all applicable waiting periods have or, prior to the
time when required, will have, expired without, in all such cases, any
action being taken by any competent authority which restrains, prevents,
imposes materially adverse conditions upon or unduly hinders, the
consummation of the purchase of Clark Shares pursuant to the Offer to
Purchase or the Merger. Additionally, except to the extent consented to by
the Required Banks there does not exist any judgment, order, injunction or
other restraint that could reasonably be expected to prevent or materially
delay the Borrower or the Purchaser from purchasing Clark Shares pursuant
to the Offer to Purchase, consummating the Merger, borrowing Loans or
performing its obligations under the Documents. At the time of their
dissemination to the public, the Offer to Purchase and any amendments or
supplements thereto and all documents required to be filed by the Borrower
or any of its Subsidiaries pursuant to the Exchange Act, copies of which
documents have been or will be delivered to each Bank (other than exhibits
to such filings, which have been made available to each Bank upon request
therefor), do not and will not, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(b) The consummation of the transactions contemplated by the
Tender Offer Documents and the Merger Documents is within the Credit
Parties' corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene, or constitute a default under, any
provision of applicable law or regulation binding upon, or of the
certificate of incorporation or by-laws of, either Credit Party or of any
material agreement or other material instrument binding upon either Credit
Party.
SECTION 4.14. Merger. On and as of the Merger Effective Date,
------
all material consents and approvals of, and filings and registrations with,
and all other actions in respect of, all governmental agencies, authorities
or instrumentalities required in order to make or consummate the Merger, or
otherwise required in connection with the Merger will have been obtained,
given, filed or taken and will be in full force and effect (or effective
judicial relief with respect thereto shall have been obtained). All
actions pursuant to or in furtherance of the Merger have been and will be
taken in compliance with all applicable laws, except to the extent that
failure to comply therewith could not reasonably be expected to prevent or
materially delay the consummation of the Merger.
<PAGE>
- 43 -
SECTION 4.15. Acquisition Intangibles. On the Tender Offer
-----------------------
Closing Date, Acquisition Intangibles will not exceed $1,000,000,000.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of
-----------
the Banks:
(a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower, a consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of such
fiscal year and the related consolidated statements of income,
shareowners' equity and cash flows for such fiscal year, setting forth
in each case in comparative form the figures for the previous fiscal
year, all reported on in a manner acceptable to the Commission by
Price Waterhouse LLP or other independent public accountants of
nationally recognized standing;
(b) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such quarter and as of the end of the
preceding fiscal year, condensed consolidated statements of income for
such quarter, for the portion of the Borrower's fiscal year ended at
the end of such quarter and for the corresponding portion of the
Borrower's previous fiscal year and condensed consolidated statements
of cash flows for the portion of the Borrower's fiscal year ended at
the end of such quarter and for the corresponding portion of the
Borrower's previous fiscal year, all certified (subject to normal
year-end adjustments) as to fairness of presentation, generally
accepted accounting principles and consistency by the chief financial
officer or the treasurer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of
the chief financial officer or the treasurer of the Borrower (i)
setting forth in reasonable detail the calculations required to
establish whether the Borrower was in compliance with the requirements
of Sections 5.05 to 5.07, inclusive, on the date of such financial
statements and (ii) stating whether any Default exists on
<PAGE>
- 44 -
the date of such certificate and, if any Default then exists, setting
forth the details thereof and the action which the Borrower is taking
or proposes to take with respect thereto;
(d) within five Domestic Business Days after the chief financial
officer, chief accounting officer, treasurer or chief legal officer of
the Borrower obtains knowledge of any Default, if such Default is then
continuing, a certificate of the chief financial officer or the
treasurer of the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto;
(e) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and
proxy statements so mailed;
(f) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms 10-K,
10-Q and 8-K (or their equivalents) which the Borrower shall have
filed with the Commission; provided that, unless the Administrative
--------
Agent notifies the Borrower in writing to the contrary, satisfaction
of the provisions of this subsection (f) shall satisfy as well the
provisions of subsections (a) and (b);
(g) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA, other than those events as to which
the 30 day notice requirement has been waived by the PBGC) with
respect to any Plan which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of
any such reportable event, a copy of the notice of such reportable
event given or required to be given to the PBGC; (ii) receives notice
of complete or partial withdrawal liability under Title IV of ERISA
which, together with any other such liability incurred since the date
hereof, exceeds in the aggregate $80,000,000 or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the PBGC
under Title IV of ERISA of an intent to terminate, impose liability
(other than for premiums under Section 4007 of ERISA) in respect of,
or appoint a trustee to administer any Plan, a copy of such notice;
(iv) applies for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such application;
(v) gives notice of intent to terminate any
<PAGE>
- 45 -
Plan under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of withdrawal from
any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or
(vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes
any amendment to any Plan or Benefit Arrangement, which in any event
has resulted or could result in the imposition of a Lien or the
posting of a bond or other security, a certificate of the chief
financial officer or the treasurer of the Borrower setting forth
details as to such occurrence and action, if any, which the Borrower
or applicable member of the ERISA Group is required or proposes to
take;
(h) immediately after the chief financial officer or the
treasurer of the Borrower obtains knowledge of a change or a proposed
change in the rating of the Borrower's outstanding senior unsecured
long-term debt securities by Moody's or S&P, a certificate of the
chief financial officer or the treasurer setting forth the details
thereof; and
(i) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as
the Administrative Agent, at the request of any Bank, may reasonably
request.
SECTION 5.02. Maintenance of Property; Insurance. (a) The
----------------------------------
Borrower will keep, and will cause each Subsidiary to keep, all Property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted, unless the failure to do so would not have
a material adverse effect on the business, financial position or results of
operations of the Borrower and its Subsidiaries, considered as a whole.
(b) The Borrower will maintain, and will cause each Material
Subsidiary to maintain (either in the name of the Borrower or in such
Material Subsidiary's own name) with financially sound and responsible
insurance companies, insurance on all their respective Properties in at
least such amounts and against at least such risks (and with such risk
retention) as are usually insured against in the same general area by
companies of established repute engaged in the same or a similar business.
SECTION 5.03. Conduct of Business and Maintenance of Existence.
------------------------------------------------
The Borrower will continue, and will cause each Material Subsidiary to
continue, to engage in business of the same general type as now conducted
by the Borrower and its Material Subsidiaries, and will preserve, renew and
keep in full force and effect, and will cause each Material Subsidiary to
preserve, renew and keep in full force and effect their respective
corporate existence and their respective rights, privileges and franchises
necessary or desirable in the normal
<PAGE>
- 46 -
conduct of business; provided that nothing in this Section 5.03 shall
--------
prohibit (i) the merger of a Material Subsidiary into the Borrower or the
merger or consolidation of a Material Subsidiary with or into another
Person if the corporation surviving such consolidation or merger is a
Material Subsidiary and if, in each case, after giving effect thereto, no
Default shall have occurred and be continuing, (ii) the termination of the
corporate existence of any Material Subsidiary if the Borrower in good
faith determines that such termination is in the best interest of the
Borrower and is not materially disadvantageous to the Banks or (iii) the
Merger.
SECTION 5.04. Compliance with Laws. The Borrower will comply,
--------------------
and cause each Subsidiary to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws
and ERISA and the rules and regulations thereunder) except (i) where the
necessity of compliance therewith is contested in good faith by appropriate
proceedings and (ii) where the failure so to comply would not have a
material adverse effect on the business, financial position or results of
operations of the Borrower and its Subsidiaries, considered as a whole.
SECTION 5.05. Debt. (a) Consolidated Debt will at no time
----
exceed 65% of the sum of Consolidated Debt plus Consolidated Net Worth.
For purposes of this Section any preferred stock, except for auction-rate
preferred stock the higher of the voluntary or involuntary liquidation
value of which does not in the aggregate exceed $100,000,000, of a
Subsidiary held by a Person other than the Borrower or a Wholly-Owned
Subsidiary shall be included, at the higher of its voluntary or involuntary
liquidation value, in "Consolidated Debt."
(b) At any time that the Borrower's senior unsecured long-term
debt is rated below BBB- by S&P or below Baa3 by Moody's, Debt of the
Subsidiaries (other than Debt owing to the Borrower or a Wholly-Owned
Subsidiary) shall not exceed $600,000,000 in the aggregate.
(c) Until the Facility Reduction Date, total Debt of the
Borrower, the Subsidiaries and, prior to the Tender Offer Closing Date,
Clark and its subsidiaries will not exceed $2,500,000,000.
SECTION 5.06. Minimum Consolidated Net Worth. Consolidated Net
------------------------------
Worth will at no time be less than the sum of (i) $1,100,000,000 plus (ii)
40% of cumulative quarterly consolidated net earnings since December 31,
1994 (for which purpose any quarterly consolidated net loss shall be deemed
to be consolidated net earnings of zero) plus (iii) 75% of the cumulative
additions to Consolidated Net Worth resulting from
<PAGE>
- 47 -
Equity Issuances after December 31, 1994. In calculating Consolidated Net
Worth for purposes of this Section 5.06, Consolidated Net Worth will be
adjusted to eliminate the effect of one time pre-tax non-cash special
charges to income during the period of 18 months after the Tender Offer
Closing Date of up to $50,000,000 in connection with the Acquisition or
transactions related thereto.
SECTION 5.07. Negative Pledge. (a) The Borrower will not, and
---------------
will not permit any Restricted Subsidiary to, create, assume or guarantee
any indebtedness for money borrowed secured by a Mortgage on any Principal
Property of the Borrower or a Restricted Subsidiary or on any shares or
indebtedness of a Restricted Subsidiary (whether such Principal Property,
shares or indebtedness are now owned or hereafter acquired) without, in any
such case, effectively providing concurrently with the creation, assumption
or guaranteeing of such indebtedness that the Loans and the obligations of
the Borrower hereunder and under the Notes (together, if the Borrower shall
so determine, with any other indebtedness then or thereafter existing
created, assumed or guaranteed by the Borrower or such Restricted
Subsidiary ranking equally with the Loans and the obligations of the
Borrower hereunder and under the Notes) shall be secured equally and
ratably with such indebtedness excluding, however, from the foregoing any
indebtedness secured by a Mortgage (including any extension, renewal or
replacement, or successive extensions, renewals or replacements, of any
Mortgage hereinafter specified or any indebtedness secured thereby, without
increase of the principal of such indebtedness):
(i) on Property (including, without limitation, any shares or
indebtedness) of any corporation which Mortgage exists at the time
such corporation becomes a Restricted Subsidiary; or
(ii) on Property existing at the time of acquisition thereof by
the Borrower or a Restricted Subsidiary, or to secure any indebtedness
incurred by the Borrower or a Restricted Subsidiary prior to, at the
time of, or within 180 days after the later of the acquisition, the
completion of construction (including any improvements on an existing
Property) or the commencement of commercial operation of such
Property, which indebtedness is incurred for the purpose of financing
all or any part of the purchase price thereof or construction or
improvements thereon; provided, however, that in the case of any such
-------- -------
acquisition, construction or improvement the Mortgage shall not apply
to any Property theretofore owned by the Borrower or a Restricted
Subsidiary, other than, in the case of any such construction or
improvement, any theretofore unimproved real Property on which the
Property so constructed, or the improvement, is located; or
<PAGE>
- 48 -
(iii) on Property (including, without limitation, any shares or
indebtedness) of a corporation, which Mortgage exists at the time such
corporation is merged into or consolidated with the Borrower or a
Restricted Subsidiary, or at the time of a sale, lease or other
disposition of the Properties of a corporation as an entirety or
substantially as an entirety to the Borrower or a Restricted
Subsidiary; or
(iv) on Property of a Restricted Subsidiary to secure
indebtedness of such Restricted Subsidiary to the Borrower or another
Restricted Subsidiary; or
(v) on Property of the Borrower or a Restricted Subsidiary in
favor of the United States of America or any state thereof, or any
department, agency or instrumentality or political subdivision of the
United States of America or any state thereof, to secure partial,
progress, advance or other payments pursuant to any contract or
statute or to secure any indebtedness incurred for the purpose of
financing all or any part of the purchase price or the cost of
constructing or improving the Property subject to such Mortgage; or
(vi) on Property, which Mortgage exists at the date of this
Agreement; or
(vii) with the prior written approval of the Required Banks; or
(viii) on the Collateral pursuant to the Pledge Agreement; or
(ix) on the Clark Shares prior to the Merger Effective Date;
provided, however, that any Mortgage permitted by any of the foregoing
- -------- -------
clauses (i), (ii), (iii) and (v) of this Section 5.07 shall not extend to
or cover any Property of the Borrower or such Restricted Subsidiary, as the
case may be, other than the Property specified in such clauses and
improvements thereto.
(b) Notwithstanding the provisions of subsection (a) of this
Section 5.07, the Borrower or any Restricted Subsidiary may create, assume
or guarantee secured indebtedness for money borrowed which would otherwise
be prohibited in subsection (a) in an aggregate amount which, together with
all other such indebtedness for money borrowed by the Borrower and its
Restricted Subsidiaries and the Attributable Debt in respect of Sale and
Leaseback Transactions existing at such time (other than Sale and Leaseback
Transactions the proceeds of which have been applied in accordance with
Section 5.07(d)(ii)), does not at the
<PAGE>
- 49 -
time of such creation, assumption or guaranteeing exceed 5% of Consolidated
Net Worth.
(c) Notwithstanding the foregoing provisions of this Section
5.07, the Borrower will not permit any Subsidiary (other than a Restricted
Subsidiary) to which after the date hereof the Borrower or a Restricted
Subsidiary has transferred any Property to create, assume or guarantee any
indebtedness for money borrowed secured by a Mortgage on such Property
unless such Property could have been so secured in accordance with the
provisions of this Agreement by the Borrower or such Restricted Subsidiary
making such transfer.
(d) The Borrower will not, and will not permit any Restricted
Subsidiary to, enter into any Sale and Leaseback Transaction, unless (i)
the Borrower or such Restricted Subsidiary would be entitled, pursuant to
the foregoing subsections of this Section 5.07, to incur indebtedness
secured by a Mortgage on such Principal Property without equally and
ratably securing the Loans and the obligations of the Borrower hereunder
and under the Notes, or (ii) the Borrower shall (and in any case the
Borrower covenants that it will) apply an amount equal to the fair value
(as determined by the Borrower's Board of Directors) of such Principal
Property so leased to the retirement, within 180 days of the effective date
of any such Sale and Leaseback Transaction, of indebtedness of the Borrower
for money borrowed which by its terms matures at, or may be extended or
renewed at the option of the Borrower to, a date more than 12 months after
the date of the creation of such indebtedness.
SECTION 5.08. Consolidations, Mergers and Sales of Property;
----------------------------------------------
Etc. (a) The Borrower will not (i) consolidate or merge with or into any
- ----
other Person or (ii) sell, lease or otherwise transfer, directly or
indirectly, all or substantially all of the Property of the Borrower to any
other Person; provided that the Borrower may merge with another Person if
--------
(A) the Borrower is the corporation surviving such merger and (B)
immediately after giving effect to such merger, no Default shall have
occurred and be continuing.
(b) If the Purchaser sells, transfers or otherwise disposes of
Clark Shares prior to the Merger Effective Date, the Borrower shall cause
the proceeds of such sale, transfer or other disposition to be in cash and
for fair value and the Borrower shall cause such proceeds forthwith to be
deposited in the Collateral Account (as defined in the Pledge Agreement)
under the Pledge Agreement.
SECTION 5.09. Use of Proceeds. The proceeds of the Loans made
---------------
under this Agreement will be used by the Borrower to fund capital
contributions and/or advances by the Borrower to the
<PAGE>
- 50 -
Purchaser required to consummate the Acquisition and to pay related fees,
commissions and expenses and, after the Merger Effective Date, for working
capital and other general corporate purposes of the Borrower and the
Subsidiaries. None of such proceeds will be used in violation of
Regulation G, T, U or X.
SECTION 5.10. Other Cross Defaults or Negative Pledges. The
-------------------------------- -------
Borrower shall not incur any Material Debt the terms of which include a
Cross Default or which include a negative pledge provision more favorable
to the holder of such Material Debt (or more restrictive of the actions of
the Borrower) than the provisions of Section 5.07 hereof unless, prior to
or contemporaneously with such incurrence, the Borrower shall have entered
into an amendment to this Agreement, to which the Required Banks shall not
unreasonably withhold their consent, providing a Cross Default or negative
pledge provision, as the case may be, no less favorable to the Banks than
the provisions of the Cross Default or negative pledge governing such other
Debt.
SECTION 5.11. Merger, Control, Etc. The Borrower shall (i) use
---------------------
all reasonable efforts to cause the Merger to be consummated as promptly as
practical after the Tender Offer Closing Date, (ii) take all actions
reasonably available to it so that designees of the Borrower constitute a
majority of the Board of Directors of Clark as promptly as reasonably
practical after the Tender Offer Closing Date, (iii) cause the Purchaser to
comply in all material respects with all of its covenants and agreements
contained in the Merger Agreement, (iv) use all reasonable efforts to cause
Clark to comply in all material respects with all of Clark's covenants and
conditions contained in the Merger Agreement and (v) not waive or agree to
amend any covenant binding upon Clark and its subsidiaries that is set
forth in Article IV of the Merger Agreement (except to the extent the
requested action would not result in a breach of any of the covenants
contained in any Credit Document (assuming same were then binding upon
Clark and its subsidiaries)). The Borrower will promptly notify the Banks
(through the Administrative Agent) when the Merger Effective Date occurs
and provide such evidence of the consummation of the Merger as the
Administrative Agent may reasonably request.
<PAGE>
- 51 -
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the
-----------------
following events ("Events of Default") shall have occurred and be
continuing:
(a) the Borrower shall fail to pay when due principal of any
Loan, or shall fail to pay within five days of the due date thereof
any interest, fees or other amount payable hereunder;
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.05 to 5.10, inclusive;
(c) the Borrower shall fail to observe or perform any covenant
or agreement contained in this Agreement (other than those covered by
clause (a) or (b) above) for 20 days after notice thereof has been
given to the Borrower by the Administrative Agent at the request of
any Bank;
(d) any representation, warranty, certification or statement
made by either Credit Party in any Document or in any certificate,
financial statement or other document delivered pursuant to this
Agreement or any other Document shall prove to have been incorrect in
any material respect when made (or deemed made);
(e) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt;
(f) the Borrower or any Material Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization
or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its Property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be commenced
against the Borrower or any Material Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking
<PAGE>
- 52 -
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its Property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be
entered against the Borrower or any Material Subsidiary under the
Federal bankruptcy laws as now or hereafter in effect;
(h) any member of the ERISA Group at the time in question shall
fail to pay when due an amount or amounts aggregating in excess of
$80,000,000 which it shall have become liable to pay under Title IV of
ERISA; or notice of intent to terminate a Material Plan shall be filed
under Title IV of ERISA by any member of the ERISA Group at the time
in question, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of
ERISA to terminate, to impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer any Material Plan; or a condition shall exist
by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the
meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the ERISA
Group to incur a current payment obligation in excess of $80,000,000;
(i) a final judgment or order for the payment of money in excess
of $50,000,000 shall be rendered against the Borrower or any
Subsidiary and such judgment or order shall continue unsatisfied and
unstayed for a period of 30 days or for such longer period of time,
not exceeding 90 days, during which, under applicable law, an appeal
may be taken from such judgment or order without leave of the relevant
court;
(j) any person or group of persons (within the meaning of
Section 13 or 14 of the Exchange Act) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the
Commission under the Exchange Act) of 25% or more of the outstanding
shares of common stock of the Borrower; or, during any period of 25
consecutive calendar months, directors of the Borrower on the date
hereof (the "Current Board"), or such directors who are recommended or
endorsed for election to the board of directors of the Borrower by a
majority of the Current Board or their successors so recommended or
endorsed, shall cease to constitute a majority of the board of
directors of the Borrower;
<PAGE>
- 53 -
(k) except to the extent the Purchaser Guarantee has been
terminated pursuant to the terms thereof, the Purchaser Guarantee or
any provision thereof shall cease to be in full force and effect, or
the Purchaser or any Person acting by or on behalf of the Purchaser
shall deny or disaffirm the Purchaser's obligations under the
Purchaser Guarantee or the Purchaser shall default in the due
performance or observance of any material term, covenant or agreement
on its part to be performed or observed pursuant to the Purchaser
Guarantee; or
(l) except to the extent the Pledge Agreement has been
terminated pursuant to the terms thereof, the Pledge Agreement shall
cease to be in full force and effect or shall fail to give the
Collateral Agent the Liens, rights, powers and privileges purported to
be created thereunder (as provided therein or herein) or the Borrower
shall default in the due performance or observance of any material
term, covenant or agreement therein;
then, and in every such event, the Administrative Agent shall (i) if
requested by Banks having more than 66 2/3% in aggregate amount of the
Commitments, by notice to the Borrower terminate the Commitments and they
shall thereupon terminate, and (ii) if requested by Banks holding Notes
evidencing more than 66 2/3% in aggregate principal amount of the Loans, by
notice to the Borrower declare the Notes (together with accrued interest
thereon) to be, and the Notes shall thereupon become, immediately due and
payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; provided that in the case
--------
of any of the Events of Default specified in clause (f) or (g) above with
respect to the Borrower, without any notice to the Borrower or any other
act by the Administrative Agent or any Bank, the Commitments shall
thereupon terminate and the Notes (together with accrued interest thereon)
shall become immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower.
SECTION 6.02. Notice of Default. The Administrative Agent shall
-----------------
give notice to the Borrower under Section 6.01(c) promptly upon being
requested to do so by any Bank and shall thereupon notify all the Banks
thereof.
ARTICLE VII
THE AGENTS
SECTION 7.01. Appointment and Authorization. Each Bank
-----------------------------
irrevocably appoints and authorizes each of the Agents to take such action
as agent on its behalf and to exercise such powers
<PAGE>
- 54 -
under the Credit Documents as are delegated to such Agent by the terms
hereof or thereof, together with all such powers as are reasonably
incidental thereto.
SECTION 7.02. Agents and Affiliates. Chase shall have the same
---------------------
rights and powers under the Credit Documents as any other Bank and may
exercise or refrain from exercising the same as though it were not an
Agent, and Chase and its Affiliates may accept deposits from, lend money
to, and generally engage in any kind of business with the Borrower or any
Subsidiary or Affiliate of the Borrower as if it were not an Agent
hereunder.
SECTION 7.03. Action by Agents. The obligations of each Agent
----------------
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, an Agent shall not be required to take any
action with respect to any Default, except (i) as expressly provided in
Article VI, (ii) in the case of the Collateral Agent, in connection with
the enforcement of the Pledge Agreement as provided therein and (iii) in
the case of the Administrative Agent, in connection with the enforcement of
the Purchaser Guarantee as requested by the Required Banks.
SECTION 7.04. Consultation with Experts. Each Agent may consult
-------------------------
with legal counsel (who may be counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable
for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agents. No Agent or any of its
-------------------
directors, officers, agents, or employees shall be liable for any action
taken or not taken by it in connection herewith (i) with the consent or at
the request of the Required Banks or (ii) in the absence of its own gross
negligence or willful misconduct. No Agent or any of its directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with any Credit Document or any borrowing
under this Agreement; (ii) the performance or observance of any of the
covenants or agreements of the Borrower; (iii) the satisfaction of any
condition specified in Article III, except receipt of items required to be
delivered to it; or (iv) the validity, effectiveness or genuineness of any
Document or any other instrument or writing furnished in connection
therewith. No Agent shall incur any liability by acting in reliance upon
any notice, consent, certificate, statement, or other writing (which may be
a bank wire, telex or similar writing) believed by it to be genuine or to
be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in
---------------
accordance with its Commitment, indemnify each Agent (to the extent not
reimbursed by the Borrower) against any cost,
<PAGE>
- 55 -
expense (including counsel fees and disbursements), claim, demand, action,
loss or liability (except such as result from such Agent's gross negligence
or willful misconduct) that such Agent may suffer or incur in connection
with any Credit Document or any action taken or omitted by such Agent
thereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it
---------------
has, independently and without reliance upon the Administrative Agent or
any other Bank, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Bank also acknowledges that it will, independently
and without reliance upon the Administrative Agent or any other Bank, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking any
action under this Agreement.
SECTION 7.08. Successor Agents. Any Agent may resign at any
----------------
time by giving notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent which, unless an Event of Default shall have occurred and be
continuing, shall be satisfactory to the Borrower in its reasonable
determination. If no successor Agent shall have been so appointed by the
Required Banks, and shall have accepted such appointment, within 30 days
after the retiring Agent gives notice of resignation, then the retiring
Agent may appoint a successor Agent, which shall be a commercial bank
organized or licensed under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$1,000,000,000. Upon the acceptance of its appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as an Agent,
the provisions of this Article shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was an Agent.
SECTION 7.09. Agents' Fees. The Borrower shall pay to each
------------
Agent for its own account fees in the amounts and at the times previously
agreed upon between the Borrower and such Agent.
SECTION 7.10. Consents Under Other Credit Documents. Except as
-------------------------------------
otherwise provided in Section 9.05 with respect to this Agreement and the
Notes, the Administrative Agent may, with the prior consent of the Required
Banks (but not otherwise), consent to any amendment or waiver in respect of
any Credit Document; provided that, without the prior consent of each Bank,
--------
no such amendment or waiver shall (i) except as expressly provided in the
Pledge Agreement, release any or all of the Collateral (as
<PAGE>
- 56 -
defined in the Pledge Agreement) or (ii) release the Purchaser from any of
its obligations under the Purchaser Guarantee or otherwise amend or waive
any provision of the Purchaser Guarantee.
SECTION 7.11. Syndication Agent. The Syndication Agent named on
-----------------
the front page of this Agreement or on any amendment hereto shall have no
duties or responsibilities hereunder other than as a Bank.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
-------------------------------------------------
Unfair. If on or prior to the first day of any Interest Period for any
- ------
Fixed Rate Borrowing:
(a) if the CD Base Rate or the London Interbank Offered Rate is
determined by reference to quotes from the CD Reference Banks or the
Euro-Dollar Reference Banks, as the case may be, the Administrative
Agent is advised by the relevant Reference Banks that deposits in
Dollars in the applicable amounts) are not being offered to such
Reference Banks in the relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, if the CD Base Rate or
the London Interbank Offered Rate is determined by reference to quotes
from the CD Reference Banks or the Euro-Dollar Reference Banks, as the
case may be, Banks having 50% or more of the aggregate amount of the
Commitments advise the Administrative Agent that the Adjusted CD Rate
or the Adjusted London Interbank Offered Rate, as the case may be, as
determined by the Administrative Agent will not adequately and fairly
reflect the cost to such Banks of funding their CD Loans or
Euro-Dollar Loans, as the case may be, for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon until the Administrative Agent notifies
the Borrower that the circumstances giving rise to such suspension no
longer exist, the obligations of the Banks to make CD Loans or Euro-Dollar
Loans, as the case may be, shall be suspended. Unless the Borrower
notifies the Administrative Agent at least two Domestic Business Days
before the date of any Fixed Rate Borrowing for which a Notice of Borrowing
has previously been given that it elects not to borrow on such date, (i) if
such Fixed Rate Borrowing is a Committed Borrowing, such Borrowing shall
instead be made as a Base Rate Borrowing and (ii) if such Fixed Rate
Borrowing is a Money Market LIBOR Borrowing, the Money
<PAGE>
- 57 -
Market LIBOR Loans comprising such Borrowing shall bear interest for each
day from and including the first day to but excluding the last day of the
Interest Period applicable thereto at the Base Rate for such day.
SECTION 8.02. Illegality. If, on or after the date of this
----------
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Euro-Dollar
Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency
shall make it unlawful or impossible for any Bank (or its Euro-Dollar
Lending Office) to make, maintain or fund its Euro-Dollar Loans and such
Bank shall so notify the Administrative Agent, the Administrative Agent
shall forthwith give notice thereof to the other Banks and the Borrower,
whereupon until such Bank notifies the Borrower and the Administrative
Agent that the circumstances giving rise to such suspension no longer
exist, the obligation of such Bank to make Euro-Dollar Loans shall be
suspended. Before giving any notice to the Administrative Agent pursuant
to this Section, such Bank shall designate a different Euro-Dollar Lending
Office if such designation will avoid the need for giving such notice and
will not, in the judgment of such Bank, be otherwise disadvantageous to
such Bank. If such Bank shall determine that it may not lawfully continue
to maintain and fund any of its outstanding Euro-Dollar Loans to maturity
and shall so specify in such notice, the Borrower shall immediately prepay
in full the then outstanding principal amount of each such Euro-Dollar
Loan, together with accrued interest thereon. Concurrently with prepaying
each such Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in
an equal principal amount from such Bank (on which interest and principal
shall be payable contemporaneously with the related Euro-Dollar Loans of
the other Banks), and such Bank shall make such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or
---------------------------------
after (x) the date hereof, in the case of any Committed Loan or any
obligation to make Committed Loans or (y) the date of the related Money
Market Quote, in the case of any Money Market Loan, the adoption of any
applicable law, rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by
any Bank (or its Applicable Lending Office) with any request
<PAGE>
- 58 -
or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending Office) to
any tax, duty or other charge with respect to its Fixed Rate Loans,
its Note or its obligation to make Fixed Rate Loans, or shall change
the basis of taxation of payments to any Bank (or its Applicable
Lending Office) of the principal of or interest on its Fixed Rate
Loans or any other amounts due under this Agreement in respect of its
Fixed Rate Loans or its obligation to make Fixed Rate Loans (except
for changes in the rate of tax on the overall net income of such Bank
or its Applicable Lending Office imposed by the jurisdiction in which
such Bank's principal executive office or Applicable Lending Office is
located); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but excluding (A)
with respect to any CD Loan any such requirement included in an
applicable Domestic Reserve Percentage and (B) with respect to any
Euro-Dollar Loan any such requirement included in an applicable
Euro-Dollar Reserve Percentage), special deposit, insurance assessment
(excluding, with respect to any CD Loan, any such requirement
reflected in an applicable Assessment Rate) or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Bank (or its Applicable Lending Office) or shall
impose on any Bank (or its Applicable Lending Office) or on the United
States market for certificates of deposit or the London interbank
market any other condition affecting its Fixed Rate Loans, its Note or
its obligation to make Fixed Rate Loans;
and the result of any of the foregoing is to increase the cost to such Bank
(or its Applicable Lending Office) of making or maintaining any Fixed Rate
Loan, or to reduce the amount of any sum received or receivable by such
Bank (or its Applicable Lending Office) under this Agreement or under its
Note with respect thereto, by an amount deemed by such Bank to be material,
then, within 30 days after demand by such Bank (with a copy to the
Administrative Agent), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank for such increased cost or
reduction. The Banks acknowledge and agree that the foregoing subsection
(a) creates no right to demand payment of additional amounts in respect of
laws, rules and regulations, as in effect and interpreted and administered
on the date hereof.
(b) If any Bank shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change in any such
<PAGE>
- 59 -
law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of
return on capital of such Bank (or its Parent) as a consequence of such
Bank's obligations hereunder to a level below that which such Bank (or its
Parent) could have achieved but for such adoption, change, request or
directive (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by such Bank to be material, then from time
to time, within 30 days after demand by such Bank (with a copy to the
Administrative Agent), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank (or its Parent) for such
reduction; provided that the Borrower shall not be obligated to compensate
--------
such Bank for any reduction incurred more than 60 days prior to the receipt
by the Borrower from such Bank of the notice contemplated by subsection (c)
below. The Banks acknowledge and agree that the foregoing subsection (b)
creates no right to demand payment of additional amounts in respect of
laws, rules and regulations regarding capital adequacy as in effect and
interpreted and administered on the date hereof.
(c) Each Bank will notify the Borrower and the Administrative
Agent within 90 days of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Bank to compensation
pursuant to this Section and will designate a different Applicable Lending
Office if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank; provided that if a Bank shall not
--------
have so notified the Borrower within 90 days of such event, such Bank may
not seek compensation for any period beginning prior to the date upon which
the Borrower is notified of such event. A certificate of any Bank claiming
compensation under this Section and setting forth the calculation of the
additional amount or amounts to be paid to it hereunder shall be conclusive
in the absence of manifest error. In determining such amount, such Bank
may use any reasonable averaging and attribution methods.
SECTION 8.04. Base Rate Loans Substituted for Affected Fixed
----------------------------------------------
Rate Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans
- ----------
has been suspended pursuant to Section 8.02 or (ii) any Bank has demanded
compensation under Section 8.03(a) and the Borrower shall, by at least five
Euro-Dollar Business Days' prior notice to such Bank through the
Administrative Agent, have elected that the provisions of this Section
shall apply to such Bank, then, unless and until such Bank notifies the
Borrower that
<PAGE>
- 60 -
the circumstances giving rise to such suspension or demand for compensation
no longer apply:
(a) all Loans which would otherwise be made by such Bank as CD
Loans or Euro-Dollar Loans, as the case may be, shall be made instead
as Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Fixed Rate Loans of the other
Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case
may be, has been repaid, all payments of principal which would
otherwise be applied to repay such Fixed Rate Loans shall be applied
to repay its Base Rate Loans instead.
SECTION 8.05. Substitution of Bank. If (i) the obligation of
--------------------
any Bank to make Euro-Dollar Loans has been suspended pursuant to Section
8.02 or (ii) any Bank has demanded compensation under Section 8.03, the
Borrower shall have the right, with the assistance of the Administrative
Agent, to seek a mutually satisfactory substitute bank or banks (which may
be one or more of the Banks) to purchase the Note and assume the Commitment
of such Bank.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
-------
communications to any party hereunder shall be in writing (including bank
wire, telex, facsimile transmission or similar writing) and shall be given
to such party: (x) in the case of the Borrower or any Agent, at its
address, facsimile number or telex number set forth on the signature pages
hereof, (y) in the case of any Bank, at its address, facsimile number or
telex number set forth in its Administrative Questionnaire or (z) in the
case of any party, such other address, facsimile number or telex number as
such party may hereafter specify for the purpose by notice to the
Administrative Agent and the Borrower. Each such notice, request or other
communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by facsimile
transmission, when transmitted to the facsimile number specified in this
Section and confirmation of receipt is received, (iii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iv) if given by any other
means, when delivered at the address specified in this Section; provided
--------
that notices to the Administrative Agent under Article II or Article VIII
or to the
<PAGE>
- 61 -
Borrower under Section 6.01(c) shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by any Agent or
----------
any Bank in exercising any right, power or privilege hereunder or under any
Note or other Credit Document shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Documentary Taxes; Indemnification.
---------------------------------------------
(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses of
the Agents, including reasonable fees and disbursements of Milbank, Tweed,
Hadley & McCloy, special New York counsel to the Agents, in connection with
the preparation of the Credit Documents, any waiver or consent thereunder
or any amendment thereof or any Default or alleged Default hereunder and
(ii) if an Event of Default occurs, all out-of-pocket expenses incurred by
each Agent and Bank, including reasonable fees and disbursements of
counsel, in connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings resulting
therefrom. The Borrower shall indemnify each Agent and each Bank against
any transfer taxes, documentary taxes, assessments or charges made by any
governmental authority by reason of the execution and delivery of this
Agreement, any Note or any other Credit Document. To the extent
practicable, the affected Agent or Bank, as the case may be, shall give the
Borrower prior notice of the incurrence of any expenses described in this
subsection (a); provided, however, that the failure to give such notice
-------- -------
shall not affect the obligation of the Borrower to pay such Agent or Bank
the amount or amounts due pursuant to subsection (a) with respect to such
expenses.
(b) The Borrower agrees to indemnify each Bank and hold each
Bank harmless from and against any and all liabilities, losses, damages,
costs and expenses of any kind, including, without limitation, the
reasonable fees and disbursements of counsel, which may be incurred by any
Bank (or by any Agent in connection with its actions as Agent hereunder) in
connection with any investigative, administrative or judicial proceeding
(whether or not such Bank shall be designated a party thereto) relating to
or arising out of any Document or any actual or proposed use of proceeds of
Loans hereunder; provided that no Bank shall have the right to be
--------
indemnified hereunder in respect of any such liabilities, losses, damages,
costs and expenses arising from its own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
<PAGE>
- 62 -
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it
-------------------
shall, by exercising any right of set-off or counterclaim or otherwise,
receive payment of a proportion of the aggregate amount of principal and
interest due with respect to any Note held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any Note held by such other
Bank, the Bank receiving such proportionately greater payment shall
purchase such participations in the Notes held by the other Banks, and such
other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Notes held by the
Banks shall be shared by the Banks pro rata; provided that nothing in this
--------
Section shall impair the right of any Bank to exercise any right of set-off
or counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes. The Borrower agrees, to the fullest extent
it may effectively do so under applicable law, that any Bank acquiring a
participation in a Note pursuant to the foregoing arrangements may exercise
rights of set-off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.
SECTION 9.05. Amendments and Waivers. Any provision of this
----------------------
Agreement or the Notes may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the
Required Banks (and, if the rights or duties of any Agent are affected
thereby, by such Agent); provided that no such amendment or waiver shall,
--------
unless signed by each Bank, (i) increase or decrease the Commitment of any
Bank (except for a ratable decrease in the Commitments of all Banks) or
subject any Bank to any additional obligation, (ii) reduce the principal of
or rate of interest on any Loan or any fees hereunder, (iii) postpone the
date fixed for any payment of principal of or interest on any Loan or any
fees hereunder or for any reduction or termination of any Commitment, (iv)
change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the number of Banks, which shall be
required for the Banks or any of them to take any action under this Section
or any other provision of this Agreement or any other Credit Document, or
(v) amend or waive any of the provisions of Section 3.01 hereof.
SECTION 9.06. Successors and Assigns. (a) The provisions of
----------------------
this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, except that the
Borrower may not assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all Banks.
<PAGE>
- 63 -
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its
Commitment or any or all of its Loans. In the event of any such grant by a
Bank of a participating interest to a Participant, whether or not upon
notice to the Borrower and the Administrative Agent, such Bank shall remain
responsible for the performance of its obligations hereunder, and the
Borrower and the Administrative Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and
obligations under this Agreement and the other Credit Documents. Any
agreement pursuant to which any Bank may grant such a participating
interest shall provide that such Bank shall retain the sole right and
responsibility to enforce the obligations of the Credit Parties under the
Credit Documents, including, without limitation, the right to approve any
amendment, modification or waiver of any provision of any Credit Document;
provided that such participation agreement may provide that such Bank will
- --------
not agree to any modification, amendment or waiver of this Agreement
described in clause (i), (ii) or (iii) of Section 9.05 without the consent
of the Participant. The Borrower agrees that each Participant shall, to
the extent provided in its participation agreement, be entitled to the
benefits of Article VIII with respect to its participating interest. An
assignment or other transfer which is not permitted by subsection (c) or
(d) below shall be given effect for purposes of this Agreement only to the
extent of a participating interest granted in accordance with this
subsection (b).
(c) Any Bank may at any time assign to one or more banks or
other institutions (each an "Assignee") all, or a proportionate part of
all, of its rights and obligations under this Agreement and the other
Credit Documents, and such Assignee shall assume such rights and
obligations, pursuant to an Assignment and Assumption Agreement in
substantially the form of Exhibit G hereto executed by such Assignee and
such transferor Bank, with (and subject to) the subscribed consent of the
Borrower and the Administrative Agent, the latter of which such consent
shall not be unreasonably withheld by the Administrative Agent; provided
--------
that if an Assignee is an Affiliate of such transferor Bank, no such
consent shall be required; and provided further that such assignment may,
-------- -------
but need not, include rights of the transferor Bank in respect of
outstanding Money Market Loans. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Bank of an
amount equal to the purchase price agreed between such transferor Bank and
such Assignee, such Assignee shall be a Bank party to this Agreement and
shall have all the rights and obligations of a Bank with a Commitment as
set forth in such instrument of assumption, and the transferor Bank shall
be released from its obligations hereunder to a corresponding extent, and
no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (c), the
transferor Bank,
<PAGE>
- 64 -
the Administrative Agent and the Borrower shall make appropriate
arrangements so that, if required, a new Note is issued to the Assignee.
In connection with any such assignment, the transferor Bank shall pay to
the Administrative Agent an administrative fee for processing such
assignment in the amount of $2,500. If the Assignee is not incorporated
under the laws of the United States of America or a state thereof, it
shall, prior to the first date on which interest or fees are payable
hereunder for its account, deliver to the Borrower and the Administrative
Agent certification as to exemption from deduction or withholding of any
United States Federal income taxes in accordance with Section 2.15.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and the other Credit Documents to a Federal
Reserve Bank. No such assignment shall release the transferor Bank from
its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.03
than such Bank would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Borrower's prior
written consent or by reason of the provisions of Section 8.02 or 8.03
requiring such Bank to designate a different Applicable Lending Office
under certain circumstances or at a time when the circumstances giving rise
to such greater payment did not exist.
SECTION 9.07. Collateral. Each of the Banks represents to each
----------
of the Agents and the other Banks that it in good faith is not relying upon
any Margin Stock as collateral in the extension or maintenance of the
credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to Jurisdiction. This
-----------------------------------------
Agreement and each Note shall be governed by and construed in accordance
with the laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York State court sitting in
New York County for purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby. The
Borrower irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient
forum.
SECTION 9.09. Counterparts; Integration. This Agreement may be
-------------------------
signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument.
<PAGE>
- 65 -
This Agreement constitutes the entire agreement and understanding among the
parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
--------------------
AGENTS AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
[THE REMAINDER OF THIS PAGE HAS
BEEN INTENTIONALLY LEFT BLANK]
<PAGE>
- 66 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day
and year first above written.
INGERSOLL-RAND COMPANY
By /s/ William J. Armstrong
-------------------------
Title: Vice President
200 Chestnut Ridge Road
Woodcliff Lake, NJ 07675
Facsimile Number: 201-573-3295
Telephone Number: 201-573-3081
<PAGE>
- 67 -
Commitment THE CHASE MANHATTAN BANK
- ----------
$150,000,000 (NATIONAL ASSOCIATION)
By /s/ Patricia B. Bril
--------------------------
Title: Managing Director
<PAGE>
- 68 -
Commitment MORGAN GUARANTY TRUST COMPANY
- ----------
$150,000,000 OF NEW YORK
By /s/ Mathias Blumschein
--------------------------
Title: Associate
<PAGE>
- 69 -
Commitment THE BANK OF NEW YORK
- ----------
$120,000,000
By /s/ Nancy McEwen
--------------------------
Title: Vice President
<PAGE>
- 70 -
Commitment THE BANK OF NOVA SCOTIA
- ----------
$120,000,000
By /s/ J.W. Campbell
--------------------------
Title: Unit Head
<PAGE>
- 71 -
Commitment CITIBANK, N.A.
- ----------
$120,000,000
By /s/ Anita J. Brickell
--------------------------
Title: Vice President
<PAGE>
- 72 -
Commitment UNION BANK OF SWITZERLAND
- ----------
$120,000,000
By /s/ Paul R. Morrison
-------------------------------
Title: Assistant Vice President
By /s/ Robert A. High
-------------------------------
Title: Assistant Treasurer
<PAGE>
- 73 -
Commitment WACHOVIA BANK OF GEORGIA, N.A.
- ----------
$120,000,000
By /s/ Forrest C. Childers
-------------------------------
Title: Senior Vice President
<PAGE>
- 74 -
Commitment THE BANK OF TOKYO TRUST COMPANY
- ----------
$75,000,000
By /s/ Jeffrey Millar
--------------------------
Title: Vice President
<PAGE>
- 75 -
Commitment COMMERZBANK AKTIENGESELLSCHAFT -
- ----------
$75,000,000 NEW YORK BRANCH
By /s/ Juergen Boysen
--------------------------------
Title: Senior Vice President
By /s/ Michael D. Hintz
--------------------------------
Title: Vice President
<PAGE>
- 76 -
Commitment DEUTSCHE BANK AG NEW YORK BRANCH
- ----------
$75,000,000 AND/OR CAYMAN ISLANDS BRANCH
By /s/ Ross A. Howard
--------------------------------
Title: Vice President
By /s/ Elizabeth Hope Tallmadge
--------------------------------
Title: Vice President
<PAGE>
- 77 -
Commitment THE FUJI BANK, LIMITED,
- ----------
$75,000,000 NEW YORK BRANCH
By /s/ Gina M. Kearns
--------------------------------
Title: Vice President & Manager
<PAGE>
- 78 -
Commitment CORESTATES BANK, N.A.
- ----------
$50,000,000
By /s/ Thomas J. McDonnell
--------------------------------
Title: Vice President
<PAGE>
- 79 -
Commitment MELLON BANK N.A.
- ----------
$50,000,000
By /s/ Joseph F. Bond, Jr.
--------------------------------
Title: Vice President
<PAGE>
- 80 -
Commitment NBD BANK
- ----------
$50,000,000
By /s/ Carolyn J. Parks
--------------------------------
Title: Vice President
<PAGE>
- 81 -
Commitment NORWEST BANK MINNESOTA,
- ----------
$50,000,000 NATIONAL ASSOCIATION
By /s/ Scott D. Bjelde
--------------------------------
Title: Assistant Vice President
<PAGE>
- 82 -
Commitment STANDARD CHARTERED BANK
- ----------
$50,000,000
By /s/ Paul B. Spooner
--------------------------------
Title: Vice President
By /s/ N/A
--------------------------------
Name:
Title:
<PAGE>
- 83 -
Commitment UNITED JERSEY BANK
- ----------
$50,000,000
By /s/ Lawrence F. Zema
--------------------------------
Title: Vice President &
Regional Manager
<PAGE>
- 84 -
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Administrative Agent and
Collateral Agent
By /s/ Patricia B. Bril
--------------------------------
Title: Managing Director
4 Chase Metrotech Center
13th Floor
Brooklyn, New York 11245
Facsimile Number: 718-242-6910
Telephone Number: 718-242-7979
<PAGE>
EXHIBIT A
NOTE
New York, New York
May 5, 1995
For value received, Ingersoll-Rand Company, a New Jersey
corporation (the "Borrower"), promises to pay to the order of
_________________________ (the "Bank"), for the account of its Applicable
Lending Office, the unpaid principal amount of each Loan made by the Bank
to the Borrower pursuant to the Credit Agreement referred to below on the
last day of the Interest Period relating to such Loan. The Borrower
promises to pay interest on the unpaid principal amount of each such Loan
on the dates and at the rate or rates provided for in the Credit Agreement.
All such payments of principal and interest shall be made in lawful money
of the United States in Federal or other immediately available funds at the
office of The Chase Manhattan Bank (National Association), 1 Chase
Manhattan Plaza, New York, New York.
All Loans made by the Bank, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by
the Bank and, if the Bank so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding may be endorsed
by the Bank in the schedule attached hereto, or on a continuation of such
schedule attached to and made a part hereof; provided that the failure of
--------
the Bank to make any such recordation or endorsement shall not affect the
obligation of the Borrower hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the $1,500,000,000
Credit Agreement dated as of May 5, 1995 among the Borrower, the banks
listed on the signature pages thereof and The Chase Manhattan Bank
(National Association), as Administrative Agent and as Collateral Agent (as
the same may be amended from time to time, the "Credit Agreement"). Terms
defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement provisions for the prepayment
hereof and the acceleration of the maturity hereof.
INGERSOLL-RAND COMPANY
By__________________________
Title:
By__________________________
Title:
<PAGE>
LOANS AND PAYMENTS OF PRINCIPAL
_________________________________________________________________
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
<PAGE>
EXHIBIT B
Form of Money Market Quote Request
----------------------------------
[Date]
To: The Chase Manhattan Bank (National Association),
(the "Administrative Agent")
From: Ingersoll-Rand Company
Re: $1,500,000,000 Credit Agreement (the "Credit Agreement") dated as
of May 5, 1995 among the Borrower, the Banks party thereto and
the Agents
We hereby give notice pursuant to Section 2.03 of the Credit
Agreement that we request Money Market Quotes for the following proposed
Money Market Borrowing(s):
Date of Borrowing: __________________________
Principal Amount1 Interest Period2
---------------- ---------------
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Terms used herein have the meanings assigned to them in the
Credit Agreement.
INGERSOLL-RAND COMPANY
By ____________________________
Title:
- --------------------
1 Amount must be $10,000,000 or a larger multiple of $5,000,000.
2 Seven days or one, two, three, six, nine or twelve months, subject to
the provisions of the definition of Interest Period.
<PAGE>
EXHIBIT C
Form of Invitation for Money Market Quotes
------------------------------------------
To: [Name of Bank]
Re: Invitation for Money Market Quotes
to Ingersoll-Rand Company (the
"Borrower")
Pursuant to Section 2.03 of the $1,500,000,000 Credit Agreement
dated as of May 5, 1995 among the Borrower, the Banks party thereto and the
Agents, we are pleased on behalf of the Borrower to invite you to submit
Money Market Quotes to the Borrower for the following proposed Money Market
Borrowing(s):
Date of Borrowing: ______________________
Principal Amount Interest Period
- ---------------- ---------------
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than [2:00 P.M.]
[9:00 A.M.] (New York City time) on [date].
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By_________________________________
Authorized Officer
<PAGE>
EXHIBIT D
Form of Money Market Quote
--------------------------
To: The Chase Manhattan Bank (National Association),
as Administrative Agent
Re: Money Market Quote to
Ingersoll-Rand Company (the "Borrower")
In response to your invitation on behalf of the Borrower dated
________________, 19__, we hereby make the following Money Market Quote on
the following terms:
1. Quoting Bank:_______________________________________________
2. Person to contact at Quoting Bank:__________________________
3. Date of Borrowing:________________________________________*
4. We hereby offer to make Money Market Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
Principal Interest Money Market
Amount** Period*** [Margin]**** [AbsoluteRate]*****
- -------- --------- ------------- --------------------
$
$
- --------------------
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the
individual offers exceeds the amount the Bank is willing to lend. Bids
must be made for $5,000,000 or a larger multiple of $1,000,000.
*** Seven days or two, three, six, nine or twelve months, as specified in
the related Invitation. No more than five bids are permitted for each
Interest Period.
**** Margin over or under the London Interbank Offered Rate determined for
the applicable Interest Period. Specify percentage (to the nearest
1/10,000 of 1%) and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest
1/10,000th of 1%).
<PAGE>
- 2 -
[Provided, that the aggregate principal amount of Money Market Loans
for which the above offers may be accepted shall not exceed
$________________.]
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the $1,500,000,000
Credit Agreement dated as of May 5, 1995 among the Borrower, the Banks
party thereto and the Agents, irrevocably obligates us to make the Money
Market Loan(s) for which any offer(s) are accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Dated:_________________ By _____________________________
Authorized Officer
<PAGE>
EXHIBIT E-1
[Form of Opinion of Special New York Counsel
to the Borrower and the Purchaser]
----------------------------------
[Closing Date]
The Chase Manhattan Bank
(National Association), as Agent
1 Chase Manhattan Plaza
New York, New York 10081
And each of the other Agents and the
Banks named in Annex A attached hereto
that are parties to the Credit
Agreement referred to below
Ladies and Gentlemen:
We have acted as special New York counsel to Ingersoll-Rand
Company (the "Borrower") and CEC Acquisition Corp. (the "Guarantor" or the
"Purchaser" and, together with the Borrower, the "Credit Parties") in
connection with (i) the $1,500,000,000 Credit Agreement (the "Credit
Agreement") dated as of May 5, 1995, among the Borrower, the banks named
therein (the "Banks"), and The Chase Manhattan Bank (National Association),
as administrative agent for the Banks (in such capacity, the
"Administrative Agent") and as collateral agent for the Secured Creditors
(as defined in the Pledge Agreement) under the Pledge Agreement (in such
capacity, the "Collateral Agent"), providing for loans to be made by the
Banks for the purpose, inter alia, of financing the Tender Offer referred
----- ----
to therein and (ii) the various other agreements and instruments referred
to in the next two paragraphs. Terms defined in the Credit Agreement and
not otherwise defined herein are used herein as defined therein. This
opinion is being delivered to you pursuant to Section 3.01(a)(iv) of the
Credit Agreement.
We also have acted as special counsel for the Borrower and the
Purchaser in connection with a Tender Offer by the Purchaser for all
outstanding Clark Shares on the terms and subject to the conditions set
forth in the Offer to Purchase, in the form filed as an exhibit to the
Schedule 14D-1 (as defined below), and the related Tender Offer Statement
(the "Tender Offer Statement") on Schedule 14D-1 (as amended, the "Schedule
14D-1") under the Exchange Act filed by the Purchaser and the Borrower with
the Commission pursuant to the Exchange Act.
<PAGE>
- 2 -
In rendering the opinions expressed below, we have examined the
following agreements, instruments and other documents:
(a) the Credit Agreement;
(b) the Notes;
(c) the Pledge Agreement;
(d) the Purchaser Guarantee;
(e) Schedule 14D-1;
(f) the Offer to Purchase;
(g) the Tender Offer Statement;
(h) the Indenture (as defined in the Pledge Agreement); and
(i) such corporate records of the Credit Parties and such other
documents as we have deemed necessary as a basis for the
opinions expressed below.
The agreements, instruments and other documents referred to in
the foregoing clauses (a) through (d) are collectively referred to as the
"Credit Documents". The agreements, instruments and other documents
referred to in the foregoing clauses (e) through (g) are collectively
referred to as the "Tender Offer Documents".
In arriving at the opinions expressed below, we have relied upon
corporate documents and records of the Credit Parties, certificates of
public officials, and certificates and statements of officers and
representatives of the Credit Parties and other Persons, and we have made
such investigations of law, as we have deemed appropriate as a basis for
such opinions.
In rendering the opinions expressed below, we have assumed, with
your permission, without independent investigation or inquiry, (a) the
authenticity of all documents submitted to us as originals, (b) the
genuineness of all signatures on all documents that we examined and (c) the
conformity to authentic originals of documents submitted to us as
certified, conformed or photostatic copies.
In rendering the opinions expressed below, we have also assumed,
with respect to all of the documents referred to in this
<PAGE>
- 3 -
opinion letter, that (except, to the extent set forth in the opinions
expressed below, as to the Credit Parties):
(i) such documents have been duly authorized by, have been duly
executed and delivered by, and constitute legal, valid,
binding and enforceable obligations of, all of the parties
to such documents;
(ii) all signatories to such documents have been duly authorized;
and
(iii) all of the parties to such documents are duly organized and
validly existing and have the power and authority (corporate
or other) to execute, deliver and perform such documents.
Based upon and subject to the foregoing and the remaining
paragraphs of this opinion letter, we are of the opinion that:
1. The Purchaser is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.
The execution, delivery and performance by the Purchaser of the Credit
Documents to which it is a party and the Tender Offer Documents to
which it is a party, and each of the transactions contemplated
thereby, are within the Purchaser's corporate powers and have been
duly authorized by all necessary corporate action.
2. Each of the Credit Documents constitutes the legal, valid and
binding obligation of each Credit Party thereto, in each case
enforceable against such Credit Party in accordance with its terms.
3. No authorization, approval or consent of, and no filing or
registration with, any governmental or regulatory authority or agency
of the United States of America or the State of New York is required
to be obtained or made by either Credit Party in connection with the
execution, delivery and performance by such Credit Party, or for the
validity or enforceability against such Credit Party, of any of the
Credit Documents to which it is a party, or for the borrowings by the
Borrower under the Credit Agreement, except for (i) the filing of
financing statements in respect of the Liens created pursuant to the
Pledge Agreement in respect of the Collateral (as defined in the
Pledge Agreement) (other than the Stock Collateral (as defined in the
Pledge Agreement)) and (ii) the consents, approvals,
<PAGE>
- 4 -
authorizations, registrations, declarations and filings referred to in
paragraph 5 below.
4. The execution, delivery and performance by each Credit Party
of the Credit Documents to which it is party, the borrowings by the
Borrower under the Credit Agreement and the granting of a security
interest in the Collateral under the Pledge Agreement do not and will
not (a) violate any provision of (i) the charter or by-laws of the
Purchaser or (ii) the Indenture, or (b) violate any applicable law,
rule or regulation of the United States of America or the State of
New York or the General Corporation Law of the State of Delaware (the
"Delaware Corporation Law"), including, without limitation, the
Exchange Act, the Securities Act of 1933, as amended (together with
the rules and regulations thereunder, the "1933 Act") or Regulations U
or X.
5. No authorization, approval or consent of, and no filing or
registration with, any governmental or regulatory authority or agency
of the United States of America or the State of New York is required
on the part of any Credit Party for the consummation of the
transactions contemplated by the Tender Offer Documents, except for
such authorizations, approvals, consents, filings and registrations as
are disclosed in the Schedule 14D-1 which have been duly obtained or
effected and remain in full force and effect.
6. The consummation of the transactions contemplated by the
Tender Offer Documents does not and will not (a) violate any provision
of the charter or by-laws of the Purchaser or (b) violate any
applicable law, rule or regulation of the United States of America or
the State of New York or the Delaware Corporation Law, including,
without limitation, the Exchange Act, 1933 Act or Regulations U or X.
Our opinion in clause (b) of the foregoing sentence is based upon the
assumption that no Tender Offer Document contains any untrue statement
of any material fact or omits to state any material fact required to
be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
7. The Schedule 14D-1 (except the financial statements and other
financial and statistical data included therein, as to which we
express no opinion) appears on its face to be appropriately responsive
in all material respects to the applicable provisions of the Exchange
Act.
<PAGE>
- 5 -
8. The Pledge Agreement is effective to create, in favor of the
Collateral Agent for the benefit of the Secured Creditors, a valid
security interest under the Uniform Commercial Code as in effect in
the State of New York (the "Uniform Commercial Code") in all of the
right, title and interest of the Borrower in, to and under the
Collateral as collateral security for the payment of the Secured
Obligations (as defined in the Pledge Agreement), except that (a) such
security interest will continue in Collateral after its sale, exchange
or other disposition only to the extent provided in Section 9-306 of
the Uniform Commercial Code and (b) the creation of a security
interest in the Pledged Stock (as defined in the Pledge Agreement),
and any other portion of the Collateral constituting a "security" (as
defined in Section 8-102(1)(c) of the Uniform Commercial Code),
requires the transfer thereof to the Collateral Agent pursuant to
Section 8-313(1) of the Uniform Commercial Code, which transfer in the
case of the Pledged Stock may be effected in the manner contemplated
by paragraph 9 below.
9. The Pledge Agreement, together with the delivery of the
certificates representing the Pledged Stock to the Collateral Agent in
the State of New York, creates in favor of the Collateral Agent a
perfected security interest under the Uniform Commercial Code in the
Pledged Stock as collateral security for the payment of the Secured
Obligations. Assuming the Collateral Agent acquires its interest in
the Pledged Stock in good faith and without notice of any adverse
claim (as defined in Section 8-302(2) of the Uniform Commercial Code
and that each certificate representing shares of the Pledged Stock is
either in bearer form or registered form, issued or indorsed in the
name of the Collateral Agent or in blank, the Collateral Agent will
acquire its security interest in the Pledged Stock free of all such
adverse claims.
Our opinions in paragraphs 2 and 3 above are subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and by an implied covenant of good faith
and fair dealing. Our opinion in paragraph 2 above also is subject to the
qualification that certain remedial provisions of the Pledge Agreement, in
whole or in part, may not be enforceable although the inclusion of such
provisions does not render the Pledge Agreement invalid, and (subject to
the limitations and exceptions referred to herein) the Pledge Agreement and
the laws of the State of New York contain adequate remedial provisions for
the
<PAGE>
- 6 -
practical realization of the rights and benefits purported to be afforded
thereby.
With your permission, we express no opinion as to (a) any
provision of the Pledge Agreement which is intended to establish any
standard other than any standard set forth in the Uniform Commercial Code
as the measure of the performance by any party thereto of such party's
obligations of good faith, diligence, reasonableness or care or the
fulfillment of the duties imposed on any secured party with respect to the
disposition or redemption of collateral, accounting for surplus proceeds of
collateral or accepting collateral in discharge of liabilities; (b) any
provision of the Credit Documents which is intended to permit modification
thereof only by means of an agreement signed in writing by the parties
thereto; (c) except as set forth in paragraph 9 above, the perfection of
any liens or security interests purported to be granted under the Credit
Documents or the priority of any liens or security interests purported to
be granted under the Credit Documents; (d) any provision of the Credit
Documents waiving objections based on forum non-conveniens; (e) any
provision of the Credit Documents that provides that any guarantor's
liability thereunder shall not be affected by actions or failures to act on
the part of the recipient of the guarantee that impairs the value of the
collateral to the detriment of the guarantor or by amendments or waivers
that have a material effect on the provisions of documents governing the
guaranteed obligations; (f) the effect of the compliance or noncompliance
with any Federal or state laws or regulations applicable to any of the
Banks or their affiliates because of their legal or regulatory status or
the nature of their businesses; (g) any provision of the Credit Agreement
insofar as it provides that any Person purchasing a participation from a
Bank or other Person may exercise set-off or similar rights with respect to
such participation or that any Bank or other Person may exercise set-off or
similar rights other than in accordance with applicable law; and (h) the
right, title or interest of any Person in or to, or the condition of title
or ownership of, or the existence of, any property purported to be subject
to the Credit Documents.
We express no opinion as to the enforceability of any provision
of any Credit Document whereby any Person purports to submit to the subject
matter jurisdiction of the United States District Court for the Southern
District of New York. We note the limitations of 28 U.S.C. Sec. 1332 on
federal court jurisdiction where diversity of citizenship is lacking, and
we also note that such submissions cannot supersede that court's discretion
in determining whether to transfer an action from one federal court to
another under 28 U.S.C. Sec. 1404(a). In addition, we note that the
enforceability of Section 9.03(b) of the Credit Agreement
<PAGE>
- 7 -
(and any similar provisions in any of the other Credit Documents) may be
limited by laws rendering unenforceable
(a) indemnification contrary to federal or state securities laws and the
public policy underlying such laws and (b) the release of a party from, or
the indemnification of a party against, liability for its own gross
negligence, recklessness, willful misconduct or unlawful conduct under
certain circumstances.
We have not been requested to render and, with your permission,
we express no opinion as to the applicability to any transfers by, or
obligations under the Credit Documents of, the Credit Parties of Section
548 of the United States Bankruptcy Code or Article 10 of the New York
Debtor and Creditor Law relating to fraudulent transfers and obligations.
The foregoing opinions are limited to matters involving the
Federal laws of the United States of America, the Delaware Corporation Law
and the laws of the State of New York, and we do not express any opinion as
to the laws of any other jurisdiction.
At the request of our client, this opinion is rendered to you in
connection with the transactions contemplated by the Credit Agreement.
This opinion may not be relied upon by you for any other purpose, or relied
upon by any other Person, without, in each instance, our prior written
consent.
Very truly yours,
<PAGE>
- 8 -
ANNEX A
Banks
- ---------
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
THE BANK OF NEW YORK
THE BANK OF NOVA SCOTIA
CITIBANK, N.A.
UNION BANK OF SWITZERLAND
WACHOVIA BANK OF GEORGIA, N.A.
THE BANK OF TOKYO TRUST COMPANY
COMMERZBANK AKTIENGESELLSCHAFT - NEW YORK BRANCH
DEUTSCHE BANK AG NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
THE FUJI BANK, LIMITED, NEW YORK BRANCH
CORESTATES BANK, N.A.
MELLON BANK N.A.
NBD BANK
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
STANDARD CHARTERED BANK
UNITED JERSEY BANK
Agents
- ---------
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
as Administrative Agent and as Collateral Agent
<PAGE>
EXHIBIT E-2
Form of Opinion of the
General Counsel of the Borrower
-------------------------------
[Closing Date]
To the Banks party to the
Credit Agreement referred to
below and to the Agents
Ladies and Gentlemen:
I am General Counsel of Ingersoll-Rand Company (the "Borrower")
and am familiar with the $1,500,000,000 Credit Agreement (the "Credit
Agreement") dated as of May 5, 1995 among the Borrower, the banks listed on
the signature pages thereof and The Chase Manhattan Bank (National
Association), as Administrative Agent and as Collateral Agent. Terms
defined in the Credit Agreement are used herein as therein defined. This
opinion is being rendered to you at the request of the Borrower pursuant to
Section 3.01(a)(iv) of the Credit Agreement.
I have examined, or supervised the examination of, originals or
copies, certified or otherwise identified to my satisfaction, of the Credit
Documents, the Tender Offer Documents, the Indenture (as defined in the
Pledge Agreement), the form of Uniform Commercial Code financing statement
attached hereto as Annex I ("Financing Statement") and such other
documents, corporate records, certificates of public officials and other
instruments and have conducted such other investigations of fact and law as
I have deemed necessary or advisable for purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of New Jersey,
and has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as
now conducted.
2. The execution, delivery and performance by the Borrower of
the Credit Documents to which it is a party, and the consummation of the
transactions contemplated by the Tender Offer Documents are within the
Borrower's corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or filing with,
any governmental body, agency or official of the State of New Jersey and do
not contravene, or constitute a default under, any provision of
<PAGE>
- 2 -
applicable law or regulation of the State of New Jersey or of the certificate
of incorporation or by-laws of the Borrower or, to the best of my knowledge
(after due inquiry), of any judgment, injunction, order or decree binding
upon the Borrower or of any limitation on borrowing, the granting of Liens
or acquisitions or mergers imposed by any agreement or other instrument
(including, without limitation, the Indenture) binding upon the Borrower.
3. There is no action, suit or proceeding pending against, or to
the best of my knowledge (after due inquiry) threatened against or
affecting, the Borrower or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official, in which there is
a reasonable possibility of an adverse decision which would materially
adversely affect the business, consolidated financial position or
consolidated results of operations of the Borrower and its Subsidiaries,
considered as a whole, or which in any manner draws into question the
validity of any of the Credit Documents.
4. Any security interest created by the Pledge Agreement in
that portion of the Collateral consisting "general intangibles" (as defined
in Section 9-106 of the Uniform Commercial Code as in effect in the State
of New Jersey (the "NJUCC")), including (without limitation) any Debt of
the Purchaser owing to the Borrower that is not evidenced by an
"instrument" (as defined in Section 9-105(1)(i) of the NJUCC), will, upon
the creation of such security interest, be perfected by the filing of a
Financing Statement in the office of the Secretary of State of New Jersey.
I am a member of the Bars of the State of New Jersey and the
State of New York, and the foregoing opinion is limited to the laws of the
State of New Jersey and the State of New York.
This opinion letter is provided to you by me in my capacity as
General Counsel of the Borrower and may not be relied upon by any Person
for any purpose other than in connection with the transactions contemplated
by the Credit Documents without, in each instance, my prior written
consent.
Very truly yours,
Patricia Nachtigal
General Counsel
<PAGE>
EXHIBIT F
Form of Opinion of Special New York
Counsel to the Agents
---------------------
[Closing Date]
To the Banks party to the
Credit Agreement referred to
below and to the Agents
Ladies and Gentlemen:
We have acted as special New York counsel to the Agents in
connection with the $1,500,000,000 Credit Agreement (the "Credit
Agreement") dated as of May 5, 1995 among Ingersoll-Rand Company (the
"Borrower"), the lenders named therein (the "Banks") and The Chase
Manhattan Bank (National Association), as administrative agent for the
Banks (the "Administrative Agent") and as collateral agent for the Secured
Creditors (as defined in the Pledge Agreement) (the "Collateral Agent"),
providing for loans to be made by the Banks for the purpose, among other
things, of financing the Tender Offer referred to therein. Terms defined
in the Credit Agreement and not otherwise defined herein are used herein as
defined therein, except that references to agreements and documents herein
mean such agreements and documents as in effect on the date hereof. This
opinion is being delivered to you pursuant to Section 3.01(a)(v) of the
Credit Agreement.
In rendering the opinions expressed below, we have examined the
Credit Documents. In our examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as
originals and the conformity with authentic original documents of all
documents submitted to us as copies. We have also assumed for all purposes
of the opinions expressed below, with respect to all of the documents
referred to in this opinion letter, that:
(i) such documents have been duly authorized by, have been duly
executed and delivered by, and (except as expressly provided
in paragraph 1 below with respect to the Credit Parties and
the Credit Documents to which they are party under the law
of the State of New York and the Federal laws of the United
States) constitute legal, valid, binding and enforceable
obligations of, all of the parties to such documents;
(ii) all signatories to such documents have been duly authorized;
and
<PAGE>
- 2 -
(iii) all of the parties to such documents are duly organized and
validly existing and have the power and authority (corporate
or other) to execute, deliver and perform such documents.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinions
expressed below, we are of the opinion that:
1. Each of the Credit Documents constitutes the legal, valid and
binding obligation of each Credit Party thereto, in each case
enforceable against such Credit Party in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights
of creditors generally and except as the enforceability thereof is
subject to the application of general principles of equity (regardless
of whether considered in a proceeding in equity or at law), including,
without limitation, (a) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy and (b)
concepts of materiality, reasonableness, good faith and fair dealing.
2. The Pledge Agreement is effective to create, in favor of the
Collateral Agent for the benefit of the Secured Creditors, a valid
security interest under the Uniform Commercial Code as in effect in
the State of New York (the "Uniform Commercial Code") in all of the
right, title and interest of the Borrower in, to and under the
Collateral (as defined in the Pledge Agreement) as collateral security
for the payment of the Secured Obligations (as defined in the Pledge
Agreement), except that (a) such security interest will continue in
Collateral after its sale, exchange or other disposition only to the
extent provided in Section 9-306 of the Uniform Commercial Code and
(b) the creation of a security interest in the Pledged Stock (as
defined in the Pledge Agreement), and any other portion of the
Collateral constituting a "security" (as defined in Section 8-102(c)
of the Uniform Commercial Code), requires the transfer thereof to the
Collateral Agent pursuant to Section 8-313(1) of the Uniform
Commercial Code, which transfer in the case of the Pledged Stock may
be effected in the manner contemplated by paragraph 3 below.
3. The security interest referred to in paragraph 2 above in
that portion of the Collateral consisting of the Pledged Stock will,
upon the creation of such security interest, be perfected by the
Collateral Agent's taking
<PAGE>
- 3 -
possession, and thereafter retaining possession, of the certificates
representing the same in the State of New York.
4. Assuming that the Collateral Agent (or any custodian acting
on its behalf) obtains, and thereafter retains, possession of the
portion of the Collateral consisting of the certificates representing
any Pledged Stock in good faith without notice of any adverse claim
(as defined in Section 8-302(2) of the Uniform Commercial Code) and in
bearer form or in registered form issued to the Collateral Agent or
endorsed to the Collateral Agent or in blank, any perfected security
interest therein will have priority over all other security interests
theretofore or thereafter created under the Uniform Commercial Code.
The foregoing opinions are subject to the following comments and
qualifications:
(A) The enforceability of Section 9.03(b) of the Credit
Agreement (and any similar provisions in any of the other Credit
Documents) may be limited by laws rendering unenforceable (i)
indemnification contrary to Federal or state securities laws and the
public policy underlying such laws and (ii) the release of a party
from, or the indemnification of a party against, liability for its own
gross negligence, recklessness, willful misconduct or unlawful conduct
under certain circumstances.
(B) The enforceability of provisions in the Credit Documents to
the effect that terms may not be waived or modified except in writing
may be limited under certain circumstances.
(C) We express no opinion as to (i) the effect of the laws of
any jurisdiction in which any Bank is located (other than the State of
New York) that limit the interest, fees or other charges such Bank may
impose, (ii) the second sentence of Section 9.04 of the Credit
Agreement, (iii) the second sentence of Section 9.08 of the Credit
Agreement (and any similar provisions in any other Credit Document),
insofar as such sentence relates to the subject matter jurisdiction of
the United States District Court for the Southern District of New York
to adjudicate any controversy related to the Credit Documents, and
(iv) the waiver of venue or inconvenient forum set forth in the third
sentence of Section 9.08 of the Credit Agreement (and any similar
provisions in any other Credit Document) with respect to proceedings
in the United States District Court for the Southern District of New
York.
<PAGE>
- 4 -
(D) We wish to point out that the obligations of the Borrower,
and the rights and remedies of the Collateral Agent and the Secured
Creditors, under the Pledge Agreement may be subject to possible
limitations upon the exercise of remedial or procedural provisions
contained in the Pledge Agreement, provided that such limitations do
not, in our opinion, make the remedies and procedures that will be
afforded to the Collateral Agent and the Secured Creditors inadequate
for the practical realization of the substantive benefits purported to
be provided to the Collateral Agent and the Secured Creditors by the
Pledge Agreement.
(E) We express no opinion as to the existence of, or the right,
title or interest of the Borrower in, to or under, any of the
Collateral.
(F) Except as expressly provided in paragraphs 2, 3 and 4 above,
we express no opinion as to the creation, perfection or priority of
any security interest in, or other Lien on, the Collateral.
(G) We express no opinion as to the applicability to the
obligations of the Purchaser under the Purchaser Guarantee (or the
enforceability of such obligations) of Section 548 of the Bankruptcy
Code, Article 10 of the New York Debtor and Creditor Law or any other
provision of law relating to fraudulent conveyances, transfers or
obligations.
The foregoing opinions are limited to matters involving the
Federal laws of the United States of America and the laws of the State New
York, and we do not express any opinion as to the laws of any other
jurisdiction.
This opinion letter is provided to you by us in our capacity as
your special New York counsel and may not be relied upon by any Person for
any purpose other than in connection with the transactions contemplated by
the Credit Agreement without, in each instance, our prior written consent.
Very truly yours,
CDP/[RMG]
<PAGE>
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of ________________, 19_ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), INGERSOLL-RAND COMPANY (the
"Borrower") and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as
Administrative Agent (the "Administrative Agent").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the $1,500,000,000 Credit Agreement dated as of May
5, 1995 among the Borrower, the Assignor and the other Banks party thereto,
as Banks, and The Chase Manhattan Bank (National Association), as
Administrative Agent and Collateral Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has
a Commitment to make Loans to the Borrower in an aggregate principal amount
at any time outstanding not to exceed $_________________;
WHEREAS, Committed Loans made to the Borrower by the Assignor
under the Credit Agreement in the aggregate principal amount of
$_______________ are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of
the rights of the Assignor under the Credit Agreement in respect of a
portion of its Commitment thereunder in an amount equal to $____________
(the "Assigned Amount"), together with a corresponding portion of its
outstanding Committed Loans, and the Assignee proposes to accept assignment
of such rights and assume the corresponding obligations from the Assignor
on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise
-----------
defined herein shall have the respective meanings set forth in the Credit
Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to
----------
the Assignee all of the rights of the Assignor under the Credit Agreement
to the extent of the Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the obligations of the
Assignor under the Credit
<PAGE>
- 2 -
Agreement to the extent of the Assigned Amount, including the purchase from
the Assignor of the corresponding portion of the principal amount of the
Committed Loans made by the Assignor outstanding at the date hereof. Upon
the execution and delivery hereof by the Assignor, the Assignee, the
Borrower and the Administrative Agent and the payment of the amounts
specified in Section 3 required to be paid on the date hereof (i) the
Assignee shall, as of the date hereof, succeed to the rights and be
obligated to perform the obligations of a Bank under the Credit Agreement
with a Commitment in an amount equal to the Assigned Amount, and (ii) the
Commitment of the Assignor shall, as of the date hereof, be reduced by a
like amount and the Assignor released from its obligations under the Credit
Agreement to the extent such obligations have been assumed by the Assignee.
The assignment provided for herein shall be without recourse to the
Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
--------
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof in Federal funds the amount heretofore agreed between them.
It is understood that facility fees in respect of the Assigned Amount
accrued to the date hereof are for the account of the Assignor and such
fees accruing from and including the date hereof are for the account of the
Assignee. Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Credit Agreement which is for the account of
the other party hereto, it shall receive the same for the account of such
other party to the extent of such other party's interest therein and shall
promptly pay the same to such other party.
SECTION 4. Consent of the Borrower and the Administrative Agent.
----------------------------------------------------
This Agreement is conditioned upon the consent of the Borrower and the
Administrative Agent pursuant to Section 9.06(c) of the Credit Agreement.
The execution of this Agreement by the Borrower and the Administrative
Agent is evidence of this consent. Pursuant to Section 9.06(c) the Borrower
agrees to execute and deliver a Note payable to the order of the Assignee
to evidence the assignment and assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
------------------------
representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition, or
statements of the Borrower, or the validity and enforceability of the
obligations of the Borrower in respect of the Credit Agreement or any Note.
The Assignee acknowledges that it has, independently and without reliance
on the Assignor, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter
<PAGE>
- 3 -
into this Agreement and will continue to be responsible for making its own
independent appraisal of the business, affairs and financial condition of
the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any
------------
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date
first above written.
[ASSIGNOR]
By_______________________________
Title:
[ASSIGNEE]
By_______________________________
Title:
INGERSOLL-RAND COMPANY
By_______________________________
Title:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Administrative Agent
By_______________________________
Title:
<PAGE>
EXHIBIT H
[Form of Pledge Agreement]
PLEDGE AND SECURITY AGREEMENT dated as of May 5, 1995 between
INGERSOLL-RAND COMPANY, a corporation duly organized and validly existing
under the laws of the State of New Jersey (the "Borrower") and THE CHASE
MANHATTAN BANK (NATIONAL ASSOCIATION), as collateral agent (in such
capacity, together with its successors in such capacity, the "Collateral
Agent") for the Secured Creditors (as hereinafter defined).
The Borrower, certain banks (the "Banks") and The Chase Manhattan
Bank (National Association), as administrative agent and as Collateral
Agent, are parties to a Credit Agreement dated as of May 5, 1995 (as
modified and supplemented and in effect from time to time, the "Credit
Agreement") providing, subject to the terms and conditions thereof, for
loans to be made by the Banks to the Borrower in an aggregate principal
amount not exceeding $1,500,000,000 (the "Loans") at any one time
outstanding.
The Borrower is also party to (1) a $400,000,000 Credit Agreement
dated as of October 31, 1994 (as modified and supplemented and in effect
from time to time, the "Other Credit Agreement") providing, subject to the
terms and conditions thereof, for loans to be made by certain banks party
thereto to the Borrower in an aggregate principal amount not exceeding
$400,000,000 (the "Other Loans") at any one time outstanding and (2) an
Indenture with The Bank of New York, as trustee (the "Indenture Trustee"),
dated as of August 1, 1986 (as modified and supplemented and in effect from
time to time, the "Indenture"), pursuant to which there has been issued (i)
the Borrower's 9.00% Debentures due 2021 (the "Debentures"), (ii) the
Borrower's 8-1/4% Notes due 1996 (the "1996 Notes") and (iii) the
Borrower's 6.875% Notes due 2003 (the "2003 Notes"), each of which requires
that the obligations thereunder shall be secured equally and ratably
hereby.
To induce the Banks to enter into the Credit Agreement and to
make Loans thereunder and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Borrower has
agreed to pledge and grant a security interest in the Collateral (as
hereinafter defined) as security for the Secured Obligations (as
hereinafter defined). Accordingly, the parties hereto agree as follows:
Pledge and Security Agreement
-----------------------------
<PAGE>
- 2 -
Section 1. Definitions. Terms defined in the Credit Agreement
-----------
are used herein as defined therein. In addition, as used herein:
"Collateral" shall have the meaning ascribed thereto in Section 3
hereof.
"Collateral Account" shall have the meaning ascribed thereto in
Section 4 hereof.
"Credit Agreement Obligations" shall mean the obligations of the
Borrower in respect of the principal of and interest on the Loans made
by the Banks to, and the Note(s) held by each Bank of, the Borrower
and all other amounts from time to time owing to the Banks or the
Agents by the Borrower under the Credit Agreement.
"Debt Securities" shall mean (i) the Debentures, (ii) the 1996
Notes and (iii) the 2003 Notes.
"Other Credit Agreement Obligations" shall mean the obligations
of the Borrower in respect of the principal of and interest on the
Other Loans made by the banks to, and the note(s) held by each bank
of, the Borrower and all other amounts from time to time owing to the
banks or the agent by the Borrower under the Other Credit Agreement.
"Indenture Acceleration Event" shall mean the declaration of the
principal of any of the Debt Securities to be due and payable in
accordance with Section 502 of the Indenture, which declaration shall
not have been rescinded or annulled.
"Indenture Obligations" shall mean the obligations of the
Borrower to pay the principal of, premium (if any) on and interest on
the Debt Securities issued, and all other amounts from time to time
payable by the Borrower, under the Indenture.
"Permitted Investments" shall mean: (a) direct obligations of
the United States of America, or of any agency thereof, or obligations
guaranteed as to principal and interest by the United States of
America, or of any agency thereof, in either case maturing not more
than 90 days from the date of acquisition thereof; (b) certificates of
deposit issued by any bank or trust company organized under the laws
of the United States of America or any state thereof the long-term
debt of which is rated AA or better or Aa or better by S&P or Moody's,
respectively, maturing not more than 90 days from the date of
acquisition thereof; and (c) commercial paper rated A-1 or better and
P-
Pledge and Security Agreement
-----------------------------
<PAGE>
- 3 -
1 by S&P or Moody's, respectively, maturing not more than 90 days from
the date of acquisition thereof.
"Pledged Stock" shall have the meaning ascribed thereto in
Section 3(a) hereof.
"Required Secured Creditors" shall mean (i) other than in the
case of directing the Collateral Agent to enforce its rights under, or
take actions pursuant to, Sections 4.01, 4.02, 5.05(c) or 5.06 hereof,
the Required Banks and (ii) in the case of directing the Collateral
Agent to enforce its rights under, and to take action pursuant to,
Sections 4.01, 4.02, 5.05(c) or 5.06 hereof, Secured Creditors holding
at least a majority of the outstanding amount of Secured Obligations
(for which purpose calculation of the requisite amount of Secured
Obligations shall exclude all Debt Securities owned by the Borrower or
any Subsidiary or Affiliate of the Borrower); provided that if (i) an
--------
Indenture Acceleration Event has occurred and is continuing and
(ii) the Borrower shall remain in default in the payment of the
principal of or interest on the Debt Securities for more than 180 days
after the occurrence of such Indenture Acceleration Event and (iii)
the Collateral Agent has not commenced enforcement action under
Sections 4.01, 4.02 and 5.05(c) hereof, the Required Secured Creditors
for the purpose of directing the Collateral Agent to enforce its
rights under, and to take action pursuant to, Sections 4.01, 4.02 and
5.05(c) hereof, shall be Secured Creditors holding at least a majority
of the aggregate outstanding amount of (i) Indenture Obligations (for
which purpose calculation of the requisite amount of Indenture
Obligations shall exclude all Debt Securities owned by the Borrower or
any Affiliate or Subsidiary of the Borrower) and (ii) other Secured
Obligations (if any) that have been declared to be, or that have
otherwise become, due and payable.
"Secured Creditors" shall mean (i) the Banks party to the Credit
Agreement, (ii) the banks party to the Other Credit Agreement, (iii)
the holders of the Debt Securities and (iv) any other holders of
Secured Obligations.
"Secured Obligations" shall mean, collectively, (i) the Credit
Agreement Obligations, (ii) the Other Credit Agreement Obligations,
(iii) the Indenture Obligations and (iv) all obligations of the
Borrower to the Secured Creditors and the Collateral Agent hereunder.
"Stock Collateral" shall mean, collectively, the Collateral
described in clauses (a) through (c) of Section 3 hereof and the
proceeds of and to any such property and, to the extent related to any
such property or such proceeds,
Pledge and Security Agreement
-----------------------------
<PAGE>
- 4 -
all books, correspondence, credit files, records, invoices and other
papers.
"Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect from time to time in the State of New York.
Section 2. Representations and Warranties. The Borrower
------------------------------
represents and warrants to the Banks and the Collateral Agent that:
(a) At the time that any Collateral becomes subject to the Lien
of this Agreement, the Borrower will be the sole beneficial owner of
such Collateral and no Lien exists or will exist upon such Collateral
at any time (and no right or option to acquire the same exists in
favor of any other Person), except for the pledge and security
interest in favor of the Collateral Agent for the benefit of the
Secured Creditors created or provided for herein, which pledge and
security interest shall constitute a first priority perfected pledge
and security interest in and to (i) the Stock Collateral upon delivery
of stock certificates evidencing the Stock Collateral to the
Collateral Agent and (ii) the Collateral (other than Stock Collateral)
upon completion of the filing of Uniform Commercial Code financing
statements in the form of Annex I to Exhibit E-2 to the Credit
Agreement in the office of the Secretary of State of New Jersey.
(b) The Pledged Stock represented by the certificates identified
in Annex 1 hereto is, and all other Pledged Stock in which the
Borrower shall hereafter grant a security interest pursuant to
Section 3 hereof will be, duly authorized, validly existing, fully
paid and non-assessable and none of such Pledged Stock is or will be
subject to any contractual restriction, or any restriction under the
charter or by-laws of the Purchaser, upon the transfer of such Pledged
Stock (except for any such restriction contained herein or in the
Credit Agreement).
(c) The Pledged Stock represented by the certificates identified
in Annex 1 hereto constitutes all of the issued and outstanding shares
of capital stock of any class of the Purchaser beneficially owned by
the Borrower on the date hereof (whether or not registered in the name
of the Borrower) and said Annex 1 correctly identifies, as at the date
hereof, the respective class and par value of the shares comprising
such Pledged Stock and the respective number of shares (and registered
owners thereof) represented by each such certificate.
Pledge and Security Agreement
-----------------------------
<PAGE>
- 5 -
Section 3. Collateral. As collateral security for the prompt
----------
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations, the Borrower hereby pledges and
grants to the Collateral Agent, for the benefit of the Secured Creditors as
hereinafter provided, a security interest in all of the Borrower's right,
title and interest in and to the following Property, whether now owned by
the Borrower or hereafter acquired and whether now existing or hereafter
coming into existence (all being collectively referred to herein as
"Collateral"):
(a) the shares of common stock of the Purchaser represented by
the certificates identified in Annex 1 hereto and all other shares of
capital stock of whatever class of the Purchaser, now or hereafter
owned by the Borrower (including, without limitation, from and after
the Merger Effective Date, the shares of common stock of Clark), in
each case together with the certificates representing the same
(collectively, the "Pledged Stock");
(b) all shares, securities, moneys or other Property
representing a dividend on any of the Pledged Stock, or representing a
distribution or return of capital upon or in respect of the Pledged
Stock, or resulting from a split-up, revision, reclassification or
other like change of the Pledged Stock or otherwise received in
exchange therefor, and any subscription warrants, rights or options
issued to the holders of, or otherwise in respect of, the Pledged
Stock;
(c) without affecting the obligations of the Borrower under any
provision prohibiting such action hereunder or under the Credit
Agreement, in the event of any consolidation or merger in which the
Purchaser is not the surviving corporation, all shares of each class
of the capital stock of the successor corporation (including, without
limitation, from and after the Merger Effective Date, Clark) formed by
or resulting from such consolidation or merger (the Pledged Stock,
together with all other certificates, shares, securities, moneys and
other Property as may from time to time be pledged hereunder pursuant
to clause (a) or (b) above and this clause (c) being herein
collectively called the "Stock Collateral");
(d) all Debt of the Purchaser owing to the Borrower;
(e) the balance from time to time standing to the credit of the
Collateral Account; and
(f) all proceeds, benefits, substitutions and replacements of
and to any of the Property of the Borrower described in the preceding
clauses of this Section 3;
Pledge and Security Agreement
-----------------------------
<PAGE>
- 6 -
provided that, upon receipt at any time on or after the Facility Reduction
- --------
Date, of a true and correct certificate from a senior officer of the
Borrower that (i) refers to this Agreement and the Pledged Stock and the
other Collateral, (ii) requests the release of the Collateral and (iii)
certifies that no Default or Indenture Acceleration Event shall have
occurred and be continuing, the Collateral Agent shall release to the
Borrower the Collateral and the security interest in the Collateral
hereunder shall terminate. Such release shall be without any recourse,
warranty or representation whatsoever, whereupon this Agreement shall
terminate and the provisions of Section 5.14 hereof shall apply to such
release mutatis mutandis.
----------------
Section 4. Cash Proceeds of Collateral.
---------------------------
4.01 Collateral Account. The Collateral Agent may establish
------------------
with Chase a cash collateral account (the "Collateral Account") in the name
and under the control of the Collateral Agent into which there shall be
deposited from time to time the cash proceeds of any of the Collateral
required to be delivered to the Collateral Agent pursuant hereto and into
which the Borrower may from time to time deposit any additional amounts
that the Borrower wishes, or may be required, to pledge to the Collateral
Agent for the benefit of the Secured Creditors as additional collateral
security hereunder. The balance from time to time standing to the credit
of the Collateral Account shall constitute part of the Collateral hereunder
and shall not constitute payment of the Secured Obligations until applied
as hereinafter provided. Except with respect to cash deposited pursuant to
Section 5.08(b) of the Credit Agreement and except as expressly provided in
the next sentence, the Collateral Agent shall remit the collected balance
standing to the credit of the Collateral Account to or upon the order of
the Borrower as the Borrower shall from time to time instruct. However, at
any time following the occurrence and during the continuance of an Event of
Default or an Indenture Acceleration Event, the Collateral Agent may (and,
if instructed by the Required Secured Creditors, shall) in its (or their)
discretion apply or cause to be applied (subject to collection) the balance
from time to time standing to the credit of the Collateral Account to the
payment of the Secured Obligations in the manner specified in Section 5.11
hereof. The balance from time to time standing to the credit of the
Collateral Account shall be subject to withdrawal only as provided herein.
In addition to the foregoing, the Borrower agrees that if the proceeds of
any Collateral hereunder shall be received by the Borrower, the Borrower
shall, except as otherwise expressly provided in Section 5.04(c) hereof, as
promptly as possible deposit such proceeds into the Collateral Account.
Until so deposited, all such proceeds shall be held in trust by the
Borrower for the Collateral Agent and shall not be commingled with any
other funds or Property of the Borrower.
Pledge and Security Agreement
-----------------------------
<PAGE>
- 7 -
4.02 Investment of Balance in Collateral Account. Amounts on
-------------------------------------------
deposit in the Collateral Account shall be invested from time to time in
such Permitted Investments as the Borrower (or, after the occurrence and
during the continuance of an Event of Default or Indenture Acceleration
Event, the Collateral Agent) shall determine, which Permitted Investments
shall be held in the name and be under the control of the Collateral Agent,
provided that at any time after the occurrence and during the continuance
- --------
of an Event of Default or Indenture Acceleration Event, the Collateral
Agent may (and, if instructed by the Required Secured Creditors, shall) in
its (or their) discretion at any time and from time to time elect to
liquidate any such Permitted Investments and to apply or cause to be
applied the proceeds thereof to the payment of the Secured Obligations in
the manner specified in Section 5.11 hereof.
Section 5. Further Assurances; Remedies. In furtherance of the
----------------------------
grant of the pledge and security interest pursuant to Section 3 hereof, the
Borrower hereby agrees with each Bank and the Collateral Agent as follows:
5.01 Delivery and Other Perfection. The Borrower shall:
-----------------------------
(a) if any of the shares, securities or other Property required
to be pledged by the Borrower under clauses (a), (b) and (c) of
Section 3 hereof are received by the Borrower, forthwith either
(x) transfer and deliver to the Collateral Agent such shares,
securities, moneys or other Property so received by the Borrower
(together with the certificates for any such shares and securities
duly endorsed in blank or accompanied by undated stock powers duly
executed in blank), all of which thereafter shall be held by the
Collateral Agent, pursuant to the terms of this Agreement, as part of
the Collateral or (y) take such other action as the Collateral Agent
shall deem reasonably necessary or appropriate to duly record the Lien
created hereunder in such shares, securities or other Property in said
clauses (a), (b) and (c);
(b) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers
that may be necessary or desirable (in the reasonable judgment of the
Collateral Agent) to create, preserve, perfect or validate the
security interest granted pursuant hereto or to enable the Collateral
Agent to exercise and enforce its rights hereunder with respect to
such pledge and security interest; and
(c) keep full and accurate books and records relating to the
Collateral, and stamp or otherwise mark such books and records in such
manner as the Collateral Agent may
Pledge and Security Agreement
-----------------------------
<PAGE>
- 8 -
reasonably require in order to reflect the security interests granted
by this Agreement; and
(d) permit representatives of the Collateral Agent, upon
reasonable notice, at any time during normal business hours to inspect
and make abstracts from its books and records pertaining to the
Collateral, and forward copies of any notices or communications
received by the Borrower with respect to the Collateral, all in such
manner as the Collateral Agent may require.
5.02 Other Financing Statements and Liens. The Borrower shall
------------------------------------
not file or suffer to be on file, or authorize or permit to be filed or to
be on file, in any jurisdiction, any financing statement or like instrument
with respect to the Collateral in which the Collateral Agent is not named
as the sole secured party for the benefit of the Banks. The Borrower will
not permit any Debt owing by the Purchaser to the Borrower to be evidenced
by any instruments (as defined in Section 9-105(1)(i) of the Uniform
Commercial Code.
5.03 Preservation of Rights. The Collateral Agent shall not be
----------------------
required to take steps necessary to preserve any rights against prior
parties to any of the Collateral.
5.04 Stock Collateral.
----------------
(a) The Borrower will cause the Stock Collateral to constitute
at all times 100% of the total number of shares of each class of capital
stock of the Purchaser then outstanding.
(b) So long as no Event of Default or Indenture Acceleration
Event shall have occurred and be continuing, the Borrower shall have the
right to exercise all voting, consensual and other powers of ownership
pertaining to the Stock Collateral for all purposes not inconsistent with
the terms of this Agreement, the Credit Agreement, the Notes or any other
instrument or agreement referred to herein or therein, provided that the
--------
Borrower agrees that it will not vote the Stock Collateral in any manner
that is inconsistent with the terms of this Agreement, the Credit
Agreement, the Notes or any such other instrument or agreement and the
Collateral Agent shall execute and deliver to the Borrower or cause to be
executed and delivered to the Borrower all such proxies, powers of
attorney, dividend and other orders, and all such instruments, without
recourse, as the Borrower may reasonably request for the purpose of
enabling the Borrower to exercise the rights and powers that it is entitled
to exercise pursuant to this Section 5.04(b).
(c) Unless and until an Event of Default or an Indenture
Acceleration Event has occurred and is continuing, the
Pledge and Security Agreement
-----------------------------
<PAGE>
- 9 -
Borrower shall be entitled to receive and retain any dividends on the Stock
Collateral paid in cash out of earned surplus.
(d) If any Event of Default or Indenture Acceleration Event
shall have occurred, then so long as such Event of Default or Indenture
Acceleration Event shall continue, and whether or not the Collateral Agent
or any Secured Creditor exercises any available right to declare any
Secured Obligation due and payable or seeks or pursues any other relief or
remedy available to it under applicable law or under this Agreement, the
Credit Agreement, the Notes, the Indenture or any other agreement relating
to such Secured Obligation, the Collateral Agent shall, if the Required
Secured Creditors so elect, and upon the giving of notice to the Borrower
of its intention to do so, have the right (i) to exercise all voting and
consensual rights pertaining to the Stock Collateral for all purposes and
the Borrower shall execute and deliver to the Collateral Agent or cause to
be executed and delivered to the Collateral Agent all such proxies, powers
of attorney and all such other instruments, without recourse, as the
Collateral Agent may reasonably request for the purpose of enabling the
Collateral Agent to exercise the rights that it is entitled to exercise
pursuant to this Section 5.04(d) and (ii) subject to applicable law or
regulation, to cause the Stock Collateral to be registered in the name of
the Collateral Agent or its nominee.
(e) If any Event of Default or Indenture Acceleration Event
shall have occurred, then so long as such Event of Default or Indenture
Acceleration Event shall continue, and whether or not the Collateral Agent
or any Secured Creditor exercises any available right to declare any
Secured Obligation due and payable or seeks or pursues any other relief or
remedy available to it under applicable law or under this Agreement, the
Credit Agreement, the Notes, the Indenture or any other agreement relating
to such Secured Obligation, all dividends and other distributions on the
Stock Collateral shall be paid directly to the Collateral Agent and
retained by it in the Collateral Account as part of the Stock Collateral,
subject to the terms of this Agreement, and, if the Collateral Agent shall
so request in writing, the Borrower agrees to execute and deliver to the
Collateral Agent appropriate additional dividend, distribution and other
orders and documents to that end, provided that if such Event of Default or
--------
Indenture Acceleration Event is cured, any such dividend or distribution
theretofore paid to the Collateral Agent shall, upon request of the
Borrower (except to the extent theretofore applied to the Secured
Obligations), be returned by the Collateral Agent to the Borrower.
Pledge and Security Agreement
-----------------------------
<PAGE>
- 10 -
5.05 Events of Default, Etc. During the period during which an
-----------------------
Event of Default or an Indenture Acceleration Event shall have occurred and
be continuing:
(a) the Collateral Agent may make any reasonable compromise or
settlement deemed desirable with respect to any of the Collateral and
may extend the time of payment, arrange for payment in installments,
or otherwise modify the terms of, any of the Collateral;
(b) the Collateral Agent shall have all of the rights and
remedies with respect to the Collateral of a secured party under the
Uniform Commercial Code (whether or not said Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled
under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted, including, without limitation, the
right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral
as if the Collateral Agent were the sole and absolute owner thereof
(and the Borrower agrees to take all such action as may be appropriate
to give effect to such right);
(c) the Collateral Agent in its discretion may, in its name or
in the name of the Borrower or otherwise, demand, sue for, collect or
receive any money or property at any time payable or receivable on
account of or in exchange for any of the Collateral, but shall be
under no obligation to do so; and
(d) the Collateral Agent may, upon ten business days' prior
written notice to the Borrower of the time and place, with respect to
the Collateral or any part thereof that shall then be or shall
thereafter come into the possession, custody or control of the
Collateral Agent, the Secured Creditors or any of their respective
agents, sell, assign or otherwise dispose of all or any part of such
Collateral, at such place or places as the Collateral Agent deems
best, and for cash or for credit or for future delivery (without
thereby assuming any credit risk), at public or private sale, without
demand of performance or notice of intention to effect any such
disposition or of the time or place thereof (except such notice as is
required above or by applicable statute and cannot be waived), and the
Collateral Agent or any Secured Creditor or anyone else may be the
purchaser, assignee or recipient of any or all of the Collateral so
disposed of at any public sale (or, to the extent permitted by law, at
any private sale) and thereafter hold the same absolutely, free from
any claim or right of whatsoever kind, including any right or equity
of redemption
Pledge and Security Agreement
-----------------------------
<PAGE>
- 11 -
(statutory or otherwise), of the Borrower, any such demand, notice and
right or equity being hereby expressly waived and released. The
proceeds of each collection, sale or other disposition under this
Section 5.05 shall be applied in accordance with Section 5.11 hereof.
The Borrower recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, the
Collateral Agent may be compelled, with respect to any sale of all or any
part of the Stock Collateral, to limit purchasers to those who will agree,
among other things, to acquire the Stock Collateral for their own account,
for investment and not with a view to the distribution or resale thereof.
The Borrower acknowledges that any such private sales may be at prices and
on terms less favorable to the Collateral Agent than those obtainable
through a public sale without such restrictions, and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have
been made in a commercially reasonable manner and that the Collateral Agent
shall have no obligation to engage in public sales and no obligation to
delay the sale of any Stock Collateral for the period of time necessary to
permit the Purchaser or issuer thereof to register it for public sale.
5.06 Registration Rights. If an Event of Default or an
-------------------
Indenture Acceleration Event shall have occurred and be continuing, then,
upon the written request of the Collateral Agent, the Borrower:
(a) will use its best efforts to cause to become effective under
the Securities Act of 1933, as amended and from time to time in effect
(the "Securities Act"), a registration statement or registration
statements or a qualification or qualifications for exemption from
registration relating to any or all of the Stock Collateral,
irrespective of the amount thereof then pledged to the Collateral
Agent, and will use its best efforts to keep effective each such
registration or qualification and cause to be filed such
post-effective amendment or amendments to each such registration
statement (including any amendment or supplement thereto required by
the Securities Act or necessary in order to make the statements
contained in the prospectus not untrue or misleading), as may be
appropriate in the opinion of the Collateral Agent to permit the sale
or other disposition of any of the Stock Collateral pursuant to this
Agreement at such time and on such terms as the Collateral Agent may
desire all in conformity with the requirements of the Securities Act
and the rules and regulations of the Securities and Exchange
Commission ("SEC") applicable thereto (it being understood, however,
that the Borrower shall not be obligated more than once to
Pledge and Security Agreement
-----------------------------
<PAGE>
- 12 -
cause a registration statement or statements to become effective under
this Section 5.06);
(b) will cause to be furnished to the Collateral Agent such
number of copies as the Collateral Agent may request of each
preliminary prospectus, prospectus and offering circular, will
promptly notify the Collateral Agent of the happening of any event as
a result of which any then effective prospectus or circular includes
an untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein not misleading in the
light of then existing circumstances and will cause the Collateral
Agent to be furnished with such number of copies as the Collateral
Agent may request of such supplement to or amendment of such
prospectus or circular as is necessary to eliminate such untrue
statement or supply such omission;
(c) will, to the extent permitted by law, and will use its best
efforts to cause the Purchaser, to the extent permitted by law, to
indemnify, defend, and hold harmless the Collateral Agent and each
Secured Creditor from and against any loss, liability, expense or
claim (including the reasonable cost of investigation and reasonable
counsel fees incurred in connection therewith) which the Collateral
Agent or such Secured Creditor may incur, under the Securities Act or
otherwise, insofar as such loss, liability, expense or claim arises
out of or is based upon any alleged untrue statement of a material
fact contained in such registration statement (or any amendment
thereto) or in the preliminary prospectus or prospectus (or any
amendment or supplement thereto) or in the notification or offering
circular, or arises out of or is based upon any alleged omission to
state a material fact required to be stated therein or necessary to
make the statements in any thereof not misleading (such
indemnification to remain operative regardless of any investigation
made by or on behalf of the Collateral Agent or any person controlling
the Collateral Agent), except to the extent that any such loss,
liability, expense or claim arises solely out of or is based upon an
alleged untrue statement or an alleged omission to state a material
fact that was based upon, or in conformity with, information furnished
in writing by the Collateral Agent;
(d) will use its best efforts to have qualified, filed or
registered any of the Stock Collateral under the "Blue Sky" or other
securities laws of such states and to obtain the approval of any
governmental authorities all as may be reasonably requested by the
Collateral Agent and will cause to be kept effective all such
qualifications, filings, registrations and approvals;
Pledge and Security Agreement
-----------------------------
<PAGE>
- 13 -
(e) will do any and all other acts and things which may be
necessary or advisable to enable the Collateral Agent to consummate
any proposed sale or other disposition of any of the Stock Collateral
pursuant to this Agreement; and
(f) without limiting its obligations hereunder will bear all
costs and expenses of carrying out its obligations under this
Agreement.
5.07 Information. If the Collateral Agent determines to
-----------
exercise its right to sell all or any of the Collateral, upon written
request, the Borrower shall from time to time furnish to the Collateral
Agent all such information as the Collateral Agent may reasonably request
in order to determine the number of shares included in the Collateral which
may be sold by the Collateral Agent as exempt transactions under the
Securities Act and rules of the SEC thereunder, as the same are from time
to time in effect. Without limitation of the foregoing, if the Collateral
Agent determines to exercise its right to sell all or any of the Stock
Collateral, the Borrower (and the directors and officers thereof) shall
upon written request from the Collateral Agent, in order to enable the
Collateral Agent to qualify such sales as exempt transactions under Section
4(1) of the Securities Act and Rule 144 of the SEC thereunder (or any
statutory provisions or rules in effect in lieu thereof), as the same are
from time to time in effect (i) register the Stock Collateral pursuant to
Section 12(g) of the Securities and Exchange Act of 1934 (or any provision
in effect in lieu thereof) and (ii) furnish to the Collateral Agent all
such information as the Collateral Agent may reasonably request in order to
determine the number of shares included in such Stock Collateral, if any,
which may be sold under Rule 144(e) (or any provision in effect in lieu
thereof).
5.08 Private Sale. The Collateral Agent and the Secured
------------
Creditors shall incur no liability as a result of the sale of the
Collateral, or any part thereof, at any private sale pursuant to
Section 5.05 hereof conducted in a commercially reasonable manner. The
Borrower hereby waives any claims against the Collateral Agent or any
Secured Creditor arising by reason of the fact that the price at which the
Collateral may have been sold at such a private sale was less than the
price that might have been obtained at a public sale or was less than the
aggregate amount of the Secured Obligations, even if the Collateral Agent
accepts the first offer received and does not offer the Collateral to more
than one offeree.
5.09 Deficiency. If the proceeds of sale, collection or other
----------
realization of or upon the Collateral pursuant to Section 5.05 hereof are
insufficient to cover the costs and expenses of such realization and the
payment in full of the Secured Obligations, the Borrower shall remain
liable for any deficiency.
Pledge and Security Agreement
-----------------------------
<PAGE>
- 14 -
5.10 Removals, Etc. Without at least 30 days' prior written
--------------
notice to the Collateral Agent, the Borrower shall not (i) maintain its
chief executive office at any place other than at the address indicated
beneath the signature of the Borrower to the Credit Agreement or
(ii) change its name, or the name under which it does business, from the
name shown on the signature pages hereto.
5.11 Application of Proceeds. Except as otherwise herein
-----------------------
expressly provided, the proceeds of any collection, sale or other
realization of all or any part of the Collateral pursuant to Section 5.05
hereof, and any other cash at the time held by the Collateral Agent under
Section 5 hereof shall be applied by the Collateral Agent:
First, to the payment of the costs and expenses of such
-----
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of the Collateral Agent and the fees
and expenses of its agents and counsel, and all expenses incurred and
advances made by the Collateral Agent in connection therewith;
Next, to the payment in full of the Secured Obligations (whether
----
or not then due), in each case equally and ratably in accordance with
the respective amounts thereof or as all of the Secured Creditors
holding the same may otherwise agree; and
Finally, to the payment to the Borrower, or its successors or
-------
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining.
Proceeds of Collateral to be applied by the Collateral Agent to
the payment of any of the Indenture Obligations shall be paid to the
Indenture Trustee and, to the extent any such Indenture Obligations shall
not then be due, such payment shall be applied by the Indenture Trustee as
agreed between the Borrower and the Indenture Trustee. As used in this
Section 5, "proceeds" of Collateral shall mean cash, securities and other
property realized in respect of, and distributions in kind of, Collateral,
including any thereof received under any reorganization, liquidation or
adjustment of debt of the Borrower or any issuer of or obligor on any of
the Collateral.
5.12 Attorney-in-Fact. Without limiting any rights or powers
----------------
granted by this Agreement to the Collateral Agent, upon the occurrence and
during the continuance of any Event of Default or Indenture Acceleration
Event the Collateral Agent is hereby appointed the attorney-in-fact of the
Borrower for the purpose of carrying out the provisions of this Section 5
and taking any action and executing any instruments that the Collateral
Agent may deem necessary or advisable to accomplish the purposes
Pledge and Security Agreement
-----------------------------
<PAGE>
- 15 -
hereof, which appointment as attorney-in-fact is irrevocable and coupled
with an interest. Without limiting the generality of the foregoing, so
long as the Collateral Agent shall be entitled under this Section 5 to make
collections in respect of the Collateral, the Collateral Agent shall have
the right and power to receive, endorse and collect all checks made payable
to the order of the Borrower representing any dividend, payment or other
distribution in respect of the Collateral or any part thereof and to give
full discharge for the same.
5.13 Perfection. Prior to or concurrently with the execution
----------
and delivery of this Agreement, the Borrower shall (i) file such financing
statements and other documents in such filing or recording offices as the
Collateral Agent may reasonably request to perfect the security interests
granted by Section 3 of this Agreement and (ii) deliver to the Collateral
Agent all certificates identified in Annex 1 hereto, accompanied by undated
stock powers duly executed in blank.
5.14 Release; Termination.
--------------------
(a) It is expressly acknowledged and agreed that any or all of
the Collateral may be released by the Collateral Agent acting (i) so long
as no Indenture Acceleration Event shall have occurred and be continuing,
at the direction of all of the Banks and (ii) if an Indenture Acceleration
Event shall have occurred and be continuing, at the direction of all of the
Secured Creditors. Upon any release of any Collateral (including, without
limitation, a release pursuant to Section 3 hereof), the Collateral Agent
shall, at the request and expense of the Borrower, and without the further
consent of, or liability to, any Secured Creditor, release such Collateral
and execute and deliver to the Borrower a proper instrument or instruments
acknowledging the release of such Collateral from this Agreement, and will
duly assign, transfer and deliver to the Borrower against receipt, but
without any recourse, warranty or representation whatsoever, the Collateral
being released.
(b) Subject to a prior termination of this Agreement pursuant to
Section 3 hereof, when all Credit Agreement Obligations shall have been
paid in full, and the Commitments of the Banks under the Credit Agreement
shall have expired or been terminated, this Agreement shall terminate, and
the Collateral Agent shall forthwith cause to be assigned, transferred and
delivered, against receipt but without any recourse, warranty or
representation whatsoever, any remaining Collateral and money received in
respect thereof, to or on the order of the Borrower; provided, however,
-------- -------
that no such termination shall occur in the event that an Indenture
Acceleration Event shall have occurred and be continuing unless the
Indenture Obligations shall have been paid in full or the holders of the
Indenture Obligations shall have consented to such termination. The
Collateral Agent
Pledge and Security Agreement
-----------------------------
<PAGE>
- 16 -
shall also execute and deliver to the Borrower upon such termination
(including, without limitation, a termination pursuant to Section 3 hereof)
such Uniform Commercial Code termination statements and such other
documentation as shall be reasonably requested by the Borrower to effect
the termination and release of the Liens on the Collateral.
(c) Upon any release of Collateral pursuant to Section 5.14(a)
or (b) above or the proviso at the end of Section 3 hereof, none of the
Secured Creditors shall have any continuing right or interest in such
Collateral or any proceeds thereof.
5.15 Further Assurances. The Borrower agrees that, from time to
------------------
time upon the written request of the Collateral Agent, the Borrower will
execute and deliver such further documents and do such other acts and
things as the Collateral Agent may reasonably request in order fully to
effect the purposes of this Agreement.
Section 6. Miscellaneous.
-------------
6.01 No Waiver. No failure on the part of the Collateral Agent
---------
or any Secured Creditor to exercise, and no course of dealing with respect
to, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise by
the Collateral Agent or any Secured Creditor of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. The remedies herein are cumulative and
are not exclusive of any remedies provided by law.
6.02 Notices. All notices, requests, consents and demands
-------
hereunder shall be in writing and telecopied or delivered to the intended
recipient at its "Address for Notices" specified pursuant to Section 9.01
of the Credit Agreement and shall be deemed to have been given at the times
specified in said Section 9.01.
6.03 Expenses. The Borrower agrees to reimburse each of the
--------
Secured Creditors and the Collateral Agent for all reasonable costs and
expenses of the Secured Creditors and the Collateral Agent (including,
without limitation, the reasonable fees and expenses of legal counsel) in
connection with (i) any Default and any enforcement or collection
proceeding resulting therefrom, including, without limitation, all manner
of participation in or other involvement with (w) performance by the
Collateral Agent of any obligations of the Borrower in respect of the
Collateral that the Borrower has failed or refused to perform, (x)
bankruptcy, insolvency, receivership, foreclosure, winding up or
liquidation proceedings, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or
Pledge and Security Agreement
-----------------------------
<PAGE>
- 17 -
settlement in respect of any of the Collateral, and for the care of the
Collateral and defending or asserting rights and claims of the Collateral
Agent in respect thereof, by litigation or otherwise, including expenses of
insurance, (y) judicial or regulatory proceedings and (z) workout,
restructuring or other negotiations or proceedings (whether or not the
workout, restructuring or transaction contemplated thereby is consummated)
and (ii) the enforcement of this Section 6.03, and all such costs and
expenses shall be Secured Obligations entitled to the benefits of the
collateral security provided pursuant to Section 3 hereof.
6.04 Amendments, Etc. The terms of this Agreement may be
----------------
waived, altered or amended only by an instrument in writing duly executed
by the Borrower and the Collateral Agent (with the consent of the Banks as
specified in Section 7.10 of the Credit Agreement); provided that no such
--------
supplemental agreement shall amend, modify or waive any provision of this
Section 6.04, Section 5.11 or Section 5.14 hereof, the definitions of
"Required Secured Creditors" or "Secured Obligation" or any other provision
hereof without the consent of the Indenture Trustee on behalf of the
holders of the Debt Securities whose rights to equal and ratable security
would be adversely affected thereby. Any such amendment or waiver shall be
binding upon the Collateral Agent and each Secured Creditor, each holder of
any of the Secured Obligations and the Borrower.
6.05 Successors and Assigns. This Agreement shall be binding
----------------------
upon and inure to the benefit of the respective successors and assigns of
the Borrower, the Collateral Agent, the Secured Creditors and each other
holder of any of the Secured Obligations (provided, however, that the
--------
Borrower shall not assign or transfer its rights hereunder without the
prior written consent of the Collateral Agent and the Required Banks).
6.06 Captions. The captions and section headings appearing
--------
herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
6.07 Counterparts. This Agreement may be executed in any number
------------
of counterparts, all of which taken together shall constitute one and the
same instrument and either of the parties hereto may execute this Agreement
by signing any such counterpart.
6.08 Governing Law; Submission to Jurisdiction. This Agreement
-----------------------------------------
shall be governed by, and construed in accordance with, the law of the
State of New York. The Borrower hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District
of New York and of any New York State Court sitting in New York County for
the purposes of all legal
Pledge and Security Agreement
-----------------------------
<PAGE>
- 18 -
proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Borrower irrevocably waives, to the
fullest extent permitted by applicable law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought
in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
6.09 WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY
--------------------
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
6.10 Agents and Attorneys-in-Fact. The Collateral Agent may
----------------------------
employ agents and attorneys-in-fact in connection herewith and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.
6.11 Severability. If any provision hereof is invalid and
------------
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect
in such jurisdiction and shall be liberally construed in favor of the
Collateral Agent in order to carry out the intentions of the parties hereto
as nearly as may be possible and (ii) the invalidity or unenforceability of
any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
6.12 The Collateral Agent.
--------------------
(a) The Collateral Agent will hold in accordance with this
Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed that the obligations of
the Collateral Agent as holder of the Collateral and interests therein and
with respect to the disposition thereof, and otherwise under this
Agreement, are only those expressly set forth in this Agreement. The
Collateral Agent shall act hereunder on the terms and conditions set forth
herein and shall have no liability to any Secured Creditor in so acting.
(b) No single Secured Creditor shall have the right to cause the
Collateral Agent to take any action with respect to the Collateral and,
except as otherwise expressly provided herein, only the Required Secured
Creditors shall have the right to direct the Collateral Agent to take any
such action. If the Collateral Agent shall request instructions from the
Required Secured Creditors with respect to any act or action (including
failure to act) in connection with this Agreement, the Collateral
Pledge and Security Agreement
-----------------------------
<PAGE>
- 19 -
Agent shall be entitled to refrain from such act or taking such action
unless and until it shall have received instructions from the Required
Secured Creditors, and to the extent requested, appropriate indemnification
in respect of actions to be taken; and the Collateral Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, no Secured Creditor shall have any right of action whatsoever
against the Collateral Agent as a result of the Collateral Agent acting or
refraining from action hereunder in accordance with the instructions of the
Required Secured Creditors as aforesaid.
(c) The Collateral Agent has been appointed as agent hereunder
by the Banks and shall be entitled to the benefits of Article VII of the
Credit Agreement.
(d) Following the payment in full of all Credit Agreement
Obligations and the termination or expiration of the Commitments
thereunder, the provisions of Article VII of the Credit Agreement shall be
deemed to continue in full force and effect for the benefit of the
Collateral Agent under this Agreement. In that connection, following such
payment in full and expiration and termination of the Commitments, the term
"Required Banks" (as used in said Article VII) shall be deemed to refer to
Persons holding Secured Obligations representing more than 50% of the
aggregate Secured Obligations.
(e) Each of the holders of the Indenture Obligations and each of
the holders of the Other Credit Agreement Obligations (collectively, the
"Holders"), by accepting, seeking to accept, or otherwise acknowledging any
of the benefits granted to it by this Agreement: (i) appoints and
authorizes Chase, in its capacity as Collateral Agent hereunder, together
with its successors in such capacity, to act as agent for the Holders under
this Agreement subject to and upon the terms and conditions herein set
forth; (ii) agrees that the Collateral Agent shall have no obligations or
responsibilities to any of the Holders except those expressly set forth
herein; (iii) without limiting the generality of the foregoing clause (ii),
accepts and agrees to be bound by the provisions of Article VII of the
Credit Agreement limiting the obligations and responsibilities of the
Collateral Agent as fully as if such provisions were set forth herein in
full; and (iv) agrees that, except as otherwise provided herein, this
Agreement may be amended, supplemented or modified, or any provision hereof
waived, and that this Agreement may be terminated, the Collateral or any
part thereof may be released, and any other action contemplated hereby may
be taken or not taken as provided herein or in the Credit Agreement without
the consent or agreement of any of the Holders.
Pledge and Security Agreement
-----------------------------
<PAGE>
- 20 -
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
and Security Agreement to be duly executed and delivered as of the day and
year first above written.
INGERSOLL-RAND COMPANY
By
---------------------------
Title: Vice President
and Treasurer
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Collateral Agent
By
---------------------------
Title:
Pledge and Security Agreement
-----------------------------
<PAGE>
ANNEX 1
PLEDGED STOCK
-------------
[See Section 2(b) and (c)]
Certificate Registered
Issuer Nos. Owner Number of Shares
- ------ ----------- ---------- ----------------
CEC Acquisition, 1 Ingersoll- 100 shares of
Corp. Rand Company capital stock,
(common stock,
$.01 par value)
Annex 1 to Pledge and Security Agreement
----------------------------------------
<PAGE>
EXHIBIT I
[Form of Purchaser Guarantee]
PURCHASER GUARANTEE AGREEMENT dated as of May 5, 1995 between CEC
ACQUISITION CORP., a Wholly-Owned Subsidiary of the Borrower referred to
below, duly organized and validly existing under the laws of Delaware
(together with its successors and assigns, the "Guarantor"); and THE CHASE
MANHATTAN BANK (NATIONAL ASSOCIATION), as administrative agent for the
banks party to the Credit Agreement referred to below (in such capacity,
together with its successors in such capacity, the "Administrative Agent").
Ingersoll-Rand Company, a New Jersey corporation (the
"Borrower"), certain banks (the "Banks") and The Chase Manhattan Bank
(National Association), as collateral agent thereunder and as
Administrative Agent, are parties to a Credit Agreement, dated as of May 5,
1995 (as modified and supplemented and in effect from time to time, the
"Credit Agreement"), providing, subject to the terms and conditions
thereof, for loans to be made by the Banks to the Borrower in an aggregate
principal amount not exceeding $1,500,000,000.
To induce the Banks to enter into the Credit Agreement and to
extend credit thereunder, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Guarantor
has agreed to guarantee the Guaranteed Obligations (as hereinafter
defined). Accordingly, the parties hereto agree as follows:
Section 1. Definitions. Terms defined in the Credit Agreement
-----------
are used herein as defined therein.
Section 2. The Guarantee.
-------------
2.01 The Guarantee. The Guarantor hereby guarantees to each
-------------
Bank and the Administrative Agent and their respective successors and
assigns the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the principal of and interest on the Loans
made by the Banks to, and the Note(s) held by each Bank of, the Borrower
and all other amounts from time to time owing to the Banks or the Agents by
the Borrower under the Credit Agreement and under the Notes, in each case
strictly in accordance with the terms thereof (such obligations being
herein collectively called the "Guaranteed Obligations"). In addition, the
Guarantor hereby further agrees that if the Borrower shall fail to pay in
full when due (whether at stated maturity, by acceleration or otherwise)
any of the
Purchaser Guarantee Agreement
-----------------------------
<PAGE>
- 2 -
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.
2.02 Obligations Unconditional. The obligations of the
-------------------------
Guarantor under Section 2.01 hereof are absolute and unconditional
irrespective of the value, genuineness, validity, regularity or
enforceability of the Credit Agreement, the Notes or any other agreement or
instrument referred to herein or therein, 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 that might otherwise
constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 2.02 that the obligations 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
alter or impair the liability of the Guarantor hereunder which shall remain
absolute and unconditional as described above:
(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 the
Credit Agreement or the Notes or any other agreement or instrument
referred to herein or therein shall be done or omitted;
(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 the Credit
Agreement or the Notes 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; or
(iv) any lien or security interest granted to, or in favor of,
any Agent or any Bank or Banks as security for any of the Guaranteed
Obligations shall fail to be perfected.
Purchaser Guarantee Agreement
-----------------------------
<PAGE>
3
The Guarantor hereby expressly waives diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement that any
Agent or Bank exhaust any right, power or remedy or proceed against the
Borrower under the Credit Agreement or the Notes 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.
2.03 Reinstatement. The obligations of the Guarantor under this
-------------
Section 2 shall be automatically reinstated if and to the extent that for
any reason any payment by or on behalf of the 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 each Agent and Bank on demand for all
reasonable costs and expenses (including, without limitation, fees of
counsel) incurred by such Agent or Bank in connection with such rescission
or restoration, including any such costs and expenses incurred in defending
against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.
2.04 Remedies. The Guarantor agrees that, as between the
--------
Guarantor and the Banks, the obligations of the Borrower under the Credit
Agreement and the Notes may be declared to be forthwith due and payable as
provided in Article VI of the Credit Agreement (and shall be deemed to have
become automatically due and payable in the circumstances provided in said
Article VI) for purposes of Section 2.01 hereof notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such
obligations from becoming automatically due and payable) as against the
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 the Borrower) shall
forthwith become due and payable by the Guarantor for purposes of said
Section 2.01.
2.05 Continuing Guarantee. The guarantee in this Section 2 is a
--------------------
continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
2.06 General Limitation on Guaranteed Obligations. In any
--------------------------------------------
action or proceeding involving any state corporate law, or any state or
Federal bankruptcy, insolvency, reorganization or other law affecting the
rights of creditors generally, if the obligations of the Guarantor under
Section 2.01 hereof would otherwise be held or determined to be void,
invalid or unenforceable, or subordinated to the claims of any other
creditors, on account of the amount of its liability under said
Section 2.01, then, notwithstanding any other provision hereof to
Purchaser Guarantee Agreement
-----------------------------
<PAGE>
4
the contrary, the amount of such liability shall, without any further
action by the Guarantor, the Agents, the Banks or any other Person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.
2.07 Subrogation. Until payment in full of the Guaranteed
-----------
Obligations and termination of the Commitments, the Guarantor hereby waives
all rights of subrogation or contribution, whether arising by contract or
operation of law (including, without limitation, any such right arising
under the Federal Bankruptcy Code) or otherwise by reason of any payment by
it pursuant to the provisions of this Section 2.
Section 3. Representations and Warranties. The Guarantor
------------------------------
represents and warrants to the Banks and the Agents that:
3.01 Corporate Existence. The Guarantor: (a) is a corporation
-------------------
duly organized and validly existing under the laws of the jurisdiction of
its incorporation; (b) has all requisite corporate 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 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 on the business, financial condition or results of
operations of the Guarantor and its Subsidiaries considered as a whole.
3.02 Litigation. There are no legal or arbitral proceedings or
----------
any proceedings by or before any governmental or regulatory authority or
agency, now pending or (to the knowledge of the Guarantor) threatened
against the Guarantor that, if adversely determined, could have a material
adverse effect on the business, financial condition or results of
operations of the Guarantor and its Subsidiaries considered as a whole.
3.03 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 Guarantor, 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 the Guarantor is a party or by which
it is bound or to which it is subject, or constitute a default under any
such agreement or instrument.
Purchaser Guarantee Agreement
-----------------------------
<PAGE>
5
3.04 Corporate Action. The Guarantor has all necessary
----------------
corporate power and authority to execute and deliver, and to incur, assume
and perform its obligations under, this Agreement; the execution and
delivery, and the incurrence, assumption and performance of its obligations
under, this Agreement by the Guarantor have been duly authorized by all
necessary corporate action on its part; and this Agreement has been duly
and validly executed and delivered, and the obligations hereunder have been
duly and validly incurred and assumed, by the Guarantor; and this Agreement
constitutes the legal, valid and binding obligation of the Guarantor,
enforceable in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding
in equity or at law) and an implied covenant of good faith and fair
dealing.
3.05 Approvals. No authorizations, approvals or consents of,
---------
and no filings or registrations with, any governmental or regulatory
authority or agency are necessary for the execution, delivery or
performance by the Guarantor of this Agreement or for the validity or
enforceability hereof.
3.06 Investment Company Act. The Guarantor is not an
----------------------
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
Section 4. Miscellaneous.
-------------
4.01 No Waiver. No failure on the part of the Administrative
---------
Agent or any Bank to exercise, and no course of dealing with respect to,
and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise by
the Administrative Agent or any Bank of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. The remedies herein are cumulative and
are not exclusive of any remedies provided by law.
4.02 Notices. All notices, requests, consents and demands
-------
hereunder shall be in writing and telecopied or delivered to the intended
recipient at the "Address for Notices" specified beneath its name on the
signature pages hereof or, as to either party, at such other address as
shall be designated by such party in a notice to the other party. Except
as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopier or personally
Purchaser Guarantee Agreement
-----------------------------
<PAGE>
6
delivered or, in the case of a mailed notice, upon receipt, in each case
given or addressed as aforesaid.
4.03 Termination. Upon the consummation of the Merger, the
-----------
obligations of the Guarantor under this Agreement shall automatically
terminate.
4.04 Expenses. The Guarantor agrees to reimburse each of the
--------
Banks and the Agents for all reasonable costs and expenses of the Banks and
the Agents (including, without limitation, the reasonable fees and expenses
of legal counsel) in connection with (i) any Default and any enforcement or
collection proceeding resulting therefrom, including, without limitation,
all manner of participation in or other involvement with (x) bankruptcy,
insolvency, receivership, foreclosure, winding up or liquidation
proceedings, (y) judicial or regulatory proceedings and (z) workout,
restructuring or other negotiations or proceedings (whether or not the
workout, restructuring or transaction contemplated thereby is consummated)
and (ii) the enforcement of this Section 4.04.
4.05 Amendments, Etc. The terms of this Agreement may be
----------------
waived, altered or amended only by an instrument in writing duly executed
by the Guarantor and the Administrative Agent (with the consent of the
Banks as specified in Section 7.10 of the Credit Agreement). Any such
amendment or waiver shall be binding upon the Agents and each Bank, each
holder of any of the Guaranteed Obligations and the Guarantor.
4.06 Successors and Assigns. This Agreement shall be binding
----------------------
upon and inure to the benefit of the respective successors and assigns of
the Guarantor, the Administrative Agent, the Banks and each holder of any
of the Guaranteed Obligations (provided, however, that the Guarantor shall
--------
not assign or transfer its rights hereunder without the prior written
consent of the Administrative Agent and all of the Banks).
4.07 Captions. The captions and section headings appearing
--------
herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
4.08 Counterparts. This Agreement may be executed in any number
------------
of counterparts, all of which taken together shall constitute one and the
same instrument and either of the parties hereto may execute this Agreement
by signing any such counterpart.
4.09 Severability. If any provision hereof is invalid and
------------
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall
Purchaser Guarantee Agreement
-----------------------------
<PAGE>
7
remain in full force and effect in such jurisdiction and shall be liberally
construed in favor of the Administrative Agent and the Banks in order to
carry out the intentions of the parties hereto as nearly as may be possible
and (ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
4.10 Governing Law; Submission to Jurisdiction. This Agreement
-----------------------------------------
shall be governed by, and construed in accordance with, the law of the
State of New York. The Guarantor hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District
of New York and of any New York State Court sitting in New York County for
the purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Guarantor
irrevocably waives, to the fullest extent permitted by applicable law, any
objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient
forum.
4.11 WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY
--------------------
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
4.12 Agents. The Administrative Agent may employ agents and
------
attorneys-in-fact in connection herewith and shall not be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith.
Purchaser Guarantee Agreement
-----------------------------
<PAGE>
8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first above
written.
CEC ACQUISITION CORP.
By
---------------------------
Title:
Address for Notices:
c/o Ingersoll-Rand Company
200 Chestnut Ridge Road
Woodcliff Lake, NJ 07675
Attention: William J. Armstrong
Vice President
Telecopier No.: 201-573-3295
Telephone No. : 201-573-3082
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Administrative Agent
By
---------------------------
Title: Managing Director
Address for Notices:
The Chase Manhattan Bank
(National Association),
as Administrative Agent
4 Chase Metrotech Center
13th Floor
Brooklyn, New York 11245
Attention: New York Agency
Telecopier No.: 718-242-6910
Telephone No.: 718-242-7979
Purchaser Guarantee Agreement
-----------------------------
