FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Pursuant To Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended June 30, 1994. Commission File Number 1-5794
MASCO CORPORATION
(Exact name of Registrant as specified in its Charter)
Delaware 38-1794485
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
21001 Van Born Road, Taylor, Michigan 48180
(Address of principal executive offices) (Zip
Code)
(313) 274-7400
(Telephone Number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Shares Outstanding
at
Class August 1, 1994
Common stock, par value $1 per share 160,221,000
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MASCO CORPORATION
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheet -
June 30, 1994 and December 31, 1993 1
Condensed Consolidated Statement of
Income for the Three Months and
Six Months Ended June 30, 1994
and 1993 2
Condensed Consolidated Statement of
Cash Flows for the Six Months Ended
June 30, 1994 and 1993 3
Notes to Condensed Consolidated
Financial Statements 4-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8-9
Unaudited Information Regarding Equity
Affiliates for the Three Months and
Six Months Ended June 30, 1994 and 1993 10
Part II. Other Information and Signature 11
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MASCO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 1994 and December 31, 1993
(Dollars in thousands)
June 30, December 31,
ASSETS 1994 1993
Current assets:
Cash and cash investments $ 58,520 $ 119,980
Marketable securities 9,910 4,890
Accounts and notes receivable, net 706,670 610,120
Prepaid expenses 79,480 84,700
Inventories
Finished goods 365,700 312,470
Raw material 299,000 280,450
Work in process 235,320 231,210
900,020 824,130
Total current assets 1,754,600 1,643,820
Equity investments in MascoTech, Inc. 308,960 294,700
Equity investments in other affiliates 56,150 54,630
Property and equipment, net 1,158,520 1,095,170
Excess of cost over acquired net assets 609,970 605,170
Other noncurrent assets 387,530 327,570
Total assets $4,275,730 $4,021,060
LIABILITIES
Current liabilities:
Notes payable $ 31,450 $ 33,160
Accounts payable 165,400 161,220
Accrued liabilities 316,960 296,060
Total current liabilities 513,810 490,440
Long-term debt 1,477,420 1,418,290
Deferred income taxes and other 117,470 113,900
Total liabilities 2,108,700 2,022,630
SHAREHOLDERS' EQUITY
Common stock, par value $1 per share
Authorized shares: 400,000,000 159,790 152,850
Preferred stock, par value $1 per share
Authorized shares: 1,000,000 --- ---
Paid-in capital 99,470 69,880
Retained earnings 1,929,350 1,805,170
Cumulative translation adjustments (21,580) (29,470)
Total shareholders' equity 2,167,030 1,998,430
Total liabilities and
shareholders' equity $4,275,730 $4,021,060
See notes to condensed consolidated financial statements.
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<TABLE>
<CAPTION>
MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Three Months and Six Months Ended June 30, 1994 and 1993
(Amounts in thousands except per share data)
Three Months Ended Six Months Ended
June 30 June 30
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net sales $1,120,000 $ 948,000 $2,170,000 $1,894,000
Costs and expenses, net:
Cost of sales 753,500 638,500 1,451,500 1,271,600
Selling, general and administrative
expenses 233,800 212,500 463,900 422,600
Other (income) expense, net:
Interest expense 27,700 25,000 54,200 54,000
Re: MascoTech, Inc.:
Equity earnings (10,700) (6,600) (18,100) (13,400)
Interest and dividend income
and gain from stock sale --- (4,400) (4,500) (8,700)
Other, net (600) (1,600) (2,700) (4,600)
16,400 12,400 28,900 27,300
1,003,700 863,400 1,944,300 1,721,500
Income before income taxes 116,300 84,600 225,700 172,500
Income taxes 46,200 31,300 90,300 64,700
Net income $ 70,100 $ 53,300 $ 135,400 $ 107,800
Per share data:
Net income $.44 $.35 $.86 $.71
Cash dividends declared and paid $.17 $.16 $.34 $.32
Average shares outstanding 158,100 152,600 158,100 152,600
</TABLE>
See notes to condensed consolidated financial statements.
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MASCO CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 1994 and 1993
(Amounts in thousands except per share data)
Six Months Ended
June 30
1994 1993
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES:
Cash provided by operations $177,340 $155,740
(Increase) in receivables, net (59,330) (68,290)
(Increase) in inventories, net (36,150) (44,380)
Decrease in prepaid expenses 7,570 6,560
Increase (decrease) in current liabilities (320) 6,080
Total cash from operating activities 89,110 55,710
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES:
Sale of affiliate investments to MascoTech --- 87,500
Proceeds from sale of MascoTech common stock 7,730 ---
Capital expenditures (91,060) (64,110)
Other, net (21,280) 15,670
Total cash from (for) investing activities (104,610) 39,060
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES:
Increase in debt 70,010 325,920
Payment of debt (63,050) (367,400)
Cash dividends paid (52,920) (48,900)
Total cash (for) financing activities (45,960) (90,380)
CASH AND CASH INVESTMENTS:
Increase (decrease) for the period (61,460) 4,390
At January 1 119,980 45,350
At June 30 $ 58,520 $ 49,740
Supplemental Cash Flow Information:
Net cash paid during the period for:
Interest $ 53,980 $ 59,520
Income taxes $ 89,490 $ 55,090
See notes to condensed consolidated financial statements.
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MASCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A. In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements contain all adjustments, of a normal
recurring nature, necessary to present fairly its financial position as at
June 30, 1994 and the results of operations for the three months and six
months ended June 30, 1994 and 1993 and cash flows for the six months ended
June 30, 1994 and 1993. The condensed consolidated balance sheet at
December 31, 1993 was derived from audited financial statements, but does
not include all disclosures required by generally accepted accounting
principles. Earnings per share are calculated based on the weighted average
common shares outstanding.
B. Other (income) expense, net consists of the following, in thousands:
Three Months Ended Six Months Ended
June 30 June 30
1994 1993 1994 1993
Interest expense $27,700 $25,000 $54,200 $54,000
Re: MascoTech, Inc.:
Equity earnings (10,700) (6,600) (18,100) (13,400)
Interest and dividend
income --- (4,400) (100) (8,700)
Gain from sale of
common stock --- --- (4,400) ---
Equity earnings, other (900) (1,400) (2,100) (2,700)
Interest income and gains
from marketable
securities and
cash investments (4,100) (2,100) (7,700) (5,500)
Other, net 4,400 1,900 7,100 3,600
$16,400 $12,400 $28,900 $27,300
C. During the second quarter of 1994, the Company acquired Berkline Corporation
("Berkline") for common stock. In the first quarter of 1994, the Company
acquired Zenith Products Corporation ("Zenith") and Melard Manufacturing
Corporation ("Melard") for common stock. Under the terms of the agreements,
the Company issued approximately 6.5 million shares of its common stock and
the transactions were accounted for on a pooling of interests basis. For
the fiscal year 1993, these companies had combined net sales in excess of
$250 million. Berkline is a manufacturer of motion furniture including
sofas and recliners. Zenith is a manufacturer of bath medicine cabinets,
shower curtain rods and other bath storage products for the home. Melard is
a manufacturer of bath hardware, accessories, plumbing specialty and other
products for the home. Prior year periods are not restated due to
immateriality.
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MASCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
D. The following presents the combined unaudited financial statements of the
Company, MascoTech, Inc. and TriMas Corporation as one entity, with Masco
Corporation as the parent company. Certain amounts for 1993 have been
restated to reflect MascoTech's formal plan to divest its energy-related
business segment. Intercompany transactions have been eliminated. Amounts,
except per share data, are in thousands.
<TABLE>
<CAPTION>
Combined Balance Sheet
June 30, December 31,
Assets 1994 1993
<S> <C> <C>
Current assets:
Cash and cash investments $ 176,510 $ 272,950
Marketable securities 74,370 32,680
Accounts and notes receivable, net 1,049,650 906,500
Prepaid expenses 132,320 118,700
Deferred income taxes 40,600 41,780
Inventories:
Finished goods 438,930 393,820
Raw material 399,050 365,370
Work in process 294,580 281,680
1,132,560 1,040,870
Total current assets 2,606,010 2,413,480
Equity investments in affiliates 159,110 163,970
Property and equipment, net 1,869,630 1,747,590
Excess of cost over acquired net assets 1,142,690 1,114,740
Net assets of discontinued operations 493,700 67,510
Other noncurrent assets 40,060 428,390
Total assets $6,311,200 $5,935,680
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable $ 35,120 $ 36,310
Accounts payable 280,270 277,070
Accrued liabilities 472,680 428,720
Total current liabilities 788,070 742,100
Long-term debt 2,553,470 2,445,540
Deferred income taxes and other 295,520 275,400
Other interests in combined affiliates 507,110 474,210
Equity of shareholders of Masco Corporation 2,167,030 1,998,430
Total liabilities and
shareholders' equity $6,311,200 $5,935,680
</TABLE>
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MASCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
<TABLE>
<CAPTION>
Note D - Continued:
Three Months Ended Six Months Ended
June 30 June 30
Combined Statement of Income 1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net sales $1,696,450 $1,476,730 $3,289,310 $2,931,110
Costs and expenses, net:
Cost of sales 1,190,920 1,043,380 2,310,230 2,067,340
Selling, general and
administrative expenses 305,000 277,150 600,620 549,480
Other (income) expense, net:
Interest expense 42,630 45,140 83,050 94,550
Other income, net (7,280) (16,020) (28,190) (24,670)
35,350 29,120 54,860 69,880
1,531,270 1,349,650 2,965,710 2,686,700
Income before income taxes and
other interests 165,180 127,080 323,600 244,410
Income taxes 68,650 54,950 139,450 105,370
Income before other interests 96,530 72,130 184,150 139,040
Other interests in combined
affiliates 26,430 18,830 48,750 31,240
Net income $ 70,100 $ 53,300 $ 135,400 $ 107,800
Per share data:
Net income $.44 $.35 $.86 $.71
Cash dividends declared
and paid $.17 $.16 $.34 $.32
Average shares outstanding 158,100 152,600 158,100 152,600
</TABLE>
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MASCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (concluded)
Note E - Concluded:
Six Months Ended
June 30
Combined Statement of Cash Flows 1994 1993
Cash Flows From (For) Operating Activities:
Cash provided by operations $ 224,860 $ 213,400
(Increase) in receivables, net (116,100) (113,050)
(Increase) in inventories, net (44,310) (49,410)
(Increase) in marketable securities, net (36,670) (15,310)
(Increase) decrease in prepaid expenses (10,410) 6,110
Increase in current liabilities 14,470 23,960
Discontinued operations, net --- 1,990
Total cash from operating activities 31,840 67,690
Cash Flows From (For) Investing Activities:
Capital expenditures (158,210) (95,760)
Proceeds from sale of Energy-related
business 20,330 ---
Other, net 33,780 36,900
Total cash (for) investing activities (104,100) (58,860)
Cash Flows From (For) Financing Activities:
Issuance of convertible debt 337,240 ---
Increase in other debt 70,010 599,060
Retirement of Notes (253,120) ---
Payment of debt (115,760) (372,430)
Cash dividends paid (62,550) (49,940)
Total cash from financing activities (24,180) 176,690
Cash and Cash Investments:
Increase for the period (96,440) 185,520
At January 1 272,950 186,120
At June 30 $ 176,510 $ 371,640
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MASCO CORPORATION
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SECOND QUARTER 1994 AND THE FIRST SIX MONTHS 1994 VERSUS
SECOND QUARTER 1993 AND THE FIRST SIX MONTHS 1993
Net sales increased 18 percent and 15 percent for the three months and six
months ended June 30, 1994, respectively, from the comparable periods in 1993.
For the three months and six months ended June 30, 1994, sales of Building and
Home Improvement Products increased 19 percent and 16 percent, respectively,
from the comparable periods in 1993. Excluding recent acquisitions, sales for
this group increased 13 percent and 10 percent for the three months and six
months ended June 30, 1994. Sales of Home Furnishing Products increased 17
percent and 12 percent for the three months and six months ended June 30, 1994,
respectively, from the comparable periods in 1993. Excluding a recent
acquisition, sales for this group increased 6 percent for the three months ended
June 30, 1994.
The Company's operating profit margins continued to improve in the first
half of 1994 with major product lines benefitting from increased sales and
profit improvement programs. Cost of sales as a percentage of sales decreased
modestly to 67.3 percent from 67.4 percent and 66.9 percent from 67.1 percent
for the three months and six months ended June 30, 1994, from the comparable
periods in 1993. Selling, general and administrative expenses as a percentage
of sales decreased to 20.9 percent from 22.4 percent and 21.4 percent from 22.3
percent for the three months and six months ended June 30, 1994, from the
comparable periods in 1993.
During the second quarter of 1994, the Company acquired Berkline
Corporation ("Berkline") for common stock. In the first quarter of 1994, the
Company acquired Zenith Products Corporation ("Zenith") and Melard Manufacturing
Corporation ("Melard") for common stock. Under the terms of the agreements, the
Company issued approximately 6.5 million shares of its common stock and the
transactions were accounted for on a pooling of interests basis. For the fiscal
year 1993, these companies had combined net sales in excess of $250 million.
Berkline is a leading manufacturer of popularly-priced recliners and motion
upholstered furniture for the family room/home entertainment market. Zenith and
Melard manufacture bath accessories and plumbing specialties and will complement
the Company's sales of building and home improvement products. Prior year
periods are not restated due to immateriality.
Included in other (income) expense, net for the three months and six months
ended June 30, 1994 are equity earnings from MascoTech, Inc. aggregating $10.7
million and $18.1 million, respectively, as compared with $6.6 million and $13.4
million of equity earnings in the comparable 1993 periods.
Net income for the second quarter of 1994 increased 32 percent to $70.1
million from $53.3 million in the comparable 1993 period, and earnings per share
increased 26 percent to $.44 from $.35. Net income for the first six months of
1994 increased 26 percent to $135.4 million from $107.8 million in the
comparable 1993 period, and earnings per share increased 21 percent to $.86 from
$.71.
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The Company continues to enjoy increased demand for most of its products.
The Company believes that an expanding economy and market share gains will more
than offset any negative effect of recent higher interest rates on its
businesses.
The Company has on file with the Securities and Exchange Commission, shelf
registration statements pursuant to which the Company is able to issue up to an
additional $200 million of debt securities as well as up to 9.6 million shares
of its common stock.
At June 30, 1994 current assets were 3.4 times current liabilities. First
and second quarter 1994 cash from operations was affected by an expected and
recurring increase in accounts receivable. As the annual increase in accounts
receivable is historically experienced in the first half of the year, cash flows
from operations in the remaining two quarters of 1994 should not be affected by
significant increases in accounts receivable. In May, 1994, the Company's bank
agreement was amended to extend its termination date to May, 1998. The Company
believes that its cash flows from operations and, to the extent necessary,
future financial market activities and bank borrowings, are sufficient to fund
its working capital and other investment needs.
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UNAUDITED INFORMATION REGARDING EQUITY AFFILIATES
FOR THE SIX MONTHS ENDED JUNE 30, 1994 AND 1993
Equity investments in affiliates consist primarily of the following
approximate common stock and partnership interests at June 30:
1994 1993
MascoTech, Inc. 41% 35%
Hans Grohe, a German partnership 27% 27%
TriMas Corporation 5% 7%
The following presents the condensed financial data of MascoTech, Inc.
Certain amounts for 1993 have been restated to reflect MascoTech's formal plan
to divest its energy-related business segment. Amounts are in thousands.
Three Months Ended Six Months Ended
June 30 June 30
1994 1993 1994 1993
Sales - Net $432,780 $412,530 $845,190 $816,600
Gross Profit $ 89,710 $ 85,610 $170,000 $170,360
Net Income
(Before Preferred
Stock Dividends) $ 29,440 $ 21,740 $ 55,740 $ 39,260
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PART II. OTHER INFORMATION
MASCO CORPORATION
Items 1 through 5 are not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
4.a- Agreement of Appointment and Acceptance of Successor
Trustee dated as of July 25, 1994 among Masco
Corporation, Morgan Guaranty Trust Company of New York
and The First National Bank of Chicago.
4.b- Supplemental Indenture dated as of July 26, 1994
between Masco Corporation and The First National
Bank of Chicago, as trustee.
11 - Computation of Earnings Per Share
12 - Computation of Ratio of Earnings to Fixed Charges
99 - $750,000,000 Amended and Restated Credit Agreement
dated as of May 18, 1994 among Masco Corporation, the
banks signatory thereto and Morgan Guaranty Trust
Company of New York, as agent.
(b) Reports on Form 8-K:
None
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MASCO CORPORATION
(Registrant)
Date: August 12, 1994 By: /s/Robert B. Rosowski
Robert B. Rosowski
Vice President - Controller
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MASCO CORPORATION
EXHIBIT INDEX
Exhibit
Exhibit 4.a Agreement of Appointment and Acceptance of Suc-
cessor Trustee dated as of July 25, 1994 among
Masco Corporation, Morgan Guaranty Trust Company
of New York and The First National Bank of Chicago.
Exhibit 4.b Supplemental Indenture dated as of July 26, 1994
between Masco Corporation and The First National
Bank of Chicago, as trustee.
Exhibit 11 Computation of Earnings Per Share -
Primary and Fully Diluted Earnings Per Share
Exhibit 12 Computation of Ratio of Earnings
to Fixed Charges
Exhibit 99 $750,000,000 Amended and Restated Credit Agreement
dated as of May 18, 1994 among Masco Corporation,
the banks signatory thereto and Morgan Guaranty
Trust Company of New York, as agent.
<PAGE>
Exhibit 4.a
AGREEMENT OF APPOINTMENT
AND
ACCEPTANCE OF SUCCESSOR TRUSTEE
THIS AGREEMENT dated as of July 25, 1994 (the "Agreement"), is among
Masco Corporation (the "Company"), Morgan Guaranty Trust Company of New
York ("Morgan") and The First National Bank of Chicago ("First Chicago").
WHEREAS, Section 6.10 of the Indenture dated as of December 1, 1982
between the Company and Morgan (the "Indenture") provides that the Trustee
thereunder may resign at any time by giving written notice of such
resignation to the Company;
WHEREAS, Morgan gave such written notice, dated July 11, 1994, to the
Company;
WHEREAS, Section 6.10 of the Indenture provides that in case the
Trustee shall resign, the Company shall promptly appoint a successor
Trustee thereunder;
WHEREAS, the Company's Board of Directors authorized the appointment
of First Chicago as successor Trustee under the Indenture; and
WHEREAS, Section 6.11 of the Indenture provides that any successor
Trustee appointed thereunder shall execute, acknowledge and deliver to the
Company and the resigning Trustee thereunder an instrument accepting such
appointment, and thereupon the resignation of such resigning Trustee shall
become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts,
immunities, duties and obligations of the resigning Trustee thereunder,
with like effect as if originally named as Trustee therein.
NOW THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that for and in
consideration of the premises and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company,
Morgan and First Chicago hereby covenant and agree as follows:
1. The Company hereby accepts the resignation of Morgan as Trustee
under the Indenture, such resignation to become effective at the close of
business on the date hereof. From the close of business on the date hereof
and except as otherwise provided for herein, Morgan shall have no further
responsibility for the exercise of the rights and powers or for the
performance of the trusts and duties vested in the Trustee under the
Indenture.
2. Pursuant to Section 6.10 of the Indenture, and in accordance
with the resolutions duly adopted by the Company's Board of Directors, the
Company hereby confirms its appointment of First Chicago as successor
Trustee under the Indenture, effective as of
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the close of business on the date hereof, and hereby vests in First Chicago
all the rights, powers, trusts, immunities, duties and obligations which
Morgan now holds under and by virtue of the Indenture with like effect as
if originally named as Trustee in the Indenture.
3. First Chicago hereby represents that it is qualified and
eligible under Article Six of the Indenture and under the Trust Indenture
Act of 1939, as amended, to accept appointment as successor Trustee under
the Indenture.
4. First Chicago hereby accepts, as of the close of business on
the date hereof, its appointment as successor Trustee under the Indenture
and assumes the rights, powers, trusts, immunities, duties and obligations
which Morgan now holds under and by virtue of the Indenture, upon the
terms and conditions set forth therein.
5. In accordance with Section 6.11 of the Indenture, Morgan hereby
confirms, assigns, transfers and sets over to First Chicago, as successor
Trustee under the Indenture, all rights, powers, trusts, immunities, duties
and obligations which Morgan now holds under and by virtue of the
Indenture, and does hereby assign, transfer and deliver to First Chicago, as
such Trustee, all property and money held by Morgan as Trustee under the
Indenture.
6. In accordance with Section 6.11 of the Indenture, the Company
and Morgan, for the purpose of more fully and certainly vesting in and
confirming to First Chicago, as successor Trustee under the Indenture, the
rights, powers, trusts, immunities, duties and obligations of such Trustee
with like effect as if originally named as Trustee in the Indenture, agree
upon reasonable request of First Chicago to execute, acknowledge and
deliver such further instruments of conveyance and further assurance and to
do such other things as may be reasonably required for more fully and
certainly vesting and confirming in First Chicago all rights, powers,
trusts, immunities, duties and obligations which Morgan now holds under and
by virtue of the Indenture.
7. Promptly after the execution hereof, Morgan shall mail the
notice of the resignation of Morgan and the succession of First Chicago as
successor Trustee in accordance with Sections 6.10 and 6.11 of the
Indenture. Such notice shall be in the form attached hereto as Exhibit A.
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8. This Agreement may be executed in any number of counterparts
all of which taken together shall constitute one and the same Agreement,
and any of the parties hereto may execute this Agreement by signing any
such counterpart.
9. This Agreement shall be governed by the laws of the State of
New York, both in interpretation and performance.
10. Unless otherwise defined, all terms used herein with initial
capital letters shall have the meaning given them in the Indenture.
11. Morgan hereby represents and warrants to First Chicago that:
(a) no covenant or condition contained in the Indenture has been waived by
Morgan or, to the best of the knowledge of the officers assigned to
Morgan's Corporate Trust Department, by the Holders of the percentage in
aggregate principal amount of the Securities required by the Indenture to
effect any such waiver; (b) there is no action, suit or proceeding pending
or, to the best of the knowledge of the officers assigned to Morgan's
Corporate Trust Department, threatened against Morgan before any court or
any governmental authority arising out of any action or omission by Morgan
as Trustee under the Indenture; (c) to the best of the knowledge of the
officers assigned to Morgan's Corporate Trust Department, no Event of
Default, or event which, with the giving of notice or passage of time or
both, would become an Event of Default, has occurred and is continuing; and
(d) Morgan has furnished, or as promptly as practicable will furnish, to
First Chicago originals of all documents relating to the trust created by
the Indenture and all material information in its possession relating to
the administration and status thereof and will furnish to First Chicago any
of such documents or information First Chicago may reasonably request,
provided that First Chicago will make available to Morgan as promptly as
practicable following the request of Morgan any such original documents
which Morgan may need to defend against any action, suit or proceeding
against Morgan as Trustee or which Morgan may need for any other proper
purpose.
12. The Company hereby represents and warrants to First Chicago and
Morgan that no Event of Default, or event which, with the giving of notice
or passage of time or both, would become an Event of Default, has occurred
and is continuing.
13. Except as hereinabove expressly set forth, all other terms and
provisions set forth in the Indenture shall remain in full force and effect
and without any change whatsoever being made hereby.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and acknowledged as of the date first written above.
MASCO CORPORATION
By:/s/ Gerald Bright
Name: Gerald Bright
Title: Vice President
[Seal]
Attest:
/s/ Eugene A. Gargaro, Jr.
Secretary
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as resigning
Trustee
By:/s/David K. Leverich
Name: David K. Leverich
Title: Vice President
[Seal]
Attest:
/s/ M. E. McNulty
Assistant Secretary
THE FIRST NATIONAL BANK OF
CHICAGO, as successor Trustee
By:/s/ R. D. Manella
Name: R. D. Manella
Title: Vice President
[Seal]
Attest:
/s/ Jamie Arlow
Trust Officer
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State of Michigan)
) ss
County of Wayne)
On the 22nd day of July, 1994, before me personally came Gerald
Bright, to me known, who, being by me duly sworn, did depose and say that
he is a Vice President of Masco Corporation, the corporation described in
and which executed the above instrument; that he knows the corporate seal
of said corporation; that the seal affixed to the said instrument is such
corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
/s/ Nancy S. Steinrock
Nancy S. Steinrock
Notary Public
Wayne County, Michigan
My Comm Exp.: Nov. 9, 1994
[NOTARIAL SEAL]
State of New York )
) ss
County of New York)
On the 22nd day of July, 1994, before me personally came David K.
Leverich, to me known, who, being by me duly sworn, did depose and say that
he is a Vice President of Morgan Guaranty Trust Company of New York, the
corporation described in and which executed the above instrument; that he
knows the corporate seal of said corporation; that the seal affixed to the
said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation; and that he signed his name
thereto by like authority.
/s/ Thomas J. Courtney
Thomas J. Courtney
Notary Public
State of New York
No. 24-4996233
Qualified in Kings County
My Comm Exp.: May 11, 1996
[NOTARIAL SEAL]
-5-
PAGE
<PAGE>
State of Illinois)
) ss
County of Cook )
On the 22nd day of July, 1994, before me personally came R. D.
Manella, to me known, who, being by me duly sworn, did depose and say that
he is a Vice President of The First National Bank of Chicago, the
corporation described in and which executed the above instrument; that he
knows the corporate seal of said corporation; that the seal affixed to the
said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation; and that he signed his name
thereto by like authority.
/s/ C. J. Bertelson
C. J. Bertelson
Notary Public
State of Illinois
My Comm Exp.: Sept. 1, 1997
[NOTARIAL SEAL]
-6-
PAGE
<PAGE>
Exhibit A
NOTICE OF RESIGNATION OF TRUSTEE
AND
APPOINTMENT OF SUCCESSOR TRUSTEE
To the Holders of the following Securities of Masco Corporation:
9% Notes Due April 15, 1996
9% Notes Due October 1, 2001
6-1/4% Notes Due June 15, 1995
6-5/8% Notes Due September 15, 1999
7-1/8% Debentures Due August 15, 2013
6-1/8% Notes Due September 15, 2003
NOTICE IS HEREBY GIVEN THAT, pursuant to Sections 6.10 and 6.11 of
the Indenture (the "Indenture") dated as of December 1, 1982 between Masco
Corporation (the "Company") and Morgan Guaranty Trust Company of New York
("Morgan Guaranty"), under which the above-referenced Securities were
issued:
1. Morgan Guaranty has resigned as Trustee under the Indenture.
2. The Company has appointed The First National Bank of Chicago ("First
Chicago") as successor Trustee under the Indenture, and First Chicago
has accepted such appointment.
3. The following is the office or agency of the Company where securities
issued under the Indenture may be presented for payment, or presented
for registration of transfer or for exchange as provided in the
Indenture and where notices and demands to or upon the Company in
respect of any of the Securities issued under the Indenture or the
Indenture may be served:
The First National Bank of Chicago
c/o First Chicago Trust Company of New York
14 Wall Street, 8th Floor
New York, New York 10005
Attention: Corporate Trust Administration
Dated: July 25, 1994
MASCO CORPORATION MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
<PAGE>
Exhibit 4.b
SUPPLEMENTAL INDENTURE
THIS SUPPLEMENTAL INDENTURE, dated as of July 26, 1994, between Masco
Corporation, a Delaware corporation (the "Company"), and The First National
Bank of Chicago, as trustee (the "Trustee").
WHEREAS, the Company entered into an Indenture dated as of December 1,
1982 with Morgan Guaranty Trust Company (the "Indenture");
WHEREAS, the Trustee is the successor trustee under the Indenture; and
WHEREAS, Section 9.01(e) the Indenture provides for supplemental
indentures to make changes, provided such action does not adversely affect the
interests of the holders of the Securities.
NOW, THEREFORE, the parties agree as follows:
1. Section 6.10 of the Indenture shall be amended by inserting the
following as a new subparagraph (e):
"(e) Notwithstanding the provisions of Section 6.12, in
connection with any sale or proposed sale of all or any portion of
the corporate trust business of any Trustee hereunder or any other
transaction that would result in a change of control of such
corporate trust business, and provided that no Event of Default
exists, the Company may remove the Trustee and appoint a successor
trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor
trustee. Any removal of the Trustee and appointment of a
successor trustee pursuant to the foregoing shall become effective
upon acceptance of appointment by the successor trustee as
provided in Section 6.11."
2. Except as hereinabove expressly set forth, all other terms and
provisions set forth in the Indenture shall remain in full force and effect
and without any change whatsoever being made hereby.
PAGE
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture
to be executed and acknowledged as of the date first written above.
MASCO CORPORATION
By:/s/ Gerald Bright
Name: Gerald Bright
Title: Vice President
[Seal]
Attest:
/s/ Eugene A. Gargaro, Jr.
Secretary
THE FIRST NATIONAL BANK
OF CHICAGO
By:/s/ R. D. Manella
Name: R. D. Manella
Title: Vice President
[Seal]
Attest:
/s/ Jamie Arlow
Trust Officer
State of Michigan)
) ss
County of Wayne)
On the 22nd day of July, 1994, before me personally came Gerald Bright,
to me known, who, being by me duly sworn, did depose and say that he is a Vice
President of Masco Corporation, the corporation described in and which
executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to the said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.
/s/ Nancy S. Steinrock
Nancy S. Steinrock
Notary Public
Wayne County, Michigan
My Comm. Exp.: Nov. 9, 1994
[NOTARIAL SEAL]
-2-
PAGE
<PAGE>
State of Illinois)
) ss
County of Cook )
On the 22nd day of July, 1994, before me personally came R. D. Manella,
to me known, who, being by me duly sworn, did depose and say that he is a Vice
President of The First National Bank of Chicago, the corporation described in
and which executed the above instrument; that he knows the corporate seal of
said corporation; that the seal affixed to the said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors
of said corporation; and that he signed his name thereto by like authority.
/s/ C. J. Bertelson
C. J. Bertelson
Notary Public
State of Illinois
My Comm. Exp.: Sept. 1, 1997
[NOTARIAL SEAL]
-3-
<PAGE>
Exhibit 11
<TABLE>
<CAPTION>
MASCO CORPORATION AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
Primary and Fully Diluted Earnings Per Share
For the Three Months and Six Months Ended June 30, 1994 and 1993
(Amounts in thousands except as indicated)
Three Months Ended Six Months Ended
June 30 June 30
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Shares for computation of primary
and fully diluted earnings
per share:
Average number of shares
outstanding 158,100 152,600 158,100 152,600
Common stock equivalents:
Shares issuable assuming
conversion of debentures 4,200 4,200 4,200 4,200
Stock options 1,100 1,200 1,100 1,200
163,400 158,000 163,400 158,000
Net income, adjusted to basis of
earnings per share:
Net income $ 70,100 $ 53,300 $135,400 $107,800
Add interest on convertible
debentures, net of tax 1,400 1,500 2,900 3,000
$ 71,500 $ 54,800 $138,300 $110,800
Primary and fully diluted earnings
per share $.44 $.35 $.85 $.71
Earnings per share as reported $.44 $.35 $.86 $.71
</TABLE>
This calculation is submitted in accordance with Regulation S-K
Item 601(b)(11), although not required by APB Opinion No. 15, inasmuch as
dilution for any period was less than 3 percent.
<PAGE>
Exhibit 12
<TABLE>
<CAPTION>
MASCO CORPORATION AND CONSOLIDATED SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
(Thousands of Dollars)
Six
Months
Ended
June 30, Year Ended December 31,
1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
Earnings Before Income Taxes
And Fixed Charges:
Income before income taxes $225,700 $362,600 $304,800 $ 97,600 $235,900 $327,100
Deduct/add equity in
undistributed (earnings)
losses of fifty-percent-
or-less-owned companies (20,170) (18,740) (17,290) 12,640 8,760 (29,060)
Add dividends received from
fifty-percent-or-less-
owned companies 2,930 4,940 4,100 25,450 1,780 1,990
Add interest on indebtedness,
net 53,840 104,080 100,490 124,950 125,770 112,830
Add amortization of debt
expense 1,120 2,650 2,710 1,630 1,420 1,460
Add one-third of rentals 5,920 10,970 10,800 12,530 9,610 8,830
Earnings before income
taxes and fixed charges $269,340 $466,500 $405,610 $274,800 $383,240 $423,150
Fixed charges:
Interest on indebtedness $ 54,130 $105,420 $113,670 $128,450 $125,770 $112,830
Amortization of debt expense 1,120 2,650 2,710 1,630 1,420 1,460
One-third of rentals 5,920 10,970 10,800 12,530 9,610 8,830
$ 61,170 $119,040 $127,180 $142,610 $136,800 $123,120
Ratio of earnings to fixed
charges 4.4 3.9 3.2 1.9 2.8 3.4
</TABLE>
Exhibit 99
$750,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
May 18, 1994
among
Masco Corporation
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Agent
PAGE
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions . . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . .15
1.03 Types of Borrowings . . . . . . . . . . .16
1.04 Basis for Ratings . . . . . . . . . . . .16
ARTICLE II
THE CREDITS
SECTION 2.01 Committed Borrowings. . . . . . . . . . .16
2.02 Notice of Committed Borrowings. . . . . .17
2.03 Money Market Borrowings . . . . . . . . .17
2.04 Notice to Banks; Funding of Loans . . . .21
2.05 Notes . . . . . . . . . . . . . . . . . .22
2.06 Maturity of Loans . . . . . . . . . . . .23
2.07 Interest Rates. . . . . . . . . . . . . .23
2.08 Fees. . . . . . . . . . . . . . . . . . .28
2.09 Optional Termination or
Reduction of Commitments. . . . . . . .29
2.10 Mandatory Termination
of Commitments. . . . . . . . . . . . .29
2.11 Optional Prepayments. . . . . . . . . . .29
2.12 General Provisions as to Payments . . . .30
2.13 Funding Losses . . . . . . . . . . . . .30
2.14 Computation of Interest and Fees. . . . .31
2.15 Withholding Tax Exemption . . . . . . . .31
2.16 Regulation D Compensation . . . . . . . .32
2.17 Application of Interest Rates
and Fees. . . . . . . . . . . . . . . .32
ARTICLE III
CONDITIONS
SECTION 3.01 Effectiveness . . . . . . . . . . . . . .32
3.02 All Borrowings. . . . . . . . . . . . . .33
______________
*The Table of Contents is not a part of this Agreement.
PAGE
<PAGE>
Page
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Corporate Existence and Power . . . . . .34
4.02 Corporate and Governmental
Authorization; No Contravention . . . .34
4.03 Binding Effect. . . . . . . . . . . . . .35
4.04 Financial Information . . . . . . . . . .35
4.05 Litigation. . . . . . . . . . . . . . . .35
4.06 Compliance with ERISA . . . . . . . . . .35
4.07 Environmental Matters . . . . . . . . . .36
4.08 Taxes . . . . . . . . . . . . . . . . . .36
4.09 Not an Investment Company . . . . . . . .37
4.10 Compliance with Laws. . . . . . . . . . .37
ARTICLE V
COVENANTS
SECTION 5.01 Information . . . . . . . . . . . . . . .37
5.02 Minimum Consolidated
Tangible Net Worth. . . . . . . . . . .40
5.03 Limitation on Dividends and
Acquisitions of Borrower's
Equity Securities . . . . . . . . . . .41
5.04 Limitations on Debt . . . . . . . . . . .42
5.05 Cash Flow Coverage. . . . . . . . . . . .43
5.06 Negative Pledge . . . . . . . . . . . . .44
5.07 Consolidations, Mergers and
Sale of Assets. . . . . . . . . . . . .45
5.08 Compliance with Laws. . . . . . . . . . .46
5.09 Use of Proceeds . . . . . . . . . . . . .46
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default . . . . . . . . . . . .47
6.02 Notice of Default . . . . . . . . . . . .50
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization . . . . . .50
7.02 Agent and Affiliates. . . . . . . . . . .50
7.03 Action by Agent . . . . . . . . . . . . .50
7.04 Consultation with Experts . . . . . . . .50
ii
PAGE
<PAGE>
Page
7.05 Liability of Agent. . . . . . . . . . . .51
7.06 Indemnification . . . . . . . . . . . . .51
7.07 Credit Decision . . . . . . . . . . . . .51
7.08 Successor Agent . . . . . . . . . . . . .51
7.09 Agent's Fees. . . . . . . . . . . . . . .52
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest
Rate Inadequate or Unfair . . . . . . .52
8.02 Illegality. . . . . . . . . . . . . . . .53
8.03 Increased Cost and Reduced Return . . . .54
8.04 Substitute Loans. . . . . . . . . . . . .56
8.05 Substitution of Bank. . . . . . . . . . .57
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices . . . . . . . . . . . . . . . . .57
9.02 No Waivers. . . . . . . . . . . . . . . .58
9.03 Expenses; Documentary Taxes;
Indemnification . . . . . . . . . . . .58
9.04 Sharing of Set-Offs . . . . . . . . . . .58
9.05 Amendments and Waivers. . . . . . . . . .59
9.06 Successors and Assigns. . . . . . . . . .59
9.07 Collateral. . . . . . . . . . . . . . . .61
9.08 Confidentiality . . . . . . . . . . . . .61
9.09 Severalty of Obligations. . . . . . . . .62
9.10 New York Law; Submission
to Jurisdiction . . . . . . . . . . . .62
9.11 Counterparts; Integration . . . . . . . .62
9.12 WAIVER OF JURY TRIAL. . . . . . . . . . .63
iii
PAGE
<PAGE>
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of Counsel for the Borrower
Exhibit F - Opinion of Special Counsel
for the Agent
Exhibit G - Assignment and Assumption Agreement
iv
PAGE
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 18, 1994 among
MASCO CORPORATION, the BANKS listed on the signature pages hereof and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, as Agent.
RECITALS
WHEREAS, Masco Corporation, certain banks and Morgan Guaranty Trust
Company of New York, as agent, are parties to a credit agreement dated as of
November 7, 1991, as heretofore amended (the "Existing Credit Agreement")
providing commitments in the aggregate amount of $750,000,000; and
WHEREAS, the parties hereto desire to amend and restate the Existing
Credit Agreement (i) to extend the Termination Date from November 6, 1995 to
May 15, 1998, (ii) to reduce certain interest rates and fees, (iii) to make
the covenant relating to Annual Cash Flow inapplicable when Level I Status
exists, (iv) to clarify the calculations required by the covenant relating to
limitations on Debt and (v) to make certain other changes;
NOW, THEREFORE, the parties hereto agree that, as of the Effective
Date, the Existing Credit Agreement is hereby amended and restated in its
entirety as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein,
have the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Acquired Debt" means, with respect to any Person which becomes a
Subsidiary after the date of this Agreement, Debt of such Person which was
outstanding before such Person became a Subsidiary and which was not created
in contemplation of such Person becoming a Subsidiary.
PAGE
<PAGE>
"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Agent and submitted
to the Agent (with a copy to the Borrower) duly completed by such Bank.
"Affiliate" means at any date a Person (other than a Consolidated
Subsidiary) whose earnings or losses (or the appropriate proportionate share
thereof) would be included in determining the consolidated net income of the
Borrower and its Consolidated Subsidiaries for a period ending on such date
under the equity method of accounting for investments in common stock (and
certain other investments).
"Agent" means Morgan Guaranty Trust Company of New York in its
capacity as agent for the Banks hereunder, and its successors in such
capacity.
"Annual Cash Flow" means, at any time from and including the 31st day
of any Fiscal Quarter (the "Relevant Quarter") to but excluding the 31st day
of the following Fiscal Quarter, (i) Consolidated Net Income for the four
Fiscal Quarters immediately preceding the Relevant Quarter plus
(ii) depreciation and amortization deducted in determining such Consolidated
Net Income plus (iii) any increase (or minus any decrease) in deferred taxes
during such preceding four Fiscal Quarters plus (iv) any accretion of debt
discount (or minus any amortization of debt premium) deducted (or added) in
determining such Consolidated Net Income minus (v) any equity in undistributed
earnings (or plus any equity in undistributed losses), net, of Affiliates of
the Borrower added (or deducted) in determining such Consolidated Net Income
minus (vi) any other non-cash items added (or plus any other non-cash items
deducted) in determining such Consolidated Net Income; provided that, if the
Borrower or any Consolidated Subsidiary directly or indirectly merges or
consolidates with any other Person or makes any Acquisition, Annual Cash Flow
shall be determined after the date of such merger, consolidation or
Acquisition on a pro-forma basis as if the Borrower or such Consolidated
Subsidiary had merged or been consolidated with such other Person or made such
Acquisition on the First Pro-Forma Day. The adjustments to be made in
determining Annual Cash Flow on a pro-forma basis pursuant to the foregoing
proviso shall include, without limitation, (x) calculating Consolidated Net
Income and the other items referred to in clauses (ii) through (vi) above as
if such merger, consolidation or Acquisition occurred on the First Pro Forma
Day, (y) amortizing any goodwill attributable to such merger, consolidation or
Acquisition as if such merger,
2
PAGE
<PAGE>
consolidation or Acquisition occurred on the First Pro-Forma Day and (z)
increasing interest expense as if any indebtedness created, incurred or issued
in connection with such merger, consolidation or Acquisition was created,
incurred or issued on the First Pro-Forma Day (assuming, in the case of any
such indebtedness which bears interest at a floating rate, that such
indebtedness would have borne interest prior to the actual incurrence thereof
at the rate applicable thereto immediately after it was actually incurred).
For purposes of this definition, "Acquisition" means the acquisition for an
aggregate purchase price of at least $25,000,000 or its non-cash equivalent
(or, at the Borrower's option, for an aggregate purchase price of less than
$25,000,000 or its non-cash equivalent) of all or substantially all of (xx)
the capital stock or other ownership interests having ordinary voting power of
any Person or (yy) the assets of any Person or of a division of the business
of such Person or associated with a complete line of business or product line
of such Person, and "First Pro-Forma Day" means the first day of the first of
the four full Fiscal Quarters immediately preceding the date of such merger,
consolidation or Acquisition.
"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).
"Bank" means each bank listed on the signature pages hereof, each
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.
"Basis Point" means 1/100 of 1%.
3
PAGE
<PAGE>
"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 Masco Corporation, a Delaware corporation, and its
successors.
"Borrower's Equity Securities" means shares of any class of the
Borrower's capital stock or options, warrants or other rights to acquire such
shares.
"Borrower's 1993 Form 10-K" means the Borrower's annual report on
Form 10-K for the year ended December 31, 1993, as filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934.
"Borrowing" has the meaning set forth in Section 1.03.
"CD Base Rate" has the meaning set forth in Section 2.07(b).
"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(b).
"CD Reference Banks" means NBD Bank, N.A., Royal Bank of Canada and
Morgan Guaranty Trust Company of New York and each other bank, if any, as is
appointed as a CD Reference Bank pursuant to Section 8.01(b) or 9.06(f).
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof, as such amount
may be reduced from time to time pursuant to Section 2.09.
"Committed Loan" means a loan made by a Bank pursuant to Section
2.01.
"Consolidated Adjusted Net Worth" means at any date (i) Shareholders'
Equity at such date less (ii) to the extent reflected in such Shareholders'
Equity, all equity and other investments in Affiliates of the Borrower;
provided that the historic cost as of December 31, 1993 of any equity or other
investment in any Affiliate of the Borrower shall be excluded from the amount
deducted pursuant
4
PAGE
<PAGE>
to clause (ii) of this definition except to the extent that such historic cost
is recovered after December 31, 1993 through the sale of such investment, the
liquidation of such Affiliate or otherwise.
"Consolidated Current Assets" means at any date the consolidated
current assets of the Borrower and its Consolidated Subsidiaries determined as
of such date.
"Consolidated Debt" means at any date the Debt of the Borrower and
its Consolidated Subsidiaries, determined on a consolidated basis as of such
date.
"Consolidated Net Income" means, for any period, the consolidated net
income of the Borrower and its Consolidated Subsidiaries for such period
(considered as a single accounting period), but excluding the net income or
deficit of any Person (other than the equity in earnings or losses of an
Affiliate previously included in such consolidated net income determined under
the equity method of accounting for investments) prior to the effective date
on which it becomes a Consolidated Subsidiary or is merged into or
consolidated with the Borrower or a Consolidated Subsidiary.
"Consolidated Subsidiary" means at any date any Subsidiary the
accounts of which would be consolidated with those of the Borrower in its
consolidated financial statements as of such date.
"Consolidated Tangible Net Worth" means at any date the aggregate of
all assets (excluding treasury stock) which would be shown on a consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of such
date; provided that there shall be deducted from the amount of such assets, to
the extent otherwise included therein, (i) any reserves on assets of the
Borrower and its Consolidated Subsidiaries where a reserve is proper in
accordance with generally accepted accounting principles, including, without
limitation, reserves for depreciation, amortization or obsolescence, loss on
receivables or inventory valuations, (ii) any unamortized goodwill, patents,
trademarks, trade names or other like intangible assets of the Borrower and
its Consolidated Subsidiaries, (iii) unamortized debt discount or expense of
the Borrower and its Consolidated Subsidiaries and (iv) any deferred charges
or prepaid expenses of the Borrower and its Consolidated Subsidiaries which
are not Consolidated Current Assets; and provided further that there shall
also be deducted from such amount (v) Consolidated Total Liabilities at such
date.
5
PAGE
<PAGE>
"Consolidated Total Liabilities" means at any date the aggregate of
all liabilities or other items which would appear on the liability side of a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries
as of such date, except the amount so appearing which constitutes
Shareholders' Equity.
"Continuing Director" means any member of the Borrower's board of
directors who either (i) is a member of such board as of May 18, 1994 or (ii)
is thereafter elected to such board, or nominated for election by
stockholders, by a vote of at least two-thirds of the directors who are
Continuing Directors at the time of such vote; provided that an individual who
is so elected or nominated in connection with a merger, consolidation,
acquisition or similar transaction shall not be a Continuing Director unless
such individual was a Continuing Director prior thereto.
"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 debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price of property,
except trade accounts payable, (iv) all obligations of such Person as lessee
which are capitalized in accordance with generally accepted accounting
principles, (v) all Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such Person, and (vi) all Debt
of others for which such Person is contingently liable. In calculating the
amount of any Debt at any date for purposes of this Agreement, accrued
interest shall be excluded to the extent that it would be properly classified
as a current liability for interest under the heading "Accrued liabilities"
(and not under the heading "Notes payable") in a balance sheet prepared as of
such date in accordance with the accounting principles and practices used in
preparing the balance sheet referred to in Section 4.04(a) and the related
footnotes thereto.
"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.
"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
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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 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).
"Domestic Subsidiary" means a Subsidiary which is incorporated under
the laws of the United States of America or any state thereof.
"Effective Date" has the meaning set forth in Section 3.01.
"Environmental Laws" means any and all federal, state and local
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to the
environment, the effect of the environment on human health 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.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Group" means the Borrower, any Subsidiary 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 or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
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"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 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(c).
"Euro-Dollar Reference Banks" means the principal London offices of
NBD Bank, N.A., Royal Bank of Canada and Morgan Guaranty Trust Company of New
York and each other bank, if any, which is appointed as a Euro-Dollar
Reference Bank pursuant to Section 8.01(b) or 9.06(f).
"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).
"Event of Default" has the meaning set forth in Section 6.01.
"Existing Credit Agreement" has the meaning set forth in the first
Whereas Clause.
"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
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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 Morgan
Guaranty Trust Company of New York on such day on such transactions as
determined by the Agent.
"Fiscal Quarter" means a fiscal quarter of the Borrower.
"Fiscal Year" means a fiscal year of the Borrower.
"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.
"High Quality Investment" means any investment in (i) direct
obligations of the United States of America or any agency thereof, or
obligations guaranteed by the United States of America or any agency thereof,
(ii) commercial paper rated at least A-1 by S&P and at least P-1 by Moody's or
(iii) time deposits with, including certificates of deposit issued by, any
Bank which was a party to this Agreement on the Effective Date or any office
located in the United States of America of any bank or trust company which is
organized under the laws of the United States of America or any State thereof
and has capital, surplus and undivided profits aggregating at least
$500,000,000; provided in each case that such investment matures within six
months from the date of acquisition thereof by the Borrower or a Subsidiary.
"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, six or (subject to subsection (d) of Section 2.07) twelve months
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 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;
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(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 end on the last Euro-Dollar Business Day of a
calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(2) with respect to each CD Borrowing, the period commencing on the date of
such Borrowing and ending 30, 60, 90 or 180 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; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination 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 such whole number of 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 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;
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(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 end on the last Euro-Dollar Business Day of a
calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination 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
thereafter (but not less than 30 days) 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; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination 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, any of 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 II Status" exists at any date if, at such date, (i) Level I
Status does not exist and (ii) any of 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.
"Level III Status" exists at any date if, at such date, (i) neither
Level I Status nor Level II Status exists and (ii) any of 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 IV Status" exists at any date if, at such date, none of Level
I Status, Level II Status or Level III Status exists.
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"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 asset, any mortgage, lien, pledge,
charge, security interest or similar encumbrance of any kind in respect of
such asset; provided that a subordination agreement shall not be deemed to
create a Lien. For the purposes of this Agreement, the Borrower or any
Consolidated Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other similar title
retention agreement relating to such asset.
"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).
"Material Debt" means Debt (other than the Notes) of the Borrower
and/or one or more of its Subsidiaries, arising in one or more related or
unrelated transactions, in an aggregate outstanding principal amount exceeding
$25,000,000.
"Material Plan" has the meaning set forth in Section 6.01(i).
"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 Agent; provided that any Bank may from time to time by notice
to the Borrower and the 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.
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"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.
"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.
"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, pursuant to an applicable collective
bargaining agreement, 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.
"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)).
"Parent" means, with respect to any Bank, any Person controlling such
Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
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"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.
"Prior Plan" means at any time (i) any Plan which at such time is no
longer maintained or contributed to by any member of the ERISA Group or (ii)
any Multiemployer Plan to which no member of the ERISA Group is at such time
any longer making contributions or, pursuant to an applicable collective
bargaining agreement, accruing an obligation to make contributions.
"Prime Rate" means the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"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
aggregate outstanding principal amount of the Committed Loans made by any
Bank.
"Regulation U" means Regulation U 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 more than 50% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing more than 50% of the aggregate unpaid
principal amount of the Loans.
"S&P" means Standard & Poor's Corporation.
"Shareholders' Equity" means at any date the shareholders' equity of
the Borrower.
"Significant Subsidiaries" means any one or more Subsidiaries which,
if considered in the aggregate as a single Subsidiary, would be a "significant
subsidiary" as
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defined in Rule 1-02 of Regulation S-X under the Securities Exchange Act of
1934. For purposes of this Agreement, a type of event shall not be deemed to
have occurred with respect to Significant Subsidiaries unless such type of
event has occurred with respect to each of the Subsidiaries required to be
included to constitute "Significant Subsidiaries" as defined in the preceding
sentence.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect
a majority of the board of directors or other persons performing similar
functions are at the time owned by the Borrower or by the Borrower and one or
more Subsidiaries or by one or more Subsidiaries.
"Substantially-Owned Consolidated Subsidiary" means any Consolidated
Subsidiary at least 90% of the shares of outstanding capital stock or other
ownership interests of which having ordinary power to vote in elections for
the board of directors or other persons performing similar functions are at
the time directly or indirectly owned by the Borrower.
"Termination Date" means May 15, 1998, or, if such day is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"Unfunded Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the value of all benefit liabilities under
such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (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 member of the
ERISA Group to the PBGC or any other Person under Title IV of ERISA.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in accordance
with generally accepted accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to
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the Banks; provided that, if the Borrower notifies the Agent that the Borrower
wishes to amend any covenant in Article V to eliminate the effect of any
change in generally accepted accounting principles on the operation of such
covenant (or if the Agent notifies the Borrower that the Required Banks wish
to amend Article V for such purpose), then the Borrower's compliance with such
covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Banks.
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 the Loans comprising such Borrowing (e.g., a "Euro-Dollar
Borrowing" is a Borrowing comprised of Euro-Dollar Loans) or by reference to
the provisions of Article II under which 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).
SECTION 1.04. Basis for Ratings. The credit ratings to be utilized
in the determination of a Status are the ratings assigned to outstanding
senior unsecured long-term debt securities of the Borrower without third party
credit support. Ratings assigned to any obligation of the Borrower which is
secured or which has the benefit of third party credit support shall be
disregarded.
ARTICLE II
THE CREDITS
SECTION 2.01. Committed Borrowings. On and after the Effective
Date, each Bank severally agrees, on the terms and conditions set forth in
this Agreement, to lend to the Borrower pursuant to this Section from time to
time amounts such that the aggregate principal amount of the Committed Loans
made by such Bank at any one time outstanding shall not exceed the amount of
its Commitment at that time. Each Borrowing under this Section shall be in an
aggregate principal amount of $25,000,000 or any larger multiple of
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$1,000,000 (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
under this Section. Amounts repaid pursuant to Section 8.02 shall not be
reborrowed except as provided therein.
SECTION 2.02. Notice of Committed Borrowings. The Borrower shall
give the Agent notice (a "Notice of Committed Borrowing") not later than 10:00
A.M. (New York City time) on
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(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, 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,
(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 on and after the Effective Date to make offers to make Money
Market Loans to the Borrower. The Banks may, but shall have no obligation to,
make such offers and the Borrower may, but shall have no obligation to, accept
any such offers in the manner set forth in this Section.
(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
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 fifth 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 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
$25,000,000 or a larger multiple of $1,000,000,
(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.
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 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 Agent shall send to the Banks by telex or
facsimile transmission (or by telephone promptly confirmed 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
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subsection (d) and must be submitted to the Agent by telex or facsimile
transmission (or by telephone promptly confirmed 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 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 Agent (or any affiliate of the Agent) in the capacity of a
Bank may be submitted, and may only be submitted, if the Agent or such
affiliate notifies the Borrower of the terms of the offer or offers contained
therein not later than (x) one hour prior to the deadline for the other Banks,
in the case of a LIBOR Auction or (y) 15 minutes prior to the deadline for the
other Banks, in the case of an Absolute Rate Auction. Subject to Articles III
and VI, any Money Market Quote so made shall be irrevocable except with the
written consent of the Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form of
Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing (as specified in the relevant
Money Market Quote Request),
(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 $1,000,000 or a
larger multiple thereof, (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 applicable London Interbank Offered Rate,
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(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 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
Agent unless such subsequent Money Market Quote is submitted solely to correct
a manifest error in such former Money Market Quote. The Agent's notice to the
Borrower shall specify (A) the aggregate principal amount of Money Market
Loans for which 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
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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 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 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
$25,000,000 or a larger multiple of $1,000,000,
(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 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 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 Agent among such Banks as nearly as possible (in
multiples of $1,000,000, as the Agent may deem appropriate) in proportion to
the aggregate principal amounts of such offers. Determinations by the Agent
of the amounts of 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 Agent shall promptly
notify each Bank of the contents
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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 Agent at
its address specified in or pursuant to Section 9.01. Unless the Agent
determines that any applicable condition specified in Article III has not been
satisfied, the Agent will make the funds so received from the Banks available
to the Borrower at the 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 Agent as provided in subsection (b), or remitted by the Borrower to the
Agent as provided in Section 2.12, as the case may be.
(d) Unless the Agent shall have received notice from a Bank prior to
the date of any Borrowing that such Bank will not make available to the Agent
such Bank's share of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such Borrowing in
accordance with subsections (b) and (c) of this Section 2.04 and the 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 Agent, such Bank and the Borrower
severally agree to repay to the 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
Agent, at (i) in the case of the Borrower, a rate per annum equal to the
higher of the Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.07 and (ii) in the case of such Bank, the Federal Funds
Rate. If such Bank shall repay to the Agent such corresponding amount, such
amount so 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
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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 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 this Agreement 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 Agent shall mail 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 prior
to any transfer of its Note shall 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 overdue 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 1% plus the rate otherwise
applicable to Base Rate Loans for such day.
(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;
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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 CD Loan or portion thereof 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, 90 days after
the first day thereof. Any overdue principal of or overdue interest on any CD
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 1% plus the higher of (i) the sum of the CD
Margin plus the Adjusted CD Rate applicable to such Loan and (ii) the rate
applicable to Base Rate Loans for such day.
"CD Margin" means:
(i) for any day on which Level I Status exists, 42.50 Basis Points;
(ii) for any day on which Level II Status exists, 47.50 Basis Points;
(iii) for any day on which Level III Status exists, 50.00 Basis Points;
or
(iv) for any day on which Level IV Status exists, 67.50 Basis
points.
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 upwards, 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 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
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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.
"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.
"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. Section 327.3(d) (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) Subject to Section 2.16, 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 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.
"Euro-Dollar Margin" means:
(i) for any day on which Level I Status exists, 30.00 Basis Points;
(ii) for any day on which Level II Status exists, 35.00 Basis Points;
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(iii) for any day on which Level III Status exists, 37.50 Basis Points;
or
(iv) for any day on which Level IV Status exists, 55.00 Basis
Points.
The "London Interbank Offered Rate" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of
1%) of the respective rates per annum at which deposits in dollars are offered
to each of the Euro-Dollar Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before
the first day of such Interest Period in an amount approximately equal 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; provided that, if such Interest Period has a duration of
twelve months, the London Interbank Offered Rate applicable thereto shall be
determined as provided in subsection (d) of this Section.
(d) If requested to do so by the Borrower at least four Euro-Dollar
Business Days before the beginning of any Interest Period applicable to a
Euro-Dollar Borrowing, each Bank will advise the Borrower before 12:00 noon on
the third Euro-Dollar Business Day before the beginning of such Interest
Period as to (i) whether, if the Borrower selects a duration of twelve months
for such Interest Period, such Bank expects that deposits in dollars with a
term corresponding to such Interest Period will be available to it in the
London interbank market two Euro-Dollar Business Days before the beginning of
such Interest Period in the amount required to fund its Euro-Dollar Loan to
which such Interest Period would apply and, if so, (ii) the interest rate
which such Bank would have been required to pay as of 10:00 A.M. (New York
City time) on such third Euro-Dollar Business Day before the beginning of such
Interest Period to obtain such deposits. If, but only if, all of the Banks
confirm that they expect such deposits to be available to them, the Borrower
shall be entitled to select a duration of twelve months for such Interest
Period pursuant to Section 2.02, in which event (i) each Bank shall advise the
Agent as to the interest rate per annum at which such deposits were offered to
it in the London interbank market at approximately 10:00 A.M. (New York City
time) two Euro-Dollar Business Days before the beginning of such Interest
Period and (ii) the London Interbank Offered Rate applicable to such Interest
Period shall be the highest of the rates so quoted; provided that, as an
alternative to the foregoing procedure, the London Interbank Offered Rate
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applicable to any twelve-month Interest Period may be established by agreement
among the Borrower and all the Banks.
(e) 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 1% plus the higher of (i) the sum of the
Euro-Dollar Margin plus any additional interest rate applicable pursuant to
Section 2.16 plus the London Interbank Offered Rate applicable to such Loan
and (ii) the Euro-Dollar Margin plus any additional interest rate applicable
pursuant to Section 2.16 plus the average (rounded upwards, if necessary, to
the next higher 1/16 of 1%) of the respective rates per annum at which one day
(or, if such amount due remains unpaid more than three Euro-Dollar Business
Days, then for such other period of time not longer than six months as the
Agent may elect) deposits in dollars in an amount approximately equal to such
overdue payment due to each of the Euro-Dollar Reference Banks are offered to
such Euro-Dollar Reference Bank in the London interbank market for the
applicable period determined as provided above (or, if the circumstances
described in clause (a) or (b) of Section 8.01 shall exist, at a rate per
annum equal to the sum of 1% plus the rate applicable to Base Rate Loans for
such day).
(f) 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 overdue 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 1% plus the Base Rate for such day.
(g) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks by
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telex or cable of each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of manifest error.
(h) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference
Bank does not furnish a timely quotation, the 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.
SECTION 2.08. Fees.
(a) Commitment Fees. The Borrower shall pay to the Agent for the
account of the Banks ratably in proportion to their Commitments a commitment
fee calculated on a daily basis at the rate per annum of (i) 2.50 Basis Points
for any day on which Level I Status exists, (ii) 3.75 Basis Points for any day
on which Level II Status or Level III Status exists or (iii) 5.00 Basis Points
for any day on which Level IV Status exists. In each case, such commitment
fee shall be calculated on the amount by which the aggregate amount of the
Commitments exceeds the aggregate outstanding principal amount of the Loans on
such day. Such commitment fee shall accrue from and including the Effective
Date to but excluding the Termination Date (or earlier date of termination of
the Commitments in their entirety).
(b) Facility Fees. The Borrower shall pay to the Agent for the
account of the Banks ratably in proportion to their Commitments a facility fee
calculated on a daily basis at the rate per annum of (i) 12.50 Basis Points
for any day on which Level I Status exists, (ii) 15.00 Basis Points for any
day on which Level II Status exists, (iii) 18.75 Basis Points for any day on
which Level III Status exists or (iv) 20.00 Basis Points for any day on which
Level IV Status exists. Such facility fee shall accrue (i) from and including
the Effective Date 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
such date to but excluding the date the Loans shall be repaid in their
entirety, on the daily aggregate outstanding principal amount of the Loans.
(c) Payments. Commitment fees and facility fees accrued under this
Section shall be payable quarterly on the last Domestic Business Day of each
March, June, September and December and upon the termination of the
Commitments in their
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entirety (and, if later, the date the Loans shall be repaid in their
entirety).
SECTION 2.09. Optional Termination or Reduction of Commitments. (a)
The Borrower may, upon at least three Domestic Business Days' notice to the
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 any larger multiple of $1,000,000, the aggregate amount of
the Commitments in excess of the aggregate outstanding principal amount of the
Loans.
(b) Upon receipt of a notice of termination or reduction pursuant to
this Section, the Agent shall promptly notify each Bank of the contents
thereof and of the new amount (if any) of such Bank's Commitment and such
notice shall not thereafter be revocable by the Borrower.
SECTION 2.10. Mandatory Termination of Commitments. 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.
SECTION 2.11. Optional Prepayments. (a) The Borrower may (i) upon
at least one Domestic Business Day's notice to the Agent, prepay any Base Rate
Borrowing (or any Money Market Borrowing bearing interest at the Base Rate
pursuant to Section 8.01(a)), (ii) upon at least two Domestic Business Days'
notice to the Agent, subject to Section 2.13, prepay any CD Borrowing or
(iii) upon at least three Euro-Dollar Business Days' notice to the Agent,
subject to Section 2.13, prepay any Euro-Dollar Borrowing, in whole at any
time, or from time to time in part in amounts aggregating $25,000,000 or any
larger multiple of $1,000,000, 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 Rate Loan prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this Section,
the 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.
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SECTION 2.12. General Provisions as to Payments. (a) The Borrower
shall make each payment of principal of, and interest on, the Loans and of
fees hereunder, not later than 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 Agent at its address referred to in Section 9.01. The Agent will promptly
distribute to each Bank its ratable share of each such payment received by the
Agent for the account of the Banks. Whenever any payment of principal of, or
interest on, the Domestic Loans 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 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 principal of, or interest on, the Money Market Loans shall be due
on a day which is not a Euro-Dollar Business Day, the date for payment thereof
shall be extended to the next succeeding Euro-Dollar Business Day. 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 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 Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the 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 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
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, Article VIII or otherwise) on any day other than the last day of
the Interest Period applicable thereto, or the last day of an applicable
period fixed pursuant to Section 2.07(e), if the Borrower fails to borrow any
Fixed Rate Loan 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 Loan after
notice has
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been given to any Bank in accordance with Section 2.11(c), the Borrower shall
reimburse each Bank within 15 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, provided
that such Bank shall have delivered to the Borrower a certificate as to 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).
SECTION 2.15. Withholding Tax Exemption. At least five Domestic
Business Days prior to the first date on which interest or fees are payable
hereunder for the account of any Bank, 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 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 this
Agreement and the Notes 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 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 Agent, in each case certifying that such Bank is entitled to
receive payments under this Agreement and the Notes 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 Agent that it is not capable of
receiving payments without any deduction or withholding of United States
federal income tax.
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SECTION 2.16. Regulation D Compensation. For so long as any Bank
maintains reserves against "Eurocurrency liabilities" (or 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 such Bank
to United States residents), and as a result the cost to such Bank (or its
Applicable Lending Office) of making or maintaining its Euro-Dollar Loans is
increased, then such Bank may require the Borrower to pay, contemporaneously
with each payment of interest on the Euro-Dollar Loans, additional interest on
the related Euro-Dollar Loan of such Bank at a rate per annum determined by
such Bank up to but not exceeding the excess of (i)(A) the applicable London
Interbank Offered Rate divided by (B) one minus the Euro-Dollar Reserve
Percentage over (ii) the applicable London Interbank Offered Rate. Any Bank
wishing to require payment of such additional interest (x) shall so notify the
Borrower and the Agent, in which case such additional interest on the
Euro-Dollar Loans of such Bank shall be payable to such Bank at the place
indicated in such notice with respect to each Interest Period commencing at
least five Business Days after the giving of such notice and (y) shall furnish
to the Borrower at least five Euro-Dollar Business Days prior to each date on
which interest is payable on the Euro-Dollar Loans an officer's certificate
setting forth the amount to which such Bank is then entitled under this
Section (which shall be consistent with such Bank's good faith estimate of the
level at which the related reserves are maintained by it).
SECTION 2.17. Application of Interest Rates and Fees. Interest and
fees at the rates described in Sections 2.07 and 2.08 shall accrue on and
after the Effective Date. Interest and fees for all periods prior to the
Effective Date shall be calculated in accordance with the Existing Credit
Agreement.
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. The Existing Credit Agreement shall be
amended and restated as provided herein on the date (the "Effective Date")
that each of the following conditions shall have been satisfied (or waived in
accordance with Section 9.05):
(a) receipt by the Agent of counterparts hereof signed by each of
the parties hereto (or, in the case of any party as to which an executed
counterpart shall
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not have been received, receipt by the Agent in form satisfactory to it of
telegraphic, telex or other written confirmation from such party of execution
of a counterpart hereof by such party);
(b) receipt by the Agent for the account of each Bank of a duly
executed Note, dated on or before the Effective Date, complying with the
provisions of Section 2.05;
(c) receipt by the Agent of an opinion of John R. Leekley, Vice
President-General Counsel of the Borrower, substantially in the form of
Exhibit E hereto and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may reasonably
request;
(d) receipt by the Agent of an opinion of Davis Polk & Wardwell,
special counsel for the Agent, 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;
(e) receipt by the Agent of a certificate of a duly authorized
officer of the Borrower, dated the Effective Date, certifying that (i) as
of such date no Default shall have occurred and be continuing and (ii) as
of such date the representations and warranties of the Borrower
contained in this Agreement are true in all material respects; and
(f) receipt by the Agent of all documents it may reasonably request
relating to the existence of the Borrower, the corporate authority for and
the validity of this Agreement and the Notes, and any other matters
relevant hereto, all in form and substance satisfactory to the Agent;
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later
than June 18, 1994. The Agent shall promptly notify the Borrower and the Banks
of the Effective Date, and such notice shall be conclusive and binding on all
parties hereto.
SECTION 3.02. All Borrowings. The obligation of any Bank to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
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(a) receipt by the 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, (i)
in the case of a Refunding Borrowing, no Event of Default shall have
occurred and be continuing and (ii) in the case of any other Borrowing, no
Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the Borrower
contained in this Agreement (except, in the case of a Refunding Borrowing,
the representations and warranties set forth in Sections 4.04(b), 4.05,
4.06 (other than clause (i) thereof), 4.07 and 4.10) 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) and (d) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower and its
Domestic Subsidiaries are corporations duly incorporated, validly existing and
in good standing under the laws of their respective states of incorporation,
and have all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on their businesses,
considered as a whole, substantially as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of
this Agreement and the Notes are within the Borrower's corporate powers, have
been
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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
filings under the Securities Exchange Act of 1934) 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 the Borrower or of any
agreement, judgment, injunction, order, decree or other instrument binding
upon the Borrower or result in the creation or imposition of any Lien on any
asset of the Borrower or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid
and binding agreement of the Borrower and the Notes, when executed and
delivered in accordance with this Agreement, will constitute valid and binding
obligations of the Borrower.
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1993 and the related consolidated
statements of income and cash flows for the Fiscal Year then ended, reported
on by Coopers & Lybrand and set forth in the Borrower's 1993 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 Consolidated Subsidiaries as of
such date and the consolidated results of their operations and their cash
flows for such Fiscal Year.
(b) There has been no material adverse change since December 31,
1993 in the business or financial position of the Borrower and its
Consolidated Subsidiaries, considered as a whole, as reflected in the
financial statements referred to in subsection (a) of this Section.
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 which, in the
reasonable opinion of the Borrower, is likely to have a material adverse
effect on the business or financial position of the Borrower and its
Consolidated Subsidiaries, considered as a whole, or which in any manner draws
into question the validity of this Agreement or the Notes.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA Group
(i) has fulfilled its obligations under
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the minimum funding standards of ERISA and the Internal Revenue Code with
respect to each Plan and (ii) 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 member of the ERISA Group has (x) sought a
waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code in respect of any Plan, (y) 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, in each case
securing an amount greater than $10,000,000 or (z) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA which could materially adversely affect the business,
consolidated financial position or consolidated results of operations of the
Borrower and its Consolidated Subsidiaries.
SECTION 4.07. Environmental Matters. In the ordinary course of its
business, the Borrower conducts appropriate reviews 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
pertinent liabilities and costs (including, without limitation, capital or
operating expenditures required for clean-up or closure of properties
presently or previously owned or for the lawful operation of its current
facilities, required constraints or changes in operating activities, and
evaluation of liabilities to third parties, including employees, together with
pertinent costs and expenses). On the basis of this review, the Borrower has
reasonably concluded that Environmental Laws are not likely to have a material
adverse effect on the business, financial position or results of operations of
the Borrower and its Consolidated 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, 1989. 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
as due pursuant to such returns or pursuant to any assessment received by the
Borrower or any Subsidiary, except such taxes, if any, as are being contested
in good faith and as to which, in the opinion of the Borrower, adequate
reserves have been provided. The charges, accruals and reserves on the books
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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 Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.10. Compliance with Laws. The Borrower complies, and has
caused 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 where (i) the necessity of
compliance therewith is contested in good faith by appropriate proceedings,
(ii) no officer of the Borrower is aware that the Borrower or the relevant
Subsidiary has failed to comply therewith or (iii) the Borrower has reasonably
concluded that failure to comply is not likely to have a material adverse
effect on the business, financial position or results of operations of the
Borrower and its Consolidated Subsidiaries, taken as a whole.
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, a consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of the end of such Fiscal Year and the
related consolidated statements of income and cash flows for such Fiscal
Year, setting forth in each case in comparative form the corresponding
figures for the previous Fiscal Year, all reported on by Coopers & Lybrand
or other independent public accountants of nationally recognized standing,
whose report shall be without material qualification;
(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, a condensed
consolidated
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balance sheet of the Borrower and its Consolidated Subsidiaries as of the
end of such quarter, the related condensed consolidated statement of income
for such quarter and the related condensed consolidated statements of
income and cash flows for the portion of such Fiscal Year ended at the end
of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal
Year, all in reasonable detail and certified, to the best of his knowledge
(subject to normal year-end adjustments), as to fairness of presentation,
generally accepted accounting principles and consistency (except for
changes concurred in by the Borrower's independent public accountants) by
the chief financial officer or the chief accounting officer of the
Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
chief financial officer or the chief accounting officer of the Borrower (i)
setting forth in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the requirements of Sections
5.02 to 5.06, inclusive, on the date of such financial statements, (ii)
stating, to the best of his knowledge, whether any Default exists on the
date of such certificate and, if any Default then exists, setting forth the
details thereof and the action which the Borrower is taking or proposes to
take with respect thereto;
(d) within 15 days after any officer of the Borrower becomes aware
of the existence of any Default, unless such Default shall have been cured
before the end of such 15 day period, a certificate of the chief financial
officer or the chief accounting officer of the Borrower setting forth the
details of such Default 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 reports on Forms
10-K, 10-Q and 8-K and similar regular and periodic reports which the
Borrower shall have filed with the Securities and Exchange Commission;
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(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) 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
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 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 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 chief
accounting officer 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; provided that no such
certificate shall be required unless the aggregate unpaid actual or
potential liability of members of the ERISA Group involved in all events
referred to in (i) through (vii) above of which officers of the Borrower
have obtained knowledge and have not previously reported under this clause
(g) exceeds $25,000,000;
(h) within 20 days after the end of each Fiscal Quarter (unless
Level I Status exists at the end of such Fiscal Quarter), a certificate of
the Borrower's chief financial officer or chief accounting officer setting
forth (i) the Borrower's best estimate of Annual Cash Flow as it will be
recalculated based on Consolidated Net Income for the four Fiscal Quarters
ended at the end of said Fiscal Quarter, (ii) Total
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Consolidated Debt at the end of said Fiscal Quarter, and (iii) the
Borrower's best estimate of Total Consolidated Debt on the 31st day after
the end of said Fiscal Quarter;
(i) immediately after any officer 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 chief accounting officer of
the Borrower setting forth the details thereof; and
(j) from time to time such additional information regarding the
financial position or business of the Borrower as the Agent, at the request
of any Bank, may reasonably request.
SECTION 5.02. Minimum Consolidated Tangible Net Worth. At no time
will Consolidated Tangible Net Worth be less than Minimum Consolidated
Tangible Net Worth. "Minimum Consolidated Tangible Net Worth" means
$977,000,000; provided that such amount shall be adjusted at the end of each
Fiscal Quarter ending after December 31, 1993, as follows:
(i) increased by 50% of Consolidated Net Income for such Fiscal
Quarter; provided that, if Consolidated Net Income for such Fiscal Quarter
is a negative number (a "Consolidated Net Loss"), an amount up to 50% of
such Consolidated Net Loss shall be applied first to reduce Minimum
Consolidated Tangible Net Worth to the extent of offsetting prior increases
(if any) in Minimum Consolidated Tangible Net Worth made pursuant to this
clause (i) during the same Fiscal Year and second to reduce (but not below
zero) any future increase in Minimum Consolidated Tangible Net Worth that
would otherwise be made pursuant to this clause (i) during the same Fiscal
Year; and
(ii) increased by an amount equal to 50% of all increases in
Consolidated Tangible Net Worth during such Fiscal Quarter attributable to
sales or issuances of the Borrower's Equity Securities; provided that an
amount up to 50% of all decreases in Consolidated Tangible Net Worth during
such Fiscal Quarter attributable to purchases or other retirements of the
Borrower's Equity Securities shall be applied first to offset any increase
in Minimum Consolidated Tangible Net Worth that would otherwise be made
pursuant to this clause (ii) at the end of such Fiscal Quarter, second
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to reduce Minimum Consolidated Tangible Net Worth to the extent of
offsetting prior increases (if any) in Minimum Consolidated Tangible Net
Worth made pursuant to this clause (ii) and third to reduce (but not below
zero) any future increase in Minimum Consolidated Tangible Net Worth that
would otherwise be made pursuant to this clause (ii).
SECTION 5.03. Limitation on Dividends and Acquisitions of Borrower's
Equity Securities. The Borrower will not (a) declare or pay any dividend
(except dividends declared on or before December 31, 1993) or make any other
distribution on its capital stock, or (b) purchase, redeem or otherwise
acquire or retire for value any Borrower's Equity Securities or (c) permit a
Subsidiary to purchase or otherwise acquire for value any of the Borrower's
Equity Securities, if upon giving effect to such dividend, distribution,
purchase, redemption, retirement or other acquisition, the aggregate amount
expended (or, in the case of dividends declared but not yet paid, to be
expended) for all such dividends and distributions on, and purchases,
redemptions, retirements and other acquisitions of, the Borrower's Equity
Securities after December 31, 1993 shall exceed the sum of (x) $242,010,000,
(y) 75% of Consolidated Net Income earned after December 31, 1993 determined
as of a date not more than 90 days prior to the proposed dividend,
distribution, purchase, redemption, retirement or other acquisition, and (z)
the net cash proceeds received by the Borrower after December 31, 1993 from
the issue, exchange or sale of any capital stock of the Borrower (other than
redeemable preferred stock); provided that the provisions of this Section 5.03
shall not prevent (i) the payment of any regular dividends on any shares of
preferred stock of the Borrower, (ii) the making of any required sinking or
purchase fund payment or required redemption in respect of any shares of
preferred stock of the Borrower issued for cash or property, (iii) any
dividend or distribution payable in capital stock of the Borrower, (iv) the
repurchase of shares of the Borrower's common stock previously awarded by the
Borrower under its Restricted Stock Incentive Plan or (v) in connection with a
grant of stock by the Borrower or the exercise of a stock option granted by
the Borrower, the acquisition of shares of the Borrower's common stock from
the grantee of such stock or the holder of such option (or a reduction in the
number of shares issued to such grantee or holder) for a non-cash credit to
cover (x) income taxes required to be withheld by the Borrower in connection
with such grant or the exercise of such option and (y) in the case of an
option, the exercise price thereof. Dividends, payments, redemptions and
repurchases referred to in clauses (i), (ii) and (iv) of the preceding
sentence shall be
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included in subsequent computations under this Section 5.03; dividends and
distributions referred to in clause (iii) of the preceding sentence and
credits referred to in clause (v) thereof shall not be included in any
computations under this Section 5.03. For purposes of computations under this
Section 5.03, (A) any non-cash distribution shall be taken at the fair value
thereof at the date of distribution or payment by the Borrower, as determined
in good faith by the board of directors of the Borrower, and (B) if any
convertible indebtedness or convertible redeemable preferred stock is issued
by the Borrower after December 31, 1993 and subsequently converted to capital
stock of the Borrower (other than redeemable preferred stock), the net cash
proceeds received by the Borrower upon the issuance of such convertible
indebtedness or convertible redeemable preferred stock shall be deemed for
purposes of clause (z) above to have been received from the issue of such
capital stock. Nothing in this Section shall prohibit the Borrower from
paying any dividend within 60 days after the declaration thereof if, when such
dividend was declared, the declaration thereof was permitted by this Section.
SECTION 5.04. Limitations on Debt. (a) The Borrower will not at
any time, and will not suffer or permit any Consolidated Subsidiary at any
time to, create, incur, issue, guarantee or assume any Debt if, immediately
after giving effect thereto, the ratio of (i) Consolidated Debt to (ii) the
sum of Consolidated Debt and Consolidated Adjusted Net Worth would exceed 65%.
(b) The Borrower will not at any time suffer or permit any
Consolidated Subsidiary to create, incur, issue, guarantee or assume any Debt
if, immediately after giving effect thereto, the aggregate outstanding amount
(determined at that time) of Debt of all Consolidated Subsidiaries (other than
Debt owed to the Borrower or one or more other Consolidated Subsidiaries)
would be greater than 15% of the maximum amount (determined at that time) of
Consolidated Debt permitted under subsection (a) of this Section 5.04.
(c) Subsections (a) and (b) above shall not prevent (i) the Borrower
from creating, incurring, issuing, guaranteeing or assuming Debt for the
purpose of extending, renewing or Refunding (as such term is defined in
Section 5.05) at least an equal principal amount of Debt then outstanding of
the Borrower or of Debt then outstanding of a Consolidated Subsidiary or
(ii) a Consolidated Subsidiary from creating, incurring, issuing, guaranteeing
or assuming Debt for the purpose of extending, renewing or Refunding at least
an equal principal amount of Debt then outstanding of such Consolidated
Subsidiary, or (iii) the creation,
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incurrence, issuance, guarantee or assumption of Debt owed to or owned by the
Borrower or a Consolidated Subsidiary.
(d) For purposes of the limitations provided in, and computations
under, this Section 5.04, (i) when a corporation becomes a Consolidated
Subsidiary it shall be deemed to create at such time all the Debt it has
outstanding immediately after such time (provided that, if after giving effect
to this clause (i), the aggregate outstanding amount of Debt of all
Consolidated Subsidiaries (other than Debt owed to the Borrower or one or more
other Consolidated Subsidiaries) would be greater than 15% but less than 30%
of the maximum amount (determined at such time) of Consolidated Debt permitted
under subsection (a) of this Section 5.04, this clause (i) shall not apply at
the time such corporation becomes a Consolidated Subsidiary, but such
corporation shall be deemed to create on the 15th day after it becomes a
Consolidated Subsidiary all the Debt it has outstanding on such 15th day),
(ii) the disposition (other than to a Consolidated Subsidiary or the Borrower)
by the Borrower or a Subsidiary of capital stock of any Consolidated
Subsidiary which holds Debt of the Borrower or any other Consolidated
Subsidiary so that the Consolidated Subsidiary ceases to be a Consolidated
Subsidiary after such disposition shall be deemed the creation of such Debt,
and (iii) the disposition (other than to a Consolidated Subsidiary or the
Borrower) of Debt of the Borrower or any Consolidated Subsidiary by any
Consolidated Subsidiary or the Borrower shall be deemed the creation of such
Debt.
SECTION 5.05. Cash Flow Coverage. The Borrower will not permit
Consolidated Debt at any time to exceed 650% of Annual Cash Flow; provided
that the Borrower shall not be required to comply with this Section 5.05 (i)
at any time when Level I Status exists or (ii) if Level I Status exists for a
period and subsequently no longer exists, at any time during the first 180
days after Level I Status ceases to exist. For purposes of this Section 5.05,
if any Consolidated Debt is to be Refunded with the proceeds of other
Consolidated Debt, the Debt to be so Refunded shall be excluded from
Consolidated Debt when the refunding Debt is incurred. For purposes of
Section 5.04(c) Debt is deemed to be for the purpose of "Refunding" other
Debt, and for purposes of this Section 5.05 Consolidated Debt is to be
"Refunded" by other Consolidated Debt, if and to the extent that (i) no later
than 5 Domestic Business Days after the refunding Debt is incurred, the
Borrower delivers to the Agent written notice stating that the purpose of such
Debt is to refund outstanding Debt and specifying the Debt to be refunded,
(ii) the proceeds of such refunding Debt are held in the form of cash or High
Quality Investments (free of any
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Lien except a Lien securing the specified Debt to be refunded) until such
specified Debt is repaid and (iii) such specified Debt to be refunded is
repaid within 45 days after the refunding Debt is incurred.
SECTION 5.06. Negative Pledge. Neither the Borrower nor any
Consolidated Subsidiary will create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it, except:
(a) Liens existing on December 31, 1993 securing Debt outstanding on
December 31, 1993 in an aggregate principal amount not exceeding
$60,000,000;
(b) any Lien existing on any asset of any corporation at the time
such corporation becomes a Consolidated Subsidiary and not created in
contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed solely
for the purpose of financing all or any part of the cost of acquiring such
asset (or acquiring a corporation or other entity which owned such asset);
provided that such Lien attaches to such asset concurrently with or within
90 days after such acquisition;
(d) any Lien on any asset of any corporation existing at the time
such corporation is merged or consolidated with or into the Borrower or a
Consolidated Subsidiary and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition thereof
by the Borrower or a Consolidated Subsidiary and not created in
contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section; provided that such Debt is not increased and is
not secured by any additional assets;
(g) any Lien in favor of the holder of Debt (or any Person or entity
acting for or on behalf of such holder) arising pursuant to any order of
attachment, distraint or similar legal process arising in connection with
court proceedings so long as the execution or other enforcement thereof is
effectively
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stayed and the claims secured thereby are being contested in good faith by
appropriate proceedings;
(h) Liens incidental to the normal conduct of its business or the
ownership of its assets which (i) do not secure Debt, (ii) do not secure
any obligation in an amount exceeding $100,000,000 and (iii) do not in the
aggregate materially detract from the value of the assets of the Borrower
and its Consolidated Subsidiaries taken as a whole or in the aggregate
materially impair the use thereof in the operation of the business of the
Borrower and its Consolidated Subsidiaries taken as a whole; and
(i) Liens securing Debt which are not otherwise permitted by the
foregoing clauses of this Section; provided that (i) the aggregate
outstanding principal amount of Debt secured by all such Liens on current
assets shall not at any time exceed 20% of Consolidated Current Assets and
(ii) the aggregate outstanding principal amount of Debt secured by all such
Liens (including Liens referred to in clause (i) of this proviso) shall not
at any time exceed the sum of (A) 20% of Consolidated Current Assets plus
(B) 5% of Consolidated Tangible Net Worth.
SECTION 5.07. Consolidations, Mergers and Sale of Assets. (a) The
Borrower will not directly or indirectly sell, lease, transfer or otherwise
dispose of all or substantially all of its assets, or merge or consolidate
with any other Person, or acquire any other Person through purchase of assets
or capital stock, unless either (i) the Borrower shall be the continuing or
surviving corporation or (ii) the successor or acquiring corporation (if other
than the Borrower) shall be a corporation organized under the laws of one of
the States of the United States of America and shall assume, by a writing
satisfactory in form and substance to the Required Banks, all of the
obligations of the Borrower under this Agreement and the Notes, including all
covenants herein and therein contained, in which case such successor or
acquiring corporation shall succeed to and be substituted for the Borrower
with the same effect as if it had been named herein as a party hereto.
(b) The Borrower will not, and will not permit any Subsidiary to,
directly or indirectly make a Restricted Transfer of its assets to any Person
(other than the Borrower or a Substantially-Owned Consolidated Subsidiary) if,
immediately after giving effect thereto, the aggregate amount of assets
disposed of in all Restricted Transfers by the Borrower and its Subsidiaries
in the twelve months then
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ended would exceed 15% of the total assets of the Borrower and its
Consolidated Subsidiaries as shown on the most recent balance sheet delivered
to the Banks referred to in Section 4.04 or 5.01. For purposes of this
subsection (b), the term "Restricted Transfer" means a direct or indirect
sale, lease, transfer or other disposition of assets (other than (i) cash or
(ii) an equity interest in a Person that is not a Subsidiary) to any Person
(other than the Borrower or a Substantially-Owned Consolidated Subsidiary) if,
in connection with such transaction (and as a substantial part of the
consideration incident thereto), the Borrower or any Subsidiary receives an
equity ownership interest in such Person or any right to receive payments
which are specifically contingent in amount or duration upon the earnings of
such Person or any portion of such Person's business.
(c) No disposition of assets, merger, consolidation or acquisition
referred to in subsection (a) or (b) of this Section shall be permitted if,
immediately after giving effect thereto, the Borrower would be in default
under any of the terms or provisions of this Agreement.
SECTION 5.08. 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 where (i) the necessity of
compliance therewith is contested in good faith by appropriate proceedings,
(ii) no officer of the Borrower is aware that the Borrower or the relevant
Subsidiary has failed to comply therewith or (iii) the Borrower has reasonably
concluded that failure to comply is not likely to have a material adverse
effect on the business, financial position or results of operations the
Borrower and its Consolidated Subsidiaries, taken as a whole.
SECTION 5.09. Use of Proceeds. None of the proceeds of the Loans
made under this Agreement will be used in violation of any applicable law or
regulation.
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ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any
Loan, or shall fail to pay within five days of the due date thereof any
interest or fees payable under this Agreement;
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.02 to 5.07, 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 30 days after written notice thereof has been given
to the Borrower by the Agent at the request of any Bank;
(d) any representation, warranty, certification or statement made by
the Borrower in this Agreement or in any certificate, financial statement
or other document delivered pursuant to this Agreement shall prove to have
been incorrect in any material respect when made or deemed to have been
made; provided that, if any representation and warranty deemed to have been
made by the Borrower pursuant to the last sentence of Section 3.02 as to
the satisfaction of the condition of borrowing set forth in clause (c)(i)
of Section 3.02 shall have been incorrect solely by reason of the existence
of an Event of Default of which the Borrower was not aware when such
representation and warranty was deemed to have been made and which was
cured before or promptly after the Borrower became aware thereof, then such
representation and warranty shall be deemed not to have been incorrect in
any material respect;
(e) the Borrower and its Consolidated Subsidiaries shall fail to
make one or more payments in respect of Material Debt (other than Acquired
Debt in an aggregate outstanding principal amount not exceeding
$50,000,000) when due or within any applicable grace period, and such
failure has not been waived;
(f) the Borrower or any Consolidated Subsidiary shall fail to
observe or perform any term, covenant or
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agreement contained in any instrument or agreement (other than this
Agreement) by which it is bound relating to Debt (other than Acquired Debt
in an aggregate outstanding principal amount not exceeding $50,000,000), or
any other event or condition referred to therein shall occur, and the
effect of all such failures, events and conditions (each a "default") is to
cause the maturity of Material Debt to be accelerated or to permit (any
applicable period of grace having expired) the holder or holders of
Material Debt (or any Person acting on their behalf) to accelerate the
maturity thereof;
(g) the Borrower or Significant Subsidiaries shall, in each case,
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 under
any such law, 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 under any such law, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or a resolution shall be adopted by either the
shareholders or the board of directors of such corporation to authorize any
of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or Significant Subsidiaries in any United States
Federal court or other court of competent jurisdiction seeking in each case
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property under any such law, and in each case 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
Significant Subsidiaries as debtors under the federal bankruptcy laws as
now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $1,000,000 which it shall have
become liable to pay
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to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans having aggregate Unfunded Liabilities in excess
of $50,000,000 (collectively, a "Material Plan") shall be filed under Title
IV of ERISA by any member of the ERISA Group, 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 $50,000,000;
provided that no Event of Default shall exist under this clause (i) with
respect to any Prior Plan unless it is reasonably likely that one or more
members of the ERISA Group is liable with respect to the relevant Unfunded
Liabilities or current payment obligation, as the case may be;
(j) a judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against the Borrower or any Subsidiary and
such judgment or order shall continue unsatisfied and unstayed for a period
of 45 days; or
(k) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said Act) of 30% or more of
the outstanding shares of common stock of the Borrower; or Continuing
Directors shall cease to constitute a majority of the board of directors of
the Borrower;
then, and in every such event, the Agent shall (i) if requested by Banks
having more than 50% 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 50% in aggregate
outstanding 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
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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 (g) or (h) above with respect to the Borrower,
without any notice to the Borrower or any other act by the Agent or the Banks,
the Commitments shall thereupon terminate and the Notes (together with accrued
interest thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The 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 AGENT
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the Notes as are
delegated to the Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan Guaranty Trust Company
of New York shall have the same rights and powers under this Agreement as any
other Bank and may exercise or refrain from exercising the same as though it
were not the Agent, and Morgan Guaranty Trust Company of New York 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 the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any
action with respect to any Default, except as expressly provided in Article
VI.
SECTION 7.04. Consultation with Experts. The 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
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accordance with the advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable (i) to the Banks for
any action taken or not taken by such Person in connection herewith with the
consent or at the request of the Required Banks or (ii) to the Banks or the
Borrower for any action taken or not taken by such Person in the absence of
such Person's own gross negligence or willful misconduct. Neither the Agent
nor 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 this Agreement or any
borrowing hereunder; (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 the Agent; or (iv) the validity, effectiveness or genuineness of
this Agreement, the Notes or any other instrument or writing furnished in
connection herewith. The Agent shall not 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 the Agent (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from the Agent's gross negligence or willful misconduct) that the Agent
may suffer or incur in connection with this Agreement or any action taken or
omitted by the Agent hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the 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 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 Agent. The Agent may resign at any time by
giving written notice thereof to the
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Banks and the Borrower. Upon any such resignation, the Required Banks shall
have the right to appoint a successor Agent. 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, on behalf of the Banks, 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 $50,000,000. 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 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 Agent.
SECTION 7.09. Agent's Fees. The Borrower shall pay to the Agent for
its own account fees in the amounts and at the times previously agreed upon
between the Borrower and the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. (a) If on or prior to the first day of any Interest Period for any
Fixed Rate Borrowing (other than a Money Market Absolute Rate Borrowing):
(i) the Agent is advised by each of the Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered to
such Reference Bank in the relevant market for such Interest Period, or
(ii) in the case of a Committed Borrowing, Banks having 50% or more of
the aggregate amount of the Commitments advise the Agent that the Adjusted
CD Rate or the London Interbank Offered Rate, as the case may be, as
determined by the 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 Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies
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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 Agent
at least two Domestic Business Days before the date of any such Fixed Rate
Borrowing for which a Notice of Borrowing has previously been given that it
elects not to borrow on such date, (A) if such Fixed Rate Borrowing is a
Committed Borrowing, such Borrowing shall instead be made as a Base Rate
Borrowing and (B) if such Fixed Rate Borrowing is a Money Market LIBOR
Borrowing, the Money 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.
(b) If deposits in dollars (in the applicable amounts) are not being
offered to any of the Reference Banks in the relevant market for any Interest
Period, by reason of circumstances affecting such Reference Bank, and not
affecting the London interbank market or the United States market for
certificates of deposit generally (as the case may be), the Agent shall, in
consultation with the Borrower and with the consent of the Required Banks,
appoint another bank to act as a Reference Bank hereunder.
SECTION 8.02. Illegality. If, after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change therein, 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
honor its binding legal obligation hereunder to make, maintain or fund its
Euro-Dollar Loans and such Bank shall so notify the Agent, the Agent shall
forthwith give notice thereof to the other Banks and the Borrower, whereupon
until such Bank notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the obligation of such Bank to
make Euro-Dollar Loans shall be suspended. Before giving any notice to the
Agent pursuant to this Section, such Bank shall designate a different
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
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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 (or, if the Borrower so elects by at least one Domestic Business Day's
notice to the Agent and such Bank, a CD 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 or CD Loan, as the case may be.
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 therein, 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
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 United States of America or any State or political
subdivision thereof or 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
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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
15 days after demand by such Bank (with a copy to the Agent), the Borrower
shall pay to such Bank such additional amount or amounts as will compensate
such Bank for such increased cost or reduction; provided that, if such Bank
fails to demand such compensation (or notify the Borrower that it will demand
such compensation) promptly upon becoming aware of the facts entitling it to
do so, such Bank shall not be entitled to such compensation for the period
before the date on which it actually demands (or notifies the Borrower that it
will demand) such compensation. If any Bank demands compensation under this
subsection (a), the Borrower may at any time, upon at least five Euro-Dollar
Business Days' prior notice to such Bank through the Agent, prepay in full
each then outstanding affected Fixed Rate Loan of such Bank, together with
accrued interest thereon to the date of prepayment. Concurrently with
prepaying each such Fixed Rate Loan of such Bank, the Borrower shall borrow a
Base Rate Loan (or, if the Borrower shall so elect in its notice of
prepayment, a Fixed Rate Committed Loan of another type) in an equal principal
amount from such Bank for an Interest Period coinciding with the remaining
term of the Interest Period applicable to such Fixed Rate Loan, and such Bank
shall make such a Loan notwithstanding any provision herein to the contrary.
(b) If any Bank shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the
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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 15 days after demand by such Bank (with a copy
to the Agent), the Borrower shall pay to such Bank such additional amount or
amounts as will compensate such Bank (or its Parent) for such reduction;
provided that, if such Bank fails to demand such compensation (or notify the
Borrower that it will demand such compensation) promptly upon becoming aware
of the facts entitling it to do so, such Bank shall not be entitled to such
compensation for the period before the date on which it actually demands (or
notifies the Borrower that it will demand) such compensation.
(c) Each Bank will promptly notify the Borrower and the Agent 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. A certificate of any
Bank claiming compensation under this Section and setting forth 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. Substitute 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 Agent, have elected that the provisions of this Section 8.04 shall
apply to such Bank, then, unless and until such Bank notifies the Borrower and
the Agent that the circumstances giving rise to such suspension or demand for
compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank as CD Loans
or Euro-Dollar Loans, as the case may be, shall be made instead as Base
Rate Loans (on
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which interest and principal shall be payable contemporaneously with the
related Fixed Rate Loans of the other Banks) or, if the Borrower shall so
elect in the Notice of Borrowing, CD Loans or Euro-Dollar Loans (whichever
type is not affected by such circumstances) for an Interest Period
coincident with the related Fixed Rate Borrowing, 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 Loan shall be applied to repay the Loan
substituted therefor pursuant to Section 8.04(a) 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 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 the Agent, at its address or
telex number set forth on the signature pages hereof, (y) in the case of any
Bank, at its address or telex number set forth in its Administrative
Questionnaire or (z) in the case of any party, such other address or telex
number as such party may hereafter specify for the purpose by notice to the
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 9.01 and the appropriate answerback
is received, (ii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid, addressed as
aforesaid or (iii) if given by any other means, when delivered at the address
specified in this Section 9.01; provided that notices to the Agent under
Article II or Article VIII shall not be effective until received.
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SECTION 9.02. No Waivers. No failure or delay by the Agent or any
Bank in exercising any right, power or privilege hereunder or under any Note
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 Agent,
including reasonable fees and disbursements of special counsel for the Agent,
in connection with the preparation of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default hereunder and (ii) if an
Event of Default occurs, all reasonable out-of-pocket expenses incurred by the
Agent and each 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 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 or the Notes.
(b) The Borrower agrees to indemnify and defend each Bank and their
respective directors, officers, agents, employees and affiliates from, and
hold each of them harmless against, any and all losses, liabilities, claims,
damages or expenses substantially relating to or arising out of (i) the
Borrower's actual or proposed use of proceeds of Loans for the purpose of
acquiring equity securities of any other Person, or (ii) a change of ownership
or control of the Borrower, including but not limited to reasonable attorney's
fees and settlement costs; provided that (x) the foregoing indemnity shall not
apply to any losses, liabilities, claims, damages or expenses that do not
relate to or arise out of this Agreement or the activities of the parties
hereto in connection herewith and (y) no Bank shall have the right to be
indemnified hereunder for its own gross negligence or willful misconduct as
determined by a court of competent jurisdiction.
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
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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 holder
of a participation in a Note, whether or not acquired 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 the Agent are affected
thereby, by the Agent); provided that no such amendment or waiver shall,
unless signed by all the Banks, (i) increase or decrease the Commitment of any
Bank (except for a ratable decrease in the Commitments of all the 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 the termination of the Commitments, or (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.
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; provided that the Borrower may
not assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of all Banks, except as provided in Section
5.07(a).
(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
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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
Agent, such Bank shall remain responsible for the performance of its
obligations hereunder, and the Borrower and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. 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
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; 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 (but not
less than $10,000,000), of its rights and obligations under this Agreement and
the Notes, 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 Agent (which
consent will not unreasonably be withheld); provided that if an Assignee is a
Bank or 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
60
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<PAGE>
subsection (c), the transferor Bank, the 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 Agent an administrative fee for processing such assignment in the
amount of $2,000. 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 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 its Note 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.
(f) If any Reference Bank assigns or otherwise transfers its Note to
an unaffiliated institution, the Agent shall, in consultation with the
Borrower and with the consent of the Required Banks, appoint another bank to
act as a Reference Bank hereunder.
SECTION 9.07. Collateral. Each of the Banks represents to the Agent
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. Confidentiality. Each Bank agrees that all
documentation and other information made available by the Borrower to such
Bank, whether under the terms of this Agreement or any other loan agreement,
shall (except to the extent required by legal or governmental process or
otherwise by law, or if such documentation and other information is publicly
available or hereafter becomes publicly available other than by action of any
Bank, or was theretofore known to such Bank independent of any disclosure
thereto by the Borrower) be held in the strictest confidence
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<PAGE>
by such Bank and used solely in connection with administration of loans from
time to time outstanding from such Bank to the Borrower; provided that (i)
such Bank may disclose such documentation and other information to any other
bank to which such Bank sells or proposes to sell a participation in its Loans
hereunder, if such other bank, prior to such disclosure, agrees for the
benefit of the Borrower to comply with the provisions of this Section 9.08,
(ii) such Bank may disclose the provisions of this Agreement and the Notes and
the amounts, maturities and interest rates of its Loans to any purchaser or
potential purchaser of such Bank's interest in any Loan and (iii) such Bank
may disclose such documentation and other information to the extent required,
in such Bank's good faith judgment, to enforce its rights under this Agreement
and the Notes.
SECTION 9.09. Severalty of Obligations. The obligations of the
Banks hereunder are several. No failure by any Bank to perform its
obligations hereunder shall relieve any other Bank of its obligations
hereunder, and no Bank shall be responsible for the performance of any other
Bank's obligations hereunder or for any action taken or omitted by any other
Bank hereunder.
SECTION 9.10. New York Law; Submission to Jurisdiction. This
Agreement and each Note shall be construed in accordance with and governed by
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 City
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 9.11. 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. 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, except
that the Existing Credit Agreement shall continue to govern the rights and
obligations of the parties thereto with respect to the period prior to the
Effective Date.
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SECTION 9.12. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT
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.
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.
MASCO CORPORATION
By /s/Robert B. Rosowski
Title: Vice President - Controller
21001 Van Born Road
Taylor, Michigan 48180
Attention: President and Vice
President-General Counsel
Telecopy Number: (313) 374-6135
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Commitments
$75,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/Timothy S. Broadbent
Title: Vice President
$70,000,000 COMERICA BANK
By /s/James R. Grossett
Title: Vice President
$65,000,000 NBD BANK, N.A.
By /s/Richard H. Huttenlocher
Title: Vice President
$45,000,000 NATIONSBANK OF TEXAS, N.A.
By /s/William A. Bowen, Jr.
Title: Vice President
$40,000,000 BANK OF AMERICA NT&SA
By /s/W. L. Hess
Title: Vice President
$40,000,000 CITIBANK, N.A.
By /s/Edward Lettieri
Title: Vice President
64
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<PAGE>
Commitments
$40,000,000 THE FIRST NATIONAL BANK OF CHICAGO
By /s/Susan L. Comstock
Title: Vice President
$40,000,000 PNC BANK, NATIONAL ASSOCIATION
By /s/John F. Broeren
Title: Assistant Vice President
$35,000,000 THE BANK OF NOVA SCOTIA
By /s/F.C.H. Ashby
Title: Senior Manager Loan Operations
$35,000,000 ROYAL BANK OF CANADA
By /s/ Holly Spencer Kaczmarczyk
Title: Manager, Corporate Banking
$30,000,000 CONTINENTAL BANK N.A.
By /s/Steven K. Ahrenholz
Title: Vice President
$30,000,000 WACHOVIA BANK OF GEORGIA, N.A.
By /s/James B. Gburek
Title: Senior Vice President
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Commitments
$25,000,000 CHEMICAL BANK
By /s/Colleen M. Roux
Title: Vice President
$20,000,000 COMMERZBANK AKTIENGESELLSCHAFT
GRAND CAYMAN BRANCH
By /s/ Kaylan Basu
Title: First Vice President
By /s/Dr. Helmut R. Tollner
Title: Executive Vice President
$20,000,000 THE DAI-ICHI KANGYO BANK, LTD.,
CHICAGO BRANCH
By /s/Tetsuya Kaneko
Title: Vice President
$20,000,000 DEUTSCHE BANK AG CHICAGO BRANCH AND/OR
CAYMAN ISLANDS BRANCHES
By /s/David S. Berger
Title: Assistant Vice President
By /s/Cameron C. Hitchcock
Title: Vice President
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Commitments
$20,000,000 DRESDNER BANK AG
CHICAGO AND GRAND CAYMAN BRANCHES
By /s/Haig C. Garabedian
Title: Vice President
By /s/John B. Sinsheimer
Title: Vice President
$20,000,000 ISTITUTO BANCARIO SAN PAOLO
DI TORINO, S.p.A.
By /s/William DeAngelo
Title: First Vice President
$20,000,000 NATIONAL CITY BANK
By /s/Marybeth S. Howe
Title: Vice President
$20,000,000 THE SANWA BANK LIMITED
By /s/Richard H. Ault
Title: Vice President
$20,000,000 SOCIETY NATIONAL BANK
By /s/Michael J. Jackson
Title: Vice President
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<PAGE>
Commitments
$20,000,000 THE SUMITOMO BANK, LIMITED
By /s/Katsuyasu Iwasawa
Title: Joint General Manager
_________________
Total Commitments
$750,000,000
=================
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/Timothy S. Broadbent
Title: Vice President
Attention: Timothy S. Broadbent
60 Wall Street
New York, New York 10260-0060
Telex Number: 177615 MGT UT
Telecopy Number: (212) 648-5336
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EXHIBIT A
NOTE
New York, New York
, 19
For value received, MASCO CORPORATION, a Delaware 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 Morgan Guaranty Trust
Company of New York, 60 Wall Street, 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, prior to any transfer hereof, appropriate notations to evidence the
foregoing information with respect to each such Loan then outstanding shall be
endorsed by the Bank on 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
obligations of the Borrower hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Amended and Restated
Credit Agreement dated as of May 18, 1994 among the Borrower, the banks listed
on the signature pages thereof and Morgan Guaranty Trust Company of New York,
as 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 for provisions for
the prepayment hereof and the acceleration of the maturity hereof.
MASCO CORPORATION
By________________________
Title:
PAGE
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
__________________________________________________________________
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
2
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EXHIBIT B
Form of Money Market Quote Request
[Date]
To: Morgan Guaranty Trust Company of New York
(the "Agent")
From: Masco Corporation
Re: Amended and Restated Credit Agreement (the "Credit Agreement") dated
as of May 18, 1994 among the Borrower, the Banks
listed on the signature pages thereof and the Agent
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 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.]
Terms used herein have the meanings assigned to them in the Credit
Agreement.
MASCO CORPORATION
By________________________
Title:
_____________
*Amount must be $25,000,000 or a larger multiple of $1,000,000.
**Not less than one month (LIBOR Auction) or not less than 30 days (Absolute
Rate Auction), subject to the provisions of the definition of Interest Period.
PAGE
<PAGE>
EXHIBIT C
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes
to Masco Corporation (the
"Borrower")
Pursuant to Section 2.03 of the Amended and Restated Credit Agreement
dated as of May 18, 1994 among the Borrower, the Banks parties thereto and the
undersigned, as Agent, 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].
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By______________________
Authorized Officer
PAGE
<PAGE>
EXHIBIT D
Form of Money Market Quote
To: Morgan Guaranty Trust Company
of New York, as Agent
Re: Money Market Quote to
Masco Corporation (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****] [Absolute Rate*****]
$
$
[Provided, that the aggregate principal amount of Money Market Loans
for which the above offers may be accepted shall not exceed
$____________.]**
___________
* 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
$1,000,000 or a larger multiple thereof.
(notes continued on following page)
PAGE
<PAGE>
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the Amended and
Restated Credit Agreement dated as of May 18, 1994 among the Borrower, the
Banks listed on the signature pages thereof and yourselves, as Agent,
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
____________
*** Not less than one month or not less than 30 days, 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%).
2
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EXHIBIT E
OPINION OF
COUNSEL FOR THE BORROWER
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
I am Vice President-General Counsel of Masco Corporation (the
"Borrower") and am familiar with the Amended and Restated Credit Agreement
dated as of May 18, 1994 (the "Credit Agreement") among the Borrower, the
banks listed on the signature pages thereof and Morgan Guaranty Trust Company
of New York, as Agent. Terms defined in the Credit Agreement are used herein
as therein defined. This opinion is being rendered to you pursuant to Section
3.01(c) of the Credit Agreement.
I have examined originals or copies, certified or otherwise
identified to my satisfaction, of such 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 Delaware, and has all corporate powers
and all material governmental licenses, authorizations, consents and approvals
required to carry on its businesses substantially as now conducted.
PAGE
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Page Two
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action of the Borrower,
require no action in respect of the Borrower by, or filing in respect of the
Borrower with, any governmental body, agency or official (except filings under
the Securities Exchange Act of 1934) 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 the Borrower or of any agreement,
judgment, injunction, order, decree or other instrument known to me to be
binding upon the Borrower or result in the creation or imposition of any Lien
on any asset of the Borrower or any of its Subsidiaries under any such
agreement or instrument.
3. The Credit Agreement constitutes a valid and binding agreement of
the Borrower and the Notes constitute valid and binding obligations of the
Borrower.
4. There is no action, suit or proceeding pending against, or to the
best of my knowledge threatened against or affecting, the Borrower or any of
its Subsidiaries before any court or arbitrator or any governmental body,
agency or official which, in my opinion, is likely to have a material adverse
effect on the business or financial position of the Borrower and its
Consolidated Subsidiaries, considered as a whole, or which in any manner draws
into question the validity of the Credit Agreement or the Notes.
Very truly yours,
John R. Leekley
Vice President and
General Counsel
PAGE
<PAGE>
EXHIBIT F
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the Amended and Restated
Credit Agreement dated as of May 18, 1994 (the "Credit Agreement") among Masco
Corporation, a Delaware corporation (the "Borrower"), the banks listed on the
signature pages thereof (the "Banks") and Morgan Guaranty Trust Company of New
York, as Agent (the "Agent"), and have acted as special counsel for the Agent
for the purpose of rendering this opinion pursuant to Section 3.01(d) of the
Credit Agreement. Terms defined in the Credit Agreement are used herein as
therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate powers and
have been duly authorized by all necessary corporate action.
2. The Credit Agreement constitutes a valid and binding agreement of
the Borrower and the Notes constitute valid and binding obligations of the
Borrower.
<PAGE>
To the Banks and the Agent -2- May __, 1994
Referred to Below
In giving the foregoing opinion, we express no opinion as to the
effect (if any) of any law of any jurisdiction (except the State of New York)
in which any Bank is located which limits the rate of interest that such Bank
may charge or collect.
Very truly yours,
PAGE
<PAGE>
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), MASCO CORPORATION (the "Borrower")
and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
relates to the Amended and Restated Credit Agreement dated as of May 18, 1994
among the Borrower, the Assignor and the other Banks party thereto, as Banks,
and the 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.
PAGE
<PAGE>
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 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 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 an amount equal to $_________. It is
understood that commitment and/or facility fees accrued to the date hereof are
for the account of the Assignor and such fees accruing from and including the
date hereof [in respect of the Assigned Amount] 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 Agent. This Agreement
is conditioned upon the consent of the Borrower and the Agent pursuant to
Section 9.06(c) of the Credit Agreement. The execution of this Agreement by
the Borrower and the Agent is evidence of this consent. Pursuant to Section
9.06(c) the Borrower agrees to execute and deliver a
_______________
*Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be prefereable
in an appropriate case to specify these amounts generically or by formula
rather than as a fixed sum.
2
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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, the 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 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:
[MASCO CORPORATION
By__________________________
Title:]
[MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By__________________________
Title:]
3
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